Asset sales bring in less than cost of tax cuts to top 10%
2 December 2013
Asset sales bring in less than cost of National’s tax cuts to top 10%
National’s tax cuts for the top 10% of income earners are costing more than the revenue generated by National’s asset sales, Green Party Co-leader Dr Russel Norman said today.
Parliamentary Library and Green Party calculations show that, by the time of the 2014 election, the reduction of the top income tax rate for the top 10% of income earners will have cost over $4.5 billion. The asset sales programme produced only $3.9 billion worth of proceeds to the Crown to date, even before sales costs are deducted.
“National isn’t selling our assets to pay for schools and hospitals; they’re flogging them off to fill a hole left in the budget by the tax cuts that they gave the top 10%,” said Dr Norman.
“John Key’s assets sales are part of a money go round. The well-off got tax cuts from National, they then bought shares in National’s asset sales, and the sale proceeds are going towards covering the cost of those tax cuts.
“National says its asset sales are necessary to maintain its capital spending programme without borrowing more. The truth is, they wouldn’t need to borrow the money if they hadn’t given massive tax cuts to the well-off in the first place. In the past, new capital spending has been funded from ordinary tax, not through desperate asset sales.
“All this privatisation of public wealth does no good for New Zealand as a whole and it leaves a permanent hole in the Government’s books, which will still be there once the asset sales end.
“New Zealanders don’t want their assets sold to the wealthy to pay for John Key’s tax cuts for the top 10%. That’s why we’ve seen such strong turnout in the referendum with nearly 700,000 votes returned so far,” said Dr Norman.
Estimated fiscal cost of the reductions in the top income tax rate received by the top 10% of earners
|October years||Cost of cut to top income tax rate received by top 10% of earners $m|
|2009||$79||Cut from 39% to 38% as of April 1|
|2010||$159||Cut from 38% to 33% as of October 1|
|Total by Election 2014||$4,557|
|Sources: IRD taxpayer data and Household Economic Survey|