Tax cuts 'right thing to do' to ease coronavirus economic impact - Simon Bridges

Opposition leader Simon Bridges says if his party is voted into Government later this year Kiwis will see tax cuts.

With the economic effects of coronavirus being felt around the world, Bridges says the Government needs to act quickly to weaken the impact in New Zealand.

"There's no doubt this is serious," Bridges told The AM Show on Wednesday.

"I think we're in slow- to no-growth for at least the first half of this year. After that it's very uncertain, but it's not beyond the realm of possibility that the world goes into a dip or a recession." 

The virus has already rocked markets around the world, with the head of the World Trade Organisation earlier this week warning the virus was likely to have a "substantial" effect on the global economy.

New Zealand is already feeling the pinch, with export sectors such as meat and forestry struggling to cope with hold-ups in global supply chains.

Importers are also struggling to secure products or manufacturing parts, and with a temporary travel ban on flights to and from mainland China the tourism and foreign education sectors have seen a big drop in numbers.

Companies struggling with a loss of income due to the virus will be given a helping hand after the Government announced a $4 million support fund earlier this week.

Speaking on Tuesday, Finance Minister Grant Robertson did not rule out the Government introducing tax cuts in order to stimulate the economy, saying he was "keeping all options on the table". 

For the moment though, he said, the Government was focusing on protecting jobs, rather than looking closely into the prospect of cutting taxes.

But Bridges said tax cuts should be a given. He said he was in favour of tax cuts for middle-income earners regardless of coronavirus.

The economic fallout from COVID-19 just "strengthens the case" for cuts, he said, adding that he was doubtful that Robertson was truly entertaining the idea.

"I think in his heart he doesn't like tax cuts - he talks about not wanting to do something permanent. But it would be the right thing to do," he said.

"Households are struggling to pay the bills and this is going to make things worse," he said.

Just how much taxes could be cut under a National Government "depends very much on the scenarios we get to".

"If we're sort of in the middle, it could go either way. I think, though, if we saw this continue to deepen, that in my view does mean potentially we should be bolder."

He said any cuts could "potentially" be passed under urgency and come into effect overnight if his party was voted in come September.

As well as introducing tax cuts, Bridges said more needed to be done to raise the confidence of businesses, particularly small businesses. 

One way to do that would be by "slashing some red tape".

"I think there's a bunch of rules and regulations that get in the way of businesses - that means they're less confident when they wake up in the morning to go at it. And we need them to [be confident] as they face issues around jobs and pay this year, and potentially actually for the next year or two or three."