An alternative budget released by the Green Party on Wednesday aims to raise roughly $22 billion a year from new taxes on wealth, businesses, and the highest income earners.
The revenue would fund a $395 minimum income guarantee, free doctors and dentists, early childhood education, expanded accident insurance, public transport subsidies, and climate policies.
Core Crown tax revenue would increase from about 29% of GDP today to 33.9%, while core expenses would rise from 30% to 35%, and net core Crown debt would exceed Treasury’s recommended 50% ceiling.
The reform hinges on raising $72.5 billion over four years through a 2.5% tax on net wealth above $2 million. To curb avoidance, a 1.5% tax would apply to assets held in trusts, and gifts and inheritances over $1 million would be taxed at 33%.
Another $9.2 billion would be raised by lifting the company tax rate from 28% to 33%, $6.2 billion from higher ACC levies, and $101 million from a $5,000 arrival or departure fee per passenger on private jets.
Income tax would be overhauled. A $10,000 tax-free threshold would be funded by a 39% rate on income over $120,000 and 45% on income above $180,000. This would give anyone earning less than about $125,000 — roughly 90% of wage earners — a $1,050 annual tax cut.
This would raise approximately $88 billion over a four year period, broadly equal to 4.9% of annual GDP, to fund expanded public services
Primary healthcare and dentistry would become free at a cost of about $5.1 billion. ACC would be converted into a public insurer covering illness, injury and disabilities for $9.3 billion. Not-for-profit early childhood centres would be funded for up to 25 hours of free care, costing $7.7 billion.
Most core benefits would be replaced by a minimum income guarantee set at $395 a week. This would mainly cover Jobseeker and the student allowance, while sole parents and people with long-term health conditions would receive additional support through separate policies.
The policy would not affect superannuation, which is already above the threshold at roughly $500 a week, depending on individual circumstances. The minimum income guarantee is expected to cost more than $21 billion over four years.
Green Party staff and volunteers produced the cost estimates, which they say were reviewed by economic consultancy Infometrics, though the firm is not named in the documents.
Seriously, not literally
In a speech, co-leader Chlöe Swarbrick called the Budget a “roadmap” for the country New Zealanders deserve, and later told reporters it likely wouldn’t be possible to implement all the reforms at once.
“What you see reflected in the Green Budget today are the needs that we heard people crying out for, needing to be addressed. When it comes to which cab is first off the rank, that’s something we continue to work through for election campaign priorities,” she said.
The document was intended to illustrate the kind of economic settings possible under a Green-led government, in contrast to the upcoming Coalition Budget, which is expected to be framed as constrained by fiscal conditions.
While the Green Budget proposes raising billions in new taxes, it still anticipates annual operating deficits and increasing debt to fund housing, renewable energy, and rail infrastructure.
Net core Crown debt would rise to 53.8% of GDP in the 2028 fiscal year, compared with 45.2% under the Coalition’s fiscal plan in Treasury’s most recent update.
In a press release, ACT Party leader David Seymour criticised the Green Party’s willingness to increase debt as “financial illiteracy”.
He said adding $40 billion to the national debt would drive up interest payments, and the taxes needed to fund it would push wealthy New Zealanders to move overseas.
"Anyone with the financial sense the Greens lack would simply take their career, their business, and their money overseas,” he said.
A Green Party spokesperson said the wealth tax modelling accounted for behavioural changes, including the possibility of capital being moved offshore.
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