Don’t Forget Personal Tax, Dr Cullen

19 December 2006

Don’t Forget Personal Tax, Dr Cullen

Farmers and other small business owners shouldn’t miss out from tax relief, said Don Nicolson, Vice President of Federated Farmers.

Mr Nicolson was commenting on today’s release of the Budget Policy Statement and the Half-Year Economic and Fiscal Update and the Minister of Finance’s cautionary comments about tax cuts.

“Dr Cullen has admitted that there will be around $1 billion extra headroom available for Budget 2008. While it is good to hear that he is committing to a ‘significant business tax package’, we are concerned that measures such as a cut in the company tax rate will do nothing for the many thousands of small businesses, including the vast majority of farmers, which are not incorporated.

“For most small business owners it is the personal income tax rate that is important and we consider it critical that the Government moves to reduce both rates.

“Farmers are struggling with escalating costs and high interest and exchange rates. Most would use the proceeds of a tax cut to invest in their businesses.

“With regard to the Minister’s concerns about inflationary pressures, we agree with the dangers of loose fiscal policy but we can’t understand why increasing Government spending by 11 percent in 2004/05 and 8 percent in 2005/06 is considered to be less inflationary than modest tax cuts.

“The Government has an embarrassment of riches due to high taxes and it seems determined to do all it can to keep the money under its own control. It’s time to give some of it back to the taxpayers”, said Mr Nicolson.

ENDS

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