National gives with one hand and takes with the other - RePress


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Thursday, October 9

National gives with one hand and takes with the other

National has unveiled an economic and tax package that gives with one hand and takes with the other.

Party leader John Key revealed a slightly pared down tax cut package that puts more in people's pocket's next April, but offers less than planned.

The cuts are funded by cutting planned increases to Government subsidies for those in KiwiSaver and axing research and development tax credits for businesses.

There is also a reduction in the amount to be spent on infrastructure in the next three years, so that borrowing is reduced.

Mr Key said a worker on the average wage of about $48,000 would be better off by an additional $18 a week above Labour's tax cuts when National's first tranche of cuts kicked in on April 1 next year, if the party is elected.

Incorporating Labour's October 1 cuts, the same worker would be $47 better off by April 1, 2011.

The package outlined by Mr Key included movements in both the thresholds that different rates start at, and drops in the actual rates themselves.

It also included a tax rebate of $10 a week for taxpayers earning between $24,000 and $50,000 who do not receive anything from Working for Families.

It is estimated 600,000 people would qualify for the rebate.

Mr Key said National had scaled back its tax cuts plan by $2 billion in the face of a decade of forecast budget deficits.

It was estimated the tax cuts would now cost $5.7 billion up to 2011/2012.

The changes to KiwiSaver as well as dropping the research and development subsidy would save $5.9 billion over the same period.

Mr Key said the worse than expected economic figures released on Monday meant National had been less generous with the top tax rate and the lower scales as well.

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