National’s Tax Cuts are a Good Start

National’s Tax Cuts are a Good Start

The Wellington Regional Chamber of Commerce has welcomed the National Party’s proposal to review government spending and go ahead with tax cuts but says even bolder cuts to tax rates are what the economy needs.

“National’s economic plan is understandably conservative in light of Monday’s pre-election opening of the books. But businesses will be disappointed that National sees no room to further reduce the top rate of tax,” said Chamber CEO, Charles Finny.

“This is what is really needed to improve the incentives to work, save and invest. A lower top rate would raise productivity, enable businesses to pay higher wages and encourage high-skilled New Zealand expatriates to return home. While the top rate only affects high earners, cutting it further would inspire people on lower incomes to work harder to reach that level.

“However, we are encouraged by National’s longer term plan, should it be elected, of moving towards a three-tier structure with a top rate of 33% - as future economic conditions allow.

“Some of our members will be concerned about the proposed replacement of R&D and Kiwisaver tax credits but the Chamber supports this so long as National agrees to an urgent review of government grant schemes such as those run by NZTE and FoRST. New Zealand does need to increase our investment in R&D but we see lower tax rates as the best way to achieve this.

“We hope that the proposed review of government spending will find sufficient savings enabling further cuts to be made in the near future.

“We are absolutely convinced that there are huge productivity gains possible within government. Existing levels of service can be maintained and improved at the same time as huge savings are achieved,” Mr Finny concluded.

ENDS

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