John Key MP
National Party Finance Spokesman
24 May 2006

Chewing gum tax cuts: will he or won’t he?

Michael Cullen needs to clear up whether the public will get their ‘chewing gum’ tax cut in 2008 or not, says National finance spokesman John Key.

Page 48 of the Budget 2006 Fiscal Strategy Report says: ‘In practice, taxes will tend to grow somewhat faster than GDP as the growth in personal incomes pushes individuals into higher tax brackets. Our decision to inflation-index personal income tax rates reduces this effect…’

“Dr Cullen should stop playing so fast and loose with the facts. Either he stands by his Budget 2005 announcement and his confirmation in Budget 2006 that indexation will take place, or he doesn’t.

“When he axed the carbon tax, he threw cold water on the plan to index personal tax thresholds to inflation.

“But the Budget is an official document signed by Michael Cullen. The Budget is not ambiguous. It states clearly that the decision has been taken to introduce the indexation.

“New Zealanders should be rightfully concerned about his inability to clarify this simple point.

“If that’s not to be believed, then what other parts of his Budget are not to be believed?

”Michael Cullen’s other gem from today’s question time is that the tax cuts he hinted at in his post-Budget media interviews were in relation to business tax, not personal tax.”

ENDS

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