Policy Statement indicates room for tax cuts
Wednesday, 15 December 2004
Copeland: Budget Policy Statement indicates room for tax cuts
The Government's Budget policy statement indicates that, in spite of protestations to the contrary, Finance Minister Michael Cullen has plenty of room to cut taxes, United Future revenue spokesman Gordon Copeland said today.
"We have to remember the start point is that, over the last three years, tax revenue has exceeded budget forecasts by $4.5 billion and the policy statement indicates that above forecast trend continuing over the next four years to the tune of a further $5.7 billion!
"Yes, that's right, over the seven years to 30 June 2008, tax collected will exceed the year by year budget forecast by a whopping $10.2 billion, and we are still told there is no room for tax cuts.
"Sorry, I don't buy it..
"It should now be obvious that tax cuts are affordable, particularly given Treasury's propensity in the last four years to underestimate tax revenues. I find Dr Cullen's plan to bank some of the windfall and direct the rest of it into new spending initiatives quite unacceptable in these circumstances.
"New Zealand families are feeling the pinch. Household borrowings are at an all-time high and New Zealanders are currently living by drawing down capital. They are currently spending 11 percent more each year than they are earning.
"Dr Cullen seems to be unable to see what is plain to the rest of us: he is busy hoarding our money in the bank while people are being forced to borrow. New Zealanders should assess these realities carefully in deciding how they should vote next year.
"Would they like to be able to keep more of their earnings through tax cuts and begin to pay down their debts, or are they content to allow Dr Cullen to increase their taxes so he can bank and spend?
"United Future would adopt a completely different approach. It would include tax reductions via income splitting for couples, adjusting the tax brackets for inflation, and reducing the corporate tax rate, coupled with reining in the Government's extravagant spending habits."