John Key MP National Party Finance Spokesman

16 November 2004

Michael Cullen's dreaming on new bank tax

"Michael Cullen is dreaming if he thinks his new banking tax regime will raise an extra $360 million a year - cash which he says is being factored in to justify future spend-ups," says National Party Finance spokesman John Key.

Dr Cullen has been quoted as saying 'the changes, which will apply from 1 July next year, are expected on current levels of bank profitability to result in the payment of another $360 million a year in tax; revenue which has already been factored in to current budget planning.'

National will support a bill being introduced into Parliament today to ensure that foreign-owned banks operating in New Zealand pay sufficient tax on their New Zealand income.

"But we do have serious reservations about Dr Cullen's expectations.

"It's very unlikely the government coffers will swell by this amount. In fact, we'll be lucky if it's just half of that.

"It's a classic case of counting his chickens before they've hatched. Dr Cullen is already adding this windfall to his war-chest for Labour's election year bribes - long before it's in the bank," says Mr Key.

ENDS

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