Fran O'Sullivan: Tax changes will keep Kiwis home

Fran O'Sullivan. Photo / NZ Herald

Kiwis have been sent a clear message to stay home and build their careers here with today's Budget package that will result in New Zealanders paying less tax that Australians once they hit the $50,000 pay rate.

New Zealand has also stolen a march on Australia with the announcement that the company tax rate will be cut to 28 cents - two years ahead of our transtasman neighbour.

Of itself this will not be enough to stymie the big outflow of New Zealanders which has resulted in 17 per cent of our skilled Kiwis offshore - the third highest rate in the OECD.

But there will enough left in the kitty to make many Kiwis think hard about their future intentions.

Finance Minister Bill English made clear that before today's budget announcement any Kiwi earning less than $200,000 could expect to pay more tax than their Australian counterpart.

The big challenge ahead of the Government will be how to overcome the competitive gap on other scores.