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Don Brash -
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ONE News understands the National Government is about to receive a report recommending radical tax changes that will affect our everyday lives.
Under National's coalition agreement with the ACT Party Don Brash is heading a commission which aims to point the way to pay parity with Australia by the year 2025.
On average Australians earn a lot more than New Zealanders.
"Australian living standards are now about a third higher than New Zealand's," says Brash.
His report is out on Monday and ONE News understands it promotes radical cuts to income tax rates.
Currently the top personal tax rate is 38 cents in the dollar and the business tax rate is 30%. The report is understood to set a goal of replacing those with one flat tax rate of between 20-25% and it warns against introducing a capital gains tax on house sales.
"I think it is Roger Douglas and Ruth Richardson re-visited. This can only result in a slashing of our key social services - health education and superannuation," says Labour Leader Phil Goff.
Billions would have to trimmed from government spending to provide tax cuts of the size Brash is proposing. It is understood his report talks of more privatisation and reducing some social services but it seems Key is reluctant.
"We campaigned on some key and core commitments and we're not going to break those promises to New Zealanders. That's not to say we can't pick our way through the report and find something that might add to New Zealand's economic performance but where we specifically campaigned on something then I'm not going to break my word," Key says.
The report questions why a number of social services and benefits are universal - in that everyone gets them regardless of income. In the commission's sights are restricting access to interest free student loans and subsidised early childhood education.
"The New Zealand government is not going to pull the rug out from underneath New Zealanders and go for a big bang approach as has been suggested in the report," says Goff.
That suggests that National pay parity with Australia takes second place to staying on side with New Zealand voters.
