Pages

Thursday, 16 December 2010

"Tax cuts don't cause growth"

...actually, it all depends on how you cut taxes, and what you raise. By raising GST at the same time as cutting income tax, the government effectively killed off any growth in consumer spending and hence immediate growth in the wider economy. Raising GST was politically one of the toughest decisions this government has made so far.

By doing so they've given New Zealanders reason to save. The same journalist The Standard quotes also called for a GST rate of 20% just last week (compare that with Roger Douglas' proposed rate of 17.5% in 1988).