Tax, tax and more tax

Australia is looking pretty appealing right now.  Apart from the warmer weather, Australians are set for large tax cuts come election time, no matter who wins, with both major parties beating the drum. 

Since 2000, Australia has been lifting personal income tax thresholds as well as reducing some personal income tax rates, while Kiwis haven't had any cuts to their personal tax since 1999 and it's wearing thin.  Since 2000, the average wage has risen by 30%, while taxation on that wage has increased by 40%. 

The news from across the ditch came just days after Dr Cullen announced his mammoth surplus of $7.9 billion, which proved again that Labour is taking more money from you than they need.  Even after that massive surplus was announced, Dr Cullen still couldn't get his tongue around the words 'tax cuts', but there's no doubt he will smash the piggy bank next year to buy votes. 

While your pockets haven't had any relief, Labour's tax hoard has been creeping up in other ways as well.  Take, for example, the money paid to ACC via petrol and the licence fee for your car.  Every time you fill your tank you pay 7 cents a litre in tax, for every $100 you earn $1.50 goes to ACC, and of the $183.22 for licensing your car, $111.03 goes to ACC. 

And if that wasn't enough, ACC wants more.  In their proposed levies for 2008, most people driving petrol cars will have a $25 increase in their licence fee, taking ACC's take to $136.  They also want a 27% increase in the petrol levy, from 7.33 cents to 9.34 cents a litre. 

ACC says operational costs are one of the reasons for the increases, yet in their proposal they spend only three lines discussing why, saying it's down to depreciation and staff costs.  These increases are unjustified and hard to take given the already high tax take and continuing rapid rise in the cost of living.

Things don't get much better for employers, especially the self-employed, with some set to pay up to 47% more in ACC levies next year.  Let's hope they don't drive cars as well!

Earlier this year, the Government chose to merge the employers' and self-employed accounts into one. At that time there was a $600 million surplus in the employers' reserve account.  They gave $100 million back to employers and chose to keep $500 million in the kitty, which has grown to $800 and is benefiting no one. 

On Wednesday, the ACC Minister Ruth Dyson effectively admitted that some of this whopping surplus will be used as a bribe next year to 'smooth' levy rates.  ACC has been flogging employers and the self-employed too hard for them to fall for Dyson's spin - the promise is nothing more than a mirage.

Meanwhile, the self-employed are having an incredibly rough time with ACC.  During the debate about merging the employers' and self-employed accounts, Dyson proclaimed that doing so would 'smooth' levies for the self-employed.   Well, she couldn't be more wrong about that. With the levy bills for 2008 in mail boxes I have received many angry calls and emails from people facing levy hikes of more than 30%.  One person, despite having the same cover since 2003, has had increases of at least 10% for the past four years and his bill for next year has gone up by 35.6%. A self-employed truck owner/driver has been sent a bill that's 47.5% higher than last year's, despite receiving the same income.  ACC even had the gall to tell him this increase is only the beginning, and his bill could go even higher over the next three years due to the phasing in of the new account.

Dyson's hint of an election-year bribe is cheap in the face of the distress the levy bills are causing businesses.  The bribe is even cheaper when you consider what ACC spends its money on. Remember the $5.1 million 'Covered' campaign, the slick PR stunt to market the  monopoly  ACC?  Remember the ads found by the Advertising Standards Authority to be misleading?  Following the public's outcry about this blatant waste of taxpayers' money, the campaign seems to have disappeared without a trace. 

The Labour Government needs to stop treating Kiwis like they're puppets on a string.  People work hard for their money and should be able to choose how they want to spend it. After all, they're bound to be more responsible than the Labour Government.  

We know that tax cuts are affordable, and National is committed to implementing progressive tax cuts to reward people for their hard work.