New Zealand rejects OECD tax suggestions

dpa German Press Agency Published: Monday April 23, 2007

Wellington- The New Zealand government rejected Tuesday an
international report on the economy that called for raising the
pension age and major tax reforms.
The annual survey of the Organisation for Economic Co-operation
and Development (OECD) said New Zealand had "one of the most flexible
and resilient economies in the world," but living standards had
remained 16 per cent below the membership's median for several years.

It cited a large overseas debt, low savings rate, poor
productivity and rising inflation as particular areas of concern.

The OECD said New Zealand may struggle to meet the retirement
costs of its ageing population and should look at raising the pension
age from 65.

Finance Minister Michael Cullen immediately ruled out an increase
in the pension age, saying it was not on the Labour-led coalition
government's agenda.

The report said New Zealand's living standards had remained 16 per
cent below the OECD median for some years and advocated cutting the
top rates of income tax, raising the goods and services tax from its
current 12.5 per cent to compensate and introducing a capital gains
tax.

These measures were also ruled out by Cullen's deputy Trevor
Mallard telling Radio New Zealand, "They've raised a number of things
which are just not acceptable."

Mallard dismissed parts of the report as reading "like a National
Party manifesto", referring to the main opposition conservative
party, which campaigned unsuccessfully on comprehensive tax cuts at
the last election in 2005.

He said the government had posted large budgetary surpluses over
recent years and introduced a superannuation fund and new national
savings scheme to ensure future pension requirements would be met.

© 2006 - dpa German Press Agency

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