13 May 2012

Govt’s 2010 tax cuts costing $2 billion and counting

The Green Party has today revealed that the National Government has so far had to borrow an additional $2 billion dollars to fund their 2010 tax cut package for upper income earners.

New information prepared for the Green Party by the Parliamentary Library show that the estimated lost tax revenues from National’s 2010 tax cut package are between $1.6–$2.2 billion. The lost revenue calculation includes company and personal income tax revenues offset by increases in GST.

“The National Government said that their signature 2010 income tax cut package would be ‘fiscally neutral’ — paid for increased revenues from raising GST. That hasn’t happened. The net cost for tax cuts has been about $2 billion,” Green Party Co-leader Dr Russel Norman said today.

“Borrowing $2 billion in 18 months to fund upper-income tax cuts is fiscally irresponsible.

“National’s poor economic decisions have led to record levels of government debt and borrowing.

“They have also broken a promise to the electorate when they said their tax cut package was going to be fiscally neutral.”

Dr Norman was also critical of the National Government’s spending in other areas.

“At a time of record levels of government debt, the Government should not be spending $2.3 billion to subsidise carbon polluters,” Dr Norman said.

“Add in an additional $14 billion over ten years for building highways that don’t make economic sense, a $400m farm irrigation subsidy, and $100m a year to due to asset sales, and you can start to see this is a fiscal crisis largely of their own making.

“When National claims it must cut spending for vital public services like health and education to control its borrowing, it carries much of the blame.”

Link to the Green Party’s economic plan for a sustainable economy:
www.greens.org.nz/greenjobs

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