Overtime ‘con trick’ in Budget-unions

Press, 14 August 1982, Page 6

Overtime ‘con trick’ in Budget-unions

PA "Wellington More than a quarter of the lowest-paid workers in New' Zealand get nothing from the Budget and the change in tax rebates includes a "con trick” on overtime, according to a union publication. A joint Federation of Labour-Combined State Unions paper, “Campaign against the cuts in. living standards,” said that of New Zealand’s one million wage earners, only one in 10 got something substantial from the Budget. Most of the 160,000 parttime workers faced a tax increase, or, at best, would receive no .; tax reduction. Most of the. 125,000 on low Wages, about $l7O or less, would get no tax relief, it said.

Most of the 380,000 full time workers receiving between $l7O and $2BO a week would get-very little in tax reductions - less than $lO a week. ’’’ ,

“These three' groups make up nearly two-thirds of workers. The Government says they must accept these insulting tax cuts as a substi-

tute for a wage increase this year,” the paper says.. Describing what it calls the overtime con trick, it says that with present overtime rebates many workers paid either 33c or 46c on each extra dollar earned. S

But, from October 1, the overtime rebate would disappear and those who qualified for the family rebate would lose 15c for each extra dollar earned. So for many of those on the 31 per cent tax bracket overtime would be taxed at 46c, it said.

The paper said the Budget was no substitute for price increases and urged people to "demand a wage increase now.” .

An analysis of the Budget prepared by the Public Service Association and circulated at the P.S.A. conference in Wellington said that the Budget would cause a fairly sharp decline in economic activity.

"This will inevitably result in an increase in unemployment, which will probably start to show up in the figures of registered unem-

ployed when the schoolleaver population starts to lodk for jobs but finds that very few are available,” it said.

The unions’ assertions were “misleading,” said the Associate Minister of Finance (Mr Falloon) yesterday.

The main aim of the Budget’s tax provisions had been to remedy the sizeable differences in tax payable by one-income and two-income households, he said. f These differences had been a source of public concern which had been identified in the report of the task force on tax reform.

The . impact of the new personal income tax measures had to be seen in the context of the household. Many of the spouses paying more tax would be in households where the principal income-earner received a tax reduction, he said.

“Only about 4 per cent of the million households in New Zealand are estimated to experience a net increase in personal income tax,” said Mr Falloon.