National walks away from debt target, committing to income tax cuts for 16 months and a temporary tax tweak to encourage businesses to invest in plant and equipment

National walks away from debt target, committing to income tax cuts for 16 months and a temporary tax tweak to encourage businesses to invest in plant and equipment
Judith Collins

National is promising 16 months of income tax cuts to stimulate the economy, stepping right back from the debt reduction target it’s been campaigning on.

The party is pledging to lift income tax thresholds in such a way that benefits middle to higher income earners the most:

Tax rate Lower threshold - CURRENT Lower threshold - PROPOSED Upper threshold - CURRENT Upper threshold - PROPOSED
10.5% $0 $0 $14,000 $20,000
17.5% $14,000 $20,000 $48,000 $64,000
30% $48,000 $64,000 $70,000 $90,000
33% $70,000 $90,000 + +

The largest proportionate benefit would be felt with those with incomes of $64,000. They would save $3,226 over 16 months.

People with an annual income of $30,000 would save $560, and those with an income of $90,000 would save $4,026.

National said the policy would cost $4.7 billion over 16 months, starting December 1, 2020. 

Accordingly, it’s reining back its commitment to reducing net core Crown debt to 30% of GDP within 10 years “or so”. The party now sees debt falling to 35% of GDP within 14 years, by 2034.

National leader, Judith Collins, hoped the relief would “keep our economy ticking,” giving people “confidence to go out and spend,” supporting the tourism and hospitality sectors.

Tax relief for businesses that make capital investments

National is also pledging to provide further temporary tax relief for businesses in bid to encourage them to make capital investments within the next year.

It’s committing to allowing businesses that invest in plant, equipment and machinery worth more than $150,000 to double their depreciation rates on that investment.

The policy would only apply to new investments for 12 months.

So, if a business invested in a new piece of machinery worth $1 million, with a depreciation rate of 10% a year, they would be able to depreciate that asset at 20%, reducing their tax liability by $100,000 a year for five years.

National expected this policy to cost $430 million per year over five years.

Savings to come from Super Fund contributions, not core services

The main way National would reduce spending is by suspending contributions to the NZ Superannuation Fund, expected by Treasury to be worth $7.7 billion over the next four years.

It’s also committing to abolishing first year fees-free tertiary education and KiwiBuild.

National’s finance spokesperson Paul Goldsmith confirmed National’s commitment to continuing increasing investment in core public services.

“We will invest more in education, health, social development and infrastructure while leaving $10.2 billion in operating allowances over the next four years to deal with future cost pressures,” he said.

“Throughout history, severe downturns have been a time when generational investments have been made that help set up future growth. National will make these much-needed historic investments.

“But unlike Labour, we recognise the need to act responsibly for future generations. The best path back to prudent debt levels is through an absolute focus on economic growth and disciplined spending, not higher taxes.”

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151 Comments

10
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National promises to do, 'whatever it takes'.

Somewhere in the mix of that, one supposes is the good policy to counter bracket creep that Bridges announced long ago? Labour have really taken the heat out of the debate by announcing only a small and percentage wise popular change. That in turn has quelled some misgivings the electorate might otherwise have had. And one assumes that the rampant rich prick tax policies of the Greens will be held at bay, as Robertson has avowed, if they end up in coalition?

I think we've been here before: Scoop article: "National's growing list of broken promises". https://www.scoop.co.nz/stories/PA1111/S00331/nationals-growing-list-of-...

"But it was only their first term, give them a chance, I'm sure that real transformational change is just around the corner!"

CJ thats from 2011, nine years ago 9.
Looks like you are living in the past.

Why not change things, now the terrible financial state of affairs have been disclosed.

My point being that National have a habit of not fore filling their tax promises, try reading the article Henry.

Isn't it pretty much the same people from 9 years ago except Key?

Labour will sell their mothers to get into power. Surely the wealth tax has to be understood by voters before the election. Unfortunately, the MMP system let's the minor parties dictate terms when the holding the balance of power. Their policies should be taken seriously. I think a vote for labour could mean a vote for wealth tax. Robertson will note be able to stop jacksh.... if it comes down to needing the Greens to form a govt.

10
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If that is their motto and they want people to increase spending, why not reduce the GST rate for a limited period ?
That would benefit every one who spends on essentials, luxuries, whatever. A quicker and more efficient way to benefit all. I wouldn't mind the tax cut as well, thanks.

Only if all shops passed on the GST cut. Many wouldn't.

It is just a question of changing their billing programme. Shouldn't be hard. If there is a hike, won't they do that ?

And all of the price tags on the shelf to be lower. Even if you cut GST by 5% doesn't mean shops wouldn't drop prices by 4% and keep the 1% difference. Or only pass on 2%, for example.

More money to shops is a still a good thing surely, it would increase money velocity.

That's the ACT policy.

18
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I have never understood why tax brackets and similar settings aren't indexed to inflation or median wage or some sensible metric.

10
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It means less money for Governments to spend, as their costs increase faster than general inflation. They've already promised that money will be spent on stuff, so it's easier to just let taxpayers take the hit and hope they don't ever understand the difference between nominal wages and real purchasing power.

16
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It is a sneaky government move so they can increase their tax take every year without increasing taxes.

13
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By design. Increased taxation by stealth..

12
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Fiscal drag. Cynical tax ploy used the world over. I think these cuts would become permanent based on that understanding.

Michael Cullen proposed indexing the brackets to inflation at the 2005 election. Winston Peters called it the "chewing gum tax cut" because it would only (initially) deliver modest tax cuts to people. National opposed it.

After the 2005 election, Labour couldn't get enough support for their coalition partners + the Greens to pass such a policy, so it was dropped.

'Prudent debt levels' - can anyone shine some light on what that means now because I have no idea when the solution to debt issues appears to be the creation of more debt. So why would you ever want 'prudent debt levels' if more debt is the magic bullet to problems? Our politicians and central banks are very confused and have no idea what prudent is.

11
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My English is limited as I immigrated here. Looking at the dictionary it has something to do with the future.
So I am guessing we like to pass on prudent debts to future generations.

Good on you for giving it a crack Jay Lim.

Prudent: "Bit less public debt so we can focus on inflating private debt to inflate our portfolios."

All part of the ruse. Ironic how economists are now calling for infrastructure spending, when it was infrastructure spending the got us in such a mess last time, a la Think Big.

Yup. Everyone wants to pledge more money to building schools because investing in infrastructure is the current buzzword.

Nobody wants to overhaul the broken system that's mass producing future workers with poor literacy and math skills. Stuff like that takes strong leadership and, more importantly, will bear fruits in future election cycles. Easier to write fat checks on public dime for building new playgrounds, flash the immediate effect of the spending on GDP and then call those locals falling behind as a result of government inaction 'lazy' in front of the media.

A recent report on TV3 indicated that only 59% of all school aged children attended school on a regular basis.
So if kids that attend school on a regular basis leave school with poor literacy and math skills we have plenty to look forward to with the 41% of kids who don't attend on a regular basis.
Just build a few Versatile Garages that should be enough to house the kids.

Think Big was about building infrastructure without a robust analysis of whether it was worth the mon.... oh wait

Not the Helicopter I was awaiting, but a mini van. Still, something is better than nothing.

Yes but at what cost?
"The main way National would reduce spending is by suspending contributions to the NZ Superannuation Fund, expected by Treasury to be worth $7.7 billion over the next four years.
It’s also committing to abolishing first year fees-free tertiary education and KiwiBuild.

14
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Oh no, not the super effective flagship policies from 2017 that Labour hasn't already basically abandoned themselves and really hopes you won't ask about this time around!

Happy to see the back end of Kiwibuild but abandoning NZ Super contributions and first year fees-free tertiary education is questionable. Tactically not a good idea, this affects a large voting base, students parents and grandparents it wont be attractive to many people

13
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Fees-free has cost a lot of money but achieved very little. The ongoing cost would have been better spent writing off a portion student loans for Kiwis who stay in NZ after study.

As for the Superfund, if pain is coming then it's hard to see the point in borrowing to speculate on equities through the Superfund, although I would prefer to see contributions continue at a lower rate to make sure the fund doesn't go backwards if things start to unwind.

I don't see a problem with Fees-Free given we're doing so much wealth transfer to the old folks as it is. It's nice to throw the kids a bone too.

Of course, the Granny State doesn't like that, but they do expect those young to sponsor their retirement.

With the share market apparently living in la-la land now is a good time to suspend contributions. You can always resume payments once the sharemarket has tanked a bit

NZ Super contributions have a much bigger role to play in our economy than the pensions paid out to retirees.
Ever dollar contributed to the fund that's not paid out in pension goes into funding infrastructure projects around the country and high-value ventures, helping communities grow and keeping successful businesses in local hands.

...or rail-roading local infrastructure projects with unsolicited bids with massively out-of-scope proposals seeking gold-plated returns, half of which would have ended up the hands of Canadians, all the while dooming Auckland to another decade of congestion with no improvement in its transport networks?

Don't believe everything that the media feeds you. The decisions coming out of the light rail JV building the business case was dominated by NZ's construction consortium (aka cartel).
They have a history of underquoting and overselling white elephant projects to our governments; Key's government got duped with Transmission Gully.

Any guesses who is 'advising' the government on chasing the wild goose of pump hydro instead of considering cheaper options to reduce emissions?

So the unsolicited bid from NZ Superfund that consisted of six slides that totally derailed the process and changed the spec/aims of the project wasn't NZ Superfund's fault? Oh, okay then. I'll stick with Transportblog's reporting on it, if it's all the same.

NZSF invests a miniscule amount in NZ infrastructure. It mostly invests in offshore equities.
https://www.nzsuperfund.nz/how-we-invest/actual-portfolio

Yea well, last time they did that it was a real vote winner.
To bad about the missed opportunity.

To fund this they would flag putting $7.7B into the SuperAnn fund? I can't say I'm very keen on that concept.

Politicians will even promise their first born if it gets them elected...

23
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Wrong. They only ever make it look like their first born, it will infact always be someone else's.

Well played @redcows

21
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So, more of the same:

- reduce provision for the young
- resort to raising house prices
- resort to high-volume immigration ASAP
- dangling a little tax cut bribe

Not really addressing the living off the wealth of succeeding generations.

11
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We weren't making much headway in any of those things pre-Covid under the current regime tbh.

As commented a few times on this morning's "Labour and National sing off a similar economic song sheet" article, this is probably why a lot of us won't be voting for National or Labour this time around.

Agree, but it would still be nice to see some real economic policy addressing important issues from National.

19
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Now that labour is effectively John Keys National party, perhaps Judith could jump to the left and promise to cut immigration and lower house prices. If she did this she would have a chance. Afterall, whats the point in having two parties trying to punish the poor and enrich the rich?

Many suggest Labour's delivery performance puts it in class of its own.

So you're saying Labour, who is proposing putting up the top tax rate, is the same as John Key's National, who dramatically cut the top tax rate and stopped contributions to the superannuation fund?

Seems like Labour is Labour and National is National, to me.

Seems like you're prepared to accept muddling do-nothing government as long as it's wearing a red hat, not a blue one, to me.

It's nothing about 'acceptance', it's about someone saying that Labour who this year are running traditional Labour policies is somehow behaving like National, and ignoring the current National party is running traditional National party policies.

It's something meaningless and wrong dressed up as if it is meaningful. It isn't.

Worked for the Democrat party all those years ago. Then they stayed there and the Republicans ended up on the right

Good consider we never received helicopter money...

You know an election is coming when parties throw money everywhere to get your vote. I do think it would have been a good policy, if it was permanent. But cutting tax for only 16 months is clearly a bribe. When saying that, it should get Nats some extra votes. 29 days to go, can't wait until this is over.

Cutting taxes for a short period of time makes sense. It isn't a bribe. People are likely to spend the extra money in the local economy and support local businesses. If it was a lump sum then it is more likely it would be spent on big ticket items which would have less benefit. Buying a new TV for $2000 wouldn't do as spending $2000 over time at local pub or on a domestic holiday. The hospitality and tourism sector has been absolutely hammered and it is important that they are up and running for when the borders open back up. It is interesting to see how people are making an effort to support them and a few extra dollars in their pocket is only going to help.

But if our goal was to get people spending more money in the local economy, we would be better off pursuing a policy that put more money into the hands of the less well-off, as they tend to actually spend more of their income (as opposed to saving it or investing it). Put it this way: I'd be getting an extra $60 a week. Would that be spent down the local pub? No. It would go in the bank.

There's no way of cutting taxes that doesn't put money in the the pockets of the rich. A single income family with 3 kids earning $90k would still qualify for a Community Services Card...

That's very much the point - we don't have to cut taxes. There are other policies we could pursue which would instead funnel that money to low income earners, and then into the economy through increased spending,more efficiently than tax cuts.

There's no way of cutting taxes that doesn't put money in the the pockets of the rich.

Utterly untrue.

It is possible to cut the lower tax rates, and adjust the rates of higher brackets and/or new higher brackets so that people earning over a certain amount receive precisely $0 in tax cuts, or you could go further and design a system where people at the bottom get tax cuts and people at the top get tax increases to pay for them.

To be honest I probably would spend a little more on eating out with this tax relief. Might do takeaways once a week rather than once a fortnight.

Good, valid points. But I still think there's a strong element of vote buying to it.

Yes and then they won't keep their promises. National always increase our taxes!

Inflationary?

Tax cuts + massive massive promises on infrastructure spend.

All parties have missed the boat here. We have a huge export crop (Think in the $9 bil) size that requires picking to help with out debt. Also if not picked, a whole industry will pretty much go down, from growers to packing houses. The 10k of imported workers cant happen.
But we have a very large and growing younger unemployment sector growing fast, plus Student , high school and tertiary coming up and available during holidays.
We need incentive.. not just thinking they will be nice , head down country, get up for work on time every day and pick fruit.
Students, and ex students have large student loans. Instead of paying PAYE tax, take it off the loans, or a significant proportion of it.
Future student could get credit to student loans.
And non students , or even those with student loans could opt for a significant part to go into kiwi saver or tax free home loan a/c as had in the past.
The objective here is long term survival of our fruit industry, And pick up the 9 bil dollar export income without importing our off shore pickers.
And not be soft on requirements.. not just be on the job but be on it with good time keeping and work ethics.

Hi Steptoe, All political parties in NZ be it in government or in opposition only cares and worried about one industry - Housing industry.

Unfortunately no other industry specially farming is on priority or care about except some verbal concern during election but even that is missing in current election campaign as coronavirus has overtaken all other issues.

Any problem with Housing, please raise it and see how promptly government can work and find ways to support the house price.

The farmers would rather their crops rotted in the field than pay a decent wage for the harvest and just make a small profit. They want big fat profits obtained from exploiting people from foreign lands. That's their choice. Violins broken.

Farmers complaining they can't get "Skilled Operators" for their machinery from overseas. Not sure what's "Skilled" about driving a tractor, harvester etc.

"The offshoot of that is people might use unskilled operators to drive these machines and there is a horrible accident - and that's the last thing we want."

Yes if you do dumb shit like stand infront of a harvester while it's screaming along at 1.5 km/h then that's horrible accident stuff right there.

https://www.newshub.co.nz/home/rural/2020/08/rural-contractors-slightly-...

Yea,this whining about needing skilled operators amuses me...in WW2 you had women going straight from the kitchen to building aircraft & 19 yo boys being trained to fly Spitfires in a short period of time.
Learning to operate a modern,nearly fully automated harvesting machine can't be that difficult,more about what they have to pay methinks...

It takes a year to learn how to fly an a380 but the farmers tell us it takes 5 years to learn how to drive a tractor. They think we are all as foolish as the politicians who fawn over them.

Spoke to an Uber driver last week who said he and some of his other driver mates would go through the right channels to get a license and jump on a flight to wherever for a few months every year for the $25-30 an hour. Alas, farmers expect years of 'experience' for a seasonal gig paying $6 over minimum an hour.

Is that a Year after they have a commercial License, or from never having flown a plane before?

> We need incentive.. not just thinking they will be nice , head down country, get up for work on time every day and pick fruit.

If the current incentives aren't enough to get people to head down country and get up on time then the industry needs to increase the incentive. Pay people more and they'll do the work.

One might say..pay the wages and they will come. However I do appreciate you are competing with the benefit system.
However, all is not lost. If the Maori Party can push through the min wage to $25 per hour you will be over run with young Maori wanting to work.
Can't afford to pay them $25 per hour? Don't worry, I'm sure some bright spark politician can arrange a business wage subsidy for you to top it up.

Mental.

Exploiting backpackers and RSE workers is fine. Exploiting the sons and daughters of the middle classes will just get you in trouble.

National can promise anything and everything as is fighting a loosing battle.

So it does not matter except byte/material for media to write.

You don't need to ask what National Party policy will be before an election.
Regardless of circumstances, it will always be: tax cuts for those earning above the median, more roads, and migration to keep GDP and house prices juiced. Every time.

Given they plan to bring this in during December, i.e. for 4 months of the current tax year, does anyone know how they will handle this? Will they split the tax year in two? Or make the thresholds 1/3 of the way between current thresholds and the ones proposed? Whatever they do feels like a real pain for the IRD.

When Labour did it in 2008 with the tax cut coming in during October of that year, your PAYE got taxed at the lower rate for the 2nd half of the year, but at the end of the year the IRD used the average rate between the two tax rates for the full year.

2007-08 rates: https://www.taxtechnical.ird.govt.nz/new-legislation/act-articles/other-...
2008-09 rates: https://www.taxtechnical.ird.govt.nz/new-legislation/act-articles/taxati...
2009-10 rates: https://www.taxtechnical.ird.govt.nz/new-legislation/act-articles/taxati...

The 2008 cut actually introduced the 12.5% bracket (then reduced to 10.5% by National under John Key), previously the lowest rate was 19.5%. You can see the rates for 2008-09 were blended with 13.75% and 16.75% rates, because the cuts took place in October 2008.

If you earned the same amount of money in the 2nd half of the year as the 1st half of the year, you would pay the correct amount of tax. But if you got a pay rise in the 2nd half of the year, your PAYE would be paid at the new lower rate, even though IRD applied the blended rate for the full year, so you'd end up owing more in tax. Similarly if you earned less in the 2nd half of the year, then you'd've retrospectively paid too much PAYE in the first half of the year, and be due a refund.

I got a pay rise so got stung with an extra tax bill.

I am happy with scraping first year tertiary - I’m a ‘user pays’ kind of girl.
I think they should have extended the lower tax band more and a lot less at top end so that it is more equal.
They should continue the super contributions.

If we're going to take a user pays approach to education it seems we should also take a user pays approach to housing debt and to pollution. We shouldn't have the government and Reserve Bank sponsoring house prices to keep them up, nor exempting people from the cost of their own pollution. It's unbalanced to only make the young pay more and more.

That's the NZ right wing for you: User pays - but only for things our voters don't use.

Just like Act - we don't like planning regulation, except in lovely Epsom!!!

Problem national faces is every four years there's another new group of people who for the most part will never be able to own there own homes.
There policy platform completely fails to address this issue. They are stuck in the 1990s with their taxation policy.

Is Labour serious about helping house affordibality !

Was initially when it came to power so introduced FBB (if would not have done in the heat of the moment would have been happy to backed out later) but soon realised that only economy in NZ is housing economy so immediately backed out of CGT though forming a tax committee for recomendation but did not following the recommendation (Than why was it formed if had no intend and wasted tax payers money).

So house affordibality is a myth in NZ.

Hard to say. Winston killed of CGT. The PM didn't really have a say in it. She does believe in it though.

Quote from the PM "However after almost a decade campaigning on it, and after forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it's clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future."

Labour is polling at about 50%, greens at 10%. We are going to get a labour or a labour/greens government. Given our country is heading into bankruptcy at the very least I would expect a capital gains tax (excluding family home) of 15%, I doubt they will go as far as a wealth tax.

10
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Jacinda killed it. She said that there'd be no CGT while she's leader - that's with or without NZ First. She could have just said the time wasn't right, it needed more work, or even owned up to the fact that her hugely partisan TWG delivered a hugely partisan and predictable outcome. Nope, she nuked it instead.

She has proven she does not mean what she says so she can just as easily reverse this decision.

Making a personal promise that she is totally in control of, is quite different than promising policies which rely on others to be implemented.

Yes, Winston killed the CGT this term, but Jacinda killed it for all of her future terms (however long that may be).

She could of said, well we don't have the numbers now, but if I have a mandate next election, then its back on the agenda. Given how they are polling now, they could of had the numbers (though maybe they would be lower if campaigning on a CGT).

Jacinda didn't want to have to keep on defending the policy, and never really sold it after the Tax working group report anyway. She realised the power of the middle, and the importance of ongoing house price inflation to their futures.

Jacinda Ardern's Labour party has essentially become John Key's National party.

I guess thats what they meant when they talked about transformational.

"Jacinda killed it for all of her future terms"

Don't really agree with this. Politicians are consummate liar's. 3 months from now we will have a labour/green's govt & the capital gains tax will be back in play.
You see we live in extraordinary times (pandemic & economic crash), any promises that were made prior to these times are allowed to be reneged on.

Nah, those sorts of statements are not forgotten or overturned.

What it means is if it is decided that a CGT is a necessity, Jacinda would simply resign. Things will never get to that point though, because there are lots of other taxes that could be implemented that would achieve the same or better outcome, as well as different proposals altogether such as UBI, and they would be put in place before Labour would be forced to put in a CGT.

11
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I voted for Labour to address housing. They've completely failed, in my books. And this election there's barely a peep about it. That group of new people will probably end up starting the next brain drain.

Yes, I did too. I really thought they would sort out the housing issue. Shameful.

Ditto. Last time I vote left tbh. Judging by the polling numbers though, as long as you do an O.K job of dealing with a pandemic and there's one every term then it doesn't matter if you don't even try to fulfill your election promises, you'll just get voted back in anyway!

They are building a crap load of houses near us...

So... the helicopter drops $4000 on those earning 90k+, ~$900 for the median wage earner, and next to nothing to those that lost their jobs and end up on the benefit. Good thing trickle down works, right?

Surely trickle up makes more sense. Poor people have to spend, rich people don't.

The tax free threshold benefits beneficiaries too.

Why not CGT be introduced to tax profit/earning just like any other business or job.

Only in NZ you earn $1 in wages or in profit and have to pay tax but you flip houses and make million and pay no tax.

BLT - how strictly has been implimented - If serious why not make it mandatory for all sellers/vendors to fill in a form declaring any other property that they hold either individually or in joint name or under trust JUST like buyers have to sign a form declaring that are resident/Citizen of NZ and another form under money laundering.

Not adding new tax but by putting measures in place, may be BLT may do the role of GCT, which is suppose to do.

..does your version of cgt tax the family home?

Tax the family home... that's a scare tactic to reinforce everyone's fears. CGT doesn't tax homes. It taxes income.

Excluding the family home was a bribe but is also equivalent to demanding that others should pay income tax but not you. Your rulers wrote it that way though at the beginning of slavery/feudalism, it's a function of the trickle up design.

Why do you think there's a distinction between capital and revenue in "income" tax law? So that you the serf pays tax and capital magically grows for free. It wasn't so much of an issue when high incomes were taxed at higher rates. But distortions and imbalance have arisen and the tax system is a major player.

The real question is how is the capital gain funded? The answer isn't economic growth.

Jenée, does this temporary change have any affect on tax transfers (i.e., WFF and AS)?

WFF is designed to keep you poor and dependent so extra cash will be clawed back. It is very depressing.
https://www.stuff.co.nz/business/114949505/tax-system-means-for-some-its...

...am I changing...I keep giving profile thumbs up?

If that is the case, I think that fact should be pointed out by some news outlet. For middle/lower middle NZ this then becomes a Clayton's tax cut.

It's also designed to supplement company wage bills and investment property yields. Companies don't need to pay as much; investors can receive higher rents.

It is depressing indeed how much we penalise the poor and hard working folk.

Nasty, confused, desperate. I don't think National will ever come back if you look at voter demographics and the 17 years olds. The new opposition are the smaller parties and they need our support now

They look like they're stuck in time - somewhere in the 1990's but don't realise its 2020.

A winning National party will look quite different from this one, but there'll eventually be another National PM of NZ.

National and act. Morally bankrupt. No vision., neo liberalism and destruction only. Of the rich, for the rich, by the rich. Dinosaurs.

So... democracy... I will vote for who can give me the most.

If I worked on that assumption - it would likely be NZ First given Winston's pledged to reduce the excise tax on a pack of smokes, taking the 20 pack down to $20.00 at retail. Interesting point. Must get my calculator out!

OMG. Just did the calc. The 20 pack a day smoker would be better off cash in hand by $700 more than the top income earner under this National tax cut! In other words, take a pack of 20 down to $20.00 from $33.00 and save $4,745 per annum!!!!!!

And then OMG again. 12.5% of adult NZers smoke ciggies; but the rate for Māori NZers is 31% and for Pasifika NZers, 21%.

They don't break it down by income brackets - but I'm guessing this move would be the BEST policy Jacinda and Labour could make in working toward tackling the poverty problem.

https://www.smokefree.org.nz/smoking-its-effects/facts-figures#:~:text=T....

You’re assuming they are gonna smoke the same number of smokes at the much cheaper price than the original price.

Or stop smoking and save $12,045 per annum!!!!!!

Yes, and hence the burgeoning black market as Winston mentions.

Wow, the typical Winston bribe. You watch if he is "kingmaker" because of this it will be forgotten about after the election (just like immigration etc).
Its a good one isn't it - he could easily pick up 5% of votes from that.

Yes, he could be onto a winner there. I just sent an email to Jackson and Sepuloni given it's their communities he is targeting.

Even at $20 a packet, only the truly addicted will keep buying them. In my opinion a price higher than that only encourages crime and the black market (apparently cheap Chinese cigarettes are readily available), and makes poor people even poorer.

Good to see National's true colours emerging. As someone forunate enough in retirement to have a decent income, I would stand to gain over $4000, but would I rush out to spend it? Of course not. i can already afford what i need/want. More importantly, would those on lower incomes increase their spending, their savings or reduce debt?
My bet is that much of this additional income would not be spent, thus defeating its purpose. It will not get my vote.

Where do you think investment in business comes from? It comes from those who have enough left over after living costs to invest. There is a damn fool socialist streak out thee who think its better we take the surplus off our high achievers and give it to Shane Jones and co to spend. That's the USSR model.

I fear for the self employed, battling away to make their business work to pay taxes so the public sector hierarchy can engorge themselves.

Would you invest if your government is in massive debt and can't stimulate the economy in the next recession? Would you invest if the health care system is in disarray and you may need that money if you get unwell? Would you invest if your population are uneducated and unable to compete with the rest of the world?
Last time National cut taxes I am fairly sure 110% of it went into investments - in housing that is.

Based on comments from articles this week we can summarise:

Cut income tax: Extra cash in hand gets pumped into housing.
Increase income tax: Pump money into housing where's it's not taxed.

Does everyone have biases.
Evidently.....

National walks away from debt target, committing to income tax cuts for 16 months and a temporary tax tweak to encourage businesses to invest in plant and equipment.

Whats missing here?
- maybe this.... this happened.
https://www.dailymail.co.uk/news/article-8741763/How-Jacinda-Arderns-loc...

How Jacinda Ardern's lockdowns have caused an even WORSE recession than feared - with the New Zealand economy plunging by 12.2% in just three months

Too funny.

Bloody cheeky implying that it was worse than expected by only looking at one forecast when it was actually better across all relevant forecasts.

Consensus from major banks, Treasury, RBNZ = 13.3% expected drop so it's slightly better... it's no wonder that the market rose slightly on the news...

At this point markets rise on Giant Meteor news

GDP reductions are happening all around the world, see the link below. And I doubt this will be due to other places having higher cases of Covid. E.g. Italy's cases are only 0.0005% of their population versus NZ at 0.0003%. Margin of error stuff. But we all know you have a secret crush on Jacinda, that's why you're constantly going on about her.

https://www.statista.com/chart/18095/quarterly-gdp-growth-predicted-grow...

Read the comments on the daily mail Jacinda article. Overwhelmingly against her.

I have to admit to occasionally reading the comments in The daily mail...it is so entertaining to read all the crazy comments from people around the world,Aussies,but mainly Americans seem to all be right wing crazies who see a communist plot around every corner...it's scary to see what is going on in some peoples heads.

If it's economic stimulus the Nats want (and votes), raising the lower bracket minimum to say $5k and then leaving it there while the rest of the brackets reverted would be a good inclusion to this policy. The poorer the person, the higher their propensity to consume and lower their propensity to save.

Well they haven't bought my vote.
I am sure it will buy them quite a few votes however. Although I doubt it will be anywhere enough

Btw I would personally benefit much more greatly by this policy than anything any other party is offering.

Do they want to win? Front-load the tax cut. As soon as New Zealand is at level 1 or National takes power. Whichever comes last. Every taxpayer over 18 and under 65 gets $1000 instantly. Balance of the tax cut distributed over the person's normal pay cycle. IRD has the mechanism to put the money directly in the vast majority of peoples bank accounts instantly. If you want to buy an election do it properly and maybe give the economy the pre-Christmmas stimulus it needs.

Yeah, instead of this silly '16 month temporary tax cut', do it as helicopter money of $1k for everyone, and then the proposed tax cuts for 12 months.

14 years to cut debt to 35% of GDP
Hilarious
They don’t seriously think that is a policy
It is a wish. Impossible to forecast GDP 2 years ahead

In this climate it's impossible to forecast it 6 months ahead, hell even 3...

Here's a link to an article I received via email. Worth a read. I agreed with all of it. https://www.wealthmorning.com/2020/09/18/634146/a-lack-of-courage-why-nz...

Interesting. Nuking gst on house construction was something I was promoting a few years back.

You know what is amazing? no one is coming out saying how we are going to improve NZ students rate of literacy, math, science and financial acumen. How are we going to create a link between universities and industry to ensure undergraduate courses actually train good future staff. As an accountant, It amazes me that you can get a BA in accounting without being able to prepare a set of financial statements, use a simple accounting package, be able to write simple macros using basic programming skills, being able to create simple APIs to be able to get data from multiple databases etc.
I am sure other professions will have similar stories. The success starts in education of the next generations. Not tweaking with this or that tax.

Great points. As someone who does some part time lecturing at the university of Auckland, I totally agree.

I had similar struggles with finance/econ grads who couldn't find their around a spreadsheet. In 2015, I did a semester abroad in Sweden and found their study levels to be a lot harder; their foundation courses were broader but higher level papers were quite challenging. There was also a lot more focus on quantitative analysis and critical thinking.
I think in a rush to get more local and international students into universities, we allowed them to tweak the difficulty levels enough to maximise intake.

Many people here would be surprised how dumbed down degrees have become. I teach some final year papers and it's like the old 7th form standard I grew up with.

How do they propose they limit it to 16 months? People will get used to the extra money, they won’t want it to disappear. In reality the 16 months thing is just so they can claim it won’t cost too much but in reality they will never increase the rates again.

Yes, similar issue has arisen with the end of the winter energy payment.

Populists to the charge!