Colin Espiner interviews Labour’s finance spokesman David Parker and finds that:
If Parker is holding the country’s purse strings after this year’s general election, there’s plenty he wants to change. The top tax rate would be 39% on income over $150,000, although the company rate would be unchanged at 28% (and no, he doesn’t think that would encourage tax evasion). He’d introduce research and development tax credits, a living wage of $18.40 an hour for state-sector workers, a higher retirement age and a 15% capital gains tax.
This isn’t a recipe for growth.
Increasing the top tax rate is merely pandering to the sock-the-rich politics of envy. Those on the top tax rate already pay far more than their fair share of tax and adding the burden will increase tax avoidance as it always has in the past.
Treasury and Brian Scott have shown the flaws in the living wage concept.
Only a small proportion of those who get less than that now are single-income families and they get top-ups through Working for Families. Anything they gain through an increase in pay they’d lose through losing WWF. there’s not even any gain for the taxpayer, they’d be paying less in WFF but more in wages.
I’m not opposed to a capital gains tax in theory but if it is to do any good it must be universal and replace other taxes. Labour’s will exempt the family home and will be on top of other taxes.
The underlying theme to all this – and what really seems to drive him – is recapturing the egalitarian spirit he believes we inherited but are slowly squandering. “Not just equality of opportunity,” he says. “I believe in equality of outcome. That doesn’t mean communism,” he adds, pre-empting my question. I ask it anyway. Doesn’t it? “No, no, no. I personally wish I had made more money for myself. I’m not a pauper but neither am I a super-wealthy person. I believe that people should be rewarded for their efforts.”
Redistribution won’t recapture the egalitarian spirit and equality of outcome is impossible without the state playing a far greater role in the economy and society than is desirable and that is communism which has failed.
The best ways to improve life is to have sustainable economic growth.
We won’t get that with more of the higher tax, higher spending policies which Labour promoted through the noughties and which put New Zealand into recession well before the global financial crisis.