By Alex Tarrant
A new top tax rate under a Labour-led government next term is not on the table, leader Jacinda Ardern says.
Ardern and Labour finance spokesman Grant Robertson were speaking after Treasury released its pre-election fiscal update earlier Wednesday. Finance Minister Steven Joyce used the forecasts to argue Labour would have to raise taxes if it wished to announce any large spending promises.
But Ardern fired back, ruling out changes to the top income tax rate of 33%. “It’s not going to happen,” she told media in Parliament Buildings in Wellington.
“We’ve looked at the books and what’s available and we believe we can deliver on what our policy intentions are with what is available. So we will not be campaigning on a top tax rate. I have no intention on giving that to the Tax Working Group that we’ll be establishing, and it’s not part of our plan.”
She later added that changes to the GST rate would also not be put in front of the Tax Working Group Labour has promised to set up after the election to review a fairer system for taxing assets, wealth, and income.
‘We don’t need the revenue’
Ardern was asked whether the income tax decision was made on a political basis, as well as economic. She replied that she made decision “simply based on the right thing to do, looking at what’s available and looking at what we are heading to this election with a policy programme around, we’re able to do it within what is available today.”
She acknowledged that the potential for a new top tax rate had been a possibility under Labour, and that she was now formally taking it off the table. “I always was leaving room for us to take a look at what the government books would look like before we made that decision,” she said. “We’ve made a decision we can maintain all of our priorities with what’s available.”
“My pledge to voters is that everything we do will be fully costed. There’ll be no question in people’s minds as to how we will fund absolutely every commitment we make. I’m campaigning here on being the Prime Minister in four weeks’ time. I need to demonstrate that absolutely everything we pledge we can pay for, and we can deliver. Anything less would be absolutely unsatisfactory.”
On Labour potentially campaigning on a higher top tax rate: “to be fair, that was what was floated by the media rather than floated by us. We were asked continuously, I reserved the right to go away and make sure that we had the books open before us before we made any decision. But that was simply us reserving the right to look at every option,” she said.
“We are not campaigning on an increase in taxes for personal income and it is not part of our plans.”
“My decision to tell you that, came today. Again, that was something that really was put to me several times – it was never a hard and fast part of our policy programme. I simply came into the role of leadership three weeks ago. I wanted the ability to look at the books, to keep a range of options on the table. Some were never particularly serious, some were, but I’m taking the option today of being absolutely open about where we’re heading.”