GST and taxes could jump in next five years; interest rate to dive; inflation at 18-year high; Key wants to work on lending guarantee; marriage breakdown could cost taxpayers $1b a year; Rings actors finally get payday; and more
- A tax expert warns GST could rise to 15 per cent and the top personal tax bracket to 45 per cent in the next five years. John Shewan, chairman of PricewaterhouseCoopers New Zealand, told the Herald he supported National's and Labour's tax cuts, but whoever led the next Government could face "the real prospect of having to increase taxes rather than decrease them within the next five years". GST is currently 12.5 per cent and the top personal tax bracket 39 per cent.
- Reserve Bank chairman Alan Bollard is expected to cut the official cash rate by one per cent on Thursday. Since Bollard cut the rate by 50 basis points six weeks ago, the credit crunch had turned into a full-blown global financial crisis, said the Dominion Post.
- Inflation is at an 18-year high, reports the Herald. Statistics NZ will release its food prices and inflation figures tomorrow, which are expected to show that inflation for the year ended September was as high as 5 per cent. The Reserve Bank aims to hold inflation at between 1 and 3 per cent.
- National leader John Key wants the two major parties to work together on a plan to guarantee all lending between New Zealand banks and overseas banks. The Press reports that Key said that unless New Zealand followed the lead of other Western nations, including Australia, and offered a wholesale deposit guarantee, lines of credit to New Zealand-based banks would dry up because overseas banks would refuse to lend to them.
- Marriage breakdown could be costing taxpayers $1 billion a year, according to the Herald. The Institute of Economic Research for the Family First says taxpayers end up paying the price for broken families through welfare benefits, family tax credits and higher costs for healthcare, housing and law and order. The research group commissioned a report which found that New Zealand has the second-highest proportion of sole parents in the developed world, behind the United States. Auckland University economist Susan St John rubbished the report.
- Dunedin could lose out on the planned Hilton Hotel in the former chief post office building. Project developer Dan McEwan of the McEwan Group told the Otago Daily Times, "It doesn't matter what business you are in, the credit squeeze has an impact on everything, and most importantly it has an impact on developments."
- Fifteen New Zealand actors in the Lord of the Rings trilogy have received a share of royalties of movie merchandise including lunchboxes and t-shirts. The actors settled out of court after complaining that they believed they would receive a share of 5 per cent of proceedings from the sale of items depicting their movie characters but ended up with nothing.