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Top earners win, workers and economy lose

October 8, 2008
Media Release

Nats’ policy means top earners win, workers and economy lose - EPMU

National’s tax cut package will see high income earners benefit at the cost of working families and New Zealand’s economic future, says the Engineering, Printing and Manufacturing Union.

The package that was announced this afternoon would see Kiwisaver contributions and investment capital for research and development greatly reduced, while delivering nothing to the average working family.

EPMU national secretary Andrew Little describes the package as reckless short-term thinking.

“If this package were in place today the CEO of Telecom would be more than five hundred dollars a week better off while a family on a single average wage of $44,000 a year and receiving Working For Families would actually pay more tax and at the same time lose their employers’ contribution to their Kiwisaver schemes.

“We are seriously concerned about National’s plan to allow employers to take Kiwisaver contributions out of wage rises as this will mean workers will effectively be paying their own contribution and their employers. This means the average worker with a Kiwisaver account stands to lose more than $200,000 over their working life.

“That’s bad enough for individual workers but there are eight hundred thousand people signed up to Kiwisaver and for business that means a huge loss of investment capital, as does the removal of the research and development tax-credit which would also be scrapped to channel public money into this package.

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“In Australia workers get a nine percent employer contribution to their superannuation which means National’s plan to make workers pay for their own employer contributions will only make it harder to keep skilled workers in this country.

“This is not a policy about fairness or about providing a secure future for working Kiwis or business. This is a policy focused on putting public wealth into the pockets of top earners at the expense of families and our future.”

The EPMU is New Zealand’s largest private sector union, representing 50,000 workers across 11 industries.

ENDS


Note: Figures have been calculated using the NZIER’s tax calculator, available at:
http://nzier.org.nz/Site/Publications/NZIER_calculators.aspx

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