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Labour leader Phil Goff -
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Parliament is on track to pass legislation today that will enact the biggest tax system shake up in a quarter of a century.
The government is rebalancing the economy by shifting it away from spending and into saving and investment.
Across the board tax cuts will put more money into people's pockets and, the government hopes, into their savings accounts.
A GST increase from 12.5% to 15% is designed to curb spending and claw back some of the lost revenue.
Loopholes used by wealthy people to hide their money are being closed and new liabilities are being imposed on property owners and speculators which will bring in billions more over the next few years.
Although yesterday's Budget has had a generally good reception the bill that puts its provisions into law isn't getting an easy ride in parliament.
Labour is vowing to fight it "all the way to the ballot box" and is putting up fierce resistance as it goes through parliament under urgency.
Labour leader Phil Goff is calling the Budget "the big tax swindle" and says with inflation running at 6% - a consequence of the tax cuts - the miserly cuts for low and middle income people will be wiped out.
As the government promises an average family will be at least $25 a week better off, Labour says it will be $30 worse off.
"This Budget of broken promises, borrow and hope and rampaging inflation, also contains service cuts which will hit families hard," Goff said last night.
"A huge cut to early childhood education funding means parents with young children will have to find extra each week and the $1.2 billion hole in health spending over four years will hit the elderly and the sick hard."
The new tax tables in the budget, due to become law when the bill is passed, show a person on the average income of $50,000 a year will get a tax cut worth $29.42 a week. When GST at 15% is factored in, the net gain is $13.71.
The gains are smaller for income below $50,000 but, according to the figures, no one will be worse off.
On income above $50,000 the gains increase, and a person earning $120,000 a year will get a tax cut of $89 dollars with a net gain of $56.
Labour is using the table to say it is a Budget for the rich, arguing that they will be the only ones with anything left after inflation pushes prices up.
The tax cuts and the increase in GST come in on October 1, and one of the surprises in the budget was that company tax will come down from 30% to 28% in April next year.
Prime Minister John Key says the package will boost economic growth by 1%, and he has brought the business sector on board.
What do you think of the Budget? Have your say on our messageboard below.
Add a Comment:
Post new commentlauzyeah said on 2010-05-27 @ 14:22 NZDT: Report abusive post
I am coping now, just, with prices as they are, but once they go up im going to struggle.and if it wasn't for Working for families, i would have to be on a benefit, and im sure this is the case for thousands of parents.i'm working to get ahead, and im doing a damn good job too, would you rather they cut WFF and have thousands back on the benefit,using more money? think about it
westy mum said on 2010-05-24 @ 07:30 NZDT: Report abusive post
WELL WE ARE REALLY STRUGGLING NOW FAMILY OF SIX ONE PARENT WORKING WE CAN BEARLYH AFFORD FOOD WEEKLY NOW WE DONT DRIM\NK HAD TO GIVE THAT UP WE DONT SMOKE TO DEAR, WE HAD TO GIVE OUR CAR UP WE COULDNT AFFORD GAS SO WE USE THE TRAIN WE ARE WE GUNA GET A BACK COME ON IF IT WASNT FOR THE WORKERS OF THIS COUNTRY WHERE WOULD WE BE
entwine said on 2010-05-23 @ 20:32 NZDT: Report abusive post
Being a single 40+ female, with no children I think the budget will be of benefit to me. To be honest, I was a bit sick of the previous Governments working for families etc. We all have choices in life, why should I pay via my taxes for someone else deciding to have children? I struggle to make ends meet too!
Juanita01 said on 2010-05-21 @ 17:36 NZDT: Report abusive post
This is a step in the right direction. If people can not afford to have these childen, then stop. Stop complaining that things are going to cost more, stop spending! People have to start taking responsibility for there actions and stop expecting the government to hand them everything.
lauzyeah said on 2010-05-21 @ 15:50 NZDT: Report abusive post
I am a single mother of 2 children both under age 4, i am 23 , i am not on a benefit, and i am working to raise these boys. I cannot afford to stop working and go study to get a better job, if i did, i would have to go on the benefit, which would cost the government and tax payers more money. the government wants people off the benefit and working, but now have raised tax on everything, making it a hell of alot harder to do so.