Tax cuts to feature in package

Press, 27 November 1987, Page 1

Tax cuts to feature in package

By

BRENDON BURNS,

political reporter

An economic package containing income and business tax cuts and revised welfare payments would be introduced by February, the Prime Minister, Mr Lange, announced yesterday.

He downplayed the prospect of an increase in GST but said this could not be ruled out. Also in the package would be plans to sell more State assets. Mr Lange took the unusual step of calling an afternoon press conference about the economic package after days of speculation that one was imminent. The package had been under preparation for a while by the Minister of Finance, Mr Douglas, and was not, said Mr Lange, being advanced or altered because of the sharemarket crash. But he said it was very important for the business community to know the Government’s plans as soon as possible. To that extent, the purpose of the package was to be reassuring. However, Mr Lange said release of the package before Christmas was unlikely. The Leader of the Opposition,

Mr Bolger, said the lack of an early announcement would be damaging, as art expectation of imminent moves to boost the economy had been created. Mr Lange gave few specific details of what the package would contain. It would be released by February at the latest. It would reinforce the Government’s economic reforms. “There will be in the course of this Government cuts in personal and business income tax,” said Mr Lange. These were not likely to take effect until October. “You’ve got two rational dates, April and October (the start and half-way points for the financial year), and I would think that April would be too soon.” Asked if there would be an increase in GST, Mr Lange said that would have to be examined. But there was no overwhelming desire within the Govern-

ment to give inflation a boost with the cost of living now moving downwards, he said. He suggested an impending document on company tax might address the shortfall in Government revenue caused by cutting income and business tax. Mr Lange also announced that the Government would privatise more State assets. The speech on privatisation given by the Minister of StateOwned Enterprises, Mr Prebble, last week, which Mr Lange was at the time keen to downplay, was the sort of analysis the Government would use, he said. The speech suggested a case-by-case examination of selling such assets as Coalcorp, Forestcorp, Property Services, the BNZ, the D.F.C., Postßank and the Rural Bank and Radio New Zealand’s commercial stations.