Govt’s latest tax grab will boost living costs again
Amy Adams - Finance
10 December 2018
Two weeks out from Christmas, the Labour-led Government has unveiled plans to extract more taxes from New Zealanders that will drive up the cost of living for the very families that can least afford it, National’s Finance spokesperson Amy Adams says.
“Legislation introducing ring-fencing of rental losses will change New Zealand’s tax settings so that residential property is treated differently to every other form of investment. Those that will feel it most will be the one third of Kiwi households who rent.
“The Government is expected to haul in an extra $190 million a year in tax from landlords but the Treasury, IRD and property investors all say, it is tenants who are likely to suffer. Higher taxes will be directly passed on to tenants via higher rents and indirectly by deterring investment in rental properties and reducing supply.
“To put that in perspective, if all of the $190 million extra tax is passed on to the 630,000 New Zealand households that rent, then rents will rise by another $300 a year. Yet again this Government’s poorly conceived policies are hurting families who are already being forced to stretch each dollar further.
“In the first 12 months of this Government, the median rent in New Zealand rose by $30 a week. That is 2.5 times faster than under National and is a direct consequence of the higher taxes and costly regulations being imposed on landlords.
“Ring-fencing of losses is just the latest tax grab from a Government that, as this legislation confirms, has cancelled tax cuts planned by National, only to embark on wasteful spending schemes.
The typical New Zealander will pay an extra $1,060 in tax every year just from the cancellation of the tax cuts legislated by National and before counting the impact of petrol taxes, increased rents and electricity prices that are set to rise.
“This Government is far from family friendly. Analysis by the Treasury shows that three out of four families would be better off under the Family Incomes package National introduced last year than under this Government’s Families’ package.
“National believes New Zealand families deserve to keep more of what they earn. This legislation does the opposite of that, confirming there will be no tax cuts and imposing new taxes that will only add to rising living costs.”