Wednesday, March 17, 2004

National’s tax policy U-turn

For a party that‘s been accusing the government of making U-turns, National has just done a pretty convincing about face on tax policy, according to United Future’s revenue spokesman, Gordon Copeland.

“Don Brash announced today that ‘National’s top priorities for tax reductions are tax relief for low-to-middle income families, and a cut in corporate tax rates to boost business investment.’

Mr Copeland said, “While I applaud this new tax policy, since it accords very closely to United Future’s approach of putting more money back in the pockets of working families, I do wonder how long it will remain National’s tax policy.

“Until recently, Don Brash had made it pretty clear on several occasions that reducing the top personal tax rate was his top priority (see below).

“Either he’s had a Road to Damascus-style conversion in the last few months, or he has realised that the significant proportion of the voting public that have swung behind National following the Orewa speech would not be so keen on a tax policy of cuts for the rich.

“In stating now that ‘Our first objective is to provide tax relief for low-to-middle income families’ I assume that Dr Brash and National will support our pleas to the government to use the surplus available in the coming year to provide tax relief to working families. Should that be the case, I look forward to voting with National in supporting the Budget.

“I can only hope that voters aren’t faced with another U-turn back to tax cuts for the rich if National are ever in government - now that really would be a case of Dr Brash and Mr Hide,” said Mr Copeland.

Don Brash’s previous utterances on tax:

“National has made a commitment to reduce the company tax rate to 30 per cent, and the top personal rate to 35 per cent, from 1 April 2003, with subsequent reductions of one cent per annum on each rate so that, by April 2006, the top personal rate will be 32 per cent and the company rate will be 27 per cent. We have also set a medium-term target of 25 per cent for both the top personal rate and the company rate.”

Speech on ‘New Zealand's Tax System: Can We Make It Better?’

to Deloitte Touche Tohmatsu, July 2002

“Some people have suggested to us that a future National Government should be looking to reduce income taxes on low income New Zealanders, or perhaps even reduce the rate of GST to achieve the same effect, instead of reducing the company tax rate and the top personal rate. We want to reduce the tax burden on all New Zealanders, but with limited scope to cut the total tax burden in the short term we will have to choose between providing further help to low-income New Zealanders and changing the tax rates in order to maximize future growth.

Obviously, it would be possible to use available resources to reduce taxes still further for low income New Zealanders. The issue is what we want to achieve: modestly higher after-tax income for low income New Zealanders now or much higher after-tax incomes for all New Zealanders a bit further down the track, by using available resources to encourage additional growth. There is no doubt which is of greater benefit, to New Zealanders of all income levels.”

‘Prosperity for All New Zealanders’, National Party discussion paper, February 2003

“…the tax take has been distorted by the increase in the top personal tax rate. The government’s operating surplus should be used to reduce the top personal rate to the 33c level of the company rate and, over time, both rates should be reduced to 30 per cent. Everyone earning more than $38,000 a year would be better off as a result. The biggest winners would be the rich, but that would be fair because they pay the lion’s share tax. Most low income New Zealanders aren’t paying much income tax, particularly if they’ve got dependents. The real choice is between giving low-income New Zealanders an extra $10 to $15 a week now or growing the economy faster so that all New Zealanders get more income”.

Dominion Post 9 April 2003

“The Government doesn’t seem interested in easing the tax burden on those who pay the most tax, or even in preventing the tax burden on the most heavily taxed people from continuing to increase.”

From ‘Don Brash Writes’ N°11, 25 June 2003

Why, only hours after landing his new job, Brash was telling TV3's John Campbell how he just might cut the business tax rate to 30 cents in the dollar, and slash the tax burden on high-income earners.

Listener, 8-14 November 2003

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