Sunday Star Times 27 April 2008
The election-year tax-cut debate has taken a new twist, with a government discussion paper proposing slashing thousands of dollars from the tax bills of families with stay-at-home mums and dads. Revenue Minister Peter Dunne is due to release proposals for income- splitting today that would see parents able to pool their joint income and be taxed on half each, putting them in lower tax brackets. The Labour-led government does not support the proposals, but agreed to the discussion paper as part of United Future’s support agreement after the 2005 election. The paper is to be open to public comment. Already National and Labour are both promising tax cuts, with Labour’s due to be unveiled in next month’s budget. Depending on how tight an election outcome is, Dunne may be able to seek backing for his proposals as the price of any coalition deal with his party, United Future.
Income splitting would benefit not only couples with a stay-at-home parent, but any couple with children in which one partner earned markedly less than the other. Dunne said he was confident feedback from New Zealand families would put the issue on the political agenda. “It’s a recognition that the mum or dad who is at home is making a very, very significant contribution,” he said.
READ the Discussion Document