The National Party will put an end to tax bracket creep:
A National Government would link income tax brackets to inflation, ensuring income taxes are adjusted every three years in line with the cost of living and allowing New Zealanders to keep more of what they earn, National Leader Simon Bridges says.
“New Zealanders’ incomes are struggling to keep up with the rising cost of living because this Government is imposing more red tape and taxes,” Mr Bridges said in his State of the Nation speech in Christchurch today.
“Over the next four years, New Zealanders will be paying almost $10,000 more per household in tax than they would have been under National. The Government is taking more than it needs, only to waste billions on bad spending.
“On top of that, by 2022 New Zealanders on the average wage will move into the top tax bracket. That’s not right or fair. So in our first term National will fix that by indexing tax thresholds to inflation.
“We will amend the Income Tax Act so tax thresholds are adjusted every three years in line with the cost of living. That will mean that within a year after every election, Treasury will advise the Government on how much the thresholds should be adjusted for inflation.
“This would prevent New Zealanders from moving into higher tax brackets even when their income isn’t keeping up with the rising cost of living. It would ensure New Zealanders keep more of what they earn to stay on top of rising costs of living such as higher prices for necessities like petrol, rent and electricity.
“We will include a veto clause so the Government of the day can withhold the changes in the rare circumstances there is good reason to. But it will have to explain that decision to New Zealanders.
It would take a very serious change in economic health, or a very stupid government, to do that.
“The changes would make a real difference. Assuming inflation of 2 per cent, someone on the average wage would be $430 a year better off after the first adjustment, $900 after the second and $1,400 after the third.
“A family with two earners – for example, one earning $80,000 and the other $40,000 – would be $600 better off a year after the first adjustment, about $1,300 after the second and $1,900 by the third.
“That’s more of their own money in their own bank accounts.
“The first adjustment would prevent Kiwis from paying an extra $650 million a year in tax based on today’s estimates. We can afford that by managing the books prudently and spending wisely.
“We will also do more on tax – but add no new taxes – and I’ll continue talking about our plans between now and next year’s election.
“National is committed to helping New Zealanders get ahead. This step means that as well as cancelling new taxes this Government has piled on, we won’t allow future governments to use inflation as an annual tax increase by stealth.”
This is a very positive start to the political year from National and a stark contrast to Labour’s which featured what amounts to an admission of failure on their flagship policy:
KiwiBuild’s “interim” targets for this electoral term have been scrapped as the Government recalibrates the programme.
Prime Minister Jacinda Ardern and Housing Minister Phil Twyford told media from their caucus retreat on Wednesday that their commitment to building 100,000 affordable homes over the next decade remains intact, but the interim targets for this term did not.
The Government has been dealing with the fallout from an admission by Twyford that the Government would not be able build 1000 of the homes by July 1, its first interim target. Instead it expects to build just 300.
The KiwiBuild policy aims to build 100,000 affordable homes for first-home buyers over 10 years, half of them in Auckland. . .
They expect us to believe they can build 100,000 affordable homes in a decade when they can’t build 300 in the first year?
Labour is planning to waste money on houses for a relatively few people earning well above the average income. National has committed to letting people keep a bit more of their own money.
It gives voters a very clear choice – Labour pains over housing or National delivering clear policy to end bracket creep.