Tax cuts help John Key's mates but leave struggling New Zealanders out in the cold

Alliance Party media release FOR IMMEDIATE RELEASE Thursday 2 April 2009

The Alliance says National’s tax cuts are a complete fiasco that punish the poor and starve the nation of vital social spending.

Alliance Party co-leader Kay Murray says anyone earning under $24,000 misses out completely.

“People on this income level desperately need a break to deal with spiralling basic costs such as food, housing and transport."

She says the tax cuts are an attack on low income earners, and make no real difference to middle income earners, as they starve spending on health, education and other important social services.

"It is a transfer of wealth to the already wealthy."

Ms Murray says the tax "rebate" of up to $10 per week, for people earning between $24,000 and $48,000 not claiming working for families tax credits, has spawned a whole new tax code for people to grapple with.

"If you earn under $48,000 and get working for families tax credits you don’t get anything extra, but if you earn over $48,000 and get working for families tax credits you get a tax cut."

Aside from the basic unfairness which sees people who earn a lot being given more and people who are struggling to make ends meet missing out, the tax cuts are a logistical nightmare for small employers when you add student loan repayments and Kiwisaver payments into the mix as well.

“They may as well just have asked everyone who voted National and who didn’t and divvied up the tax cuts accordingly. It would have been a lot easier and their elaborate ruse hasn’t fooled anyone,” says Ms Murray.

Ms Murray says the only equitable taxation system is a truly progressive system, similar to what New Zealand used to have.

"Let everyone have the first $10,000 income tax free and have a realistic progressive tax scale that sees those who earn the most pay the highest percentage of tax while those who earn little pay a minimal amount."

She says this is a fair and just solution, with the tax being allocated to provide first class health, education and social services, and the best possible way of life for all New Zealanders.

ENDS

© Scoop Media