Business Tax Cuts Will Lead To Spending Shortfalls

Tuesday, 25 July 2006, 5:55 pm
Article: Kevin List

Business Tax Breaks Will Lead To Spending Shortfalls

This afternoon Finance Minister Michael Cullen told the media that while a Labour Government will not cut existing spending or programs to pay for corporate tax cuts other projects may have to be deferred to compensate for the revenue that will be lost.

Dr Cullen quipped that he "looked forward to Bob Geldof returning" in relation to questions of where spending may have to be deferred.

This was presumably in relation to the one time Boomtown Rat, who disliked Mondays', criticism of the Government's allegedly parsimonious overseas aid budget.

The desire to give businesses a tax break was according to a Government press release aimed at "improving the ability of business to grow and compete in the global economy."

Another reason behind the desire of the Labour led Government to look at options of bestowing corporate tax cuts at the expense of other projects was based on 'confidence and supply agreements with United Future and New Zealand First.'

Fronting a press conference to explain a number of hypothetical options for tax breaks this afternoon along with Dr Cullen was United Future Leader and Revenue Minister Peter Dunne.

The issue of whether or not personal tax reductions would follow Government largesse to the business community was also canvassed.

In 1999 the business tax rate and the top personal tax rate were the same however after the Labour Alliance Government took power it raised the top personal tax rate to 39 cents in the dollar while leaving the business tax rate unchanged at 33 cents in the dollar.

Listen to Dr Cullen and Peter Dunne outline the hypothetical goodies on offer to the business community

Scoop Streaming Audio: Cullen and Dunne Discuss Business Tax Cut Proposals 25 July 2006

Click here to download file (mp3)

ENDS

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