May 17, 2007

EPMU welcomes incomes-boosting budget

The country’s largest private sector union has welcomed Budget 2007 saying it has the potential to boost incomes.

The combination of Kiwisaver measures, with its own tax benefits for employers and employees, as well as a lower corporate tax rate means workers should be able to secure good contributions to retirement savings and up-front pay increases says the Engineering, Printing and Manufacturing Union.

EPMU National Secretary Andrew Little says the corporate tax cut announced today brings New Zealand’s business tax rate into line with Australia’s which should mean more money for New Zealand production and jobs.

“This is an incomes budget with a long-term outlook and we welcome it but now business has got its tax cuts we’re expecting it to step up to the mark with higher wages and more investment in New Zealand’s manufacturing sector,

“While some commentators are already labelling the compulsory contributions to KiwiSaver a ‘payroll tax’it’s well worth noting that these contributions are subsidised through employer tax credits and represent only a tiny proportion of the value of the business tax cuts. Business has won an Australian-level tax rate and they should realise that this strengthens our arguments for raising Kiwi’s wages and conditions to Australian levels, including a fair super scheme for workers.

“The tax breaks around KiwiSaver will also provide much better long-term stability for both individual workers and their families and for the economy as a whole, whereas tax cuts would have only pushed inflation higher and made life even harder for low-income and indebted Kiwis.

“The test for business is to see how they use their corporate tax reduction. Will they invest in their businesses and their people or will they pocket the extra for themselves?”

Earlier this year the EPMU called for employer contributions to KiwiSaver to be included in bargaining claims across its more than 1500 collective agreements and will continue to push for decent pay rises.

ENDS

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