Tax package ‘has serious deficiencies’

Press, 9 March 1988, Page 2

Tax package ‘has serious deficiencies’

PA The Minister of Finance, Mr Douglas has told influential Australians that serious deficiencies exist in the New Zealand Government’s modified tax package. i In the latest issue of the Melbourne-based Institute of Public Affairs review, Mr Douglas said the revised package was designed mainly to give certainty to business for the coming i financial year. |

He said the revised package clearly did not address the position of either families or lowincome earners.

The Prime Minister, Mr Lange, and Mr Douglas announced on February 10 that the flat-tax proposal by Mr Douglas contained in |an economic statement on December 17[ had been postponed. [ In the 1.P.Al magazine, Mr Douglas : said that while the flatter personal tax scale (announced on February 10) jwould provide" extra incentives to those on relatively high incomes to save and invest in productive activities, similar [ incentives did not yet exist at the low-income end.

Mr Douglas said this remained an area where the Government had to meet two fundamental objectives — provide assurance and i protection :to those sections of the [population who needed it, !and to build into the [system encouragement [for those people to seek 'and keep work, ,to improve productivity and to save. “We have a [situation in New Zealand today where many ipeople can earn more |as beneficiaries than in work,” he said. | “That is obviously both socially and) economically disastrous.” he said.