Tax Cuts Beat Tax Rebates Hands Down
Rodney Hide
Thursday, 21 July 2005
Press Releases - Taxation
Comprehensive tax cuts are the best way to help students repay their loans faster, ACT Leader Rodney Hide said today.
"What graduates need are higher wages and more money in their pocket - that's what every New Zealander needs.
"Tax cuts the size ACT has proposed are the best way to help graduating students hammer their debt down in double quick
time - not National's rebate scheme.
"National explains their rebate scheme would benefit a graduate earning $45,000 a year by $693 a year. That's if they
had a loan of $30,000. In fact they would only receive that benefit in their first year. Their interest charge falls as
they pay down their loan and so too does National's rebate.
"ACT's tax policy would see that graduate $2,270 better-off whether or not they had a loan. They would be that much
better off every year.
"National's rebate scheme would allow them to pay off their 1.25 times faster. ACT's tax cuts would allow them to pay
off their loan 2.5 times faster.
"ACT's tax cuts are better for students - and better for every New Zealander than targeted tax rebates. Tax cuts will
also spur growth - something tax rebates won't do.
"The benefit from National's rebate scheme also becomes smaller each year because as graduates pay off their loans the
interest charge and their corresponding rebate decreases.
"The best thing National could do for students - and all working New Zealanders - is to reverse their support for
Cullen's Super Fund and give every Kiwi a decent tax cut," Mr Hide said.
ENDS