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Balanced approach taken in Budget 08

Hon Nanaia Mahuta
Minister of Local Government

23 May 2008
Media Statement

Balanced approach taken in Budget 08

Local Government Minister Nanaia Mahuta says tax cuts deliver to ratepayers and a little extra in the pocket goes a long way.

“Personal tax cuts will see by 1 October a reduction in the lowest rate of tax to 12.5 per cent on an individual earning $14,000,” Nanaia Mahuta said.

“The tax cuts will relieve some pressure to those households who need it most. This will be good news for our superannuitants who will see a little extra in their pockets by 1 October.”

“We need a balanced approach to this year’s budget and Dr Cullen has continued to build on the gains of previous budgets,” Nanaia Mahuta said.

“Central government funding of local government has increased between 1999 and 2007 from 10.8% to almost 14% of local government revenue, representing a 112% from $390 million to $827 million.”

In addition to this increased funding the government:

• has inflation-proofed the rates rebate scheme which now provides $50 million a year to support those on limited incomes pay their rates
• is providing $1.3 billion in new transport funding – a significant share of which will go to local government
• has allocated $150 million over 10 years for drinking water schemes
• provided around $9.8 million for sewage schemes for smaller communities
• planned spending of $600 million over six years for urban rail in Auckland and Wellington

“Local Government and central government need to work closely together. But we need to maintain a balance, and ensure that costs are properly allocated. That is what is intended by the series of decisions providing additional support for local government,” Nanaia Mahuta said.


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