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Hutt Valley taxpayers worse off under National

Chris Hipkins
Labour Candidate for Rimutaka

12 October 2008
Media Statement

Hutt Valley taxpayers worse off under National

Nearly half of the people living in the Rimutaka electorate could end up paying more tax under a National government, Labour’s Chris Hipkins has revealed.

Mr Hipkins said that under National’s proposed tax plan, those earning under $20,000 would pay more tax regardless of their family circumstances, while those with children earning under $40,000 would also end up paying more under National.

“National’s tax plan is like Robin Hood in reverse – they’re robbing from the poor to give to the rich. While those on the lowest incomes would end up paying more under National, the CEO of Telecom would get an extra $500 a week. How on earth is that fair?” Chris Hipkins asked.

Data from the 2006 census shows that there were 15,447 people living in Rimutaka earning under $20,000 and 13,563 earning between $20,001 and 40,000. The electorate’s total population aged 15 years and over is estimated at 48,642.

“It’s clear that when John Key talked about reconfiguring Labour’s fair and balanced tax cut package what he really meant was he wanted to see more money go to those who need it the least and to punish the most vulnerable in our society,” Chris Hipkins said.

“At a time when our families are already under financial pressure due to higher interest rates and rising food and petrol prices the last thing they need is a kick in the guts from the National Party. Mr Key has made much of his own personal climb up the economic ladder, it’s a shame he’s now trying to pull it up behind him.

“To make matters worse, John Key is also going to destroy the very successful Kiwisaver scheme in order to pay for his tax cuts for the wealthy. Over 800,000 Kiwis who have signed up for the scheme will be worse off, regardless of their income,” Chris Hipkins said.

Under National’s plan, employer contributions would be cut from 4 percent to 2 percent, government contributions would be reduced for those earning between 26,000 and 52,000, and the Employer Tax Credit would be axed.

“It’s that kind of short-sighted slash and burn approach that did so much damage to the New Zealand economy in the 1970s and 1990s under previous National governments,” Chris Hipkins said.

“As a result of National’s Kiwisaver proposals somebody around the average wage will be at least $23 a week and possibly as much as $35 a week worse off.

“When you add that up over the longer-term it makes a huge difference. Someone who signs up for Kiwisaver at the age of 20 and earns $30,000 a year will see their final Kiwisaver nest egg slashed from $402,843 when they retire to $233,491 – that’s a difference of nearly $170,000.

“Small businesses will also cop it as a result of National’s plan to axe Employer Tax Credits for Kiwisaver. These tax credits have helped offset the cost to business of contributions to their employees’ savings. I thought National was supposed to be pro-business?

“The past 18 months of international financial turmoil has highlighted just how important it is for New Zealand to improve our savings record. Kiwisaver is a really important part of that and the National Party are showing a complete lack of vision by promising to rip into it,” Chris Hipkins said.

“The National Party’s tax plan shows just how short-sighted their thinking is. They are more interested in lining the pockets of the wealthy than doing anything to improve our standard of living.

“By contrast, Labour has a positive economic plan for the future that is based on building a culture of savings, investing in infrastructure, innovation and skills and continually improving our social services. National’s recent announcements make it pretty clear that kind of progress is only safe under Labour,” Chris Hipkins said.


ENDS

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