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Where 2020 will go down as a Covid election, history will remember this year’s election as being won and lost on the cost of living.

Ever since former prime minister Jacinda Ardern refused to admit and then eventually admitted we were in a “cost of living crisis”, opinion polls have consistently shown New Zealanders want financial support and are increasingly worried about the rising cost of just about everything. Rents, food prices, mortgages, petrol, airfares, transport… very little has been able to escape soaring inflation.

And so with just one day to go until polls close, and one day to go until we find out whose economic bribe worked best, let’s take a look at the cost of living policies from across the political spectrum. 

Tax

Let’s start with tax because much of the cost of living debate in this election campaign has been around what sort of tax relief, if any, is needed (and what’s been ruled out). 

Labour ruled out a capital gains tax or a wealth tax early in the campaign, but followed that up by announcing it would remove GST from fruit and vegetables. That’s the key pillar of the party’s cost of living policy package. The party would also increase Working for Families support, and provide tax rebates for improving energy efficiency in existing homes. 

There aren’t any adjustments to income tax thresholds in Labour’s plan, but there are in National’s. The party has centred much of its tax plan around the so-called “squeezed middle” – meaning average income earners. National would adjust income tax brackets for inflation, except the top rate. Under this plan, the 17.5% income tax rate threshold would change from $14,000 to $15,600, the 30% threshold from $48,000 to $53,500, and the 33% threshold from $70,000 to $78,100.

National would also freeze petrol taxes for three years.

While Labour’s ruled out a wealth or capital gains tax, the likely coalition partners have not. The Greens would make the first $10,000 of income tax free, and reduce all tax paid on incomes below $120,000. This would be paid for with a wealth tax and by hiking the tax paid on income over $180,000. 

Te Pāti Māori would make the first $30,000 of income tax free and has also promised to introduce a wealth tax and increase tax on income over $300,000. It would also remove GST from all food, a step further than Labour’s proposal.

Landing somewhere in the middle on the GST discussion is New Zealand First. While the party had previously pledged to remove GST from basic foods, it’s now seeking a select committee inquiry to determine whether this is a feasible plan. New Zealand First would also adjust tax brackets for inflation and introduce a tax-free threshold of $14,000. 

Finally, Act has proposed a two-rate income tax system, though it has suggested a longer lead-in time on this would be needed due to the state of the government accounts. This proposed tax system would see a 17.5% tax rate for those who earn less than $70,000 a year and a 28% tax on incomes over this amount, seeing the current top tax rate scrapped.

Other changes

Not all cost of living policies are directly to do with tax and incomes, however. Some parties have promised to introduce broader changes, many of which are around support for families with children or when it comes to healthcare. You can find our two-minute wrap of the benefits and welfare policies here.

Labour has pledged two weeks of paid partner’s leave along with increased support and eligibility for Working for Families payments. It’s also promised to continue the free school lunches programme as it says “one in five children in New Zealand live in households that struggle to put enough good-quality food on the table”. Labour would retain the free prescriptions policy introduced in this year’s budget and provide free basic dental care to under 30s. Labour would also abolish starting out and training wages, increase the minimum wage every year in its next term and keep the superannuation age at 65.

In some of these areas, National is aligned. The party would also increase support and expand eligibility for Working for Families payments and has also promised a childcare tax rebate for families earning less than $180,000 per year. The winter energy payment would also be maintained and it’s promised to keep the school lunches programme, though would consider tweaking it. 

On parental leave, National would allow parents to take paid leave at the same time. The party would also increase superannuation payments annually (and eventually hike the super age to 67) and introduce Kiwisaver changes allowing people to split savings across multiple providers. Fair pay agreements would be abolished. 

The Greens would go a step further than Labour with its dental policy, pledging free universal dental care as opposed to capping it at 30. It would also increase superannuation payments (while maintaining the retirement age), double the Best Start payment for families with a newborn and extend paid parental leave to 15 months. They would also introduce a weekly income guarantee, a sort of universal income, of $385 for individuals, $770 for couples, and $735 for single parents. “[The Greens] would ensure that every citizen has the financial means to cover basic needs, regardless of their employment status or personal circumstances,” reads the policy.

NZ First has promised to compensate people who lost jobs due to Covid-19 vaccination requirements. Those who lost their jobs due to mandates would also be allowed back into their original jobs.

Act wants to reduce the burden on businesses through actions like removing a public holiday (in place of the Matariki holiday introduced under the current government). It would also reduce the number of public servants and limit pay increases. It would also raise the retirement age to 67 and index it to life expectancy.