Jim Anderton MP Mon Aug 30 1999

The claim that 50,000 low income families will pay no tax next year shows that the Treasurer doesn't really understand the tax system, Alliance leader Jim Anderton said today.

'They all pay GST, which is a 12.5% tax on everything they buy.

'Mr English gives the example of a single-income family with four children under thirteen, which he says receives $55 more in family assistance than it pays in tax.

'He is wrong. Assuming the family spends a third of its income on rent, it pays $2752.13 in GST, or about fifty-three dollars a week.

'Mr English should explain why he thinks a family of four, trying to get by on a single income of $30,000, should pay an extra $53 a week in tax for their food, clothes and bus fares.

'However, if the family spent their meagre income on shares, financial securities and international trips, as Mr English's National Party cronies do, they wouldn't have to pay GST at all.

'The Treasurer says, 'It's hard to see how people can argue that tax cuts are bad for these families. Yet only last Friday he described a proposal to reduce their tax burden by replacing GST with FTT as 'loopy.'

'At best, Mr English doesn't understand the tax system he has recklessly been put in charge of. He seems to think that personal income tax is the only type of tax. It isn't. In looking at the tax system, it is important to look at the full range of taxes,' Jim Anderton said.

ENDS

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