Personal tax adjustment logical from business cuts
For immediate release
Friday, 16 May 2008
Personal tax adjustments logical flow on from business tax cuts, says Dunne
UnitedFuture leader Peter Dunne says the tax reduction programme in next week’s Budget is a direct consequence of the UnitedFuture-driven business tax cuts announced in last year’s Budget.
“At the time the Business Tax reforms were agreed, UnitedFuture made it clear there would be consequences for personal taxes, a point that was reiterated in last year’s Budget, and the coming Budget’s announcements will be the recognition of that.
“Personal tax reductions are long overdue, but it is important that they are part of an ongoing programme, not just a one-off event.
“We have always argued that tax reductions should be made on a regular and steady basis, not just through occasional big-bangs once or twice a decade, as has been the New Zealand experience over the last two decades,” Mr Dunne says.
He says that while many New Zealand households are likely to benefit from the Budget’s announcement, that advantage could be short-lived for middle income families in particular, if they are not additionally compensated for rising energy and other household costs arising from the Emissions Trading Scheme.
“New Zealanders deserve tax reductions now as a dividend for the strong economic performance of recent years.
“It would be an insult to their intelligence, however, if these coming tax reductions are in effect likely to be substantially clawed back through increased living costs once the ETS comes in,” he says.