CTU MEDIA RELEASE 17 May 2007

Budget 2007: An Investment Budget, But Employers Need To Invest Too

"I hope that that employers will use their large tax cut to invest in modernisation, improving productivity, skills and boosting wages for workers in a tight labour market," CTU president Ross Wilson said today.

"The introduction of a 4% employer contribution over the next 4 years and the up to $20 direct credit from the Government makes it really worthwhile for workers to sign up to KiwiSaver," he said.

"With the small bracket creep adjustment in income tax announced in 2005 gone, workers will be looking to the Government to set out how they will address tax issues in the context of the need for maintaining and improving quality public services and any inflationary pressures."

"The extra funding to help low paid workers in the state sector which is targeted money to retain and recruit staff and improve quality, will be an important start to addressing low wages in this sector."

"It is good to see progress in a number of key social development areas, including the primary teacher increases, healthy homes initiatives, sustaining increase in funding to early childhood education, public health spending, and also the pre-budget announcements for university and polytechnic funding."

"The CTU also welcomes tax credits for research and development, as called for by CTU and in the 'Manufacturing Plus' report last year, extra spending to promote exports, and the increased investment in infrastructure, including rail," Ross Wilson said.

ENDS

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