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Taskforce announces ways to save government cash

Monday, November 30, 2009
New government ways to save cash. Image: Getty
Read more: business news
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Don Brash wants to see New Zealand close the pay gap with Australia by 2025 with measures including big cuts in top tax rates, cashing up the superannuation "Cullen Fund" to reduce government debt and a traffic congestion tax in Auckland.

The 2025 Taskforce, chaired by Mr Brash, will announce today its report into ways to increase New Zealand's productivity, according to the New Zealand Herald.

The main recommendation is to reduce Government operating spending from 37.3 percent of gross domestic product to 29 percent within four year.

Steps to reduce Government spending and debt could include congestions charges being introduced into central business districts, with the roll-out starting in Auckland for drivers.

Interest-free student loans could be scrapped and the current 20 hours free childcare allowance could be made subject to means testing.

The age of eligibility for the pension could be raised in line with increasing life expectancies and the NZ Superannuation Fund or Cullen Fund could be liquidated so the Government can get itself into the black sooner.

In the report, a new "flat" tax of between 20 and 25 per cent rate would be introduced at a reduced rate for workers and businesses.

Now the top personal rate is now 38c in the dollar, or 30c for company tax.

On Friday, finance minister Bill English said baseline budget spending had increased by 45 percent since 2005 and the economy had grown by 15 percent.

"This kind of rampant spending growth is unsustainable and cannot continue," he said.

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What do you think of these proposals? Should the Government adopt the suggestions from the 2025 Taskforce?

User comments
Unfortuately this all sounds like the same old tired moneterist dross that was trotted out in the 80s, 90s and now the 00s. Remember Douglas telling us to endure the pain and the light was at the end of the tunnel? Unfortuatey that tunnel was endless. Remember Jim Bolger telling us to admire the rich and the wealth would trickle down to those at the bottom if we helped the rich get richer? Yeah right! The rich got richer, a few became rich, some had finance companies and we got ripped off, some got rich developing property and we got leaky homes, but no one at the bottom has ever seen anything good from any of it. The tax system needs an overhaul all right but raising the retirement age? Get real. People are living longer but are not necessarily capable of working longer, especially in physical jobs. Also if the retirement age rises then people will need Kiwisaver and the like more than ever, not have it scrapped. This is typical wealthy people making plans for poor people's lives.
As usual the rich are taking away from the poorer people in the community perhaps if these rich people on high wages actually looked at really budgeting their own spending and extravagant behaviour all the trips houses meals for the boys etc and actually started doing something which was for the good of all people of New Zealand we would all be better off greed is the main trouble that NZ is in trouble and that is the greed of people in high positions often the perks are worth more than the tax cuts or any cuts the reduction in staff does not stop the spending because the top people do not cut or stop their own spending and definately do not work harder just greedy greedy people
Don Brash ignores the value of the social wage and if he has his way we the people will have more to pay for and less to pay for it. The failure of NZ is directly linked to the policies of the new right which were to fix our problems when they were introduced by Lange and Douglas. For God's sake we need a return to State Services provided on the old public service model , very much including health care and government cooperation in funding and planning business infrastructure. The exporting of jobs is a result of the policies of the new right but clearly we can't sustain the unemployment, crime and social costs they have incurred. We are a small nation - we must work together to create and sustain jobs not chop NZers out because a grossly exploited Asian is cheaper.
In response to above. Prior to the last election the Labour government had Billions of dollars put away. As a tactic to get back into power (which didnt work) this was spent within a year and a half on unsustainable ventures within New Zealand. National was then left with a recession and no money to deal with it. By dropping tax (accros the board) more money is freed up for buissness' who are currently struggling, this would mean investment, bigger buisness and therefore more jobs. Yes, Australia does have an excellent super annuation scheme, but they also have the economy to support it and whether we like it or not New Zealand currently does'nt. I therefore commend National for at last making an attempt at moving foward rather than the previous spiralling debt and bad economic decisions by labour. Kiwisaver is a prime example of this. Simply another form of tax on already struggling buisness,' I have to say get your head out of the sand and stop asking for handouts!
Great go for it, it is a no brainer that a flat tax will incentivise people to work more, top wages with fall into line with productivity, less wasted money spent hiring accountants. the government infact will see a higher tax return on people who should currently be paying tax but are finding loopholes to avoid the higher tax brackets. Increasing retirement age in line with life expectantcy will have to happen sooner or later otherwise it is an unsustainable benefit.
Another fiasco wasting valuable taxpayer money. Why weren't Guy Espiner, Brian Gaynor and others more well informed economists on the task force. What needs to happen is to raise taxes, remove gst on food then raise gst on luxury items. taxes need to go up not down to fund valuable services like health and education that no other country has for free. Next there are huge inefficiencies with businessess that need identifying and remedied--- young people need training and promoting to manage operations as opposed to the old boys network--they will keep leaving the country. Productivity needs to triple and can only happen if this country's population is educated, off welfare that comes a little to easily when one goes to the shopping centres and sees far too may single young mothers, and the population needs to double especially in rural areas to form businessess and jobs. that will increase government coffers. New and exciting services training and development need to happen not ra
no i do not think this is the way to go it relates to the 30 ties when my father got 3 pound a week and had to pay 3 pound to go to the doctors they took half a crown in the pound where is that todayunless you are well off you cant get the basic nessities let alone feed and cloth your family some cant do that now what you get in extra pay you have to spend on the nessitis what is this lets get real john k
Im quite sure Don Brash is on the right track for the small proportion of the population that have huge fortunes and dont have to worry about working and paying for food,accomadation,health,education and retirement.Good on you Mr Brash and the chosen ones that live oblivouslyor arrogantly in your small Utopia
BRASH IS ABSOLUTELY RIGHT! IF WE ARE ALL TO PROSPER IN THE LONGTERM, THEN IT IS CRUCIAL THAT WE TAKE THE HARD DECISIONS NOW! IT IS TIME FOR OUR BELOVED LEADER TO SHOW BACKBONE AND MAKE THOSE DECISIONS - REGARDLESS OF THE SHORT TERM PAIN!
So Don Brash thinks cutting taxes on the rich will increase GDP. In real life, the people who make the most money, make more money by having machines replace more and more workers. Then these people who are replaced are either on the unemployment benefit, looking to compete with other people for the same job, or become self-employed. Cutting taxes on the rich, will give more money into the pockets of those who maximise profits, by finding ways of replacing workers. If you really want to create wealth, how about this, charge no tax on the first $10,000 to those who have lost their job and are self-employed for the first two years. It will give them a chance to start somewhere, and grow their business. If Dr. Brash believes tax cuts to those who replace workers with machines is the way to grow rich good luck. But I know that won't help get the people at the bottom get somewhere, as they will be taxed even more.