Archive for the ‘Budget 2007’ category

Budget popular, but so are tax cuts.

May 18, 2007

Sharpenz has just done a poll of 629 people on their thoughts on the budget.¬† 64% of New Zealanders¬†support the cut in the company tax rate, with 10% opposed.¬† 77% agree with tax credits going to Kwisaver, with 11% disagreeing. 60% agree with employers being required to put money into their employees kiwisaver account, with 25% opposed. However only 39% of peopel support the new regional petrol taxes, with 47% opposed. 53% of people say they will probably use Kiwisaver, with 37% saying they probavly won’t.

However tax cuts remain popular. 50% of voters would prefer the money spent on Kiwisaver to give them a tax cut now. When asked if they wanted a tax cut if it would cause intrest rates to rise, 32% said yes, 38% want one delayed and 25% opposed to any new tax cuts.

In conclusion, while most people don’t have a negative attitude towards the budget, public demand for tax cuts is still strong.

The money go-around

May 18, 2007

Kiwiblog has an excellent post showing that the overall effect of the budget on bussiness. It is well worth reading and shows that the compulsory bussiness payments for kiwisaver ( a de facto payroll tax) represents the equivalent of a 5% increase in the company tax rate. It shows that bussiness is actually worse of under this budget than before this budget.

Budget unveiled

May 17, 2007

Dr Greedy Cullen has unveiled his eighth budget. There are no big suprises. It involves a 10 cent increase in petrol tax for Auckland and Wellington, which will be used to pay for the eletrification of Auckland’s rail network and new roads. Also included is the cancellation of the “chewing gum” tax cuts anounced in 2005. This means that by 2008 14% of taxpayers will be paying tax at the top 39% tax rate, much higher than the 5% Labour promised in 1999. This is a promise they have failed to deliver on. On the positive side there is a cut in the company tax rate from 33% to 30%. However much of the money bussiness save from this will go to compulsory payments into their employees kiwisaver accounts. David Farrar has a good pst with tables on the changes to Kiwisaver, which involve the employee contributing 45 of his/her salary into kiwisaver, and for every dollar he/she puts in to his/her kiwisaver account, the government also puts 65 cents in. The employer is required by law to put an amount of money equaling 1.4% of their employees salary into their Kiwisaver accounts (once tax rebates are taken into account), effectively a 1.4% payroll tax. Also included is the abolition of the cap on chrity tax rebates, as advocated for by John Key earlier in the year. Overall this budget is a mixture of good and bad, but the bad outweighs the good.