Political party

Fiscal policies of political parties. Here’s what we know so far

Tax policies are set to be a hot topic ahead of the next general election, as households begin to feel the effects of rising interest rates and inflation, and Crown spending takes center stage. subject to scrutiny.

Here’s a look at what’s happened with tax policy over the past 18 months and what has been proposed by the parties ahead of the next election, which is due to take place by January 13, 2024.

Labor’s big tax policy ahead of the 2020 election was to introduce a new top tax rate of 39% on any income over $180,000.

The tax rate applies to 2% of New Zealanders and is an additional 6 cents on the dollar on any income above this amount.

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In the run up to the election, Labor also promised that there would be no changes to income tax for the rest of New Zealanders and that there would be no new taxes or new income tax increases.

So far, this mandate has increased the tax rate for higher benefits to 63.93% and introduced property tax changes, including changes to the light line test and interest deductibility rules.

In December, the Treasury said tax revenue was much higher than expected.

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In December, the Treasury said tax revenue was much higher than expected.

Then there is New Zealand’s proposed income insurance scheme, which some say would essentially be a new tax on employers and their staff.

On April 1, a new tax imposing 15% New Zealand GST on international roaming charges comes into effect.

There have been a series of tax changes introduced under the Labor government led by Prime Minister Jacinda Ardern and Deputy Prime Minister Grant Robertson.

ROBERT KITCHIN/Stuff

There have been a series of tax changes introduced under the Labor government led by Prime Minister Jacinda Ardern and Deputy Prime Minister Grant Robertson.

It is also exploring the option of a ‘value capture’ tax on property along Auckland’s proposed light rail route.

More recently, when war in Ukraine drove up oil prices, the government quickly cut fuel taxes by 25c per liter for the next three months.

On upcoming policies, a Labor spokeswoman said it was too early for the 2023 election policies to be announced.

National leader Christopher Luxon has said he will reverse Labour's tax changes.

ROBERT KITCHIN/Stuff

National leader Christopher Luxon has said he will reverse Labour’s tax changes.

National Leader Christopher Luxon has said that if National wins the next election he will repeal Labour’s tax changes.

National wants the government to adjust the bottom three tax brackets in the next budget to account for recent inflation and to reverse bracket creep.

The change would mean that the 10.5% tax rate would apply to the first $15,600 of income, not $14,000 as is currently the case.

The 17.5% rate would extend to $53,500 rather than $48,000.

And rather than the 33% tax rate starting at $70,000, it would increase to $78,100.

Someone earning $50,000 a year before tax would save $362 from National’s tax cuts, someone earning $55,000 would save $800 a year, and anyone earning $78,100 or more would get a tax break of 1 $000 per year.

The ACT says it will replace fuel taxes with road pricing on the busiest roads.

ROBERT KITCHIN/Stuff

The ACT says it will replace fuel taxes with road pricing on the busiest roads.

The ACT party wants to permanently reduce the marginal tax rate paid by those earning the median wage from 30% to 17.5%, simplifying the three-rate tax system.

He says reducing the rate to 30% would make the tax system flatter and fairer, with only three rates:

On the first $14,000, workers would pay 10.5%. On the next $56,000, they would pay 17.5%, while the rate on income over $70,000 would remain at 33%.

It would also repeal the 39% tax rate, reverse the government’s changes to interest deductibility and remove the bright line test.

He proposes scrapping the $35 conservation and tourism levy on international visitors and returning the proceeds to tourism businesses, based on their 2019 GST receipts.

The ACT would also prohibit councils from using the rating system to impose a hotel bed tax, like the one being introduced in Auckland.

It would replace fuel taxes with road pricing on the busiest roads.

Finance spokesman Rawiri Waititi said Te Pāti Māori wanted to shift the tax burden from the poor to the rich.

ROBERT KITCHIN/Stuff

Finance spokesman Rawiri Waititi said Te Pāti Māori wanted to shift the tax burden from the poor to the rich.

Finance spokesman Rawiri Waititi said Te Pāti Māori wanted to shift the tax burden from the poor to the rich.

“We would do that through wealth taxes, including on capital gains, ghost houses, pollution and land values,” Waititi said.

It would provide tax relief to low-income whānau while improving the progressive nature of the tax system, including exempting food and sanitary products from the GST, he said.

Te Pāti Māori recently called for GST to be removed from all food sales in Aotearoa and started a petition supporting his cause.

He would release a fully costed tax policy package ahead of the next election, he said.

Current Green Party economic policy states that the tax system should be progressive, comprehensive and encourage sustainability.

It proposes a tax on pollution and the use of environmental resources.

“Green tax reform should shift taxes away from income and business toward resource use, waste and pollution.”

He says those least able to pay taxes should pay the least as a proportion of their income, while those who can pay more should do so to contribute to the welfare of society.

It says a capital gains tax should be applied to real estate investment, excluding family homes.