ACT eyes company tax cut to hike economic growth

Last updated 12:40 03/08/2014
Jamie Whyte
ACT LEADER: Jamie Whyte.

Relevant offers


Report reveals details of Gerry Brownlee airport incident PM John Key arrives in Jakarta en route to India Prime Minister John Key's trade trip to India has been anything but smooth sailing 100 Aucklanders take up Government offer to relocate with $5000 grant Government to examine funding application for Joseph Parker world boxing title fight How does John Key fly around the world, and why did his plane break down? Youth delegate at Climate Change conference Briar Wyatt Add 'PM slams military for airplane breakdown' to other headlines you will never read Townsville media track down stranded John Key Mike Yardley: Legalising euthanasia a step onto a slippery slope

ACT says it can boost economic growth by a third with a policy to cut the company tax rate to 12.5 per cent.

Leader Jamie Whyte says this will increase investment, and job and GDP by one third, leading to higher wages.

He would fund the tax cut by slashing "corporate welfare," worth about $1.5bn a year, and carbon trading, worth $164m.

The current corporate tax rate is 28 per cent. Over the year to March, GDP grew by 3.3 per cent.

Whyte unveiled ACT'S economic policy at a candidate's meeting in Auckland this morning.

European and American studies suggest cutting the rate by 10 percentage points will make economies grow by between 1 and 2 per cent extra a year. Each 1 per cent reduction in the rate boosts wages by between 0.3 and 0.5 per cent, he said.

"No single policy proposal from any party in this election can do more to increase economic growth, create jobs and lift wages," he added,

Company tax is a "terrible drag" on growth and wages while raising "relatively little" revenue, he argued.

"The Labour party and their left-wing allies will no doubt complain that this is yet another ACT policy aimed at benefiting 'the rich.' They are wrong because, as explained, the primary beneficiaries of a lower company tax rate are workers whose pay increases."

Ad Feedback

- Stuff

Special offers
Opinion poll

Should the speed limit be raised to 110kmh on some roads?



Vote Result

Related story: 110kmh limit moves closer

Featured Promotions

Sponsored Content