Wednesday, June 23rd, 2004

Disappointment at Budget's disincentive to work

The Prime Minister effectively acknowledged in Parliament yesterday that the Budget offers a disincentive to middle income earners to work overtime and the like, and that is very disappointing, the Employers & Manufacturers Association (Northern) says.

"The Prime Minister told Parliament yesterday that middle income earners are just as well off on money obtained through the tax system as on money earned from working," said Alasdair Thompson, EMA's chief executive.

"This unfortunate remark is not the type of signal business wants to hear as they desperately stretch to meet labour and skills shortages.

"In an answer to a question the PM said people are just as well off on money coming into their pockets through the targeted tax rates announced in the Budget as from working overtime.

"The response underscored the Budget's focus of wealth redistribution.

"The signal bodes ill for New Zealanders' ambitions for a higher standard of living since redistributing the nation's income won't build a better education system or provide more health services."

ENDS

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