MEDIA RELEASE

Thursday 23 November 1999

AUSSIE TO DROP TAX - NEW ZEALAND NOT SMART TO RAISE IT

"Yet another country is cutting taxes," Employers' Federation CEO, Steve Marshall said today, "At the same time, some politicians in New Zealand want to raise taxes."

Mr. Marshall was commenting on Australia's decision to cut its corporate rate of tax.

"Australia's move follows recent moves by other countries to drop their tax rates. Recently both Germany's Chancellor Schroeder and British Labour Prime Minister, Tony Blair, jointly announced support for lower taxes.

"Whether some politicians like it or not, taxation is critical to growth and more jobs. It is difficult to understand why some political parties are pushing to raise tax rates when our trading partners are lowering them.

"And now with our biggest trading partner dropping its rate, New Zealand simply cannot afford to put tax rates up. Raising them is not a smart move.

"Comparisons between New Zealand's and other OECD countries' personal tax rates are misleading when you consider, for example, that the top rate in the United States is 39.6% but it only applies when someone's income is over $480,000. In Japan the top rate is 50% but that only cuts in at $475,000," Mr. Marshall concluded.

Contact: Steve Marshall, CEO
Conor English, Manager Corporate Communications
Ph 04 499 4111

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