NZ Doomed To Status Quo
Press Release
by Hon Sir Roger Douglas, ACT New Zealand

Tuesday, October 13 2009

ACT New Zealand Finance spokesman Sir Roger Douglas today urged Prime Minister John Key to consider a flat tax, following his decision to blindly dismiss the work Treasury was doing.

“If John Key really wants to have an economic recovery – boosting productivity and exports - then he is being foolhardy to reject out of hand the idea of a flat tax, when instead he should consider all the options on the table” Sir Roger said.

“Incentives matter. A flat and low rate of tax would provide incentives for people to work, for people to seek promotions, and for people to upskill. Unfortunately, current levels of tax –combined with the abatement of benefits – means that the incentives to work harder and get ahead are dulled. Many of our best and brightest are leaving New Zealand for low taxes overseas.

“If Mr Key is concerned about equity, then a flat tax can be designed that is equitable as well. Simply have a high tax free threshold with a minimum guaranteed income for individuals provided through tax credits. The idea that a flat tax is inequitable is nonsense.

“The message this sends is very clear: Mr Key is perfectly happy to lead a Government that spends around 40 percent of GDP, wasting billions of taxpayers’ dollars and churns many of those tax dollars back to the people who paid them. He is more concerned about how he will look in two years’ time rather than actually doing his job, and restoring this nation to economic prosperity.

“The modus operandi of the National Party is becoming fairly clear. They constantly talk about the need to change, about the need to boost productivity, but every option except the status quo seems to be off the table. Unfortunately for National, good ideas never die” Sir Roger said.

ENDS

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