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National Goes Wobbly On Indexation: Luxon Must Commit To Axing The Stealth Tax

If National wants to make New Zealand a prosperous and productive society, they need to show a commitment to fully costed tax reform.

In comments reported in the New Zealand Herald, both Christopher Luxon and Nicola Willis refused to make a firm commitment to automatic indexation of tax thresholds. Luxon only went as far as reiterating that National thinks ‘as a principle indexation is really good’ and the party’s current policy of a one-off adjustment of thresholds back to 2017 levels.

National’s previous policy under Simon Bridges would have seen tax brackets automatically adjusted for inflation every three years. New Zealand First recently agreed to adopt this policy going into next year’s general election.

On 4 August, Chris Luxon called the Taxpayers’ Union and assured us that a National-led Government is committed to income tax indexation,” says Taxpayers Union Campaigns Manager, Callum Purves. “Luxon needs to go on the record and say the same to the NZ Herald.”

“Too many times, National have advocated for bold, fiscally conservative policy in opposition before becoming caretakers for Labour’s policies when they get into government.

“Every time prices go up while tax brackets remain fixed, Kiwis become poorer. This inflation tax allows the Government to take a higher share of your wages by stealth without a single vote to increase taxes ever having to be cast in Parliament.

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“Since the last changes to tax brackets in 2010, New Zealanders have been paying the price of no indexation. Someone on today’s median wage of $61,828 is paying $1,946 more in tax than someone on the same real income in 2010. A registered nurse on an average salary of $76,000 is paying $2,126 more each year.

“Luxon wants a change of Government—but with most New Zealanders now saying the country is headed in the ‘wrong’ direction—he needs to offer a change of direction.”

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