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New Govt Urged To Progress Tax Reform To Benefit All NZers.

Political parties forming the next government are urged to think about how they can work within their existing tax commitments and policies to progress tax reform to benefit all New Zealanders.

That's the wero (challenge) issued to New Zealand's likely new governing parties, from the Better taxes for a Better Future campaign following Saturday's election.

“We know ACT and National have committed themselves to significant tax cuts, but while politicians spent a lot of time during the election campaign ruling out various taxes, we think an incoming government will have some wriggle room to be creative,” says Better taxes for a Better Future campaign spokesperson Glenn Barclay.

“Moving the tax thresholds as National has promised was overdue, but it will also create fiscal issues for the government - and lead to cuts to public services, with major impacts on the least well off in society.”

"However, we think there is public appetite for tax reform and there are tax options that no political parties have ruled out - which the incoming government could utilise to offset this expected loss of revenue,” says Glenn Barclay.

“This was demonstrated by a recent poll conducted for the Better Taxes for a Better Future campaign that showed strong support across the political spectrum for taxing the wealthy more.”

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Better Taxes also points to the increasing number of economists who are raising concerns about the growing gap between the revenue we collect and the fiscal demands arising from the challenges we face - and are arguing that that we cannot continue to rely on income tax as the source of that revenue.

Organisations involved in the coalition supporting the Better taxes campaign understand these demands and are calling for action.

The NZ Nurses Organisation doesn’t think we can properly address the current health system crisis without more tax revenue.

“We need more nurses and midwives - and more student nurses and midwives. Our healthcare system - and timely health care where and when it is needed - is failing now. Taxes fund healthcare - tax cuts don’t,” says NZNO President Anne Daniels.

For the Salvation Army, there is a focus on ensuring sufficient revenue to address poverty and inequality.

“Continuing to reduce the number of children living in poverty and hardship requires government to increase the incomes of families on the lowest incomes through tax transfers and welfare payments funded out of tax revenue," says the Salvation Army's senior social policy analyst Paul Barber.

"We call on the new government and its leaders to honour the commitments made in their election campaigns to meet targets to more than half child poverty by 2028, by acting to lift lower incomes and set out a plan to reach those targets,” says Paul Barber.

The Better taxes for a Better Future campaign notes the National Party has demonstrated a willingness to look at new taxes as part of their policy programme - including such taxes as the 15% foreign buyer taxes on houses worth more than $2million and ending the commercial building depreciation tax break - and is calling on the incoming government to look at other taxes to help bridge any fiscal gaps that may arise.

“We think there are several other options that haven’t been ruled out,” says Glenn Barclay.

“These include an excess profits tax, which has been used to help curb inflation in countries such as Spain. Or a 'ghost houses' tax - which, by taxing long term vacant houses, could help fund our need for more social housing and is used in Vancouver. A wealth transfer tax on income such as gifts and inheritances might also be an option.”

The Better taxes campaign’s poll also illustrated that there was support for initiatives such as these. 78% of respondents supported an excess profits tax, including a clear majority of National and ACT voters. 62% also agreed that all forms of income should be taxed in a similar way and again there was reasonably strong support for this idea from National and Act voters.

“Our poll shows there is support across the political spectrum for taxing the wealthy more,” says Glenn Barclay. “So there shouldn’t be any impediments for an incoming government to think a bit differently about tax.”

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