The fiscal update raises ante on National

Rodney Hide

Thursday, 18 August 2005
Press Releases - Taxation

The pre-election economic and fiscal update shows plainly that National can deliver big tax cuts, ACT Leader Rodney Hide said today.

"National now has the economic window for big tax cuts. All it needs is for Don Brash to have the courage to make the big tax cuts that New Zealanders so desperately need. That would match their policy with their advertisements.

"The fiscal update shows a ballooning tax revenue - up 9% this year and 28% over 5 years.

"Labour's plan is for government spending increases, 30 percent over five years. The most pressing priority for a tax cut is the removal of the 39% envy tax.

"Labour said they needed the money, but the $7 billion surpluses say otherwise.

"The best tax policy is ACT's, which is to drop the top personal and company rate of tax to 25 cents and the middle rate of 21 cents to 15 cents. That would leave just two rates of tax - 15 percent up to $38,000 and 25 percent over that," Mr Hide said.

"To boost the economy it's the top rate of tax and the company rate of tax that need to be cut.

"Even allowing for National's sign up to Cullen's super fund, National can now cut both the company rate and the top personal rate to below 30 cents.

"Our economic outlook is not great - the Prefu shows growth slowing to 2.2% and staying under 3% per annum. This is significantly below our trading partners projections of 3-3.5% over the next four years.

"Across the board tax cuts are the best way of lifting our economic fortunes as a nation. They are fair, affordable, and urgently needed," Mr Hide said.

ENDS

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