New taxes won't make the boat go faster

Tax proposals announced by the Labour Party won’t make the boat go faster, says BusinessNZ.

BusinessNZ Chief Executive Phil O’Reilly said steeper tax on higher income earners would be an incentive to leave New Zealand.

“This would erode the tax base, rather than building it up. Five percent of New Zealanders pay around a third of all income tax, and bumping up their tax risks reducing their ranks further and making New Zealand poorer.

“A capital gains tax as outlined by Labour is unlikely to help the economy either.

“With all the proposed exemptions, it wouldn’t raise much revenue.

“And it would create problems of its own. It’s the exact opposite of what is widely accepted as the fairest and most efficient system: a broad-based, low-tax policy.

“It would be open to gaming – people would structure their assets to avoid it.

“And it would be complicated and expensive to enforce. Lawyers and accountants would be the main beneficiaries of the system.

“What’s needed from political parties is not more taxes, but policies to help us to grow the economy – lower taxes, responsible government spending and more sensible labour laws.”