Joyce sets pri­or­i­ties for tax cut moves

The Press - - News - VER­NON SMALL

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.

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