Summarised by Centrist
National and Labour are drawing increasingly firm lines around tax ahead of the election, with both parties ruling out a GST increase and now rejecting a planned rise in fuel excise.
National finance spokeswoman Nicola Willis has explicitly ruled out increasing GST from its current 15%, following speculation that the party’s promise of “no new taxes” might still leave room to raise existing ones.
“I can absolutely rule out increasing GST,” Willis said. “We will not be increasing GST.”
Labour has also ruled out raising GST.
The parties are converging on fuel tax too.
Labour leader Chris Hipkins has promised there will be no fuel excise increases for the next three years, including cancelling the 12c-a-litre increase scheduled for January 2027.
The coalition has now confirmed that the January increase will not proceed either, although National has not yet said what it would do about planned increases of 6c in 2028 and 4c in 2029.
The difference is increasingly about how the lost revenue would be absorbed.
Treasury estimates each six-month delay to the January fuel-tax increase costs the National Land Transport Fund about $300 million. Cancelling it for three years would leave roughly $1.8 billion less for transport.
Labour has indicated it would deal with that by scaling back transport spending rather than borrowing to replace the lost revenue.
Combined with its proposed $195 million public-transport fare cap, Labour would need to find around $2 billion in reductions from the transport programme.
“We have to scale our ambition in terms of what new roads we want and so on to fit within the budget that’s available,” Hipkins said.
Read more at The NZ Herald here and here, and at interest.co.nz
Re-published from the Centrist with permission
