Tax cuts by Christmas 2014?

Rodney Hide Thursday, 26 May 2005

Press Releases - Taxation

Labour and National appear to be in a perverse auction to boast the stingiest tax cut promise, ACT Leader Rodney Hide said today.

“Labour looked a dead cert for stingiest tax cut pledge when Don Brash announced tax cuts by Christmas. But Dr Brash didn’t mention which Christmas. Now National’s Finance spokesman John Key has admitted that National would phase in tax cuts, over up to nine years. This has forced Brash to backtrack today. Maybe he meant Christmas 2014 all along.

“What is now becoming rapidly clear is that under either National or Labour, tax cuts are not only small but distant.” Mr Hide said. “ACT’s tax policy will not be phased in. It won’t take nine years. And it won’t be loose change. We will move quickly to the new rates to take effect from 1 April 2006.”

Mr Hide said the interest rate bogey was a red herring from a Labour Government desperate to detract attention from its own aversion to cutting taxes.

“Sure there will likely be a one-off spike to headline inflation. The Reserve Bank’s focus is on the underlying inflation, not headline inflation. Dr Brash knows this, but has allowed Michael Cullen to get the better of him, forcing him to water down National’s policy before it is even announced.

“We have yet to see National’s tax policies. They appear to be developing in an ad-hoc manner in response to criticism from the present Finance Minister. That is not a good process for developing policy. By the time National gets to unveil their policy, it might well be two packets of chewing gum as opposed to Labour’s one.

“While National is busy watering down its tax cuts policy, tax revenues continue to surge.

“Crown accounts released today, show that the total tax collected for the first 10 months of the year is $42.6 billion, up $3.3 billion or 8.5% on the same period last year.

“Direct taxes, including income tax, are up 10.4% and indirect taxes, including GST, are up 5% on last year. Tax is coming in at the rate of $4.2 billion a month. There is every chance it will top $50 billion this year for the first time ever.

“The reality is that decent tax cuts are both affordable and fair. “ACT is the only party pledging significant and immediate tax cuts to all working New Zealanders, with just two rates of tax, 15% up to $38,000 and 25% after that. Someone on the average wage would take home an extra $2,000 a year under ACT’s tax package.” Mr Hide said.

ENDS

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