ACT’s plan to boost wages

April 24, 2015. 11:00am

ACT Leader David Seymour is proposing a programme of one per cent per year reductions in the company tax rate.

Company tax would drop by a percentage point each year for eight years, to a target of 20%.

“In Budget 2015, the Government should be signalling continuous improvement in our business environment, and this proposal does that,” said Mr Seymour.

ACT’s proposal would reduce revenue by around $170-180 million each year, which could be funded by a share of existing planned net expenditure growth and the phase-out of existing corporate welfare.

“This is a very modest proposal, but one that will help grow New Zealand’s wealth. It is the kind of thing that a future-focused government should be putting in its budget.

The ACT Leader also released a summary document, reviewing the academic literature on the relationship between company taxes, economic growth and real wages.

“In short, we need higher wages in New Zealand. But that needs strong business investment. We won’t get either without a more sensible tax rate on businesses.”

ENDS

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