Bill English indicates tax cut is possible for middle income earners
Finance Minister Bill English has indicated that he might consider cutting taxes for middle income earners during the year 2017.
Englishalso said that he will soften the Budget's stance on cutting debt that will allow for further tax cuts in the country. He said that any tax cuts will depend on the level of surpluses in the economy. He said that there are also other considerations for cash flows in the economy that may influence decisions on tax cuts. There was no tax cuts announced in his eighth budget on Thursday. While speaking to the media persons after the Budget breakfast in Wellington, he said slower pace of planned debt reduction might utilise additional cash in the economy from the forecast surpluses between now and 2020 and leave nothing for the tax cuts.
English has indicated that the government is planning larger spending this year but is aiming to cut spending in the coming years. He said that he has taken a decision not to include a 2017 tax cut in the budget. The government is aiming to spend today in order to save tomorrow. They pointed out that the exiting allocation of $1 billion for new spending will not be able to cater to the growing demand. The addition funds will come from a fund of $2.5 billion that was saved for the election year. Out of the total $2.5 billion, the minister had kept $1.5 billion for offering tax cuts. Thus tax cuts now appear to be out of the agenda for the government until improvements in economic and fiscal situation are recorded.
English said, "Yeah that's one of the options. That would be implied by, for instance, putting more money into the super fund, reducing taxes or spending more than we forecast."
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