IMF Sounds Alarm: Cut Taxes To Get Debt Under Control
MEDIA RELEASE
IMF SOUNDS ALARM TO JOYCE: CUT TAXES TO GET DEBT UNDER CONTROL
9 MAY
2017
FOR IMMEDIATE RELEASE
Excessive tax on Kiwi households is reducing their ability to pay down debt, is the message from the IMF reports released today. The IMF projects household debt will amount to 168% of disposable income by 2022, leaving the New Zealand economy vulnerable to economic shocks.
Government debt is projected to fall to only 12% of GDP by 2022, less than half its current rate, and the Government surplus projected to rise to 2.8% of GDP.
Executive Director of the Taxpayers Union’ Jordan Williams says, “The IMF have issued a warning to the Government. While the Governments books look good, household debt is alarmingly high and growing. It represents a major threat to the economy.”
“The Government likes to proclaim that they are reducing public debt, but they have failed to acknowledge the incredibly high level of private debt, which the IMF correctly points out makes New Zealand vulnerable to shocks. Tax relief would allow households to reduce debt.”
“Tax relief which allows Kiwis room to pay down debt is overdue. Unless the Government acts now, in five years time Kiwis will spend five times more of their income on interest payments than they do on savings.”
“The Government has about $90 billion in gross debt. This amounts to around $56,000 per household. However, there is $400 billion of gross private debt. This is equivalent to $250,000 per household.”
The Taxpayers’ Union report, Five Options for Tax Relief in 2017, is available at www.taxpayers.org.nz/5_options
ENDS