Dunne: tax cuts fair, equitable for all New Zealanders

Revenue Minister Peter Dunne today said critics of the fairness of the Government's tax reform package that comes into effect on Friday 1 October were "way off the mark".


He said the bottom tax rate for New Zealanders will have fallen 30 percent in the last two year and the threshold to which it applies will have jumped form $9500 to $14,000 when the package is introduced.


Mr Dunne said lower income groups benefited most from the Budget 2010 tax changes: "Two thirds of the cost of the income tax cuts is going to reducing the bottom two marginal tax rates."


"That is for annual income up to $14,000, reducing the rate from 12.5percent to 10.5 percent, and for income up to $48,000, reducing that marginal tax rate from 21 percent to 17.5 percent," he said.


"That means nearly three-quarters of taxpayers will have a top marginal tax rate of just 17.5 percent - critics of the fairness of this Government's tax package simply don't have a leg to stand on.


"And when the effects of Working for Families tax credits are added in, a family with two children will now pay effectively no tax at all until their earnings exceed $50,000 a year," he said.


"No honest critic can say this package is unfair. It is extraordinarily fair and of real and substantial benefit to the average New Zealander.


Mr Dunne also slammed the Opposition's "play-with-the-numbers mischief" over the increase in GST from 12.5 percent to 15 percent.


"Let's be straight here - which is something Labour is not doing. The fact is that at all taxable levels, the income tax cuts coming in next Friday more than offset the increase in GST," he said.