Govt income rise

Tuesday, March 1st, 2005

Govt income rise three times faster than individual incomes

Government's income from tax has been rising nearly three times faster than the average person's income the Employers & Manufacturers Association (Northern) says.

"The average person earned 8.6% more from 2000 to 2004 according to the Labour Cost Index, but in the same four years Government's tax take went up by 25%," said Alasdair Thompson, EMA's chief executive.

"Government income from taxation has risen from $34 billion in 1999/2000 to $42.5 billion last year.

"The tax take impacts on all earners and is the proper context in which to consider union claims for higher wages and salaries.

"It shows there's ample room for people to keep more of the money they earn. Some level of tax cuts are in order, in addition to the wealth redistribution and family support package introduced last year.

"Where is the union's call to bring present tax levels back to the level of 2000?

"Cuts to the business tax rate are especially important if Government wants business to concentrate on lifting productivity.

"Since Government recognises that higher productivity is the only route to higher wage packets it should allow business to retain more of the funds earned for investing in boosting productivity, and by forging an environment that otherwise encourages investment.

"It is not doing this well. For example, the cost of Government administration has been rising twice as fast as the economy overall.

"In the September quarter last year the cost of Government expanded 8.7% in GDP terms though the economy overall increased by 4.6% of GDP."

ENDS

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