Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Copeland: Bring fiscal creep to an end


Copeland: Bring fiscal creep to an end

United Future revenue spokesman Gordon Copeland has again challenged the Government to relax the income tax bands to take into account cumulative inflation since they were established in April 2000.

In debating the annual tax bill read in Parliament for a second time yesterday, he outlined the simple economic formula involved: "All taxpayers will know that if inflation goes up by 4% they will need to have an increase in their pay packet of at least 4% in order to maintain purchasing power parity and a consistent standard of living.

"However, in a progressive income tax system, as their salary or wages move, because of inflation, into a higher tax bracket they will move up from say a 19.5% tax rate to a 33% tax rate, thus losing part of the increase in their pay packet through increased taxation.

"This used to be referred to as 'fiscal drag' and is now more typically referred to as 'bracket creep' but I think we could better refer to it as 'fiscal creep'. Such fiscal creep, which reaps extra revenue for the Government, is not an honest straightforward tax increase brought before Parliament for an open debate, but it is a tax increase nevertheless.

It is these economic fundamentals which lead United Future to the strong conviction that the tax bands reaffirmed in this bill at their April 2000 levels should have been adjusted at 1 April 2003 as follows:

* The 15% low income rebate level from $9,500 - $10,500

* The 19.5% rate from $38,000 to $42,000.

* The 33% rate from $60,000 to $65,000

* The 39% rate from above $60,000 to above $65,000.

The Government's failure to make these adjustments results in the over-taxation of New Zealanders by the following amounts:

For those earning between $25,000 and $35,000 - $60 per annum. For those earning between $38,000 and $42,000 - $300 per annum. For those earning between $42,000 and $60,000 - $600 per annum. For those earning over $65,000 - $900 per annum.

"These figures may seem modest but as we have 2.7 million taxpayers in this country, they represent an over-taxation of some $450 million per annum. These are funds which, through fiscal creep, the Government is gathering into its coffers but which correctly belong in the pockets and purses of taxpayers and their families.

"This is wrong in principle and United Future will continue to challenge the Government's inaction in this regard and ensure that it is brought to the attention of the electorate until a firm policy commitment is made to eliminate fiscal creep from the New Zealand tax system once and for all.

"Simply stated fiscal creep is unprincipled and unjust," Mr Copeland said.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Compelling Case For Meatless Meat

Talk about living in a bubble. As vegetarianism and veganism become normalised – there are more options on restaurant menus! - it can be easy to think that the whole world is gradually giving up on meat. Alas, the reverse is true. Americans for instance consumed 100 kilograms of meat and poultry in 2018, up from 75 kilograms in 1960, according to the US Department of Agriculture figures... More>>


 
 

Pay Policy: CTU Public Service Unions Meet With Public Service Minister

The Council of Trade Unions and affiliated public service unions, met with the Minister for the Public Service Hon Chris Hipkins this afternoon to discuss the pay expectations of those working in our public services. CTU President Richard Wagstaff said it was ... More>>

Government: Further Action Against Gang Crime

The Government will make it illegal for high risk people to own firearms by introducing Firearms Prohibition Orders (FPOs) that will strengthen action already taken to combat the influence of gangs and organised crime to help keep New Zealanders and their ... More>>

ALSO:

Maori Party: Whakatōhea High Court Decision

“We applaud the Whakatōhea High Court case that has now set a precedent for Māori rights and interest in their foreshore and seabed. It’s an outstanding decision because the Court recognises all reclaimed lands with significant and boating traffic” ... More>>

ALSO:

PM: Statement On The Speaker And Annual Review Debate

“The serious issue of alleged sexual assault and harassment at Parliament was poorly managed and inappropriately politicised last night. The tone of the debate did not reflect well on Parliament as a whole,” Prime Minister Jacinda Ardern said. ... More>>

Parliament: Mallard Fails To Give Taxpayers A Straight Answer

Trevor Mallard has confirmed he is unfit to be Parliament’s Speaker by failing to answer several important questions relating to the false rape accusation saga that cost taxpayers more than $330,000, Shadow Leader of the House Chris Bishop says. ... More>>

Local Government: Independent Review To Explore Future

Local Government Minister Nanaia Mahuta says an independent review of local government will explore how councils can maintain and improve the wellbeing of New Zealanders in the communities they serve long into the future. More>>

ALSO:

PM Ardern And PM Morrison: Commencement Of Two-Way Quarantine-Free Travel Between Australia And New Zealand

Joint Statement by Prime Ministers Scott Morrison and Jacinda Ardern Commencement of two-way quarantine-free travel between Australia and New Zealand Today, Australia and New Zealand have fulfilled their commitment to establish two-way quarantine free ... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels