On the streets of middle NZ the time for a tax cut is now
5:00AM Sunday May 13, 2007
"It would be a hard government," said Benjamin Franklin, "that should tax its people one-tenth part of their income." If the founding father of the new United States had met Dr Michael Cullen, he would have adjudged the Finance Minister, who presents his eighth Budget on Thursday, a very hard man indeed.
For some time, in the interests of stable economic management, significant changes have been semaphored, if not announced, in advance of Budget night, and simply locked in place when the document is tabled. So it takes no great acumen to predict that this Budget will contain no change to personal tax rates.
A cut, from 33c to 30c, in the company rate and the likelihood that contributions to the KiwiSaver retirement savings scheme will be made tax-deductible hold out the prospect of some relief. But the Finance Minister, sitting on a larger-than-forecasted Government surplus ($6.5 billion at the end of February), has made it pretty plain that he will be maintaining his policy of not cutting marginal tax rates.
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