0.9% Over 7 Years Not Good Enough - 30 September

0.9% Over 7 Years Not Good Enough - 30 September

There is a lack of ambition in the tax package that comes into effect tomorrow say the New Zealand Manufacturers and Exporters Association (NZMEA). The additional 0.9 percent growth improvement over seven years projected by Treasury is pitiful considering the Government aims to catch Australian income levels.

NZMEA Chief Executive John Walley says, “An unbalanced tax system was one of the key drivers of the recession. The tax free status of capital gains on land and buildings encouraged excessive domestic debt on low yield assets that stifled the tradeable sector.”

“It seems a long time ago now, but it is important to remember that New Zealand was in a recession by June 2008, well before the collapse of the finance giants in the United States. Our recession was made worse, but not caused by the global problems.”

“Moving taxation from income and company tax towards consumption tax is helpful, but it is only a start. Tax harbours around capital gains must be removed to boost investment in productive activity.”

“We also need to see incentives to invest in our export industries; we need to reinstate both the Research and Development tax credit and the 20 percent depreciation loading on new equipment that were removed by the Government”

“New Zealand’s long run economic performance demonstrates an abject policy failure; that cannot be fixed by tinkering.”

ENDS

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