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Biz can invest in themselves with drop in company tax rates
20 May 2010
The Budget’s surprise dropping of the company tax rate to 28% gives NZ business the opportunity to invest in themselves, grow and employ, and is a small but welcome edge over Australia, Auckland Chamber of Commerce says.
Chief executive Michael Barnett says coupled with the other tax changes, when the Budget talks of “NZ in recovery" , this equates to every New Zealander being able to move forward as a result of this Budget.
“Leaving more money in New Zealanders’ pockets leaves them to make the choice to spend or save.” he says.
"It would be good for NZ to see at least a large share of the personal tax cuts diverted towards savings.”
New Zealand economy is forecast to grow by about 3% over the next four years, after contracting in the last two years.
The recovery is being driven by stimulatory measures, a stronger global economy, a rise in export volumes and prices and higher confidence.
Finance Minister Bill English says he expects a positive affect on economy from the significant tax reform in the Budget
But he cautioned recovery would be gradual.
“Uncertainty continues to surround the outlook, particularly the strength of recovery and whether imbalances in the economy that built up in the previous expansion will adjust. There are also growing risks associated with recent developments in Europe related to sovereign debt.”
The minister says the Government is focussed on shifting economy away from borrowing and consumption and government spending and towards saving, investing and exports.
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