Joyce sets priorities for tax cut moves
Finance Minister Steven Joyce has signalled that cutting the top tax rate paid by lower and middle income earners is his priority for tax cuts - if he has room to move in his first Budget.
In a speech to the Auckland Chamber of Commerce yesterday he said it was still too early to be sure of a surplus this financial year, particularly given the costs associated with the Kaikoura earthquakes.
Treasury also revealed yesterday that the books were in surplus by a narrow $9 million for the first six months of the current financial year - almost $700m ahead of forecast.
Surpluses are tipped to rise to $5.4 billion by 2018/19 and, provided they come to pass, that provided options, Joyce said in his first major speech as finance minister.
He was concentrating on four key areas for his May 25 Budget.
They were better public services for a growing country, building infrastructure, paying down debt as a percentage of gross domestic product and reducing the tax burden ‘‘and in particular the impact of marginal tax rates on lower and middle income earners, when we have the room to do so’’.
He said the country was seeing the biggest infrastructure programme for many decades, with the Government’s capital spending reaching about $7b, up from $3b or $4b a year in recent times.
In Auckland the level of work on the transport network was unprecedented, and disruption from that was one of the reasons commuter travel times were longer.
The Government was looking at other ways to manage demand including electronic tolling.
‘‘But to be clear, we see this as a way to make the roading system work better – and not as a revenue raising exercise.’’
Any road pricing initiative on existing motorways and highways would be as a replacement for petrol taxes and road user charges not in addition to them.
He and Transport Minister Simon Bridges had told the Auckland Council regional fuel taxes were not part of the mix because they were difficult to administer and were prone to ‘‘leakage’’ and cost-spreading. Longer term, they might look at private finance for some projects.
Auckland Mayor Phil Goff said he was disappointed in the move to rule out a regional fuel tax.
Putting the burden of the transport funding deficit onto ratepayers would push up rates by about 16 per cent next year, and he did not intend to do that.