Updated Taxometer Shows 44% Tax Rate Under Labour - So FarHealth
The taxometer shows Labour's "credit card" of promises would require a tax rate of 44%, Education Minister Wyatt Creech and Health Minister Bill English said today.
National has added Labour's two promises on tertiary education and elective surgery to the taxometer while removing the promise to restore the Emergency Unemployment Benefit to students from wealthy families.
The five promises now included in the taxometer are:
increased state housing subsidies $120 m
increases in the purchasing power of super $101 m
the risky industry policy $100 m
$2,000 average tertiary fees (assuming current average of $2,870) $142 m
elective surgery $ 80 m
"Assuming nothing else at all was done, the taxometer shows these promises would require a tax rate of 43.86% under Labour's tax policy, significantly higher than the 39% promised by Labour.
"That high rate of tax would cost economic growth and jobs," the Ministers said. "It would therefore undermine tax revenue in the long term, hampering New Zealand's ability to afford sensible increases in social spending in the future.
"Labour continues to be prepared to shed jobs and economic growth for extra spending."
The Ministers said they had been conservative when costing Labour's "wishy-washy" promises.
Mr Creech said he had assumed that Labour only intended to reduce the average tertiary tuition fee to $2,000. He had assumed that fees would stay at their current average level of $2,870 between now and the year 2000, and that Labour has no intention to increase student participation from National's forecast of 163,550 in that year.
"These assumptions are very generous to Labour, (they make conservative estimates of the costs) yet, even so, they would need to increase funding
by $142 million in the 2000 academic year," Mr Creech said.
"The $142 million will not provide funding for a single extra student."
"It appears Michael Cullen has beaten Steve Maharey on the issue of restoring the Emergency Unemployment Benefit for students. National therefore accepts, at this stage, that Labour would not reverse National's recent changes to the Emergency Unemployment Benefit - changes that Mr Maharey said had "no logic" and were "heartless"," Mr Creech said.
Health Minister Bill English said given that Labour had made elective surgery one of its top five priorities, he had assumed it would increase funding by $80 million a year - the among promised by Labour's coalition partner, the Alliance.
The updated taxometer is available for viewing in Wellington. Attached is a copy of the updated taxometer.
For further information please contact Anna Hughes (04) 4719 819 or (025) 477 987 or Liz Rowe (04) 4719 154.