National promises to lower corporate tax

By Phil Boeyen, ShareChat Business News Editor

Monday 15th April 2002

Business groups have applauded the National Party's election economic policy which includes lowering the corporate tax rate to 27 cents in the dollar by 2006 as well as reducing personal tax.

Leader Bill English announced the election policy on Monday, outlining the party's 'Plan for Prosperity' which targets sustainable growth rates of more than 4% a year.

Part of the policy includes lowering the corporate tax rate from 33 cents to 27 cents over a four-year period and reducing the top personal rate to 32 cents. The present Labour-Alliance coalition government increased the top rate to 39 cents on earnings over $60,000 after it was elected three years ago.

Mr English says his party has a number of strategies aimed at achieving the 4% sustainable growth rate.

"Things such as upskilling our workforce, cutting business compliance costs and red tape, creating an environment that supports innovation, encouraging private/public investment partnerships, as well as lowering taxes - both business and personal - are all important and included in our strategy.

"Lower taxes are good for the economy and National makes no apologies for implementing policies that will encourage growth and benefit all New Zealanders. We don't believe in the politics of envy where people are needlessly punished for being successful."

Mr English says National can afford tax reductions because it is not committed to the Cullen fund.

Michael Barnett, chief executive of the Auckland Chamber of Commerce, has given the National Party's economic policy a mark of 9 out of 10 and says it shows that the concerns of business have been heard.

"The recognition given to SMEs in the package as the future engine for growing a larger economy is an important stake in the ground."

The Employers & Manufacturers Association (Northern) says National's focus on achieving faster growth and cutting company taxes to help do it will be appreciated by business.

"Without a better growth rate we can forget about more health, education and environment funding," says EMA's chief executive, Alasdair Thompson.

"Better growth is the key to funding our ageing population and the delivery of first world health and education outcomes."

Mr Thompson says the new policy signals that National is raising its sights above its traditional rural support base to start building a vigorous, economy wide, enterprise oriented society.

Business Roundtable chairman Dr Murray Horn says his organisation has been quick to criticise National policies in the past when it felt they did not measure up but "we are now equally quick to support these very positive policy developments".

"Bill English's willingness to raise National's sights is refreshing. National is putting forward a positive vision for New Zealand and its plan for achieving it is shaping up in a credible fashion."

Dr Horn says National's tax proposals are in line with the recommendations of the McLeod tax review commissioned by the government and promote a greater consensus on ways of taking the country forward.

However Council of Trade Unions president Ross Wilson says it is disappointing that Bill English has adopted the tired old National Party strategy of the 1990s by promising tax cuts for the rich.

"We have seen this all before. Unfortunately it is those on low and middle incomes who will miss out."

Another union spokesman, Andrew Little from the Engineering, Printing and Manufacturing Union, claims employers will come under increasing pressure to provide subsidised superannuation schemes if a National government scraps the current universal scheme, says the country's largest union.

"Workers need security over superannuation. The government has given them that security with its current scheme, but now National is threatening to take it away again."

Mr Little says that any attack on superannuation will lead to increased pressure on wage bargaining.

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