National Party Deputy Finance Spokesman
17 March 2004
Tax Cuts Will Benefit Us All
Claims by Finance Minister Michael Cullen that a cut in the company tax rate serves to benefit only foreign companies
should be dismissed as short-sighted, says National Party Deputy Finance spokesman John Key.
"Dr Cullen must recognise that corporates make their investment decisions based on the headline company tax rate, so
lowering the company rate will only lead to more investment and the creation of better quality jobs for New Zealanders,"
Mr Key says.
"Lower company taxes have played a significant role in the growth story of an overwhelming number of successful
countries.
"Dr Cullen's comments smack of hypocrisy following the Government's introduction of a policy that gives $40 million tax
break to foreign film makers - or are wealthy Hollywood studios somehow special? "The OECD, an expert body with regard
to economic growth, endorses National's proposal. Its latest report says 'an option that should at least be considered
is reducing the statutory corporate tax rate'. "Lower corporate tax encourages business (domestic and foreign)
investment - an important driver of economic growth. It's also worth remembering that the vast majority or those who
would benefit from National's tax regime are small companies that earn net profits of less than $38,000 a year.
"Attracting foreign investment is absolutely critical in a small economy like New Zealand - many countries around the
world are lowering corporate tax rates to compete for foreign investment.
"It's time that Dr Cullen took a fresh look at this issue," says Mr Key.
Ends