Budget 2006: Kiwis look across Ditch for tax relief

Skilled glass factory worker Steve Patterson came home a couple of years ago after five years in Melbourne. After last night's Budget he "can't wait to go back".

He's not impressed with the "minuscule" extra money in the Budget to fix Auckland's "joke" of a transport system, and says middle-income earners have nothing to keep them here.

"They are looking at Aussie and saying 'shit, they are getting good tax cuts, they have a health system that works and their standard of living is better,' " he said. "Why shouldn't you go?"

Some Herald readers who sent in emails last night agreed.

"Thanks Labour (for nothing). Australia looks more attractive every day," wrote Hamilton microbiologist Owen Shrubb.

But others disagreed. Rachel Wike, who runs a worldwide translation business with her husband Andreas Ernst from Henderson, said she would rather have New Zealand's extra spending on roads and health than the tax cuts announced in Australian Treasurer Peter Costello's Budget last week.

Mr Costello cut the top tax rate from 47 per cent to 45 per cent, and raised the threshold where the top tax rate cuts in to A$150,000 ($183,500).

Increases in tax thresholds across the board gave some tax cuts to everyone earning over A$21,600 ($26,400).

New Zealand has higher tax rates on low incomes up to A$25,000 ($30,600).

It has a lower top tax rate of only 39 per cent, but it cuts in at an income of just $60,000.

"Quite frankly, if you give me a tax cut I'm probably going to have another nice brunch at a cafe," Rachel Wike added.

"If you make some improvements to health and roading, that is absolutely needed.

"I don't think you can really trust people to spend that money wisely and invest it and put it into super."

Australian construction entrepreneur Leli Coluccio, who brought his family here seven years ago, agreed.

"New Zealand needs the roads and health much more so than tax cuts."

He said Australians paid capital gains tax and land tax and lived in a rat race. "Currently the construction industry there is almost dead. Builders are falling over like flies.

"Interest rates have just gone up and people can't afford to buy homes."

In contrast, another entrepreneur, who gave his name as Alan, wrote in an email that he no longer had the stamina to fund state spending with no tax relief or retirement security.

"There is now a real advantage for Australia to arbitrage its higher salaries and lower tax rates to finally convince me to reluctantly turn my back on my desire to live here, and relent to pressure to let my company move me and my role over the Tasman," he wrote.

Ardijah musician Betty-Anne Monga said many of her friends in the music industry had already moved to Australia in the past three years.

But she and husband Ryan Monga brought their children home after five years in Australia.

"Yes, I'd like to have tax cuts, who wouldn't?" she said. "But I suppose it's where are they giving those tax cuts, when you have a 10-year plan and you have a family and it's like it's nice that the Government isn't always taking, taking, so that we can build as a country.

"Myself and Ryan do our thing. We just love Aotearoa.

"We just love that we can do almost anything here and work on an international scale and still be based here."