Recommendations in the Tax Working Group's recently released report could – and should – have been much bolder, according to the chief executive of the New Zealand Institute for Economic Research.“Anyone who seriously thinks that the gro
Recommendations in the Tax Working Group’s recently released report could – and should – have been much bolder, according to the chief executive of the New Zealand Institute for Economic Research.
“Anyone who seriously thinks that the group’s recommendations are radical needs a reality check,” Jean-Pierre de Raad said today in NZIER’s Insight.
Bolder tax reform was needed to gatch up with our cousins across the ditch, he said.
“We need to accept the adjustment to a higher long-term growth path might cause some short term pain, and we need political leaders to commit to seeing the reforms through.
“Successive generations will miss out on higher living standards if we keep choosing second-best options based on worries about short term adjustment costs”
Tax initiatives including encouraging people to stay in lower income positions in order to access Working for Families payments retarded productivity, he said.
“We agree with the report’s diagnosis – the tax system is indeed a long way from best practice. And we agree with the intent and spirit of the recommendations. However, the report needs to be seen as a starting point for a more concerted discussion about what we, as a nation, want the economy to deliver and what that requires.”
The group’s report was released on Wednesday and, among other things, recommended aligning top personal, trust and company tax rates, raising GST to 15% and cutting back the tax break to property investors.
