From the press room
Dunne: Tax cuts and affordability – 2008-07-28
UnitedFuture leader Peter Dunne says the confirmation by National that it will retain the Working for Families programme and offer tax cuts as well, should it become Government, is excellent news for working Kiwis.
“With household budgets under increasing pressure, any affordable offer to meet that pressure is welcome – but the key word is affordable,” he says.
“It’s no good having tax cuts that are immediately wiped out by Government borrowing forcing up mortgage interest rates, lowering the value of the dollar and increasing the price of imported goods.
“UnitedFuture’s tax policy is simple fair and well-costed. We know it’s affordable.
“We want.-
• income up to $12,000 taxed at 10%
• income between $12,001 and $38,000 taxed at 20%
• income above $38,000 taxed at 30%
"We would also push for.-
• Income splitting for parents with dependent children
• Honoraria for volunteers up to $1,000 to be tax free
• Gift duty to be abolished.
"We have carefully costed the impact of these policies and in a full year, they would cost $4.5 billion.
"Looking at the tax cuts alone for a family on $45,000 a year, from 1 October this year, they will get a tax cut of $33 a fortnight.
"Under UnitedFuture's plans, the same family would get a tax cut of $45 a fortnight.
"Couple that with UnitedFuture's income splitting plan, and the tax cut rises to $87 a fortnight.
"Let me repeat that – the low-income family gets a $33 tax cut next October, but under the UnitedFuture plan, the same family would get either $45 or $87 more a fortnight.”
Mr Dunne says a family on $60,000 a year gets a tax cut of $31 a fortnight from 1 October 2008.
"Under UnitedFuture's proposals, that would more than double to $63 a fortnight and with UnitedFuture's income splitting plan, they would get a tax cut of $137 a fortnight.
"For the family earning $80,000 a year, they will get a tax cut of $54 a fortnight from 1 October 2008.
"Under UnitedFuture, that would become a tax cut of $130 a fortnight and with UnitedFuture's income splitting plan, a tax cut of $191 a fortnight.
"This tax policy is affordable, simple and fair. It strikes the right balance between letting Kiwis keep more of their own money and providing the Government with enough revenue to carry out its necessary work without making cuts in Government spending on social services and family assistance," says Mr Dunne.