NZ to review corporate tax, boost productivity
WELLINGTON, Nov 8 (AFP): New Zealand Prime Minister Helen Clark's new government will focus on improving the country's economic performance and intends to review company tax, parliament was told today.
In the traditional opening speech outlining the government programme, the Queen's representative, Governor General Dame Sylvia Cartwright, said the government had ruled out significant tax cuts.
Clark led her centre-left Labour Party to a third straight election victory in September and has formed a government with the support of minor centrist parties New Zealand First and United Future.
With inflation heading towards four per cent and interest rates on the rise amid a consumer spending boom, the government indicated it wanted to avoid any stimulation of the economy through further loosening of the purse-strings.
"Fiscal loosening-either by way of large expenditure increases above those already signalled or by way of significant tax cuts-cannot be considered," Cartwright said.
Finance Minister Michael Cullen would aim to maintain "substantial operating surpluses" in the next few years but would also look to improve economic performance, including a review of the corporate tax structure.