Deferred tax cuts – fact sheet

Thursday, 28 May 2009, 2:37 pm
Press Release: New Zealand Government

28 May 2009

Deferred tax cuts – fact sheet

The Government remains committed to lower personal income taxes.

The planned second and third tranches of tax cuts, which were due to take effect on 1 April 2010 and 1 April 2011 respectively, have been deferred to avoid further increasing debt.

Even with the other debt reduction measures in Budget 2009, the Treasury is forecasting large budget deficits for 2010 and 2011. This means the Government would have added to its already considerable debt to fund the planned second and third tranches of tax cuts.

This has been a difficult decision. But, on balance, the Government has decided to prioritise safeguarding entitlements, improving public services and reducing debt.

Tax cuts will be assessed to consider whether they are affordable, as part of future budget processes.

The Government's first round of tax cuts delivered on 1 April 2009 is not affected. It left around $1 billion a year in the pockets of 1.5 million New Zealand workers. These tax cuts were fully funded from other policy changes rather than through borrowing.

By deferring the second and third tranches of the tax cuts, the Government will save around $900 million a year from 2011/12.

ENDS

The Government’s medium-term goal remains to align and reduce the top rate of personal tax, trust, and company tax rates at a maximum rate of 30 per cent.

The decision to defer the tax cuts will be included in legislation introduced today.

ENDS

Advertisement - scroll to continue reading

Using Scoop for work?

Scoop is free for personal use, but you’ll need a licence for work use. This is part of our Ethical Paywall and how we fund Scoop. Join today with plans starting from less than $3 per week, plus gain access to exclusive Pro features.

Join Pro Individual Find out more

Find more from New Zealand Government on InfoPages.

Parliament Headlines | Politics Headlines | Regional Headlines

NEW ZEALAND POLITICS

Gordon Campbell: On The Making Of King Donald

After decades of watching the US prop up dictatorships in Central America, South America and the Middle East, there’s a certain irony in seeing authoritarian rule play out on the streets of Los Angeles. No doubt, Donald Trump’s deployment of the National Guard - and the US Marines! - to quell what were (initially) peaceful protests against his harsh immigration policies has been deliberately provocative. That’s the point. The enemy is whoever opposes him.

Deferred tax cuts – fact sheet

Using Scoop for work?

NEW ZEALAND POLITICS

Gordon Campbell: On The Making Of King Donald

EDS: Government Undermines Regional Powers To Protect Coastal Biodiversity

Greenpeace: Shane Jones Indicates NZ's Entire EEZ Now Open For Oil And Gas Free-for-All

Ngati Kahungunu Iwi Inc: Kahungunu Submission Rejects The Regulatory Standards Bill In Its Entirety

Fire and Emergency NZ: Older People Are More Likely To Die In A House Fire This Winter - Check They Are Fire Safe Today

The Reserve Bank of New Zealand: Statement from RBNZ chair Neil Quigley about OIAs on Adrian Orr's resignation

Deep Sea Conservation Coalition: Protected Corals Destroyed In Six-Tonne Bycatch “Disaster” From A Single Bottom Trawl

LATEST HEADLINES

Featured News Channels

Politics Section

Parliamentary Parties

National Party

Labour Party

Green Party

ACT Party

New Zealand First Party

Te Pāti Māori

Political Blogs

Political Websites