Dunne on tax reform challenges

Revenue Minister Peter Dunne said tonight New Zealand faced significant challenges in its plans for business tax reform "but these are challenges we must overcome if we are to remain competitive in the international marketplace".

Addressing a seminar of accountants and other tax professionals in Wellington, Mr Dunne pointed to several indicators that show the economy heading for a rocky ride in the months ahead.

"Inflation is forecast to rise, growth to slow and the returns from exports do not match the cost of imports.

"Yet income growth is still strong, business balance sheets are in a good position and the property market is booming.

"Faced with these contradictory indicators, now is not the time to slow down or abandon the drive towards business tax reform.

"Our major trading partner, Australia, is already looking at significant tax cuts to both business and private incomes in next year's Budget and we simply cannot afford to ignore what Canberra is planning," said Mr Dunne.

He said he and Finance Minister, Michael Cullen, have been actively engaged with officials since the election in mapping out a process for business tax reform and they hope to make a progress announcement on that soon.