Wed Sep 29 1999

The Employers' Federation criticism of the Alliance tax policy is based on a flawed tax report they wasted their money on, the Alliance says.

'The report's analysis of Alliance tax policy was completed before they even saw it. Their model is flawed further because it does not take into account the positive effects tariffs will have on fixing the balance of payments crisis,' Alliance Leader Jim Anderton said.

'Based on this flawed report the National/Act party aligned Employers Federation claim the Alliance tax policy will cost jobs. But they also say that reducing taxes on high incomes will create jobs.

'They should explain why a $20 increase to people's income at the bottom end of the tax scale will cost jobs while a $20 increase to incomes for the rich, as National is suggesting, wont.

'The Executive Surcharge on incomes over $75,000 will only affect 83,000 people. In return for this 832,000 superannuitants and beneficiaries will get a $20 a week boost.

'This will not mean more people are unemployed. The $20 a week will be spread through the economy in the form of wages for new jobs, and profits for businesses, both large and small.

'If the same money was to be given to high income earners it would be more likely to be spent on less economically useful activities such as overseas travel.

'In fact the Alliance's Economic Development fund together with its policy of removing barriers to training will create 80,000 more jobs.

'We don't see those figures in the Employers' Federation biased analysis,' Jim Anderton said.

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