Tuesday, July 25, 2006

Kiwis - bigger tax cuts needed

New Zealand doesn't just produce decent chicks (pleasant, sense of humour, like sport, never spoilt, don't read The Guardian etc). Kiwis get the idea of tax cuts too

The New Zealand government today announced its Business Tax Review. NZ plans to cut its corporate tax rate from 33% to 30%, and increased depreciation rates and new tax credits. Bear in mind that New Zealand does not tax capital gains and has a full imputation system - ie Kiwi Pension Funds, unlike the UK, are not subject to tax on dividend income.

Here's an example of general reaction in NZ ......................

"The discussion document Business Tax Review proposes fairly timid moves towards improved business taxation, says Business NZ. Chief Executive Phil O’Reilly welcomed the fact that the Review has picked up on Business NZ’s recommendation to move to a 30% corporate tax rate as a first step.“But this should be a first step only. Business would like to see evidence of the Government looking beyond simple parity with Australia, to a situation where New Zealand’s rate is well below Australia’s, so New Zealand companies can compete more effectively. The Review lacks a strategy for further reductions, within a dynamic framework. What if Australia now drops its business tax rate below 30%? They could potentially do this even before these proposals are implemented.

“The Review appears to be looking at lower business tax as a cost, not a benefit. This is a fallacy. The evidence shows that lower business tax stimulates business growth, bringing a higher tax revenues as well as increased economic growth. "

Contrast this with the attitude of Cameron, Letwin etc. Kiwis understand the need to cut taxes in an increasingly competitive world, why then don't some leading Tories?

Maybe we could have campaign posters like these

http://www.national.org.nz/images/billboards/austaxcuts.jpg

http://www.national.org.nz/images/billboards/placefortaxcuts.jpg

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