Labour Wants Wage And Salary Earners To Pay More

  • Bill English

Revenue Minister Bill English said today the only conclusion that could be drawn from Labour's list of fee and tax increases under National was that Labour wanted wage and salary earners to pay a bigger share of taxes.

"What Dr Cullen's list really shows is the consistent and fair approach that National has applied in closing off tax loopholes, applying direct charges or levies for users of non-social services, and ensuring that social policies are well targeted.

"For instance, some of the non-social services where users are now charged include passports, use of airports, use of roads, drivers licensces, border inspection and pest control. Why should a hard working family pay high taxes so that someone who can afford to take overseas holidays gets a Government-subsidised passport and uses a Government subsidised airport?

"Dr Cullen's list is a real hotch-potch. It includes some things that the Government has not done, such as removing tax exemptions for charities, some things that the Government has nothing to do with, such as increased health insurance fees, and leaves some increases out which should be there, such as closing tax loopholes in the film and petroleum mining industries.

"Other items on the list can hardly be described as tax increases. Changes to income related state house rentals means that our social policies are well-targeted and fair because 230,000 people can benefit from rent assistance, not just the 60,000 in state houses.

"Labour's policy seems to be to forget about the loopholes, ignore the issue of who benefits from a service and just load the cost of these things on to wage and salary earners. That's the easy way out.

"But narrowing the tax base like this means that some people end up paying more than their share of taxes, while others get away with paying much less.

"By highlighting this list Dr Cullen is presumably promising to wind back all these changes. That means income tax will have to go up a great deal higher than 39% to pay the bills because Dr Cullen has already spent the $400 million he plans to raise with his first round of tax increases.

"National believes in quality social services supported by a broad-based progressive tax system. At the same time we want to get costs down as low as possible so that we can keep taxes as low as possible. People who work hard for their money deserve to get as much reward for their effort as possible," said Mr English.