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$20 a week for those who missed out on tax cuts

Jim Anderton MP Tue Sep 28 1999

95% of New Zealanders will pay no more tax

The Alliance wants low income wage earners, superannuitants and beneficiaries who have missed out on tax cuts to get a cash boost of $20 a week.

The policy will be paid for by adding six cents in the dollar to the marginal tax rate on earners over $60,000 and introducing a twin-step Executive Surcharge on very high incomes, Alliance leader Jim Anderton announced today.

The Alliance will not increase personal income tax on those who earn less than $60,000. 95% of New Zealanders will pay no more tax.

Superannuitants will get an immediate cash increase of $20 a week, taking the base (married) rate of New Zealand Superannuation to 68.6% of the average, after tax, ordinary time wage – still less than the level it was at when the 1993 Superannuation Accord was signed.

The minimum wage will be increased by fifty cents an hour to $7.50, delivering a $20 a week cash boost to the lowest paid workers.

Benefits would also be increased by $20 a week in cash. Jim Anderton said the biggest step the Alliance will take for beneficiaries is to provide more job opportunities, but $20 a week would provide much-needed relief.

'Low wage-earners, superannuitants and beneficiaries have received virtually nothing from tax cuts over the last two years. They need relief urgently.'

The top marginal tax rate will be set at 39 cents in the dollar for incomes over $60,000.

An Executive Surcharge of four cents in the dollar will be applied to incomes over $75,000 a year and a further 4 cents on incomes over $100,000. The top tax rate together with the surcharge would harmonise New Zealand's tax rates with the top Australian rate of 47 cents in the dollar.

The Executive Surcharge combined with a tax increase of six cents in the dollar on incomes over $60,000 will raise a total of $760 million a year extra. It will cost $640 million to provide superannuitants and beneficiaries with a cash boost of $20 a week extra.

ENDS

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