Little wonder, then, that in 2005 more than 20,000 New Zealanders moved to Australia, with our expatriates there reporting average incomes more than a third higher than back home. Multinationals are avoiding us and local companies’ growth prospects are constrained. GDP growth last year was a paltry 1.9%.
Our New Zealand mates are suffering from a Labour government that in the past six years has increased the public service head count some 33%. High personal and corporate tax rates are making it tough for NZ companies to compete…
…Governments around the world have learned the benefit of tax cuts. Between 1990 and 2005, the average OECD company tax rate dropped from 37% to 27%. In Australia, corporate taxes are now 30%, down from 34% in 2000, and personal taxes have been cut progressively over the past five years. The Australian threshold for the top personal income tax rate, for example, has been pushed out — from $46,200 in 2002-03 to $115,800 in the current tax year — while in New Zealand the upper tax threshold has remained at $40,200 ever since the top rate was increased in 1999 to 39%.
Meanwhile, the high tax structure is generating surpluses — $1.24 billion for the Sept 30 quarter. Tax cuts seem the obvious policy, but Labour prefers increasing government spending.
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