National's 16-month income tax cut could do more to boost high income earners' bank balances than get people out spending, Jenée Tibshraeny suggests

National's 16-month income tax cut could do more to boost high income earners' bank balances than get people out spending, Jenée Tibshraeny suggests
Paul Goldsmith, Judith Collins

By Jenée Tibshraeny

Labour’s finance spokesperson, Grant Robertson, says National’s promise to cut income taxes for 16 months is more about stimulating the polls than stimulating the economy.

While Robertson himself could be doing much more to stimulate the economy, his attack line is spot-on.

National has gone down the tried and tested path, pitching an income tax cut, with the word “temporary” in fine print.

The largest proportionate benefit of lifting income tax thresholds would be felt by those with incomes of $64,000 a year, as they’d keep $3,226 more over 16 months or $46.50 a week.

Someone on $200,000 would keep $58.10 a week more, while someone on $30,000 would only get $8.10.

National will undoubtedly reap the rewards of this policy at the polls.

But drip-feeding more cash to those who need it least is both inequitable and an ineffective way of stimulating the economy.

Sure, a family of four with a single above-average income of $100,000 wouldn't feel “rich”. It would welcome an extra $58.10 a week.

But if you want to ensure the money you give people gets spent and not banked, you give it to those who need it the most.

A wealthy person probably won't take an extra weekend away or go out for dinner more knowing they'll accumulate a few thousand dollars over 16 months. 

Put the same amount of money in the account of a low-income earner, and I’m sure they’d have a list of necessities to spend it on.

As for those who have lost their jobs or had their hours reduced - the likelihood of them banking the cash is even lower.

If National’s policy was about providing a burst of economic stimulus, it might have gone down the route of giving people vouchers to spend at local retailers, hospitality and tourism providers.

Otherwise it could’ve provided lump sum payments to people. One might have a larger propensity to spend if the Government said, “Here’s $2000. Enjoy!” As opposed to discretely deducting tax via the PAYE system over a prolonged period of time.

These policies would of course be more difficult to administer, but this wouldn’t be impossible.

Kiwis are a conservative bunch. When Covid-19 hit, we tightened our purse strings and stashed the cash. The fact we were in lockdown did of course prevent us from going out and spending.  

But the amount of money households deposited, mainly in banks, increased by a whopping $6 billion between the March and June quarters. The quarterly growth rate in deposits jumped to 3.2%.

Overall, National’s tax cuts would have a stimulatory effect. The fact it’s walked away from its unrealistic, arbitrary “reduce net core Crown debt to 30% of GDP with 10 years or so” target is a good thing.

With the Reserve Bank (RBNZ) pulling out all the stops to stimulate the economy with lower interest rates, it’s important the government does enough on its side of the ledger to support demand.

There’s no point the RBNZ encouraging businesses to borrow and invest if those businesses have no customers.

But $4.7 billion could be employed in a more stimulatory way, calling into question whether boosting demand or boosting votes is really the aim.

National Leader Judith Collins said Auckland going into Level 3 lockdown on August 12 was what prompted her to make a U-turn and decide a tax cut was necessary. A week earlier she told Stuff National wouldn’t campaign on tax cuts.

Collins knows that National going into the election saying, "We'll give you a tax cut while Labour will give you a tax rise," will give it lots of political mileage. It might lose some of its base if it said, "We'll give you vouchers or helicopter money". 

The other issue is that $4.7 billion spent here, is $4.7 billion less spent there.

National’s decision to suspend $7.7 billion of Super Fund contributions over four years, forgoing the returns this investment is likely to generate, is a massive opportunity cost.

It’s a matter of a weak sugar rush now at the expense of helping fund the ever-increasing cost of NZ Superannuation in the future.

National has provided an assurance it won’t cut spending on health, education, social development and infrastructure.

This is where it needs to be held to account.

Serving up an inequitable vote winner with a bit of stimulus on the side is one thing. But paying the bill by forgoing investment in essential services would be another.

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Interesting to compare the National income tax policy with the ACT one. Here's ACT;

Our proposed 5-point cut in GST would conclude in June 2021, while our income tax cut will be permanent. By cutting the 30% rate, we make the tax system flatter and fairer, with only three rates: On your first $14k, you would pay 10.5%. On your next $56k you would pay only 17.5%, while the rate on income above $70k would remain 33%.


If people are silly, self-centred and short-term enough to fall for this nonsense.............

We're f----d.


I get the impression that neither of them think they're ever going to pay back the debt. So why not make things worse is their logic.

Tax cuts are like intergenerational theft. Have been for years.

That is why we should also take and not bother about the future. She will be alright.

National only have one baton in their knapsack and thats tax cuts
Twirling the baton like a drum major to hypnotise

Tax cuts are purely consumption driven
The draw down is today, consumed today, paid for by energy-resource drawdown tomorrow


Yeah well Labour only have one tactic.. be kind. Doesn't pay the bills though aye?

Haha...great comeback

It's a pathetic comeback - but it raises a valid question, one which comes back and bites the asker on the bum.

I'm shocked at number of people who are ok with taxes going up and not down. Do any of you think govts ever spend your hard earned money properly ??? We are heading into worst recession, Judith is at least trying to look at ways to get us out of this. Labour is unfortunately clueless and offers nothing at this stage other than being kind and nice. We are heading into negative interest rates, asset prices skyrocket. If lower taxes can get out of this, I will take it over inflating asset prices.


But National aren’t going to cut spending, they are just going to increase borrowing. I can’t see how that can get us out of this. Surely all it does is shift more burden to the next generations.

> Do any of you think govts ever spend your hard earned money properly

No government is ever 100% efficient but I cant think of any major expense that I would call a total waste of money. Overall the government seems to spend taxpayer money reasonably well.

> We are heading into negative interest rates, asset prices skyrocket. If lower taxes can get out of this, I will take it over inflating asset prices.

Lower taxes won't get us out of this. The RBNZ has already decided that they want to pump asset prices, they'll find a reason to justify it regardless of the current tax rate.


With a post like this, I doubt if you know the difference between a pawn and a rook-and your English is pretty shaaky too.

Why should lower tax-for just 16 months- "get us out of this"? Why would this reduce presure on asset prices?

If i was marking this, it would be D-.

Yes sorry my English is poor as I was just trying to make it easy to read. This is a blog not a grammar assessment.

Btw you spelt pressure wrong. It's 2 asses. And you made 2 unrelated points in one sentence. Chess pieces and my English. Try keeping a point to a sentence. Don't worry won't mark you down.

You are not alone. The spelling and grammar in these comments is usually very poor. Try proof-reading before sending the post.

What nonsense are they falling for? The world has moved to money printing en masse and just like Trump all governments will probably look to lower taxes and print the shortfall. Labour's tax increases will net around $550M. What a joke when you are printing $100,000M. Both parties are engaged in nothing but BS and electioneering. They only reason they are trying to keep the narrative going is they don't want people to start thinking money is free. That is only for the bankers and CEOs.

National use the spin 'middle' income earners. In economics and maths middle=median. The median income in NZ is 53k. The 70k threshold is well above 'middle' income. If they wanted to help 'middle' earners they would be giving 4 grand to those struggling on 30 to 55k. Think about it.

But 30 is not middle, right?

True. Middle would be 43 to 63k i guess.

It is stimulating, certainly. Both National's prospects and their campaigners. ACT's GST cut is the best idea put forth in this election's tax policies. Sad they won't be able to implement it.

Excellent idea given the current circumstances.

We're still paying for the last tax cut. The wealthy aren't. This is beyond reckless.

So its helicopter money by another name... how socialist of them


no, its not helicopter money at all, helicopter money would be far better. This is a handout to the better off, with bugger all effect for those at the bottom.


I have voted National and Labour in the past. I didnt think National would have the gall to suggest tax cuts at this time. Ridiculous and dumb.
This is the second appalling decision of the week, the first was NZ First reducing the price of cigarettes. Both desperate and obscene im afraid.
Moving the 70k threshold all the way to 90k ?? Really??

70 - 90 k - pretty much the band that our teachers nurses social workers - fit in after 3 or four years and exactly the people that have been squeezed most with band creep - - time to reward people in those professions -- and create some incentive for people to improve their education trainng and move into this earnings bracket

Labours latest giveaway - doubles sick leave - which half of NZ consider annual leave -- cost t Labour - NOTHING -- but massive cost to our struggling businesses -- add a significant cost - whilst reducing productive work time -- yet their forecast and budget requires lasrge and sustained growth to .... increase our debt slightly slower!

will kill off a few moe businesses - and create even more job losses - and less revenue --


Agree with you 100% - whatever veneer of credibility National had is long gone.
They’re literally making this up as they go along. No tax cuts... now tax cuts. Pay back debt fast... ooops not so fast now.
I’ve voted National most of my adult life but this mob is absolute unprincipled rabble.


The effects of the tax cut would be felt the most by middle income NZrs - the ones that constantly get missed in all the feel good frumpery about how hard doneby those at the bottom are. The bottom tax brackets get more recycled tax benefits than those in the middle (50-70K). Those people in the middle are just as needy as those below them, mortgages, children's education, medical expenses, etc. Anyone who thinks this is a tax break for the "better off" is missing the point completely


Pretty sure the $58/week that someone on $200k gets is a wee bit better than the $8.10 someone on $30k gets. Those in the middle are not just as needy, how do you regurgitate this shite with a straight face.

I think you are forgetting the fact that over 50% of the population contribute nothing to the government when all transfers are added in. So a bigger tax cut just means more government money - not really about letting them keep more of their own money.

They might be in a position to contribute more if there wasn't either a suppression in wages or a disproportionate increase in the cost of living in relation to wages.

I think we are all forgetting an important aspect to this - the tax is our money - getting some back via cuts or helicopter money is welcome either way. The comment from Jenny that stopping the cullen fund payments is shortsighted is garbage - the Cullen fund wasn't prudent - it was from Cullen knowingly running surpluses by overtaxing - which was actually a breach of the legislation - and then investing our money and locking it away for others to benefit.

No. Tax also covers super. So that money was invested to pay for super in the future.


$3000 helicopter money to every adult taxpayer would be far better than this weak vote buying attempt.

I concur.

But that would disadvantage all the single occupant householders !! If we're going to be fair it should only be 3K/household not 3K each adult, surely

I don’t understand that logic.

There is no logic to understand

I presume Hook doesn't have a partner, no surprise there.

But if we do it by household that disadvantages multi occupant householders.

I suspect someone who can afford it live alone is on average better off that someone living with flatmates.

Change that to every adult NET tax payer and It'll look better.

Weak? I’d say pretty strong move as far as vote buying goes.

So when you boil it all down the fortunate ones who for whatever reason have a job that is still ok and over 70k will get about 4 grand, and the unfortunate ones who through no fault of their own have lost their jobs and ended up in a 30 or 40 k job (or unemployed) will get about 500 to a grand. This is classic post Bolger National policy. I am happy to pay my present rate of tax to help support public services eg hospitals. In 4 weeks we will find out what New Zealanders values are for better or worse,

Lookslike bad day blues.

But drip-feeding more cash to those who need it least is both inequitable and an ineffective way of stimulating the economy.

On the other hand.
This tax cuts goes into the SME builders, supporters and entrepreneurs and equity partners.
(Edit, SME builder, a business builder, not so much construction).
The people that make business, back business ideas and employee people.
This making activity stimulation is better than the dead weight stimulation. As a community need need people to get off the couch. Have a pathway to move through class groups.
The preference should be enterprising, not Locking folk into poverty and dependency.

The inequality line does not hold, its got to be bang for buck. Stimulation pmt is not benefit. Benefits already covers the disadvantaged.

Refer Thomas Sowell for emperical evidence.

Most small SME builders & tradies will hardly get anything...most massage the books to show minimal earnings at the end of the year...

SME Builders, being the builders of SME business....

For me it looks like Jones & Shaw are funding construction business for vanity projects and low growth poor productivities guaranteed.

". But drip-feeding more cash to those who need it least is both inequitable and an ineffective way of stimulating the economy." - so tell me.. how do you designate those who are more or less needy?

But if you want to ensure the money you give people gets spent and not banked, you give it to those who need it the most.
Aid not "stimulus"

Some will always call it “stimulus” but it never works out that way even under less stressful (deflationary) situations. Link

Tried and tested or tired and tested?

National's current tactics will not make them elected.

Their only chance is that Labour screws up really bad from now to Oct.

Lucky this came out Friday,it will give Hosking all weekend to come up with a positive spin on this Monday morning.


I like this policy - It's advantageous towards the macro economy in the medium term.

However, a few extra dollars means nothing if your rent increases or you're a FHB and prices are on the up.

STILL, it's better than Labour's offerings. Also, house prices and rents might start declining. National are myopic to release policies without tethering them to treats for wannabee FHB's.

If the election were held today - I'd vote TOP.

Is it actually better than Labour's policies though, or just sexier?

Well, it's more a signal and tangible indication where National's thinking is at.

To me it says National recognize the hodgepodge nature of Labour's spending and how wasteful it is.

By the time Labour's social spending trickles through working groups, MP's offices, select committees, IT updates, bureaucracy heads, administrative arms, impact forums, logo designers, lawyers, etc, etc .. there is little left to give lol ..

.. hence why we have people earning millions-per-year receiving the Winter Energy Payment.

Labour seem to like trickle-down-social-policy. National are just proposing we pay less tax instead, seems reasonable. That way, the people dolling out this trickle-down-social-policy can go do something useful .. like harvesting crops. They can get fit, fresh air, meet different kinds of people .. and keep more of their money!

I was generally agreeing with your comment until you came out with this - . "hence why we have people earning millions-per-year receiving the Winter Energy Payment" _ what a pile of hogwash. Unless of course you're counting the few who are superannuitants still in the workforce earning north of 1 mill/an. - not many of those around though

I see where you're coming from. It's not hogwash though.

I reckon there are plenty of pensioners still working, getting paid good coin, going to work on free public transport and getting their power subsidised. Also plenty of pensioners who own millions of dollars of assets getting subsidised. The same people probably ring talk back every day whinging about anyone else getting anything, free tertiary etc.

My dad is 80. He worked full time till he was 68 then 20 hrs per week until he retired at age 75.

You do realise that the winter energy payment is Labour's form of National's 2017 tax cuts, right?

A pensioner would have received something like $767 from the tax cuts so Labour's winter energy payment gives them $770 instead {say least it did until it was doubled under COVID) so they wouldn't lose the votes of the pensioners (cravenly pandering to Greypower and the oldies).

So you're effectively complaining about the name of the policy. Under National it would have been called a tax cut, but that's somehow more virtuous.

Never mind that the winter energy payment also goes to beneficiaries, which under National it wouldn't have to the same extent. That seems a lot more virtuous then a tax cut the primarily goes to the wealthy.

Well, it is better than nothing...

Lets do this!
Given the lack of any ideological appeal or differentiation of any party, a pay rise may simply do the trick.

Yes that thought crossed my mind. Labour can't do any transformational stuff, so why not get some more money in the back pocket.
If Labour were the only alternative then I might buy that, but they're not.

Tax cuts will give you more money if you are employed or self employed and have an income. Whether you spend that money or put it away for a rainier day is indeterminate. BUT tax cuts will not help those currently unemployed or the thousands more likely to become unemployed in the coming months. Selectively putting the money in their hands by other means is much more likely to stimulate demand. The ineffective policy of tax cuts is the National Party at its hoariest.

I guess in theory tax cuts could save some jobs with more spending in the economy, however it's possibly not that many. Goldsmith was just on Radio NZ and indicated they had done no work to estimate that.

Moving the tax thresholds is really just updating them in line with income inflation.
So, in a sense, not really a cut, more like an inflation adjustment.
Otherwise, soon everyone will be paying the top tax rate for a good proportion of their income.

Then why are they temporary?

Pretty sure beneficiaries pay tax on their income, so they too would benefit.

Correct Brando, they do pay tax. Also any income earned by a beneficiary gets stung with secondary tax (as it's a secondary income). This is the biggest oxymoronic situation. Same goes for people who work multiple part time jobs to get 40hrs employment. Labour - the great social philanthropist and union controlled lapdog have never addressed that inconsistency. If either party wanted to help the bottom tier of earners they would wipe secondary tax.

Yes, secondary tax should be abolished.

You need to understand what secondary tax actually is.

You have know idea what you are talking about. You dont get stung with secondary tax. Are you suggesting one pays more tax due overall due to secondary tax? Perhaps educate yourself here:

“Secondary tax” is the name given to the tax rules which apply when a person has more than one job. A common misconception is that secondary tax is unfair, because tax is deducted from a person's earnings from a second job at a higher rate than their first job. This explanation and diagram show why that difference in tax rates is correct.

A person’s first job, like Roxy's in this example will be taxed at a range of rates because lower levels of income are taxed at lower rates. If Roxy was to get a second job, it would be taxed at a flat rate, as if she earned interest income. This flat rate would be 30% or 33%, depending on how much Roxy expected to earn from all her sources of income. If Roxy earned $50,000 from her first job and $15,000 from her second job she would have a secondary tax rate of 30%. The correct amount of tax would be deducted from her earnings from her second job.

The secondary tax rules would not work so well if Roxy earned more than $20,000 from her second job. Then Roxy would have a secondary tax rate of 33%, because she would expect to earn more than $70,000 overall. The flat rate of 33% would mean too much tax would be deducted from the first $20,000 Roxy earned from her second job. This would happen because her income from her second job would take her total income over an income tax rate threshold.

Improving the timeliness and accuracy of PAYE information, for example through businesses using software which submits the information directly to Inland Revenue, will improve Inland Revenue's ability to make pro-active interventions where incorrect tax codes are being used. It will also enable Inland Revenue to suggest the use of a special tax code, (a deduction rate tailored to an individual's circumstances) to a person when income from their second job takes them over an income tax rate threshold as would happen if Roxy earned more than $20,000 from her second job.

Then what about this example smart@rse - where someone’s first job earns them $40,000 per annum which they would have an M tax code for. Their second job earns them $10,000 per annum which they would have an SH tax code for. The SH tax code taxes them on their $10,000 earnings at 30% where as in reality their first $8,000 of income from their second job should only be taxed at 17.5%.
I agree it all washes out at the end of the tax year but that means "Roxy" has subsidised the IR for a big chunk of the year - money that would have been better off in her pocket

Yes we know that Hook. And maybe there is a better system. So whats your solution Hook. Your solution will have to meet all the requirements of employers, employees IRD. Your analysis will have to take notice of all their requirements - all of them - and the list is vast.

well Labour agrees and supports a living wage - not just the minimum wage -- simple solution -- remove all taxation on all income up to the living wage threshold -- Then begin a new progressive tax structure from taht point - say 30% up to 80K 35% 80-140K and 38% 140K and over

Big advantage is it would immediately reduce the amount of Government costs administering this tax take and returning it by WFF / Acco Sup / Temporary assistance payments - so eliminating wasteful and non productive work

Ok, how about removing all tax on Govt paid benefits - JS,WFF, AS etc. Simplify the tax system so we only have 3 tiers - 10% up to 30K, 17.5% to 70K, 35% on everything else. Ditch fees free study. Apply R&D rebate at 100%. Remove GST on all fresh (and frozen) locally grown food and produce. Remove Superannuation eligibility from those people still in full time paid employment earning 60K or more.
Rescind the Secondary Tax brackets and mandate information sharing between employers and IRD so people are not temporarily under/overtaxed.

The no GST on fresh fruit etc etc sounds great but the costs of doing this in compliance and the Pack Save's and New World owners and Countdown just working it back to the pre GST removal price and then they benefit and not the consumer in the long run. The more exemptions you put in the greater the compliance. Our pure GST on everything bar financial services is much simpler than the Australian system.

Also the R&D rebate will just be a scam. All of sudden everything is classified as R&D. I have seen this before in a number of countries I have worked in. Also the professionals get large fees for dressing up expenditure as R&D. Having run a very successful tech company the driver to undertake the R&D or not will not be decided by tax policy on deductibility.

I like the idea of a regressive income earner tax rebate. So the rebate grows as they work more hours. Rather than living wage as the living wage is pushing more and more labour cost onto small businesses. Where as the rebate is funded from the tax base and is distributed out each week so the low income earners get to share in the success of the country as it grows.

I would also like to see the accommodation supplement scrapped and rents will fall.

As per your previous comments on the FIF regime you dont know what you are talking about. In your first statement people are getting "stung" by secondary tax. When you have been educated that this is BS you still rant. If it is such a big issue this overpayment of $19 a week that is refunded now automatically at year end one can apply for a tailored tax code at the start of each year. This is free through IRD's website. You can then use this for all your jobs

Without using secondary tax codes most would end up underpaying and struggling to pay the tax bill at the end of the year having spent the money. So the system makes sense if you understand it.

That assumes the people who are working multiple jobs are actually computer literate enough to avail themselves of IRD's website. I'm not sure the cleaner from South Auckland (or anywhere else for that matter) working 3-4 jobs to crack the 40hrs would be that computer literate. Many people who work multiple jobs do so casually so don't know what their earnings are going to be month to month, let alone over a full tax year. As per many on this site you are well removed from the daily struggle of low income earners but have many solutions applied through a relatively privileged and no doubt financially secure existence. I on the other hand have many friends who are experiencing exactly what I commented about.


Well I guess I should be privileged to receive instruction from such a "rags to riches" success story. I'm so humbled. Being as, I assume, you were mopping floors as a 16 yr old and you retired at 42, you truly are inspirational. I wasn't aware Bill Gates subscribed to this site.. obviously I was wrong (again..sigh)


Well for a start I wasn't going on a rant (your words) I was giving my opinion. Secondly, your justification of your position merely strengthens my position. A privileged and financially secure commentator telling the downtrodden (< 100K) how well off they are. Nice to hear from someone who is a direct investor in offshore equities how he's so hard done by but got to where he is by mopping floors and cleaning toilets. Such an inspiration.

Perhaps stick to your circle of competence. As it does not include an understanding of the tax system. Re comments on direct investing in offshore equities would you rather I buy multiple houses in Auckland city and pay no tax on the gains?

Kevin, have you got any empirical evidence. Please show it.
Evidence to the contrary, against your position is provided by Thomas Sowell.

its all about the polls not to boost spending and help the the recovery that is BS.
if it was to boost spending you would make the first 10k free as those that earn the least spend it, higher up it just goes into a bank account or to pay of the mortgage neither does anything for the economy

Well, the polls must be showing this policy is worth a 3% swing or so, indicated by the quick attack by the PM. The pollsters on both sides will know how many votes are in a $30 to $60 a week pay rise.

I think it gives National a shot. If the greens and NZ first don’t make 5% (which is looking more likely) then national and act could come close to labour.

6% + 32% isn't enough to form a government.

Wasted votes are shared proportionally by parties that make it into Parliament, and this year may have the biggest wasted vote in a long time.

As long I can get smokes for 20 bucks.

With all this money printing you might not be able to get a packet of chips for $20 bucks soon.

$8 a week for the poor, $30 a week for the middle, $60 a week for upper end.

For $4.7b it kinda of seems to do not much for most.

$8 spent on food, $30 spent on the mortgage $60 into an investment property
that is what is wrong it should be $60 at the bottom and 8 at the top if you want to stimulate spending

Desperately poor stuff from National. Not a worthy caucus at the minute I’d say. Labour deserve a shot unhindered by Winston.

Desperate and long out of good ideas.

There has been nothing by either parties to fix the housing crisis, which is one reason NZ is in such trouble. So what if NZers get an extra few dollars a month. It doesn't keep pace with house price inflation, which is just creating a divide between haves and have nots. Considering how many people have saved money this year, extra money IMO is unlikely to do much to stimulate the economy. People seem to be saving for the rainy days.

People are saving money because they have been locked in their homes! You are like the US commentator that said it was a pity that people could not make use of the drop in fuel prices because they were lockdown. They did not seem to understand the fuel price crash was caused by the lack of demand during the lockdown. We are not a nation of savers, but a nation of speculators.

It's not a housing crisis, it's a population crisis. Same way a birdstrike is really a plane strike.

We are too self-centred in our narrative - it is why the current multi-faceted unravelling. The other failure is the fixation on 'money', which ws a claim on future resoures and energy. That system is currently overshot; too many bets and not enough planet. Yet some twits will - totally unaware of the pending paradigms - vote for short-term, personal-advantaging, access to those resources and that energy. Tragedy of the Commons leading to Lifeboat (both Hardin essays well worth the read) 101.

IMO it is both. The housing crisis is a knock on effect of the population crisis. But it will also likely become an infrastructure crisis, because we have only looked at the short term benefits of increasing our population so quickly. These people will need more and more healthcare as they age etc. WE need more motorways, schools, hospitals etc.
Personally I hoped Covid would cause us to make a major shift, as the way it was heading was not sustainable long term. Something will break.

Lets set a population level. My view is we would solve a lot of problems, and New Zealand a better place with a population of two million.

Do you seriously think that a population of 2 mill can pay for the required infrastructure? Or are you just being an idiosyncratic fool??

Please don't butt into this conversation Hook. Unless you can actualy contribute usefully and politely.

He raises a valid point, but only as a means to prop up his POV.

Debt is indeed unrepayable, both globally and probably here too. Hence the Steve Keen warnings in recent years. There WILL be a re-set. But how we deal with that is irrespective of population - Hook makes the same mistake the Catholic Church makes.

It's pointless any government providing any more rax benefits or further payments at this point.

Any extra weekly cash and kiwis are climbing over each other to give it to the nearest mortgage provider...

About time for bracket creep to be addressed.Those in the middle class are paying near the highest rate. Compare NZ to Australia and the U.S,. We are very heavily taxed. Good one National. Labour has thrown away so much money even before Covid, no wonder they cannot address bracket creep.

you could do the same by making the first 10k tax free, a lot of countries already do this
aussie have it set at 18200, it cuts out a lot of work for companies employing part timers, the money pretty much all gets spent not saved
and the bottom and middle get the most benefit

australian tax rates
Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $90,000 $3,572 plus 32.5c for each $1 over $37,000
$90,001 – $180,000 $20,797 plus 37c for each $1 over $90,000
$180,001 and over$54,097 plus 45c for each $1 over $180,000

nz tax rates
Up to $14,000 10.5%
Over $14,000 and up to $48,000 17.5%
Over $48,000 and up to $70,000 30%
Remaining income over $70,000 33%

Also, Aus Student Loan repayment threshold is 2x NZ's and repayments are at a variable rate, which cap out below NZ's flat rate repayments for income over $20K

Your forgetting stamp duty. Given the market right now the Government would be raking it in. These are the rates in NSW:

Property’s value Rate of stamp duty
$0 – $14,000 1.25% of the property’s value
$14,001-$30,000 $350 plus 2.4% for every dollar over $25,000
$30,001-$80,000 $415 plus 1.75% of every dollar over $30,000
$80,001 to $300,000 $1,290 plus 3.5% of every dollar over $80,000
$300,001 o $1,000,000 $8,990 plus 4.5% of every dollar over $300,000
$1,000,001 to $3,000,000 $40,490 plus 5.5% of every dollars over $1 million
$3,000,001 and over $150,490 plus 7% of every dollar over $3 million

Stamp duty on cars sales in NSW:

Stamp duty is calculated at $3 per $100, or part thereof, of the vehicle's value.
For passenger vehicles valued over $45,000 with seating for up to 9 occupants, the rate of stamp duty is $1,350 plus $5 per $100, or part thereof, of the vehicle's value over $45,000

Compulsory CTP Green Slip in NSW was about $900 a year per car when i lived there.

A Green Slip covers costs like medical treatment and lost income for people who need it after they’re injured in a road accident.

A Green Slip doesn’t cover damage to your vehicle, other vehicles or property - only injuries.

Given Aus GST is 10% and NZ is 15%, a 3% or 5% stamp duty on cars is only catching them up to us, not paying more than us.

They have luxury car tax. LCT is a massive cost. Cars with a luxury car tax (LCT) value over the LCT threshold attract an LCT rate of 33%. In NZ the importers just charge the same or more than Australia and pocket the equivalent of the LCT. One of the reasons cars are so expensive here in NZ and distributors and importers are multi millionaires.

Also what about stamp duty on houses? A $2m house sale means AUD$95,490 of stamp duty!

Plus their CGT.

Will "undoubtedly" give National a boost in polls.
Pure assumption.
National are rooted at 28-32% and that is where they will stay.
Labour at 50-52%, ditto.
This is a nothing election and nothing is going to change in 4 weeks to change that.

Eh, this got me interested. Plus the arrogance of Labour insisting their plan 'didn't affect' 98% of taxpayers which was the cowards way of saying 'no tax relief for 98% of taxpayers'.

Tax relief. You mean austerity and cutbacks by any other word, enhancing the rich as well. Arrogance? National personified.

No, I mean the government letting me keep more of the money I've earned so I can use it to pay for the things the government didn't provide when they unwound Bill English's tax bracket adjustments. Like increased housing costs because Kiwibuild was a failure, or lack of transport options in Auckland and higher fuel taxes.

Arrogance? I'd say the "I'm alright Jack, so how dare you question my favourite party" seems more out of touch than anything else I've seen here.

Usual drivel arguments.
Tax taken is spent on community and societal objectives that virtually all gain from, often in ways they utterly fail to acknowledge, if even capable of thinking that far. People do not get created and grow, in a vacuum. It takes a society to grow a socialised person who is some use and not a liability. All services cost money. Not being willing to fund that is an abdication of responsibility. Some so called "adults" need to grow up

Yea because we undoubtedly got a lot of the promised services the 2017 Labour campaign proposed when they decided to cancel the 2018 tax cut package. Definitely got our money's worth there. Hey, how's that light rail, child poverty and housing programme coming along?

I referred to paying tax for services sui generis
Not specific gov promises
Tax cutter attitude is to ignore the fact that many things have to be done by gov as prices sector is no good or not interested. Most National supporters are anti gov per se not just Labour gov. All this rhetorical shite about it’s your money not gov money. Yes, and the entire structure of society that protects you and facilitated your ability and liberty and choices is law made by gov

A lot to unpack here.
Re covid response.
The best parts have been performed by non MOH operations.

The Government has an obligation provide the services that it campaigns on to get elected - otherwise the fundamental idea of representation starts to fall apart. Why should a greater burden fall on the taxpayer to swallow a government that acts (or fails to act) with impunity? I'm sure many of us would like $160K a year regardless of competence or ability to execute your job description, but we are not that lucky, and an extra $4K a year would make a huge difference.

None of those policies were predicated on the potential capital gains tax.

So are we saying it's better optics to give temporary tax relief to lower income earners and then take it away from them? Are we really meant to believe all the people losing their shit over people who earn $64K being the biggest beneficiaries of this tax package would have been way happier with having tax relief eventually taken away from lower income earners instead?

why not rebates to those under a certain threshold? is that too hard? seems to work ok for the power trusts.

Your comment that 'National’s decision to suspend $7.7 billion of Super Fund contributions over four years, forgoing the returns this investment is likely to generate, is a massive opportunity cost.' suggests that in the short-term that if you borrow money you will make money.

I do not think that in the middle of a global recession it is wise to borrow money, to try and make money on global stock-markets. I learnt this from global investments I made during the GFC.

Labour's policy is to borrow money to make money by investing in the NZ Superannuation fund which has a portfolio of global shares & other investments.

In the short-term, in this environment, it is risky to assume that you can make money on global stock markets by borrowing money because severe recessions usually result in stock markets declining in value over time.

If you borrowed $1 billion at 2% interest rate & if the NZ Superannuation fund had a loss of 10% over the next 12 months you would have a net loss of 12% or $120 million. Is the risk worth it?

Currently the global stock markets are at near record highs due to "printing of money" to support economies. There is a big risk that this support will not continue and when it does global stock markets will fall.

Are there any financial planners out there at the moment recommending that people borrow money to make money on global stock markets?

I think National's policy to temporarily suspend payments to the NZ Superannuation fund is prudent at this time.

i did the opposite to you and made enough after the GFC to sell and purchase my house in cash and have now rebuilt back to what i had,
maybe it says more about your investing choices and history rather than what the super fund has achieved

The NZ Superfund had a Net Return of -12.88% in 2007/08 & -27.63% in 2008/09. Add on borrowing costs to that. What a disaster those 2 years were for the government. Was is worth the risks during those 2 years to gamble? It is far more prudent to borrow money for investment in NZ's recovery rather than global stock markets.

Once the recession is over, I would support investing money in the NZ Superfund for the longer term benefits it provides

At least this crisis has made it plain for all to see that the RBNZ is not fit for purpose. Over inflating assets has shown their incompetance and made them look amateur. The whole top tier needs replacing. As for taxes, we should all just stop paying every tax and just look out for ouselves. Stuff everyone else. Do what the speculators and property accumulators do. What's good for the goose is good for the gander. Collective selfishness is all that this government body is pushing. Tragic to see what NZ is becoming. Really sad.

Sadly the RBNZ is not amateurish. They know exactly what they are doing and what the consequences will be. The tax paying savers have been thrown to the wolves.

Given that Labour and the Greens are convinced that climate change is man made then I would expect them to promote policies that reduce the future/maintain the present population level of NZ. So no tax incentives/benfits for larger families but tax/welfare penalties for having more than say 2 children. An immigration policy that reflects the population goal. Population being the number of people in NZ and including all temporary visitors including students and tourists.

Woke conficted confusion.

Climate change IS real, is it manmade or a natural cycle?, who knows. Does Nz contribute to the increasing carbon count - yes. Will bankrupting our country and reverting back to pre stone age existence change anything - a resounding NO. Maybe Covid is nature's way of resetting the clock. Maybe it's overdue. Is the world over-populated - depends on who you ask, Catholic Church maintains there is at least 1 acre available for every human. Is that unrealistic drivel - of course. Do NZrs want a discussion about immigration - probably. Is any political party going to seriously start that discussion - highly unlikely.

You're right, we seriously need a discussion on immigration. As you say though, highly unlikely as the Government think high immigration is the only way to keep the housing market trucking along. I would go as far as to say we need a referendum on the number of immigrants we let into this country. The problem with that is, as soon as you talk about limiting the numbers the racist call comes out so I throw my hands in the air in frustration at what's going on. It seems so simple to me to limit the numbers so therefore demand for houses and everything else is reduced. Just seems a no brainer but who is talking about it. Only TOP that I can see. The two main issues amongst my family and circle of friends is immigration and housing affordability. Yet no one has the balls to address it. I personally haven't talked to anyone in the last little while that likes mass immigration, that we have had now for years. BUT, what the hell can we do about it, ideas anyone.

Why isn't the lowest range tax free? Also Australias system seems so much fairer and better than NZs. People complain that governments don't know how to spend their tax money, so they would prefer to pay less tax. But these are eh same people who expect free education for their kids, free healthcare, free super, and free handouts when a crisis hits. Tax is like paying insurance. This money goes into the economy to pay for essential services, and help you when you need it, and that money has to come from somewhere.

Taxing people less so they have more money each week, will likely just push up house prices even more, as mixed with lower interest rates, people will be able to afford to service even larger mortgages. Madness.

Changing the lower bands affects every tax payer, so changes cost more. I would prefer to pay less tax. I'm sure as hell not getting the Light Rail or house building program the government were elected to implement when they unwound the most recent tax cut - which was really just aligning the income brackets with inflation, which hasn't been done in years. Or is the expectation that we just keep paying tax and how dare we even question how it's spent? No deal - that's not part of the social contract that comes with income tax and the Government should have uphold its end of the bargain as well.