Roll on Oc­to­ber 1 and in­come tax changes

South Waikato News - - NEWS - By LOUISE UP­STON

In the last few weeks I have been talk­ing to busi­ness own­ers and con­stituents in Pu­taruru, Ti­rau and Toko­roa. Whether they were em­ploy­ers, em­ploy­ees or fam­i­lies who re­ceive govern­ment as­sis­tance they all know they will be bet­ter off de­spite the small 2.5 per cent in­crease in GST.

The Govern­ment’s Oc­to­ber 1 tax changes will fur­ther boost real af­ter-tax earn­ings and leave the vast ma­jor­ity of New Zealan­ders bet­ter off.

Real af­ter tax av­er­age earn­ings – which take into ac­count the rise in GST and other fore­cast cost of liv­ing in­creases – are set to rise 1.2 per cent in the last three months of this year on the back of the Oc­to­ber 1 tax cuts.

This builds on an 8.7 per cent in­crease in real af­ter tax av­er­age earn­ings since Septem­ber 2008 – a sig­nif­i­cant im­prove­ment on the mea­gre 3 per cent growth over the pre­vi­ous nine years of Labour.

The Oc­to­ber 1 tax re­forms are part of our six­point plan for a stronger econ­omy.

They will help South Waikato fam­i­lies get ahead un­der their own steam, boost growth to cre­ate jobs and raise in­comes, en­cour­age sav­ings and in­vest­ment, and make the tax rules fairer for all New Zealan­ders. The main tax changes on Oc­to­ber 1 are:

Per­sonal in­come tax rates will be cut across the board leav­ing 72 per cent of tax­pay­ers fac­ing a top rate of 17.5 per cent or less.

The res­i­dent with­hold­ing tax rate on things like bank sav­ings will drop in line with per­sonal tax rates.

The top tax rate on sav­ings in port­fo­lio in­vest­ment en­tity in­vest­ments will drop to 28 per cent.

The rate of GST will in­crease from 12.5 to 15 per cent.

Af­ter the Oc­to­ber 1 cuts an av­er­age in­come fam­ily will be about $25 a week bet­ter off, an av­er­age wage earner about $15 a week bet­ter off and a cou­ple on NZ Su­per about $11 a week bet­ter off. You will no­tice these ben­e­fits grow over time as wages in­crease.

This is great news for fam­i­lies in the South Waikato. They will ben­e­fit im­me­di­ately from tax cuts and you will ben­e­fit more from a lift in growth and jobs this pack­age will cre­ate.

This ties in well with new busi­ness growth. There is a new su­per­mar­ket be­ing built; I had the plea­sure of open­ing the Blue Pa­cific Min­er­als new fa­cil­ity last week and we have a lot of ap­pre­ci­a­tion to show in our South Waikato com­mu­nity through Com­mu­nity Con­nect and the recog­ni­tion of busi­ness ex­cel­lence at award nights com­ing up in Pu­taruru and Toko­roa.

You can cal­cu­late how much bet­ter off you will be af­ter Oc­to­ber 1 by vis­it­ing the Govern­ment’s tax in­for­ma­tion web­site www.taxguide.co.nz.

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