JobStart policy no substitute for tax cuts

The National Party’s JobStart policy - under which businesses could claim $10,000 per new employee, for up to ten new employees - looks great on paper but would fail in practice, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union spokeswoman Islay Aitchison says, "While there’s definitely some appeal to subsidies targeted at job creation, taxpayers would rather see their money go toward tried-and-tested methods of boosting the economy, such as tax cuts. For the most part, businesses still hiring aren’t the ones that need support."

"One issue with schemes like JobStart, where relatively small amounts of money are distributed, is that it’s difficult to enforce the requirements. It would cost IRD much more to chase up a rule-breaking business than they’d actually have returned. There are also issues at the margins of this policy; for example, a business could claim the first payment of $5000 and then let the employee go."

"The obvious and better alternative is to simply cut the tax burden on business. Leaving money with the private sector means more reinvestment and helps businesses get back on their feet."