With the BNZ-Business NZ PMI signaling manufacturing is contracting, the Government needs to seriously consider tax relief, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union Economist Joe Ascroft says, “Global stock markets have been in turmoil for the last two weeks in response to trade tensions and protests in Hong Kong, but this most recent data shows the economy may now be softening at home. Tax relief would be a quick and effective way of relieving pressure on households and businesses.”

“Monetary policy may not be able to do all of the heavy lifting in a downturn – last time we had a recession we needed to cut interest rates by 500 basis points and there is far less room than that available now.

“When he last cut interest rates, Adrian Orr said that ‘monetary policy needs friends’. Letting employees and employers keep a little bit more would be an effective way to give the RBNZ some of this support.”

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