Saturday, May 22, 2010

2010 Budget a Good Start

Thurday's 2010 New Zealand Budget was probably one of the best I have seen in my 44 years but it lacked the will to live within a budget.

Lets gripe first.

There were no cut-backs in Government spending, in fact spending was increased by $1.8 billion, so borrowing is the name of the game for sometime yet.

Little incentive for investors to save.

Welfare needed to be cut and the Emissions Trading Scam tax dumped along with some superfluous Government departments like Wimins affairs and the Ministry for "climate change" but I guess there is time for that at a latter stage.

The tax cuts, while good, were not sharp enough or bold enough to change the direction of the economy quick enough.

What I like.

The tax cuts gave a good incentive for all to work harder and were especially generous to low income earners with good cuts in the lower income brackets. A flat overall tax of 20% would have given the economy a good kick-start , with a tax free threshold of $10,000 for all earners.

The cut in company tax from 30 to 28%, while not bold enough (a cut to 25% reducing to 20% in 2011 would have been wiser) will be good for private and listed companies and will be a small incentive to those buying listed stocks.

A good budget tax wise but not enough restraint.

Related

Budget 2010 - stuff.co.nz
Budget 2010 - nzherald.co.nz

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