Hon Dr Michael Cullen
Labour Party Deputy Leader
Finance Spokesperson

15 October 2008 Media Statement
John Key – fast and loose with numbers last night

John Key was playing fast and loose with the facts in last night's television debate, Finance Minister Michael Cullen said today.

"On KiwiSaver, John Key was dishonest in pretending that under National's proposals employers won't be able to pass on the cost of the employer contribution to the employee.

That is precisely what was happening before Labour changed the law that National is now promising to repeal.

"That would mean an employee on the average full-time wage in KiwiSaver would be nearly $40 a week worse off under National.

"Second, Mr Key was dishonest in suggesting low income families would get National's complicated Earner Rebate. He knows that is not true.

"In fact, low income families would be worse off under National's proposals up to a level of over $40,000 a year.

"Third, Mr Key was dishonest in suggesting that a family on $40,000 benefitting from Working for Families would lose two thirds of any extra dollar earned under Labour, but only one third under National.

"At present the effective marginal tax rate for such a family is 53 per cent. That falls to 41 per cent under Labour's legislated for tax policies versus 40 per cent under National's. But so far, no other Parliamentary party has expressed support for National's proposals.

"Fourth, Mr Key claimed that the top tax rate in Australia cuts in at 'hundreds of thousands of dollars' above New Zealand's.

"In fact, the top tax rate of 45 per cent cuts in at $A180,001, but their second top rate of 40 per cent is still higher than NZ's top rate, and it cuts in $A80,001. In any case, under National's policy, the top rate would cut in at ten thousand dollars less than Labour's legislated for tax cuts.

"Finally, for Mr Key to suggest that because he headed Merrill Lynch's foreign exchange division then that fits him to be Prime Minister in the current financial crisis – that is a little like Sweeney Todd claiming the right to be the right person to regulate the hairdressing industry."

ENDS

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