KEY POINTS:
New Zealanders could be working as much as a week longer to pay off all their taxes this year than they did in 2006.
Independent accounting firm Staples Rodway today said early research indicated the average New Zealander's so-called Tax Freedom Day 2007 was likely to be even later than June 1, when it fell last year.
It could potentially be up to a week later than last year and two weeks later than 2005, Staples Rodway tax director Roger Thompson said.
His figures are different to those published by the Business Roundtable which labelled today Tax Freedom Day, three days later than it fell in 2006.
The Roundtable's calculation was based on central government core expenditure, which it said amounted to 33 per cent of gross domestic product (GDP).
Staples Rodway said its result took into account all taxes, including income tax, local body rates and other taxes such as petrol tax, cigarette tax and alcohol levies.
Staples Rodway said that if its provisional figures turned out to be right, New Zealand's Tax Freedom Day would be nearly a month later than Australia's and later than in Britain for the first time since 1997.
Previously the firm said the tax burden on New Zealanders had been reduced during the 1990s, with Tax Freedom Day almost four weeks earlier in 2002 than in the early 1990s.
But in the past four years two weeks of that improvement had been eroded.
The cause of the erosion was a combination of strong tax revenue growth, and a slowing in GDP growth.
Despite their differences of opinion about when Tax Freedom Day fell, both groups had no doubts that the lengthening of the time taken to pay taxes was a bad thing.
Staples Rodway labelled the situation as "alarming" and "increasingly bleak".
Roundtable executive director Roger Kerr said economic evidence was that, beyond a certain point, government spending and taxation were harmful to economic growth.
No country has achieved per capita growth rates of 4 per cent or more a year on a sustained basis with general government spending of around 40 per cent or more of GDP.
Measured by the OECD, total government spending in New Zealand, was projected to be 40.7 per cent of GDP in 2007, Mr Kerr said.
On that basis, Tax Freedom Day would actually fall on May 30, and for the first time since 2000 would be after that for the OECD as a whole, which this year would be May 29.
- NZPA
