Hon Dr Michael Cullen
Minister of Finance

09 October 2008
Media Statement

All KiwiSavers worse off under National

Finance Minister Michael Cullen today released data that shows anyone in KiwiSaver would be worse off under National’s tax cut package released yesterday, regardless of whether they qualified for Mr Key’s “independent earner rebate“.

“For a person on around the average wage this means they are about $23 a week worse off if they do qualify for the independent earner rebate or about $35 a week worse off it they don’t.”

“These figures show that Mr Key completely misled New Zealanders when he said on National Radio this morning that “by and large their tax cuts are larger.” This is simply not true.” Michael Cullen said.

Notes to editors

The quote from John Key can be found at: The quote from John Key can be found at: http://www.radionz.co.nz/audio/national/mnr/2008/10/09/clark_and_key_on_nationals_tax_policy
(at 4 minutes 15 seconds)

These figures assume under National there would be a genuine 2+2 regime. However, National has announced it would change the law to encourage employers to recover their contribution through reduced wage increases. These lost wage increases are additional to the amount people are worse off in the tables below

What National’s Tax Plan means for families with children

Annual Gross Salary / Income change National’s tax package / Position under National if you keep making KiwiSaver contributions at 4% / Position if you reduce contributions to 2%

$ 20,000.00 / -$8.65 / -$31.65 / -$23.98
$ 25,000.00 / -$7.69 / -$36.44 / -$26.86
$ 30,000.00 / -$6.73 / -$38.22 / -$26.72
$ 35,000.00 / -$5.77 / -$39.17 / -$25.76
$ 40,000.00 / -$4.81 / -$40.13 / -$24.79
$ 45,000.00 / $1.92 / -$35.31 / -$18.06
$ 50,000.00 / $14.42 / -$24.73 / -$5.56
$ 55,000.00 / $14.42 / -$27.74 / -$6.66
$ 60,000.00 / $14.42 / -$31.58 / -$8.58
$ 65,000.00 / $14.42 / -$35.41 / -$10.49
$ 70,000.00 / $14.42 / -$39.24 / -$12.41
$ 75,000.00 / $10.58 / -$46.92 / -$18.17
$ 80,000.00 / $6.73 / -$54.60 / -$23.93

What National’s Tax Plan means …. if you don’t have children, you’re not on superannuation and you don’t receive income support.

Annual Gross Salary / Income change National’s tax package / Position under National if you keep making KiwiSaver contributions at 4% / Position if you reduce contributions to 2%

$ 20,000.00 / -$8.65 / -$31.65 / -$23.98
$ 25,000.00 / $7.31 / -$21.44 / -$11.86
$ 30,000.00 / $8.27 / -$23.22 / -$11.72
$ 35,000.00 / $9.23 / -$24.17 / -$10.76
$ 40,000.00 / $10.19 / -$25.13 / -$9.80
$ 45,000.00 / $14.42 / -$22.82 / -$5.57
$ 50,000.00 / $14.42 / -$24.73 / -$5.57
$ 55,000.00 / $14.42 / -$27.74 / -$6.66
$ 60,000.00 / $14.42 / -$31.58 / -$8.58
$ 65,000.00 / $14.42 / -$35.41 / -$10.49
$ 70,000.00 / $14.42 / -$39.24 / -$12.41
$ 75,000.00 / $10.58 / -$46.92 / -$18.17
$ 80,000.00 / $6.73 / -$54.60 / -$23.93

All figures are as at full implementation of KiwiSaver, Labour’s tax package and National’s tax package at 2011.

ENDS

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