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Minority reaps benefits of strong economic growth

Privileged minority reaps benefits of strong economic growth

Those who keep shouting for tax cuts are selfish and misled, says Alliance social services spokesperson Gail Marmont.

"Taxes are the price of civilisation and New Zealand is not highly taxed at all by international standards. The top tax rate in Australia is 47%, so the recent emphasis on tax cuts in Australia is very misleading."

Ms Marmont says adjustments to tax thresholds may be warranted, given the “bracket-creep” of the last few years, but it is higher rates at new steps above the current 39% top rate, not tax cuts, that should be introduced.

“What we have is a low-wage economy. The exploitation of more than 65% of the people of NZ, especially over the last 15 years, has enabled the privileged minority to live well and enjoy the benefits of the recent 4.5% growth in GDP. These people need to contribute their fair share,” Ms Marmont says.

The Alliance says an integrated tax and income policy (with a higher minimum wage of $15) is required to enable the two-thirds of the population on low incomes (less than $30,000) to properly participate in society as healthy and happy citizens.

The first $10,000 earned should be tax-free ( www.alliance.org.nz ). This will “cost” $2.25 billion and give all income tax payers around $750 extra each year. That amount would have to be replaced by increasing income taxes higher up the scale of earnings.

The Alliance is also concerned that GST, alcohol and tobacco taxes (and other flat “taxes” like line charges) fall disproportionately on the poor.

“GST must be removed from basic items. A higher sales tax on 'luxury' consumer goods like cars, electronic devices and the like could offset the removal of GST on necessities like food and clothing,” Ms Marmont says.

The Alliance would like to see a payment such as the Family Benefit restored, that could be capitalised on, and low-interest state loans that would make it possible for young families to purchase their own homes.

"A third of our children in New Zealand live below the official poverty line, and that is a disgrace," she says.

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"Much of the cheapest housing in New Zealand is alongside busy roads, high tension electric pylons, and they are too small for growing families. The Alliance wants to see real beneficial change, not tinkering around the edges."

She says Alliance members are disappointed that the budget has not done more for those trying to get into their first home.

"It is too big an ask to expect people who are on low wages and who are paying high rents to save for five years before getting any help. Housing is the biggest problem faced by our young families, and to dangle the prospect of help in five years time is just no use."

New Zealand has some of the lowest pay rates in the developed world, and until these are addressed to a realistic level that makes it possible to save, it is just not going to happen, Ms Marmont says.

"Jam tomorrow indeed. It feels more like a miserly trail of bait to lead Labour voters on for the next five years."


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