National has released their tax policy and it is rather more detailed than anything we have seen from the Labour Party. Predictably, Labour has rubbished it, but it certainly looks like Nicola Willis has put considerable thought into this policy.
The National Party has unveiled its plan to introduce four new taxes and cut public service spending to fund $14.6 billion in income tax cuts aimed at assisting “the squeezed middle”.
The plan – which includes inflation-adjusted income tax brackets, childcare subsidies and increases to Working for Families – means some households would be up to $250 better off per fortnight, leader Christopher Luxon said.
To fund the package, National would implement a foreign buyer tax, immigration levies, close tax loopholes and end the commercial building depreciation tax break.
Savings would include reduced spending within government departments, ending half-price or free public transport, undoing Labour’s recent extension of 20 hours’ free ECE and reallocating funds raised through the Emissions Trading Scheme.
Luxon and finance spokesperson Nicola Willis released the long-awaited package at a news conference at Parliament on Wednesday.
“This plan confirms that a National government can do what we’ve said all along that we will do, which is to put money in the back pockets of New Zealanders as part of a prudent, fully funded and balanced tax plan,” Luxon said.
Stuff
The key details are:
Incomes
- A family with children earning the average household income of $120,000 will be $250 a fortnight better off
- An average income child-free household up to $100 a fortnight better off
- Full-time minimum-wage workers get a $20 boost to their fortnightly incomes, and paying lower rates of tax on extra hours worked.
- Anyone earning over $78,100 gets the same tax cut of $40 a fortnight
- A superannuitant couple will get up to $26 a fortnight more.
Tax Cuts/Credits
- 17.5% threshold moves from $14,000 to $15,600
- 30% rate moves from $48,000 to $53,500
- 33% rate moves from $70,000 to $78,100
- Extend eligibility for Independent Earner Tax Credit from $48,000 maximum income to $70,000
- Previously announced childcare tax credit of up to $150 a fortnight for 25% of costs of early childhood education for low and middle income families
- Increase WFF in-work tax credit by $25 a week.
Cancelled taxes
- Fully restore interest deductibility for rental properties
- Bring the brightline test back to two years
- Cancel Labour’s planned fuel tax hikes which would add 12 cents per litre of petrol, or $8 for a full tank
- Remove the Auckland Regional Fuel Tax which adds 11.5 cents per litre of petrol
- Cancel Labour’s new App Tax.
Spending reprioritisations
- $594 million on average per year reduction in spending on back-office functions in government departments, excluding non-core and frontline agencies
- $400 million on average per year reduction in government spending on consultants
- $590 million on average per year Climate Dividend, returning taxes raised on climate polluters to Kiwi families rather than giving subsidies to large corporates.
New revenue
- $740 million on average per year from introducing a 15% foreign buyer tax on the purchase of houses worth over $2 million
- $525 million on average per year from ending the commercial building depreciation tax break
- $179 million on average per year from closing a tax loophole and ensuring offshore operators delivering online gambling to New Zealanders, pay tax
- $123 million on average per year from moving to user-pays immigration levies, excluding tourist visas.
There is much to discuss here, but I have to say I am pleasantly surprised.
Have at it in the comments.
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