Your back pocket

Weekend Herald - - NEWS -

The back­bone of Na­tional’s tax pol­icy is putting more money in the pock­ets of mid­dle- in­come New Zealan­ders who can do with it what they will.

Un­der a Na­tional- led gov­ern­ment, peo­ple earn­ing a salary of $ 52,000 or more would be richer to the tune of $ 1000 a year. Peo­ple earn­ing be­tween $ 22,000 and $ 48,000 a year would be about $ 560 bet­ter off while peo­ple earn­ing $ 15,000 or less would re­ceive lit­tle to no ben­e­fit from tax cuts.

Na­tional is also look­ing at a sec­ond round of cuts in years two and three of its ten­ure. It will also in­crease the $ 14,000 in­come tax thresh­old to $ 22,000 and the $ 48,000 tax thresh­old to $ 52,000, mean­ing a tax re­duc­tion of $ 10.77 a week for any­one earn­ing more than $ 22,000 a year, in­creas­ing to $ 20.38 a week for any­one earn­ing more than $ 52,000.

How­ever, the party will scrap the In­de­pen­dent Earners Tax Credit, which cur­rently en­ti­tles peo­ple earn­ing be­tween $ 24,000 and $ 44,000 to an ex­tra $ 10 a week.

Na­tional says th­ese peo­ple will still be bet­ter off though as a re­sult of its other tax poli­cies. It will in­crease Work­ing for Fam­i­lies tax cred­its, but not to the same ex­tent as Labour. The party says it will raise the age of su­per to 67 after 2037.

Labour has ruled out tax cuts and would in­tro­duce taxes on com­mer­cial water use, a tourist tax and an Auck­land re­gional fuel tax of up to 10c a litre.

It will sig­nif­i­cantly boost the money avail­able to house­holds earn­ing un­der $ 57,000 a year through its Work­ing for Fam­i­lies pol­icy. For ex­am­ple, sin­gle- child fam­i­lies mak­ing $ 30,000 would get an ex­tra $ 20, ris­ing to $ 47 a week if they have two chil­dren or $ 74 with three chil­dren.

This com­pares with Na­tional’s $ 9.25 a week for sin­gle- chil­dren fam­i­lies, $ 36.06 for t wo chil­dren and $ 62.87 for three. But it’s with mid­dlein­come earners where Labour’s Work­ing for Fam­i­lies pol­icy most sig­nif­i­cantly di­verges from Na­tional’s: A $ 55,000- a- year house­hold with one

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