National reaffirms promise to adjust taxes
The National Party is sticking to its promise to tie tax rates to the cost of living as households face a growing squeeze on living standards.
Finance spokesperson Nicola Willis yesterday said National was ‘‘the party of tax reduction’’.
Her comments come after Labour accused Willis of ‘‘taking the knife’’ to her party’s tax indexation policy – a plan to add cost-of-living adjustments into tax to keep pace with inflation.
‘‘We will be providing permanent tax reduction that adjusts the tax thresholds as we presented in January,’’
Willis said in the Beehive yesterday. ‘‘At a minimum if we can adjust the tax thresholds further to provide more tax relief ... if the fiscal and economic conditions permit, we will go further and offer more tax relief for New Zealanders.’’
Labour jumped on comments purported to show her party was backing away from the policy, and were only for this year’s budget. But Willis confirmed her party’s tax policy would include indexation and scrapping the 39% tax rate for people earning above $180,000.
Education Minister and MP for Remutaka Chris Hipkins said New Zealanders ‘‘know exactly where they stand’’ under a Labour Government. ‘‘When it comes to spending on health and education, when it comes to issues around tax, they’re set out very clearly in the budget documents every year,’’ he said.
Stats NZ reported annual inflation climbed again to 7.3% last month – a 32-year high. The figure was drawn from the Consumer Price Index which measures the annual increase in prices of commonly bought goods and services during the three months to the end of June..
ACT is also calling for tax cuts. However, the policy may be counterproductive because tax cuts could drive further inflation, as more cash in the economy is commonly believed to increase demand.