Government Must Act on Tax Working Group’s Recommendations

The Wellington Regional Chamber of Commerce has welcomed the Tax Working Group’s report but says that reductions in government expenditure in tandem with tax cuts will be necessary if the government wants to make a real difference.

“We will scrutinise the options over the coming days and make recommendations to the government but our initial reaction to the Working Group’s report is very positive,” said Chamber Chief Executive Charles Finny.

“We agree that the tax system can be improved. There is an opportunity here for the government to make some meaningful reforms to the system which must not be foregone.

“Tax reform is probably the best means available to the government to increase New Zealand's economic growth and productivity by improving the incentives to work, save and invest.

“Reductions in income tax rates will play a major role here alongside broadening the tax base.

“We are strong advocates of a low-rate, broad based tax system and we acknowledge the Working Group’s terms of reference to maintain fiscal neutrality.

“However at the end of the day, due to the practical difficulties associated with the taxation of capital, reductions in government expenditure are the best way to fund the necessary tax cuts - especially given the budget deficit the government is currently running,” Mr Finny concluded.

ENDS

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