Luxon embraces the inflation tax

The Taxpayers' Union is slamming Prime Minister Christopher Luxon’s dismissal of inflation-indexing income tax thresholds as “not on our radar”, saying it shows the Government is happy to keep profiting from bracket creep.

Taxpayers’ Union spokesperson Tyler Groenewald said:

“Luxon is choosing an inflation tax over simple cost-of-living relief. Bracket creep lets the Government quietly take more from workers whose pay has not even kept up with rising prices. It is a tax increase by stealth."

"Kiwis shouldn't be punished for inflation caused by years of excessive Government spending. When prices go up, the Government shouldn't get an automatic tax windfall at workers' expense."

"If the Government is serious about helping with the cost of living, inflation-indexing tax thresholds should be at the top of the agenda, not 'off the radar'."

The Taxpayers’ Union’s January 2026 report, Robbing Peter To Pay Paul’s Doctor: Why Indexing Tax Thresholds Makes More Sense, is available at https://www.taxpayers.org.nz/indexing_tax_thresholds