CTU media release
20 May 2010
Tax cuts won’t lessen lure of Australia
The Government could be spending more to help people on lower incomes and to improve public services with the improved
economic outlook and government deficits disappearing even earlier than forecast in the last Budget or in December, said
the CTU. Instead $460 million is being spent this year on tax cuts, meaning the Government exceeds its self-imposed
Operating Allowance of $1.1 billion.
“The tax changes announced won’t stop anyone leaving for Australia,” said Bill Rosenberg, CTU Economist and Policy
Director. “Treasury calculates the net benefit will be 0.7 percent for those on high and low incomes, and 0.4 percent
for middle income New Zealanders. But those on high incomes don’t all own property, and those that do have plenty of
room for finding ways to avoid the property tax rises. People on incomes of millions of dollars could benefit by up to 5
percent – but these figures are hardly enough to bridge the 20-30 percent income gap with Australia.”
“We welcome the changed tax regime for property but it is not enough to bring a ‘step change’ in our economy.”
“District Health Boards are going to be under great pressure. Their funding has been increased by only $350 million,
compared to the $450 million the CTU has calculated they require. In addition, they won’t have any help with deficits
from central government.”
“Opportunities have been missed to put more into education at a time when students are queuing to get into tertiary
education. More opportunities for industry training are urgently needed as skills shortages loom as a result of
competition with Australia.”
ENDS