‘231,000 worse off’ over tax

Press, 19 November 1982, Page 6

‘231,000 worse off’ over tax

PA Wellington About 231.000 taxpayers •were worse off because of ’Budget tax changes. Parlia'ment heard yesterday. ' Sixty-four per cent of concessions go to the top 10 pep cent of income earners, according to figures read to the ;House by the Labour Party’s •finance spokesman. Mr R. J. Tizard (Otahuhu), during debate on the Inland Revenue estimates.

He said the figures corrected earlier information which had been supplied to the Public Expenditure Committee.

About 23,000 people, those earning between 54000 and $6OOO a year, were paying an extra $48.7 million in tax because of Budget changes to the system. The top 10 per cent of wage earners were receiving $585.6 million of the $9OO million total tax cut, Mr Tizard said.

The Minister in charge of the Inland Revenue Depart-

ment. Mr Falloon accused the Opposition of ignoring a need to regard people who were putting more effort into jobs and taking greater responsibility, such as those on middle incomes.

He said the tax changes had been designed specifically to assist the family and, in particular, the one-income family. To help low-income families, the Government had brought in a special tax concession.

Mr Peter Neilson (Lab., Miramar) accused the Government of being “soft on tax evasion.”

He told Parliament that the Inland Revenue. Department had prosecuted only 160 people this year for offences against the tax laws, compared with almost three times that number prosecuted by the Social Welfare Department. Tax frauds which had been detected this year represented $5O million in lost

revenue and this was only the “tip of the iceberg." Social Welfare had got back $1.25 for every dollar in staff costs spent in tracing fraud and overpayments. The tax department got a per dollar value of $4.59 for audit, $8.71 for inspectors’ investigations, and $11.49 on P.A.Y.E. investigations. “At this level of yield,, more emphasis should be piaced on detecting tax evasion,” Mr Neilson said. Mr D. C. McKinnon (Nat., Albany) said the practice of publishing the names of tax offenders was a good deterrent. Not a person or a company in New Zealand wanted to see their name in the published lists. Mr R. O. Douglas (Lab., Manurewa) said that in spite of the Government’s claims to have dropped the marginal tax rates, they had in fact gone up from the levels inherited by National when it ousted Labour in 1975.