New calculations have claimed National’s planned tax cuts would see even more money than predicted end up in the pockets of wealthy New Zealanders – while the lowest earners would recoup about $100 a year.
The Council of Trade Unions says the tax package would give 10 times as much money to the wealthiest New Zealanders as it does to middle and low income earners. That works out at about $54,000 over three years for someone on the prime minister’s salary, while a minimum wage earner would get about $2.15 a week – or about $350 over three years.
“When you add it all together top income earners and those who own multiple properties end up with the lion’s share of the income benefits of National’s tax cuts – $5.8 billion or 53% of the gains,” said the CTU’s economist economist Craig Renney. That works out at about half the cost of the tax plan.
“This is a question of priorities. If the government is going to spend $11 billion, it should be focusing that money on public services like health, education and housing or on boosting incomes for families who need it, not a tax package focused on the well-off.”
While National costed its policy of adjusting the tax brackets at $1.7 billion earlier this year, Renney said it would actually cost $200 million more in its first year because of inflation.
But National’s leadership has rejected the new figures from the CTU. Deputy leader Nicola Willis told the Herald the analyst’s immediate previous role was as a political advisor to the finance minister, so she questioned his motives.
“We completely reject these numbers as they are based on a number of false assumptions including about aspects which are not in our tax plan and that the entire plan will be rolled out immediately.”