Pressure mounts for across the board tax cuts

Rodney Hide Wednesday, 11 May 2005

Press Releases - Taxation

Finance Minister Dr Cullen is under fire to explain why he won’t cut people’s taxes despite record surpluses, ACT Leader Rodney Hide said today.

Mr Hide asked Dr Cullen in Parliament why Australia could afford across the board tax cuts in their budget with a government surplus of just 1% of Gross Domestic Product (GDP), while New Zealand’s surplus of over 4% of GDP wasn’t sufficient for a tax cut according to Dr Cullen.

Dr Cullen’s reply of ˜wait until next week’s budget appears to leave the door open for across the board tax cuts in New Zealand, but Mr Hide is sceptical that the budget will contain anything of the sort.

"Apart from a bit of tinkering on company tax deductions which he has already signalled, there will be no changes to headline tax rates." Mr Hide said.

"The tragedy is that the government's $8 billion surplus is so huge that decent tax cuts for workers are affordable. This will be a budget of missed opportunities.

"New Zealand could have just two rates of tax- 15% up to $38,000 and 25% after that, and still be running a surplus.

That would give the average worker an extra $2,000 a year in the hand." Mr Hide said.

ENDS

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