Mr Templeton critical of Labour ‘tax bribe’

Press, 26 July 1978, Page 6

Mr Templeton critical of Labour ‘tax bribe’

PA Wellington No-one should be misled into believing that they would be better off as a result of the Labour Party’s new tax proposals, said the Minister in Charge of the Inland Revenue Department (Mr Templeton) yesterday.

“Labour proposed to fund its scheme by way of an overseas exchange surcharge — more correctly, a direct tax on imports,” he said. The cost would come out of the same pocket which received the tax relief, and would be a “highly inflationary way to fund Labour’s election tax bribe.”

“There is no way Labour can impose a tax of 10 per cent, exempt on imports that relate to export industries and other essential import that relate to xport industries and other essential im-

port items, and still get the $475M necessary to fund these tax proposals.” A tax on imports would substantially increase the cost of many basic imported food items, all petroleum products and transport, new materials and capital equipment for industry, medical and pharmaceutical supplies, capital equipment for hospitals, schools, scientific research, works projects and motorvehicles.

"Labour proposes to increase the costs of essential raw materials for New Zealand industry,” said Mr Templeton. “That is a dangerous gamble — a gamble that could have disastrous effects on our capacity to export profitably, and on the capacity of New Zealand industry to provide employment opportunities.”

On a realistic analysis of possible exemptions, the maximum tax take at 10 per cent would be no more than $275M, he said. The Leader of the Opposition (Mr Rowling) has attacked Mr Templeton’s estimates of the likely yield from Labour’s foreign exchange surcharge. “Mr Templeton’s estimates of the likely yield from a foreign exchange surcharge are as inaccurate as the esttimate of the total package made yesterday by his boss,” he said. “The facts are that a 10 per cent, across-the-board surcharge on all private purchases of foreign exchange would yield over $430M,” said Mr Rowling, replying to the statement front Mr Templeton that the maximum tax take at 10 per cent would

yield no more than $275M. Mr Rowling said Labour intended to exemplt a small range of essential products, and those people who had not travelled overseas in the last five years. Mr Rowling also commented on a statement by Mr Templeton that Labour’s tax policy would cost an additional $475M, not the S3B6M estimated by Labour. “Treasury costing of Labour’s tax policy is somewhat closer to the mark than the wild estimate made yesterday by the Prime Minister (Mr Muldoon) that it would come to more than $$73OM," said Mr Rowling.

“With a bit more work by the backroom boys, they will be able to come down a further SB9M to reach the estimate made by Labour’s economists," he said.