MEDIA RELEASE

21 September 1999

Government committed to lowering company tax rate

Treasurer Bill English said today the Government remained firmly committed to bringing down the company tax rate to match Australian moves to lower its company tax rate to 30%.

"As I have already said, I want to maintain our tax advantage over Australia because it helps keep business and jobs in New Zealand.

"Today's announcement by the Australians makes bringing down our company tax rate the next priority for the Government and we will aim to lower it to 30%. How quickly we can reduce the rate depends on how fast the economy improves.

"The Australian move is not unexpected. The fact that the tax cut will be phased in gives us more time to respond. The Australian company rate will initially move to 34% for the 2000-01 year and then to 30% by June 31, 2001.

"The Australian tax cut will largely be paid for by scrapping accelerated depreciation and tightening tax loopholes. That confirms the view taken by the Government that tax breaks and other incentives for particular industries are less effective in encouraging business competitiveness than across-the-board tax cuts which benefit every business," said Mr English.

Ends

Internet address - www.executive.govt.nz/minister/english

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Alastair Thompson

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Alastair Thompson is the co-founder of Scoop. He is of Scottish and Irish extraction and from Wellington, New Zealand. Alastair has 24 years experience in the media, at the Dominion, National Business Review, North & South magazine, Straight Furrow newspaper and online since 1997. He is the winner of several journalism awards for business and investigative work.

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