As attention turns to Thursday's budget and the possibility of tax cuts loom large in the minds of voters, taxpayers can tomorrow celebrate Tax Freedom Day.
Tomorrow is the day New Zealanders stop working to pay the nation's tax bill and start earning for themselves, accounting firm Staples and Rodway calculated.
Finance Minister Michael Cullen is under pressure to deliver tax relief to workers in his ninth budget on Thursday as Labour falls further behind National in the polls.
Staples Rodway research showed New Zealanders would pay off their tax five days earlier this year, although this is still nine days longer than it took Australians - a gap which widened to more than three weeks between 2004 and 2007.
"It is pleasing to see the tax burden improving, although we are still several days behind Tax Freedom Day six years ago, when it was May 17," Staples Rodway managing director Roger Thompson said.
The improvement this year reflected the combination of slower growth in tax revenue and stronger economic growth.
However, Mr Thompson had some caution for those celebrating the earlier date, particularly the input of gross domestic product (GDP) into Tax Freedom Day.
The largest contributor to the improvement in GDP growth was an increase in inflation, not an improvement in real activity.
Tax revenue had been affected by the tightening of the economy, with corporate profitability being squeezed by cost pressures, including both generalised costs due to high inflation and higher labour costs.
"The challenge is now for Dr Cullen to deliver meaningful tax cuts in Thursday's budget so as to bring back Tax Freedom Day even further."
Tax Freedom Days
NZ: May 20, five days earlier than 2007
UK: June 4, two days earlier than 2007
US: April 24, four days earlier than 2007
Australia: May 12, unchanged from 2007
