If National forms the next government its partners’ tax plans will cost the country at least $42 billion, and maybe as much as $50 billion, wreaking havoc with the books, says Labour’s Finance spokesperson David Parker.
“National claims to be extremely concerned about the fiscal prudence of the next Labour Government. This is despite Labour producing a fully costed alternative budget with headroom for coalition arrangements after the election.
“National refuses to say how its tax and spending plans match up with its partners. It should really take a look at the obligations it may have to fulfil in any coalition arrangement with its likely partners ACT, the Conservatives and United Future.
“To please the politically naïve yet stubborn Conservatives, National would need a tax-free threshold up to $20,000 with a flat tax rate of 25 per cent thereafter. That would cost at least $6.5 billion a year even though this would actually increase taxes on incomes between $20,000 and $48,000.
“Then to mollify the ACT party National would have to cut tax on earnings above $70,000 to 20 per cent which would cost an additional $1.3 billion.
“The ACT leader has said the party’s top priority in government is to lower the tax paid by corporations to 20 per cent costing around $2.8 billion a year rising to over $5 billion when cut to 12.5 per cent in 2017/18.
“All up these tax promises cost at least $10.5 billion a year which works out over four years to at least $42 billion, and possibly as much as $50 billion by end of the 2018/19 financial year. And that is without including the forgotten Peter Dunne who wants to introduce the regressive income-tax ‘splitting’ measure which Treasury said would cost around $500 million a year
“The total does not include the cost of any hidden surprises like Charter Schools that National is keeping secret from the public until after the election either.
“National has run a relentlessly negative campaign because it does not want to be up front with New Zealanders. Voting has already started yet National has still not released its fiscal plan for the next term. That is why National has resorted to misrepresenting Labour’s policies,” says David Parker.
5 September 2014 MEDIA STATEMENT