Nod for business tax cuts

By COLIN JAMES

Voters back tax cuts for business. This is the finding of a poll of 503 people by BRC Marketing & Social Research.

BRC found 59 per cent in favour of cutting company income tax to 30 per cent from the current 33 per cent. Only 28 per cent were in favour of keeping the current rate. The rest had no opinion.

This runs counter to past surveys which have recorded suspicion and ignorance about business.

The poll, from July 22 to August 2, will lift the hopes of National Party leader Don Brash, who has made cutting company taxes a key policy for the next election.

National went into the last election promising to cut company tax to 30 per cent from 33 per cent and the top income rate to 35 per cent from 39 per cent. It now says high-income earners will have to wait for tax cuts.

"Our first objective is to provide relief for low-to-middle-income earners," Brash told an Institute of Directors' breakfast earlier this year.

Finance Minister Michael Cullen has vowed there will be no cut in the corporate tax rate. In his Budget speech he attacked the business lobby for calling for lower taxes, accusing them of waging "near-permanent war on the hopes and aspirations of most New Zealanders".

The corporate tax take is forecast to rise to $7.7 billion in 2008 from $6.9 billion in 2004 and $5.14 billion in 2002.

Aucklanders were particularly in favour of the lower rate: 65 per cent of those in the upper North Island were in favour. As would be expected, those on upper incomes were more in favour than those on lower incomes (but a clear majority of those on the lowest incomes still favoured a cut).

Those in favour gave reasons that the cut would boost the economy (10 per cent of all respondents) or jobs (8 per cent) or make the economy more competitive (6 per cent) - or just that taxes were too high (11 per cent). Only 2 per cent said it should be cut to match Australia's rate. The margin of error was 4.5 per cent.