Roll on October 1 and income tax changes
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.