Most in top tax bracket by 2024

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Wage rises will push most Kiwis into the top tax bracket within 15 years, new Treasury figures show.

The Treasury's forecasts show that the average New Zealand income will top $70,000 by 2024 - adding impetus to calls for a tax- system overhaul.

Finance Minister Bill English said workers on the average wage would be hit with the top 38c tax rate if tax rates remained the same.

Workers on the average $49,500 wage currently pay between 12.5c and 33c.

English said having workers on the average wage in the top tax bracket was contrary to the goal of "an internationally competitive, low- tax economy" that provided incentives for workers to stay in New Zealand.

"The Government's aim is to keep both debt and taxes low."

A tax working group is due to report back to the Government early next year on tax-system options after declaring the current system flawed.

The Government was forced to cancel planned personal tax cuts because of the state of the economy.

As the economy improves, the Government will be under pressure to reinstate the tax cuts and lower corporate tax rates.

The Government had signalled tax cuts in the 2010 Budget.

However, it says any cuts will have to be balanced by savings in other areas.Fairfax

- © Fairfax NZ News