Friday 24 May 2002

The $2.3 billion surplus in the Budget shows the government is grossly over-taxing New Zealanders, ACT leader Richard Prebble told a post-Budget breakfast meeting in the Beehive today.

"The government could reduce company tax to 28 cents, lower personal tax rates to just two - 18 and 28 cents - keep the low-income rebate of 15 cents, for a cost of about $2 billion, according to the McLeod Tax Review," Mr Prebble said.

"That would give us lower taxes than Australia and give every working person a pay rise.

"If the government made no changes to expenditure and implemented the suggestion in the McLeod report, there would still be a $300 million surplus.

"Everyone knows Budget deficits are bad for the economy, but so are big surpluses. A $2.3 billion surplus shows the government is over-taxing every household. That is money which could otherwise be used for investment, growth and jobs.

"The government's tax increase to 39 cents, which we were told was needed, was clearly unnecessary. The extra $400 million paid by high income earners is unnecessary.

"What's happened to the $200 million that the extra 4 cents-a-litre petrol tax raised? The state highways budget is $50 million less than last year, and the total roading budget - local and state highways - has been reduced from $724 million last year to $711 million this year.

"Last year's vote wasn't fully spent. The Budget shows not only was the extra 4 cents petrol tax not needed but also the claim that it will be spent on Auckland's roads, Transmission Gully and solving the wall of wood, is a lie.

"Perhaps even more concerning is that the vote for Corrections is to fall by $20 million. This is proof positive that the government does intend letting violent criminals out of our jails - a false economy.

"ACT believes the first priority of government should have been personal security, through a Zero Tolerance for Crime approach and Truth-in-Sentencing to keep dangerous criminals in jail," Mr Prebble said.

ENDS

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