-
Labour leader Phil Goff -
Related
The Labour Party and the Greens are expressing dismay and scorn at the Prime Minister's speech on his government's policy agenda on Tuesday.
A rise in GST is on the cards, as are moves to encourage mining and tighten benefit regimes.
A 2.5% rise would earn the government an extra $2 billion, money that could be used to reduce top tax rates.
Hopwever Labour Leader Phil Goff is damning of any move to increase GST.
He wants to know which New Zealanders the Prime Minister's met on the streets that support such an idea.
Goff says no-one asks for an increase in GST except those people on the top income bracket.
"People who earn the least are going to be the worst affected and we have no confidence the Government will look after those people."
"There's no way the government will ensure tax changes are fair," he says.
He compared the government's intentions with the way the Australian government had handled the recession and boosted economic growth, saying there was "a smart government" in Australia while Key had no plan to catch up.
"There is nothing here that shows the government has any idea of how to create growth," he says.
Green Party Co-Leader Russel Norman agrees, saying National is intent on digging the country into an economic and environmental black hole.
He says it's not a plan for a better and fairer society, rather it's a scam that'll leave most ordinary New Zealanders worse off.
"This is a scam that will only benefit the wealthy," he says.
Businesses welcome tax reform
The government's proposed tax reforms will promote economic growth and plug holes in the existing tax system, business groups say, but a major union has criticised them.
The reforms demonstrated the government had "a cohesive plan" to bring significant improvements to many parts of the economy, Business NZ chief executive Phil O'Reilly says.
"It is encouraging to see that the government has a plan and is sticking to it."
"Lower income tax and an increase in GST, with benefit adjustments to ease the transition, will be helpful for business growth and competitiveness, and fairer to all."
Exporters would welcome the government's commitment to rein in spending, which would keep pressure off interest rates and drive down the exchange rate, O'Reilly says.
KPMG chief executive Jan Dawson says it was clear that the government was looking at the reforms as a broad package that would ensure "a fair and coherent tax regime".
The rejection of a land tax or capital gains tax had provided "welcome clarity", but questions still remained around corporate tax rates, the amount GST would be increased, and the impact of taxing property investments.
Employers and Manufacturers Association northern chief executive Alasdair Thompson says the changes would make employees better off and encourage saving and investment.
"These moves will go a long way to allow for reductions to income tax across the board," he says.
"There is plenty of scope to plug holes in the income tax base to ensure people are not overtaxed."
Others were critical of the reforms, with Council of Trade Unions economist Bill Rosenberg describing the announcement as a missed opportunity to boost jobs and make the tax system fairer.
"It is good that the government is still looking at options for changing the way property is taxed, but it has missed an opportunity to make significant changes in our tax structure," he says.
"This will only further encourage the development of the 'emerging underclass' he speaks about. The priority should be to reduce inequality, not increase it."
