Media statement
Embargoed until after Budget reading
Thursday, 22 May 2008

Tax cuts – a start at long last

UnitedFuture leader Peter Dunne says the tax cuts announced in today’s Budget are long overdue.

“They have been inevitable since the UnitedFuture-led Business Tax Review introduced the first business tax cut in 20 years in last year’s Budget.

“Today’s moves are a step in the right direction, but they are not the full answer.

“These are Labour’s tax cuts, designed with a clear eye to Labour’s constituency,” he says.

Mr Dunne says that while it will support today’s moves (“any tax cuts are better than nothing”) UnitedFuture wanted a more fundamental overhaul of the tax system than just tinkering.

“There is still the unfinished business of the differing top personal tax rate, the business tax rate and the trust rate which last year’s Budget went part way towards addressing but which this year’s Budget makes no further progress upon.

“Our tax policy, to be announced shortly, will address these issues.

“We regard today’s tax cuts as just the platform for the future changes we would like to make, rather than an end in themselves,” he says.

Mr Dunne said the real question in many New Zealanders’ minds after today’s changes will be what impact they will have on likely sharp increases in the cost of living if the Emissions Trading Scheme is introduced.

“Today’s tax cuts are a dividend to hard working families for the economic good times.

“There will be justifiable outrage and anger if the Government decides to treat these cuts as effectively a down payment on increases in the cost of living brought on by the Emissions Trading Scheme.

“Households will need separate compensation for those increases, if today’s tax cuts are to have any meaning in the future.

“Otherwise, they will exact a justifiable vengeance on any Government seen to be giving grudgingly with one hand, while preparing to grab back eagerly with the other,” he says.

Ends

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