Monday, 29 March 2004, 12:05 pm
Press Release: New Zealand National Party

NZ out of step on corporate tax rates
National Party Deputy Finance spokesman John Key is calling on the Labour Government to review its anti-business tax policies in the wake of an international survey which gives backing to National's programme.

"National supports a lowering of the corporate tax rate to at least match Australia in a bid to encourage investment and growth on this side of the Tasman.

"The KPMG world tax survey confirms that many of our international competitors are using corporate tax rates as a carrot for foreign investors.

"New Zealand is now at serious risk of being left behind. High taxes, increasing compliance costs, labour law reforms and a logjam in the RMA process have all been identified by business leaders as barriers to growth.

"Since Labour was elected in 1999 the average OECD corporate tax rate has fallen from 35% to just below 30%, with more than two thirds of OECD countries cutting their corporate tax rates," Mr Key says.

"Meanwhile, the Labour Government has stubbornly left the New Zealand rate unchanged at 33%.

"The KPMG report has also found that eight of 30 OECD countries reduced their corporate tax rates over the past year, while 21 countries have lowered their corporate tax rates since 1999.

"We've moved from a position where we were better than average in 1999 to a situation where we are now worse.

"The survey clearly says 'if we want to provide incentives to business, the best way to do this is to lower our tax costs across the board, not just for selected industries'. Michael Cullen should be sitting up and taking notice," says Mr Key.