13 June 2024

National to ‘let Kiwis keep more of what they earn’ by tax cuts

National is promising to “let Kiwis keep more of what they earn” by lifting tax thresholds that will put more than $3000 in back pockets of middle-income earners.

Tax Cuts
National is promising more money in your back pocket (NewsViews)

This National tax stimulus proposal comes on the back of Labour’s announcement of an increase in taxes for those earning $180,000 a year.

The next National Government, party leader, Judith Collins says, will let Kiwis keep more of what they earn by lifting the bottom tax threshold from $14,000 to $20,000, the middle threshold from $48,000 to $64,000 and the top threshold from $70,000 to $90,000.

Proposed cuts
Source: National Party

Alternative, according to National, is to tax New Zealanders more, and Government – rather than ordinary Kiwis, gets to spend more on their ‘pet projects’.

According to National’s proposal, these changes will be in place from December 1, 2020 until March 31, 2022. The total cost of this over the 16-month period is estimated to be $4.7 billion.

“To keep our economy ticking, New Zealanders need money to spend. National will deliver temporary tax relief that puts more than $3000 – or nearly $50 a week – into the back pockets of average earners over the next 16 months.

“This will give Kiwis the confidence to go out and spend, which will be crucial for our retail, tourism and hospitality businesses to survive this economic crisis.

Source: National Party

“New Zealand is facing a much longer and more painful economic shock than earlier forecast. We need a serious plan for economic growth to get us back on track,” Collin says.

Apart from the stimulus of tax relief, National, if elected, will double the depreciation rate for businesses that invest in new Plant, Equipment and Machinery over the next 12 months. This will bring forward the amount a business can claim in depreciation for new investments, which will stimulate investment by increasing the return on capital.

These savings, by way of tax cuts, are likely to make many house-holds feel better due to the cash crunch they have been facing because of Covid-19.

One local resident to whom NewsViews spoke, welcomed the proposal, but would have been happier if “the change was permanent, rather than short-term.”

“This saving would help me to keep paying my mortgage debt,” another pleased local commented.

“This will be a god-send relief,” says SuperGold Card holder Chris.

“No political party- including the current Labour government, has sought to provide any relief for pensioners. If (tax cuts) this happens, I can pay my bills.”

Labour Party, however, has called National’s plan “desperate and reckless”.

“Judith Collins’ unaffordable plan will lead to harsh cuts to public services,” Labour Finance Spokesperson Grant Robertson says.

National’s plan is to spent $10 billion over five years and proposes to use the unallocated portion of the government’s Covid-19 fund.

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