Transformational tax moves needed

Mary Hearn, Glendowie

It’s not surprising the cost of living is the most important issue for New Zealanders (Weekend Herald, November 5).

The Government’s tax credits for childcare are a positive first step, but it needs to be more transformational, as pledged. Labour needs to closely re-evaluate tax thresholds and GST. New Zealand has the secondhighest GST in the world and other countries have exemptions for food. Currently, 80 per cent of taxpayers earn between $0 and $70,000. People in the $48,000 to $70,000 bracket pay a 30 per cent tax rate and, if eligible for “Working for families”, receive less in real terms because those tax credits haven’t been inflation adjusted. Approximately 80 per cent pay a third or more of their income for rent.

In some areas, more than half goes toward rent. Anecdotal evidence suggests that this new “working poor” is showing up at food banks. Letting this income group keep more of their earnings won’t stoke inflationary pressure. It’s simply going to allow them to feed their families and pay their power bills, and maybe even buy new school shoes for their children.