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Does National now want to put taxes up?

Hon Jim Anderton

Progressive Leader

19 February 2008

Does National now want to put Joanna Average's taxes up?

Progressive leader Jim Anderton is asking if National thinks New Zealanders are no longer over-taxed, now that the surplus has come in much lower than forecast.

On 10 October last year, National's Bill English released a statement headlined "Surplus underlines over-taxation." His statement claimed, ""The surplus shows that the Labour Government is taking far more out of the pockets of hard working New Zealanders than it needs."

But now the surplus is much lower, due to super fund losses, Jim Anderton is asking if National will now follow its own logic.

"If New Zealanders were over-taxed when the surplus was up, are we now under-taxed when the surplus is down? That is the logical conclusion of the absurd position National has been taking when it claims the entire surplus is available to spend."

On 11 October 2006 when the government's non-cash surplus reached $11.5
billion, John Key said the surplus showed "every man, woman and child has been overtaxed to the tune of $2,875 each." He said the sum should be given away in tax cuts.

"If the government had taken Mr Key's advice, not only would the super fund have been wiped out, we would also face massive tax increases to make up for the losses sustained by the fund when global markets fell. No other interpretation of National's tax policy is reasonable.

"The only logical conclusion from all of National's previous statements on tax is that today it favours a tax increase."

Jim Anderton says the impact of tax increases under National when the surplus fell would be mainly felt by middle income earners.

"Last year National made a hash of attempting to calculate the tax burden faced by "Joanna Average". It miscalculated how much better off a household on the average wage has grown over the last eight years. Now National won't even state that a household on the average wage with two kids would receive a tax cut as big as someone on $100,000.

"That can only be because National links tax cuts to the size of the operating surplus, meaning that taxes on Joanna Average would increase whenever the super fund made a loss.

"National still hasn't stated whether it supports the Business Roundtable's flat tax policy, which could only be funded by taxing Joanna Average more and Joanna Affluent less.

"National can say anything about tax and the media give them a free pass. But what National says is falling apart in front of them," Jim Anderton said.


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