John Key
26 February, 2010
Key Notes - Improving our tax system
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IMPROVING OUR TAX SYSTEM
I've had lots of comment and questions about our ideas for tax reform, and I want to thank those of you who have shared your views.
Over the past eight months, the Tax Working Group has looked at our tax system and found that the mix of taxes is not ideal. We want to fix that, to improve our economic performance, help create sustainable jobs, and lift family incomes.
We'll be making some changes to the way property is taxed. Those changes will be fairer for taxpayers. We'll announce details in the Budget in May.
As part of the overall package we are also considering increasing the rate of GST to 15 per cent, together with a reduction in personal income taxes across the board, and up-front increases in benefits, New Zealand Superannuation, and Working for Families payments.
What would be the effect of this tax switch?
Prices would rise by just over 2 per cent, but at the same time people would have more money in their pockets through income tax cuts, and increases in benefits, Super, and Working for Families.
As a Government, we are working to ensure that the extra money in people's pockets would be more than the increase in prices. If we can't make sure that happens for the vast bulk of people, we won't be increasing GST.
Today, in a speech to Grey Power on the North Shore, I spoke more about our proposed tax changes and how they will lift superannuation payments.
Read and comment on my speech here.
MAKING ACC AFFORDABLE, SUSTAINABLE, AND FAIR
National is committed to ACC. We want it to be a fair and efficient 24/7 no-fault insurance scheme for all New Zealanders. But in the past four years, the cost of ACC claims has risen by 57 per cent - five times as fast as inflation. Meanwhile, unfunded liabilities have blown out from $4 billion to $13 billion.
Without changes, this would mean big increases to ACC levies for everyone - families, workers, and employers. That's why this week we passed a new law to help get levy increases under control, and make ACC more affordable, sustainable, and fair. Click here for more details.
BOOSTING DOCTORS, NURSES, AND MIDWIVES
The second intake of Nationals' voluntary bonding scheme for graduate doctors, nurses, and midwives has opened for registrations. Under the scheme, graduates who are keen to work in hard-to-staff areas and specialties for three to five years are eligible for student loan write-offs and cash incentives.
Demand last year was huge. We expected 350 doctors, nurses, and midwives to apply. We ended up welcoming 890 into the scheme. That's great news for areas with shortages of critical health professionals. This year we've added to the areas and specialties in the scheme. Registrations for graduates close at the end of April.
LIFTING ACHIEVEMENT IN OUR SCHOOLS
A few weeks into the school year, it's great to see the vast majority of teachers and schools introducing National Standards in a practical and professional way. National Standards will ensure primary and intermediate schools regularly assess children's progress in reading, writing, and maths, and provide that information to parents in plain language. The standards will help identify pupils who are struggling so that teachers and parents can give them extra help.
Last week we appointed an independent advisory group to support the implementation of National Standards. This group, which includes Professor John Hattie, will provide the Minister of Education with free and frank advice about National Standards, and any refinements that could make them better. Learn more about National Standards here.
BACKING THE BAY
Last Friday I had a really busy day in Hawke's Bay - as Prime Minister and Minister of Tourism - catching up with the locals. A big thank you to everyone I met for making the day in the Bay such a great one. See photos by clicking on the links below:
Watching the boys wharf jump and checking out the McLean Park upgrade
Meeting workers at Mr Apple in Whakatu
Visiting the Havelock North Community Centre
Getting on my bike in Hastings to support Bikes in Schools
Enjoying the Art Deco Festival
FROM MY DIARY
Today I've been in my electorate and tonight I'm opening the Asia-New Zealand Lantern Festival at Auckland's Albert Park.
On Saturday I'll be at the Helensville Show. If you live in Auckland, I hope you'll come and join us for a great day out!
Best wishes 
John Key
Prime Minister
