May 12, 2006

LET THE MAORI HAVE IT BACK (via Gene Brown):

N.Z. Won't Offer Income Tax Cuts Like Australia (Bloomberg, 5/12/06)

New Zealand's Finance Minister Michael Cullen said he won't cut taxes in next week's budget, fueling concern that more workers will join an overseas exodus seeking better incomes in countries such as Australia.

Australian Treasurer Peter Costello this week cut the top tax rate and raised the threshold at which it kicks in. Cullen says he can't afford tax cuts in his May 18 budget because slowing economic growth is eating into tax income and he has to pay for spending promises in last year's election campaign.

"There's not much spare room at all,'' Cullen told reporters this week. "There aren't tax cuts'' in the budget.

After Costello's changes, a worker earning the equivalent of $75,000 in Australia will pay $17,850 in tax, while in New Zealand they pay $20,520, according to Joanna Doolan, a tax director at Ernst & Young Ltd. The tax cuts may add to the emigration that has taken 450,000 New Zealanders, equivalent to 11 percent of the 4.1 million population, to Australia.


Don't look for Tom Tancredo to try to stop Kiwi immigration.

Posted by Orrin Judd at May 12, 2006 4:32 PM
Comments

Actually New Zealand went through a series of quite sweeping free market reforms ("Rogernomics") starting in 1984. Here's a Policy Review article.

Posted by: PapayaSF at May 12, 2006 4:49 PM

Yes, they pioneered the Third Way in many respects.

Posted by: oj at May 12, 2006 4:53 PM

New Zealand can't afford tax cuts. Because their economy is stagnant. Tee-hee.

Posted by: b at May 12, 2006 4:59 PM

b, Exactly. Hope the Democrats read the article.

Posted by: Genecis at May 12, 2006 5:25 PM

NZ is now stuck in a vicious cycle, they're losing their more hard-working and creative people to Australia, so they need to cut taxes and encourage economic activity to keep them, wich they can't do because they've lost too many hard-working and creative people to Australia.

Posted by: Amos at May 12, 2006 10:16 PM

Well, they are the Canada of Down Under.

Posted by: Jim in Chicago at May 12, 2006 11:51 PM
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