Labour promises to slash income tax

Press, 26 April 1978, Page 7

Labour promises to slash income tax

PA Auckland The Labour Party will go to the country in November with plans for a big upheaval in the tax structure and a promise to slash income tax.

Pre-empting possible Budget moves by the Government to ease taxes. Labour disclosed its hand at the week-end and its election goal — to put “more money in your pocket.” Labour’s aim is to end the present graduated tax scale and to lower income tax by putting more emphasis on indirect taxation.

Describing the moves as the biggest tax reorganisation yet attempted by Labour, the Deputy Leader of the Opposition (Mr Tizard) said: “We will stop the insane race to grab more and more of a family’s income by taxing it so. hard that there is no point in working overtime.”

The aim would be to tax spending rather than earnings. Tied to the taxation package are Labour proposals to boost production, cut unemployment, and to give New

Zealand goods more protection from imports.

Mr Tizard spoke of the tax moves when, as the party’s spokesman on finance, he gave his first pre-election speech on the economy at Glen Eden. Expanding on his comments later, he said the Labour plan was progressively to put more emphasis on indirect taxation and charge income tax by category. “It is not just a copy of the Australian system,” he said. “The idea is that if you are in a particular tax category and decide to work overtime or take on extra worlf you will not get slogged the higher amount of tax.” Labour intends to release full details of its tax reforms just before the Budget, so that its plans can be compared directly with the Government’s.

Mr Tizard was reluctant to disclose how much income tax would drop. “But it is certainly a substantial reduction,” he said. A Labour government would recoup the money lost from lower income taxes from high production, savings in social welfare payouts because of less unemployment, increased sales taxes, and levies on selected imports, he said. Mr Tizard told his Glen Eden audience: “We will change the Government’s habit of sitting back and

watching while factories close and production drops . . . we will give our manufacturers the incentive to help this country stand on its own feet.

“Local industry will get further encouragement and unnecessary imports will be cut to ensure that overseas funds are used for the greatest benefit.”

He added: “If you really want to own a fancy pair of Italian shoes my best advice is to buy them before election day.” The disclosures of Labour’s tax proposals is part of a special party effort to get main policy planks across to the people as early as it can.

The Leader of the Opposition (Mr Rowling) already has touched on housing, and policy statements have been made on transport and farming. The efforts of party spokesman are being boosted by the release of an economic “mini-manifesto” w’hich sets out Labour’s economic aims.

Among the economic policy planks are to “slash red tape” to get quicker decisions for manufacturing development; to help farmers so that they no longer “live poor and die rich”; to establish a Ministry of Consumer Affairs to stop shopping “rip-offs”; and to turn electricity pricing “upside down.”