Apr 26 2023

Wealth inequality: Greens ask for ‘courage’ on tax, National says Labour to blame

The (Image: Getty Images)

A new report highlighting the average wage earner is taxed at twice the rate of the wealthiest New Zealanders has drawn a range of responses from across the political spectrum.

The extensive, data-driven IRD report was released earlier this afternoon, prompting the revenue minister David Parker to label the country’s tax system as fundamentally unfair – but not go so far as to announce any new policy.

Both National and Act blamed the government for the wealth inequality described in the report and said that introducing new taxes, for example like one on capital gains, would be the wrong approach.

“The IRD research shows that in 2017 the wealthiest New Zealanders made economic income of $1 billion. However this soared to a staggering $14.6 billion in 2021 as finance minister Grant Robertson’s policies took hold,” National’s Nicola Willis said.

“This is the direct result of the government’s decision to allow the Reserve Bank to print tens of billions of dollars through its extended quantitative easing programme and the massive blow out in its own spending, up $1 billion a week since Labour came to office.”

She added, doubling down on the party’s views about a capital gains tax, that: “The Minister for More Tax, David Parker, can keep flogging the dead horse of a capital gains tax as much as he likes, but it doesn’t change the fact that the main driver of inequality under Labour has been its own economic policies.”

Meanwhile, the Greens called for the government to “show the courage of Michael Joseph Savage and fix our crumbling infrastructure with taxes on those who profited handsomely during hard times for many”.

Chlöe Swarbrick, the party’s revenue spokesperson, said it was now a “political choice” not to force millionaires to pay “their fair share”.

One party outside of parliament that’s been pushing for changes to the tax system is the Opportunities Party, or TOP. Its leader Raf Manji has proposed a tax-free threshold of $15,000 and the replacement of the current tax thresholds. “We cannot continue to have more working groups and committees discussing this issue without taking any action,” he said. “It is time to shift our focus to a fairer tax system that ensures everyone pays their fair share.”

New report shows tax system ‘fundamentally’ unfair, minister says

Always useful when you have a new baby.

A new report has highlighted the massive gap between how much tax is paid by New Zealand’s wealthiest and middle income earners, prompting the revenue minister David Parker to say it confirms “fundamental unfairness” in the tax system.

The Spinoff’s Duncan Greive has broken down the key details of the report, which show New Zealand’s wealthiest have a median effective income of about $8 million per year and yet pay about 9.4% in tax, after benefits are subtracted and GST paid is added in. The equivalent rate for a median wage earner is 20.2% – more than double that paid by this group.

No new taxes have been announced today, though Parker affirmed that Labour’s tax policy would be made clear before the election.

Read our full explainer here. 

There’s been a $100k drop in house prices – new stats

New zoning rules have allowed townhouses and apartments in more areas.

New figures show the average asking price for a property has dropped by just over $100,000 across the past 12 months.

Trade Me Property stats revealed that the average asking price was over $971,000 in March 2022, but has since fallen back to $866,000 in the same month this year.

In Wellington and Auckland, prices were down an average of 13% – or $128,000 and $164,000 – over that same time period.

“The Wellington and Auckland property markets have been running red hot post the first Covid lockdown in 2020, so it’s unsurprising that these regions have seen the sharpest drops,” said Trade Me Property sales director Gavin Lloyd.

The March 2023 figures showed Bay of Plenty fell by $110,000 to $883,000 (-11%), while Hawke’s Bay wad down $73,000 to $763,000 (-9%). Manawatū/ Whanganui prices fell by 9% and Waikato was down six points.

“We are still seeing a market that’s correcting itself after the huge gains made in the past few years,” Lloyd said.”The national average has dialled back to similar levels we saw at the end of 2021, and with the OCR rising yet again, we expect these drops should continue for a little bit longer.”

Writing for his newsletter The Kākā, Bernard Hickey reported that the Reserve Bank had today loosened the loan to value ratio restrictions on borrowing, noting that it didn’t expect house prices to fall much more. “In effect, the Reserve Bank has intervened to put a floor under the housing market and boost an economy veering towards a recession without having to take the politically and economically difficult decision to cut interest rates at a time when inflation is still over 6%,” Hickey wrote.

Just 17% back proposed cuts in Auckland Council budget

Wayne Brown is the mayor of Auckland. (Image: Tina Tiller)

Just 17% of Aucklanders surveyed on the council’s proposed budget backed going ahead with the planned cuts – though a majority are onboard with some reductions.

The full results of the council’s budget consultation, which received record turnout of over 41,000 people, have been released today.

It shows that 34% of those surveyed endorsed some of the proposed budget cuts, while 39% did not want any reductions whatsoever (meaning just over half, 51%, backed some cuts, though few fully endorsed the current proposal).

Mayor Wayne Brown said the overall survey results showed that there was public support for the “key elements” of the proposed budget and promised to take feedback onboard.

“We will listen to what Aucklanders have told us, and balance that with the correct mix of different levers for this budget. By putting a number of options on the table, my budget proposal provided us with the flexibility to genuinely take into account public input.”

A snapshot of the budget consultation results

Over half – 51% – of submitters opposed cuts to regional services, while 27% were against reductions to public transport services. There was also opposition – 28% of submitters – to reduced spending on arts and culture.

Brown said that he believed pushing forward with his planned selling of Auckland Airport shares “allows room to move on some of the more disliked cuts to social, arts and culture services”.

He added: “At this stage, I believe we should go ahead and sell the airport shares, because it makes good financial sense, and allows room to move on some of the more disliked cuts to social, arts and culture services.”

The survey results showed 25% of individuals backed the proposal to sell all shares in Auckland International Airport, while 28% supported selling some shares – meaning there was a majority in favour of at least a partial sale. However, 34% were fully opposed and said all shares should be kept.

Ahead of consultation closing, The Spinoff reported that most early submitters – about four in five – identified as ethnically European. The full survey results show that 57% of those who ultimately responded were European, with just 10% of submitters Māori.

String of earthquakes hit Hawke’s Bay


A magnitude 5.9 earthquake has struck the Hawke’s Bay, triggering a string of follow-up tremors.

GeoNet’s reported the first quake hit near Porangahau at 10.16am, at a depth of 22 kilometres. A few minutes later, another “severe” quake – this time magnitude 5.3 – hit the same area at a depth of 15 kilometres. Similarly located quakes of up to magnitude 4.4 have continued hitting every few minutes since then.

Thousands have already reported feeling the shake, according to GeoNet. However, the Civil Defence has confirmed there is no tsunami threat.

The Bulletin: Much-anticipated IRD tax report released today

The long-awaited IRD report into the tax paid by New Zealand’s 400 wealthiest individuals lands today, along with another from Treasury looking at the tax burden shouldered by all sectors of society. Wrote Duncan Greive last week, “together these reports are expected to give the most detailed view yet of the financial world of the richest New Zealanders, and just how much tax that wealth generates”.

The IRD and Treasury reports will form the research base for any change to New Zealand’s tax regime, Grieve wrote. “After the bonfire of the policies, Labour is about to start announcing some new ones.” Could that include a capital gains tax? We may have a better idea by the end of today. Revenue minister David Parker, who commissioned the research, will speak at 12.30pm.

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Jacinda Ardern joins Harvard for new roles linked to leadership, Christchurch Call

Jacinda Ardern poses for one last photo in the prime minister’s office (Photo by Hagen Hopkins/Getty Images)

Recently departed prime minister Jacinda Ardern will join Harvard University for new roles based around her time as a global leader and her ongoing work with the Christchurch Call.

Ardern, who formally quit politics earlier in the month after stepping down as prime minister in January, has been named a 2023 “Angelopoulos global public leaders fellow” and as a “Hauser leader” at Harvard’s Kennedy School in Massachusetts.

The global public leaders programme provides “opportunities for high-profile leaders who are transitioning from public service roles to spend time in residence at Harvard Kennedy School” while the Hauser leaders programme brings “several high-profile leaders from public, private, and nonprofit organizations to campus each semester to engage with students and faculty on building skills in principled leadership”.

Ardern said she was humbled to be joining the university as a fellow. “Not only will it give me the opportunity to share my experience with others, it will give me a chance to learn,” Ardern said. “As leaders, there’s often very little time for reflection, but reflection is critical if we are to properly support the next generation of leaders.”

On Instagram, Ardern added that while she would be away from New Zealand for a semester – “helpfully the one that falls during the NZ general election” – she’d then be returning home. “I’ll also be sharing my experiences through speaking both here and abroad, while also taking time over the next year to learn too.”


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A post shared by Jacinda Ardern (@jacindaardern)

Ardern also is being appointed to a concurrent fellowship at the Berkman Klein Center for Internet and Society, based at Harvard Law School. Here she will study ways to improve content standards and platform accountability for extremist content online, and examine artificial intelligence governance and algorithmic harms – a role that aligns with her recent appointment as a special envoy to the Christchurch Call.

Ardern delivered the 2022 commencement address at Harvard University while serving as prime minister.

Cross-party support sought for possible congestion charging

Another day, another Auckland traffic jam. Photo: Getty

The government is seeking support from across the political spectrum for a possible congestion charging scheme.

First teased early last year, the scheme would force drivers to pay money for driving into Auckland City during peak hours, incentivising the use of public transport.

According to RNZ’s Katie Scotcher, legislation for the proposal may not be introduced in time for this year’s election – but whenever it is released, the government is hoping to have opposition support.

“I’ve been continuing to engage with my officials to get that advice and to examine the models, to consider how this could potentially work in a New Zealand context, and also engaging with other political parties,” said transport minister Michael Wood. “That work has been carrying on, we haven’t just been sitting back and doing nothing in that period.”

National has expressed concern at having congestion charging in place at the same time as Auckland’s regional fuel tax. Wood, too, acknowledged it would be a “significant impost” to have congestion charging and the fuel tax in place at the same time.

Meanwhile in transport-related news, The Spinoff’s Toby Manhire has today reported on the results of an Auckland Transport survey that revealed low satisfaction from customers. And on Newsroom, what does the decision to keep curbside parking in place of new bus and cycle lanes signify for Auckland? And Auckland mayor Wayne Brown speaks to Mike Hosking here.

Auckland traffic
Traffic in Auckland (Photo: Getty)