Key to Tax Cuts is Expenditure Cuts

Prime Minister John Key claims to believe in the power of tax cuts - so it seems odd that he is only willing to decrease taxes on income if we increase taxes on consumption, ACT New Zealand's Finance Spokesman Sir Roger Douglas said today.

"I asked him today why he wasn't willing to reduce Government expenditure by $1 billion - the amount expected to be raised by hiking GST to 15 percent, after taking into account the planned benefit and compensation package changes - in order to pay for personal income tax reductions," Sir Roger said.

"Unfortunately for us all, the Prime Minister confirmed what has become increasingly obvious: there will be no reduction in the real size of Government under National.

"The reality is that $1 billion amounts to approximately 1.5 percent of Government expenditure. The idea that it is too difficult to reduce expenditure by that much is nonsense. Half of that amount would be raised by scrapping the ETS, and other revenue could be raised by scrapping nonsense agencies like the Charities Commission, the Ministry of Youth Affairs, the Ministry of Women's Affairs, and many other bogus entities.

"In fact, we could secure massive tax cuts if we ended welfare programmes like Working for Families, which the Prime Minister again today called communism by stealth. Why he's not willing to do anything about it is puzzling," Sir Roger said.

ENDS