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Tax Freedom Day Today, Or in June, Depending On Who's Counting

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, April 30 NZPA - New Zealanders could be working as
much as a week longer to pay off all their taxes this year than they
did in 2006.

Independent accounting firm Staples Rodway today said early
research indicated the average New Zealander's so-called Tax Freedom
Day 2007 was likely to be even later than June 1, when it fell last
year.

It could potentially be up to a week later than last year and two
weeks later than 2005, Staples Rodway tax director Roger Thompson
said.

His figures are different to those published by the Business
Roundtable which labelled today Tax Freedom Day, three days later
than it fell in 2006.

The Roundtable's calculation was based on central government core
expenditure, which it said amounted to 33 percent of gross domestic
product (GDP).

Staples Rodway said its result took into account all taxes,
including income tax, local body rates and other taxes such as
petrol tax, cigarette tax and alcohol levies.

Staples Rodway said that if its provisional figures turned out to
be right, New Zealand's Tax Freedom Day would be nearly a month
later than Australia's and later than in Britain for the first time
since 1997.

Previously the firm said the tax burden on New Zealanders had
been reduced during the 1990s, with Tax Freedom Day almost four
weeks earlier in 2002 than in the early 1990s.

But in the past four years two weeks of that improvement had been
eroded.

The cause of the erosion was a combination of strong tax revenue
growth, and a slowing in GDP growth.

Despite their differences of opinion about when Tax Freedom Day
fell, both groups had no doubts that the lengthening of the time
taken to pay taxes was a bad thing.

Staples Rodway labelled the situation as "alarming" and
"increasingly bleak".

Roundtable executive director Roger Kerr said economic evidence
was that, beyond a certain point, government spending and taxation
were harmful to economic growth.

No country has achieved per capita growth rates of 4 percent or
more a year on a sustained basis with general government spending of
around 40 percent or more of GDP.

Measured by the OECD, total government spending in New Zealand,
was projected to be 40.7 percent of GDP in 2007, Mr Kerr said.

On that basis, Tax Freedom Day would actually fall on May 30, and
for the first time since 2000 would be after that for the OECD as a
whole, which this year would be May 29.

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