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9
FEB 10

Speech from the Throne




Seems we all agree on what the problem is"

“The Government agrees with the Tax Working Group that New Zealand relies heavily on the taxes most harmful to growth, particularly corporate and personal income taxes; that there is a hole in the tax base around the taxation of property; that the tax system lacks integrity and fairness because of differences in the treatment of entities; and that there are significant risks to the sustainability of the tax base,

We have a tax system that taxes Labour and investment income at relatively high rates, taxes consumption at a relatively low rate and generally gives money back to people when they invest in residential property,

Is it any wonder that our economy is tilted towards consumption and property investment, that we have a shortage of savings, and that a high proportion of graduates live overseas?

Tinkering over recent years has made the tax system more complicated, led to poor incentives in the economy and created a raft of different ways for people to minimise their tax payments."

Then he goes on to to foreshadow more tinkering and complication.  How will playing with the system at the edges do anything to increase productivity, increase investment in productive activity, improve returns to exporters, stem the loss of skills and talent and all up enhance growth?

Time for more than tinkering. 


tags: key, tax policy
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