Wednesday, 26 November 2008

Taxing Flight Plans by UK Labour Party

Gordon Brown has given British citizens a firm reminder that they're living under a Labour government, with a mini-budget for the UK which includes tax increases for those on high incomes, a temporary cut to VAT, bringing forward infrastructure spending, and increasing borrowing by £118 billion.

Brown's Chancellor, Alistair Darling, announced a raft of initiatives yesterday, aimed at providing "a £20 billion fiscal stimulus to help the British economy through the global downturn".

The UK's VAT rate (similar to GST) will be temporarily cut from 17.5% to 15%, until the end of 2009, while National insurance contributed will increase by 0.5%. The top personal tax rate will be increased to 45% (currently 40%), and the tax-free threshold will also be scrapped for people earning over £140,000.

The Conservative Party says Labour's borrowing plans will see UK national debt double to an impressive £1 trillion in just a few years.

As No Minister points out, this is just the kind of mini-budget Dr Cullen and Hillin Cluck had promised New Zealand, if they won the election... Rumoured to have been under consideration by Labour NZ was a increase in GST to 15%, an increased top tax rate, a 10% surcharge on mobile phone bills/prepaid phone cards, and a $1000 funeral fee/death duty.

But the tax announcement from Labour UK that could have a big impact on New Zealand is the plans to massively raise airport departure taxes from British airports. The government is proposing a new 4-tier system (under the guise of an "environmental tax") which will penalise air travellers based on the distance travelled.
That will see travellers flying from Britain to New Zealand charged around NZ$250 in flight taxes by 2010, with Labour using the false religion of climate change to justify the increases, which will supposedly "help offset carbon emissions".

Premium Economy and Business class seats will be taxed at double those rates (because those people obviously cause more carbon emissions per seat?!).

New Prime Minister and Tourism Minister John Key raised the issue with Gordon Brown this morning, concerned that it could have a detrimental impact on tourism numbers here. The UK is currently New Zealand's second largest tourist market, with almost 289,000 visiting from Britain in the year to October.
The huge hike in departure taxes will also hit the 100,0000 New Zealand holidaymakers who fly out of the UK each year. The Pacific Asia Travel Association has labelled the UK government's decision as "short-sighted and self-defeating".

The organisation believes the move could backfire, with travellers choosing to fly in and out of other airports in mainland Europe, including Paris, Amsterdam, and Frankfurt. PATA says that would lead to an increase short-haul air traffic to and from the UK, and "increase carbon emissions".

Posted in |