National has unveiled a new tax plan that would boost income tax thresholds every three years to keep pace with inflation.
National leader Simon Bridges giving his State of the Nation speech today. Photo: RNZ / Conan Young
Leader Simon Bridges has announced the new policy at his State of the Nation speech in Christchurch.
"By 2022, New Zealanders on the average wage are expected to move into the top tax bracket.
"That's not fair, and it's not right. New Zealanders should not pay more tax every year even when their income isn't keeping up with the rising cost of living."
The first change would be in 2021 and would relate to the tax years of 2018, 2019 and 2020.
There would be a veto clause so any government could withhold the threshold changes in the "rare circumstances that there is good reason to do so".
Mr Bridges also ruled out any increases to petrol taxes in the first term of a National government, along with three other tax-related commitments.
He said the coalition government had burdened New Zealanders with more taxes including a regional fuel tax, and is lining up to introduce even more.
When it came to power the government cancelled National's $2 billion tax cut package, using that money instead to fund its more targeted Families Package.
"The government now has more money, while New Zealanders have less. And worse is coming," he warned.
Mr Bridges told the business audience the government's "bad decisions" were driving up the cost of necessities.
"New petrol taxes are costing households $250 a year and more costs on landlords have already driven up rents by $30 a week.
"At the same time, the government cancelled tax relief which would have given the typical working Kiwi an extra $1000 a year," said Mr Bridges.
He said that all added up for families earning $50,000, or even $70,000, who should not be considered wealthy.
"An extra $1000 a year, on top of rising wages, would have given them fewer worries, and more choices."
The Tax Working Group will soon deliver its final report to Finance Minister Grant Robertson, with proposals for different ways of taxing capital gain.
Mr Bridges said the government was lining up to introduce "a Capital Gains Tax on small businesses, farms, lifestyle blocks, family baches, rental properties and KiwiSaver accounts".
"That is even though New Zealanders already pay too much tax. Why do I say that? Because this government is wasteful."
He also made four commitments if National was elected in 2020:
- Repeal the Auckland Regional Fuel Tax
- Ensure no increase in petrol taxes during the first term
- No new taxes in our first term
- Repeal a Capital Gains Tax.