For immediate release
Wednesday, 20 January 2010

Company tax cuts would shift more profit offshore and threaten local services

Foreign owned banks and well off New Zealanders will be big winners and low and middle income workers the big losers if the government implements the recommendations of its tax working group to align and reduce company and personal tax rates, says bank workers union Finsec, who are describing the recommendations as unfair and self interested.

“We believe the thirteen highly paid men on the group have prioritised and aligned the interests of business and the well paid over the interests of ordinary New Zealanders,”said Finsec spokesperson Andrew Campbell.

“Any cuts to the company tax rate will primarily benefit foreign owned companies. Australian banks, which make millions in profits, should not receive further tax cuts while their workers have to pay more on GST at the supermarket,” said Campbell.

The tax working group’s recommendation to cut the top personal tax rates would have to be funded from increases in tax elsewhere, including a recommendation to increase GST to 15%.

“At a time in which government revenue is significantly down and cuts are being made to social spending it would be irresponsible for the government to increase the taxes on the poor while decreasing tax for the rich,” said Campbell.

“It would say a lot about who the government really cares about if they end up making working people paying more for GST on food and rent and slash their social entitlements in order to fund tax cuts for the better off and greater profits for the Aussie banks," said Campbell.

“It is hard to see how these recommendations will do much to help the average New Zealand household, especially if Working For Families payments and other social services get cut as a result of the changes,” said Campbell.

ENDS

© Scoop Media