Bridges pledges tax indexation to protect incomes
By Gavin Evans
Jan. 30 (BusinessDesk) - National leader Simon Bridges is pledging to index tax thresholds to inflation to prevent wage and salary earners being pushed into ever higher tax brackets.
He told an audience in Christchurch today that, if elected in 2020, a National government would amend the Income Tax Act so that tax brackets would be adjusted three-yearly in line with the cost of living.
Bridges said that would prevent New Zealanders from moving into higher tax brackets even when their income isn’t keeping up with the rising cost of living.
“It would ensure New Zealanders keep more of what they earn to stay on top of rising costs of living such as higher prices for necessities like petrol, rent and electricity,” he said in notes for his speech.
“We will include a veto clause so the Government of the day can withhold the changes in the rare circumstances there is good reason to. But it will have to explain that decision to New Zealanders.”
He said the $650 million a year that would be saved, based on today’s estimates, could be afforded by “managing the books prudently and spending wisely.”
Assuming 2 percent inflation, a worker on $52,000 would save $430 a year after the first adjustment; a two-income family earning $120,000 would be $600 a year better off.
The latest Colmar Brunton poll in December showed support for National had climbed 3 percentage points to 46 percent. Support for Labour was down 2 at 43 percent, as was support for its Green Party support partner at 5 percent. Government coalition partner NZ First was down one at 4 percent.
Bridges said poor policy by the government had helped increase the cost of petrol, rents and power. New petrol taxes are costing households $250 a year while more costs being imposed on landlords had increased rents by $30 a week, he said.
If elected, National would have no new taxes in its first term. The Auckland regional petrol tax would be repealed as would be any capital gains tax the government introduces.
Bridges said the country’s housing shortage remains serious and National will this year release a bill to overhaul the Resource Management Act to free up land and unlock development while also protecting the environment.
Economic growth and improving the economy must go hand in hand, he said.
National remains committed to working with the government on a bipartisan Climate Change Commission to ensure actions are enduring and comprehensive, and its first policy paper this year will be on the environment.
“Sound environmental policies don’t mean we have to sacrifice our economy, and vice versa,” he said.