New Govt Must Address NZ's Revenue Gap
New Zealand's growing revenue deficit needs urgent attention from its new Finance and Revenue Ministers, says Tax Justice Aotearoa.
"We congratulate the new Ministers of the incoming government - specifically Nicola Willis as Finance Minister and Simon Watts as Revenue Minister," says Tax Justice Aotearoa chair Glenn Barclay.
"However, we hold strong concerns over the affordability of the coalition's tax cut package - which the Prime Minister says will go ahead through a combination of spending reprioritisation and additional revenue measures."
TJA also questions the suitability of proposed tax breaks for landlords, given the widening equity gap between renters and landlords.
National's proposed foreign buyer tax has been scrapped - but questions remain about how the government will fund its promised tax cuts.
"We're wary of the Prime Minister saying policy changes will offset the loss of revenue from that change," says Glenn Barclay.
"We're unconvinced the government's fiscal plan is adequate for its tax cuts to be funded responsibly."
Tax Justice Aotearoa has issued a Briefing to Incoming Ministers (BIM) as an outline of New Zealand's fiscal challenges - and suggests a number of proposed solutions.
The BIM makes clear that Aotearoa’s tax system is not fit for purpose.
It outlines the multiple inequities of the current system, which does not raise enough revenue for the challenges we face as a country - including climate change, poverty & inequality, a changing population, growing demand on public services and ageing infrastructure.
Ideas put forward to address Aotearoa's revenue gap include broadening the types of income that can be taxed, introducing new tax brackets, new taxes such as excess profits tax, better tax transparency (eg. chasing tax evasion), and supporting international tax reform (eg. addressing foreign corporates' tax avoidance).
The BIM also points to a recent poll conducted by the Better taxes for a Better Future campaign - led by Tax Justice Aotearoa - which shows strong public support for progressive tax changes across the political spectrum, including taxes on wealth, capital gains and excess profits.
"There are a number of tax measures that no political parties have ruled out, and we encourage the new Government to consider these, as demand on Treasury's books grows," says Glenn Barclay.
"Tax Justice Aotearoa wishes the new Finance and Revenue Ministers well in their important and challenging work. We look forward to engaging with them on the crucial area of tax reform over the coming years."