25 May 2012

Opposition labels Budget trivial

12:10 pm on 25 May 2012

Opposition parties are arguing the Budget should have been bolder in its attempts to grow the economy.

Labour said the Budget delivered on Thursday will deliver zero growth and zero hope and send New Zealanders flocking to Australia.

Opposition parties also say tax changes are minor and not enough to support the development of manufacturers and exporters.

Labour's finance spokesperson David Parker says returning the Government's books to surplus by 2014/2015 will not cure the country's fundamental economic woes.

Mr Parker told Radio New Zealand's Morning Report programme the Budget does nothing to lift exports which in the year to April fell 17%, an $800 million drop.

"That's the fundamental problem, because the projections in this budget show that even when the Government gets back to surplus the country is still going backwards."

ACT leader John Banks says a small interest rate on student loans could have raised more than $800 million a year.

On tax changes revealed in the Budget, the Labour Party says the Government is being petty in picking the pockets of children, when it should be tackling the big issues in the tax system.

The Green Party says the Government's focus is too narrow in striving towards its self-imposed target of getting the books back into surplus, and it should have introduced a capital gains tax to raise money.

But Revenue Minister Peter Dunne says the Government is getting more money out of closing tax loopholes than it would by introducing tax systems that are complex and inefficient.

The budget clamps down on two tax loopholes and removes three tax credits in a move that is expected to save the Government $410 million over the next four years.

Tax rules on renting out assets such as holiday homes are tightened and new livestock valuations rules will prevent farmers who change valuation schemes getting an unintended tax break.

Three tax credits will also be removed; the income under $9880 tax credit, the childcare and housekeeper tax credit and the tax credit for children in part-time work, which will be replaced by a limited exemption.