Government misleads Kiwis over tax calculator

The Government is misleading Kiwis in the ‘official’ information it’s peddling about the impact of inflation on their weekly earnings, says Labour Finance spokesperson David Cunliffe.

David Cunliffe said that under questioning in Parliament today Finance Minister Bill English had confirmed that the Government had failed to include the Treasury’s actual forecast inflation or other expected price movements in its online tax benefit calculator.

“Because of this Mr English effectively admitted that the Government had “overstated the benefits to middle and low-income New Zealanders of the tax switch in Budget 2010.

“It is unacceptable that when Treasury is forecasting 5.9 percent inflation in 2011, the Government’s tax calculator on the Treasury website fails to take full account of this,” David Cunliffe said.

“The reality is that 5.9 percent may even be an understatement, given that the Minister confirmed today that the Government had omitted the potential impact of property tax changes on rentals.

“The Government’s estimate of net benefits also excludes quasi taxes like ACC increases, increased child care costs and so on,” David Cunliffe said.

“By Labour’s calculations minimum wage earners will be worse off until 2014, and average wage earners won’t even catch up then. That’s two elections away.

“Kiwis have been misled by the Government with an online tax calculator that does not include the real impact of forecast inflation,” David Cunliffe said.

“Most Kiwis will be worse off until at least 2014 and face the prospect they will lose further essential services as the Government further reduces spending.”