9 Feb 2010

MPs briefed on PM's speech

1:49 pm on 9 February 2010

Prime Minister John Key has briefed National Party MPs and provided opposition MPs with details of his speech to Parliament, which he will deliver shortly after 2pm on Tuesday.

The main focus of the address will be the economy, and tax reform.

Mr Key says the speech will provide New Zealanders with a strong sense of what the Government wants to achieve this year.

He says the Government has been working on the reforms he will refer to, for about four months.

A tax working group report recommended a cut in the top tax rate, a rise in GST, as well as other options including a land tax and capital gains tax.

Radio New Zealand's Parliamentary chief reporter says it's likely Mr Key will give indications about the Government's intentions in all of these areas.

Mr Key acknowledges not everyone will support the changes and concedes his popularity may take a knock.

Mr Key says there is still work to do on the reforms the Government is planning and more detail will be revealed in the budget on 20 May.

Tax cuts recommended

The Goverment's tax working group has recommended to Mr Key that personal tax rates be cut across the board.

The head of the group, Bob Buckle, told Nine to Noon on Tuesday that part of the unfairness of the current tax system is that there are so many opportunities to avoid the top personal tax rate, that it is not very effective.

He said the main message in the report was the reliance of New Zealand on taxes which do not encourage growth.

Professor Buckle said any rise of GST would be a one-off jump in price levels and beneficiary and superannuitant payments would have to be adjusted to reflect them.

audio:http://www.radionz.co.nz/audio/national/ntn/2010/02/09/new_tax_proposals]Listen to more on Nine to Noon

Mr Key is deliver a Prime Ministerial statement to Parliament shortly after 2pm.

The speech will set out the Government's programme for the year.

Mr Key says lifting economic performance is the Government's main goal this year and changes to the tax system feature prominently as part of that agenda.

Labour Party leader Phil Goff says any changes to the tax system must be fair to all New Zealanders.