Annabel Young National Revenue Spokesperson

31 July 2000

Tax Review will become "Heart of the Nation Part II"

"The Government is spending half a million dollars of taxpayer money on policy development for the Labour party to use at the next election," National's Revenue Spokesperson Annabel Young said today.

"Dr Cullen says the new review is long overdue, saying the last time the tax system was reviewed was in 1967. Perhaps he slept through the release of the McCaw Report on Tax Reform in 1982 and the Report of the Committee of Experts in 1998.

"The Government's handling of taxation so far this term has been a joke, with Michael Cullen's pre-election 'read-my-lips-no-new-taxes' schtick promptly followed by half a dozen new taxes and ghastly complexity.

"Now he's entrusting a review panel with the mammoth task of reviewing every single philosophy behind, and aspect of, taxation. The Government's shown its lack of commitment to that task by providing just half a million dollars for the entire exercise, the price of two Heart of the Nation reports. That's like asking NASA to design a space craft for 50 bucks, and the results will be similarly disastrous.

"We will know Cullen's real agenda when he announces who is going to be on his panel and what their real terms of reference are. But you don't buy much tax expertise for half a million dollars. They will bolster the expertise by stripping it out of the IRD. This is a joke because every policy person at the IRD is already working full-time sorting out the consequences of Cullen's tax rise last Christmas.

"Taxation affects every New Zealander, affecting their livelihood, their standard of living and whether the business they run or work for stays afloat.

"The comparison with the Heart of the Nation report will likely prove prophetic. That report ended up being shelved because its terms of reference were airy-fairy high policy. I'll predict there's a great danger the tax review could go the same way," Annabel Young said.

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