Thursday 4 Jul 2002

Labour's proposed 8 percent health tax would be the biggest increase in income tax in New Zealand's history, ACT leader Richard Prebble said.

"New Zealand already has higher effective rates of income tax than Australia, the UK, the US and Canada, in all income bands from $20,000 to $80,000. (Australia is half a percent higher than us on incomes over $80,000.)

"This proposed new health tax will be a crippling burden on the work force.

"As an example, a low-income worker in New Zealand now pays an effective income tax rate of 21 cents, compared with 3.2 cents in the UK. After Labour's health tax,, low-income workers will be paying 29 percent of their income in tax, plus 12.5 percent GST, on top of a host of other taxes such as petrol tax.

"Such a massive increase in tax will discourage investment, growth and jobs, and lead to an increase in the Brain Drain which has seen 184,000 New Zealanders leave the country under this Labour government," Mr Prebble said.

ENDS

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