Finance Minister Steven Joyce has given some indications of Government thinking on tax cuts (in election year).
Finance Minister Steven Joyce has signalled that cutting the top tax rate paid by lower and middle income earners is his top priority for tax cuts.
In a speech to the Auckland Chamber of Commerce on Thursday he said it was still too early to be sure that a surplus will be achieved in the current financial year, particularly given the costs associated with the Kaikoura earthquakes.
Treasury revealed on Thursday that the books were in surplus by a narrow $9 million in the first six months of the current financial year – almost $700m ahead of forecast.
He was concentrating on four key areas for his first Budget on May 25.
- better public services for a growing country,
- building the infrastructure a growing modern economy needed,
- paying down debt “as a percentage of gross domestic product”
- reducing the tax burden “and in particular the impact of marginal tax rates on lower and middle income earners, when we have the room to do so”.
The Government has let bracket creep effectively increase tax rates for all income earners over the past eight years – something Michael Cullen eventually got hammered for by voters in 2008.
One could be a bit cynical about now offering to address this in the first election after John Key’s exit.