NZ Prime Minister John Keys resigned on December 5th and went out on a high! How has John Keys turned NZ into a winner?
Consider these fundamentals:
1.NZ taxes all workers between $0-14 thousand at 10.5 percent based on the philosophy that the government is spending everyone’s working taxes, so all Kiwis in theory take more interest in how their money is being spent and redistributed
2.Oz has zero tax collected from $0-18 thousand
3.The top tax rate in NZ is 33 per cent
4.The top tax rate in Oz is 47 per cent
5.The company tax rate in NZ is 28 per cent
6.The company tax rate in Oz is 30 per cent and reductions have been rejected in parliament
7.The GST in NZ is 15 per cent and includes fresh food (all goods and services have a GST applied)
8.The GST in Oz is 10% and fresh food is excluded (some goods and services are not in the GST)
9.NZ GDP growth 3.6 percent
10.Oz GDP growth 3.3 per cent
11.NZ unemployment rate 4.9%
12.Oz unemployment rate 5.6%
13.NZ is in budget surplus
14.Oz is in budget deficit
It seems like New Zealand has some real forward momentum with more folks working and good take home after tax incentives through the tax scale. Can we learn from their economic settings?
Graham O’Hehir GMO MD.