On Friday, reductions in personal income tax come into effect, along with the rise in GST to 15%.
Deloitte Dunedin tax partner Peter Truman said yesterday the Government had consciously sought to discourage spending and encourage saving through those two measures.
"The Government also hopes the reduction in the top marginal tax rate will make New Zealand more attractive to migrants or expats considering returning home.
The changes were announced as part of the tax package in the Government's May Budget.
Overall, the tax changes were intended to be fiscally neutral to the Government.
The package also included a reduction in the company tax rate, abolition of depreciation on buildings and removal of the 20% new-asset depreciation in addition to the GST and personal income tax changes.
Those earning higher incomes would benefit most from the individual tax reductions because of the 38% tax rate reducing to 33% on taxable income of more than $70,000, Mr Truman said.
Someone earning $70,000 would save $40.96 a week, whereas someone earning $150,000 would save $117.88 a week.
Council of Trade Unions economist Bill Rosenberg said the tax changes were unfair and would hit low-income people hard and be ineffective in dragging New Zealand out of recession and into long-run improvements in the economy.
He pointed out someone on $30,000 a year would receive a tax cut of only $16.15 a week.
"Income disparity has widened over the last 25 years and tax cuts like these only widen the gap further. It is all very well to say that the top 50% of income earners pay 89% of the income tax take, but they get 84% of taxable income."
The tax working group showed the lower a household's income was, the harder it was hit by GST, Mr Rosenberg said.
After GST, the CTU estimated someone on $30,000 a year would only have $4 a week more spending money after the tax cuts.
Someone near the average wage on $50,000 a year would be getting about $14 more a week after GST.
Three-quarters of taxpayers got less than that income, he said.
But someone on $150,000 would be $90 a week better off.
Mr Truman said because there was a tax-rate change halfway through the tax year ended March 2011, there were composite rates applying for the 2011 year for individuals required to file end-of-year tax returns.
If an individual did not have to file an end-of-year tax return or was not liable to complete a personal tax summary, the benefit of tax reductions was immediate.
For those who had to file a return, there was a phased introduction over the next six months, he said.
An IRD spokeswoman said people did not need to change their tax code because of the reduction in personal income tax rates.
The new rates of PAYE applied to the current tax codes and had been updated into the new PAYE tables.
Employees did not need to do anything but their employers would need to use the new PAYE rates to calculate the correct amount of PAYE to deduct from their employees' salaries and wages from pay periods ending on or after October 1.
