Bill English MP
National Party Finance Spokesman

12 November 2007

Dr Cullen maintains tradition of tax-cut denial

National Party Finance spokesman says Michael Cullen's strongly held view that tax cuts make no difference to the trans-Tasman brain-drain is not new.

"Dr Cullen has always maintained that tax makes no difference to the decision by a growing number of Kiwis that they should pack up and leave."

In the heat of the 2005 election campaign, Dr Cullen put his real feelings down on paper when he said: 'If, as some have suggested, New Zealanders are fleeing as tax exiles to Australia, one can only conclude that those individuals are functionally innumerate, and we are probably better off without them.' **

Mr English says Dr Cullen's message has always been that there's no way New Zealand can win, so there's no point even trying.

"So, instead of working tirelessly to try to close the gap, Labour has become pre-occupied with staying in power. That's the only reason Helen Clark put tax on the agenda at her recent conference. The reality is that neither she nor Dr Cullen actually believes in them."

Mr English says National has been a long term advocate of phased tax cuts as an incentive for enterprise and productivity growth. Meanwhile, Dr Cullen cancelled the 'chewing gum' tax cuts he promised in an election year because New Zealanders weren't grateful enough.

"By Dr Cullen's own calculations, someone on the average wage who has had pay increases of around $10,000 since he came to power, has been allowed to keep only $1,700 of it, once taxation and inflation is taken into account.

"On Dr Cullen's best-case-scenario numbers, the total dividend to Joanna Average is just $1,700 in real terms.

"Little wonder, on those figures, that according to Dr Cullen, New Zealanders have 'zero' chance of closing the income gap with Australians."

ENDS

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