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National tax plan heading in the right direction but needs to go further

Reacting to the National Party’s tax policy announcement, Taxpayers’ Union Campaigns Manager, Callum Purves said:

“Today’s announcement is a welcome one with some significant victories for taxpayers but we need to see more radical change.

Tax bracket adjustments
“National has disappointingly significantly watered down its previous pledges to adjust tax brackets to account for inflation since Labour took office in 2017 – never mind since when the brackets were last set back in 2011. It’s plans announced today would only adjust tax brackets for inflation over the past two years, meaning those middle earners not benefiting from their expanded tax credits will still be paying much higher tax on average than they would have been had brackets kept pace with inflation.

“While we welcome the proposal to index tax brackets for inflation, these adjustments should be automatic on an annualized basis rather than every three years if the Finance Minister feels like it. If the Government wants to hike taxes, they should legislate for it rather than doing it by stealth.”

Tax credits
“Tax credits are a more targeted measure of getting financial support to those who need it compared with other policies such as removing GST of fruit and vegetables."

Carbon Dividend and climate policy changes
“We have long called for a carbon dividend as a way to help reduce the impacts of rising carbon prices on consumers while continuing to encourage the shift to lower emission production and consumption.

“Excluding agriculture, all other sectors of the economy are already covered by the ETS. There is no need to continue the wasteful spending and corporate welfare on ‘cost-effective climate action’ such as the Green Investment Fund.

Fuel Tax changes
“The commitment to cancel the planned tax hikes will be welcome for families struggling with the cost of living. National also needs to commit to tightening the National Land Transport Fund to ensure that fuel taxes aren’t used to subsidize projects unrelated to roading such as loss-making rail and cycleways.

“The Auckland Regional Fuel tax punished families trying to get by while. Fuel taxes disproportionately hurt those on lower incomes, we welcome its removal."

Landlord tax changes
“The restoration of interest deductibility corrects a distortion that unfairly targeted landlords and reduces long-run incentives to invest in providing housing for others.

“We welcome the move to put the bright-line test back to two years as a good start but this capital gains tax should be removed completely. It fails to address the root cause of the housing crisis which is supply. This tax simply encourages people to hold on to properties past the bright-line period. The way to stop speculation is to increase supply in order to stabilise the price so it is no longer a lucrative venture.

App tax changes
“We welcome the cancelling of the app tax which would further drive up costs of digital services such as Uber and Airbnb for consumers."

Foreign buyer tax
“A foreign buyer tax is better than a complete ban; however, as a country that urgently needs foreign direct investment and to attract international talent we should not be making it more difficult for that to occur.

“If we sort out our boondoggle resource management system and replace it with a system based on property rights and incentivising development, there is no issue with foreign buyers of property. Even before the ban, these buyers made up a fraction of the total property purchases in New Zealand.

Commercial building depreciation
“New Zealand’s location, combined with one of the highest corporate tax rates in the OECD, means we struggle to attract enough investment. Growth has stalled and standards of living have fallen as a result.

“Depreciation deductions encourage building and investment, and both National and Labour’s plans to scrap them will leave New Zealand much poorer in the long run. This short-term thinking from National is putting the election before New Zealand’s future prosperity."

User-pays immigration levies
“We support a user pays system where possible and practical, it is unfair on other taxpayers to subsidise those wanting to come to the country before they have contributed to the tax system."

Cost reductions
“While we welcome the reduction in spending on back-office bureaucrats, these reductions need to go further. With Government spending increasing by 68% since 2017, there is plenty more fat to trim.

“Removing corporate welfare through the GIDI fund is long-overdue with it being one of the most unfair, expensive and ineffective policies we have. It is disappointing to hear that National will continue with other forms of corporate welfare such as film and gaming subsidies which could otherwise be directed at further tax relief."

“It is encouraging to see that the National Party funded their plan without additional borrowing and received independent peer-reviewing from Castalia – this is the minimum level of fiscal discipline taxpayers should expect from all parties.”

Showing 1 reaction

  • Nztu Media
    published this page in News 2023-09-04 09:48:06 +1200

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