Brash wants tax and wage reforms

Don Brash. Photo / Dean Purcell

The Act Party will look at abolishing the minimum wage for people under 20 and dropping the company tax rate to 10 per cent as part of its economic platform.

Act leader Don Brash, who will deliver his economic policy speech to the Workplace Savings Industry Conference in Auckland this morning, said the youth unemployment rate - 27.6 per cent for those aged 15 to 19 - was a "scandal".

He said abolishing the minimum wage for those under 20 could see more people in work for lower wages, rather than fewer people working for higher wages.

"Let's say there's someone straight out of school with no qualifications, and maybe he's had a brush with the law a year ago, and an employer says he'll hire him for $8 an hour.

"If you mandate a minimum of $9 an hour, that guy has to go back home and watch TV at $4.50 an hour [on a benefit]. You've got to ask yourself if that is a sensible thing to do."

Dr Brash repeated his support for scrapping the Emissions Trading Scheme and lifting the eligibility age for superannuation to 67, but believed it should be done more quickly than the recommendation of the Retirement Commissioner - though he did not have a specific alternative.

He wanted to cut Government spending to what it was in 2005 - 29 per cent of GDP.

This would allow a cut in the top tax rates - company tax, trust tax and the top personal income tax rates - to 20 per cent or 21 per cent. "But there is a choice of harmonising those at around 21 per cent, or alternatively leaving the top personal and the trust rates a bit higher, and cutting the company tax rate more aggressively."