LAWRENCE GULLERY
The Government's proposal for business tax cuts is good news but should be introduced sooner, Hawke's Bay Chamber of Commerce co-vice presidents, Douglas Ducker and Peter Holly, said today.
The Government has raised expectations of a corporate tax cut and is set to come under renewed pressure to deliver personal
tax cuts as a result.
A cut in the corporate tax rate to 30c from 33c is one of several options outlined in the much-awaited business tax review released yesterday by Finance Minister Michael Cullen and Revenue Minister Peter Dunne.
The cut, which would cost $540 million a year, is seen as a move that would improve New Zealand's productivity and growth and bring the country's corporate rate into line with Australia's.
But any decision won't take effect until 2008.
"We want it sooner," Mr Holley said.
"It should be immediate, rather than predictive."
Mr Holley said the tax cuts needed to be implemented now to bring New Zealand businesses in line with Australia's.
"We need to be in a equitable position in terms of where Australia is," Mr Holly said.
"They are talking about 2008, which is quite a long way down the track," he said.
Mr Ducker, who is also managing director of Pan Pac Forest Products, said businesses taxes in New Zealand needed to at least match Australia's business tax of 30 percent.
The Government's proposal could signal a tax-rate cut for businesses from 33 percent to 30.
"The obvious thing to say is the lower the better," he said. Mr Ducker said the chamber would make a submission on the Government's discussion document.
Future Products chief executive Robert Darroch said the proposed tax cuts could put businesses on a level playing field with Australia's. However, there needed to be a focus on incentives for businesses investing in research and development, which is an area of paramount concern to Future Products.
"At the moment there is some help from Government but nothing in the form of tax cuts ... there's no incentives there at the moment. Research and development is the lifeblood for the company when we are trying to be first in the market," Mr Darroch said.
Future Products is an equipment manufacturing company for the service and hospitality industry around the world. As the Government opens the door to a corporate cut, its move is triggering further speculation about personal tax cuts.
* Editorial - P6
