National Will Cut Taxes For Hard-working Kiwis
National’s massive tax stimulus package will put more than $3000 extra into the pockets of hard-working Kiwis on middle incomes, National Party Leader Judith Collins says.
Ms Collins has announced the next National Government will let Kiwis keep more of what they earn by lifting the bottom tax threshold from $14,000 to $20,000, the middle threshold from $48,000 to $64,000 and the top threshold from $70,000 to $90,000.
These changes will be in place from December 1, 2020 until March 31, 2022. The total cost of this over the 16-month period is estimated to be $4.7 billion.
“Today we are facing the biggest economic downturn in living memory, but with the right leadership and economic plan we can grow our economy and keep Kiwis in jobs,” Ms Collins says.
“It’s clear New Zealand is in for a tough year in 2021 and we will need more stimulus to avoid prolonging the recession and to reduce the economic and social scarring Treasury predicts. The fairest and most efficient way to do that is through the tax system
“To keep our economy ticking, New Zealanders need money to spend. National will deliver temporary tax relief that puts more than $3000 – or nearly $50 a week – into the back pockets of average earners over the next 16 months.
“This will give Kiwis the confidence to go out and spend, which will be crucial for our retail, tourism and hospitality businesses to survive this economic crisis.
“New Zealand is facing a much longer and more painful economic shock than earlier forecast. We need a serious plan for economic growth to get us back on track.”
National’s Finance spokesperson Paul Goldsmith pointed to higher taxes as Labour’s only plan to get New Zealand out of this economic hole.
“No country has ever taxed its way out of a recession – and this is a big one we’re in now.”
As well as tax relief for households, National will double the depreciation rate for businesses that invest in new Plant, Equipment and Machinery over the next twelve months. This will bring forward the amount a business can claim in depreciation for new investments, which will stimulate investment by increasing the return on capital.
Doubling the depreciation rate is expected to cost $430 million a year for five years, while increasing tax revenues in out years.
“Our stimulus package has been fully-funded and costed, and is included in our independently reviewed Economic and Fiscal Plan released today,” Mr Goldsmith says.
“National’s plan carefully balances the need to drive economic stimulus, increase investment in core public services and restore government debt back to prudent levels.
“Labour, on the other hand, has announced it will increase taxes during a recession. The contrasting approaches to the economy at this election could not be clearer.
“Judith Collins and her strong National team will bring the leadership, experience and vision needed to get our country back on track.”