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Poll shows importance of tax policy

Published: 6:25PM Monday June 20, 2005 Source: One News/RNZ

Labour has dropped the ball on the key election issue of tax according to the latest One News Colmar Brunton Poll.

The small scale of tax changes in last month's budget appears to have backfired on the government as the political poll shows voters have not been swayed by the tax cuts announced in the budget.

According to the One News Colmar Brunton poll the small tax changes have not been well received. The poll shows 55% say the tax changes will not influence their vote, 13% say the changes have influenced their intention to vote National and just 7% say it has led them in the direction of Labour.

The key changes to tax announced in the budget include lifting the thresholds for personal income tax so average income earners will get an extra $4 a week from 2008.

All personal income tax thresholds will be raised by 6% every three years, to account for inflation. This will result in low income earners paying approximately $35 less a year in tax, while those earning more than $40,000 a year will pay $300 less and those earning more than $63,000 just over $500.

The poll shows 54% believe that three years is too long to wait for those cuts.

Labour says tax cuts are not affordable. Prime Minister Helen Clark says she couldn't look the electorate in the eye and say significant across the board tax cuts can be afforded, while maintaining spending in critical areas.

But voters believe they are and politicians have read the public mood with National, Act and United Future all dangling tax cuts in front of voters.

Fifty one percent of people polled say by eliminating waste in the public service tax cuts are affordable, while 42% thought budget surpluses could pay for them.

United Future and Act have both released their policies.

Act has pushed for lower taxes across the board. The top rate would be slashed to 25% for businesses and those with an income over $38,000. Workers earning less than that would be taxed at 15%.

Party leader Rodney Hide says the policy would cost $5.7 billion which is $1.7 billion less that this year's forecast surplus.

United Future would lift tax brackets by $5,000 by April 2006, taking the top threshold to $65,000. The first $3,000 of all workers' incomes would also be tax free.

But National says it won't release its tax policy until the election date is named.

Meanwhile, Clark has ruled out a July election.

A July 30 election was the first possible date the Labour led government could have gone to the polls while serving a full term.

Helen Clark would not be drawn on an election date at her post cabinet briefing, but pointed out there were still three months to the last possible date.