National's tax policy under review post-OCR hike- Luxon

Author: RNZ,
Publish Date: Wed, 23 Nov 2022, 4:18pm

National Party leader Christopher Luxon says everything in its tax policy but indexed tax brackets is now under review, after today’s cash rate rise.

The Reserve Bank today lifted the Official Cash Rate by 75 basis points to 4.25 per cent: The highest level since December 2008, the biggest single rise since the OCR was established in 1999 and the ninth consecutive rise.

Luxon this afternoon told reporters National would review its tax policy as a result: It would still index tax brackets but other promises including cutting the top tax rate would be reassessed.

A major focus of National’s tax policy is the indexing of tax thresholds to inflation.

ACT Leader David Seymour said the party “remains unequivocal” in its position that the top tax rate of 39 per cent needs to be repealed.

”We will steer New Zealand away from its current path of Government-led, high tax, high debt nonsense that makes life harder for hardworking New Zealanders.

”New Zealand needs real change. We need a Government that does not run at the first sign of trouble but actually stand up for good policy. A top tax rate that raises only 0.42 per cent of Government expenditure is an exercise in envy. It is tall poppy syndrome in the tax code that holds us back from solving real problems like low productivity.”

Seymour described the 39 per cent rate as an “envy tax”.

”Tax cuts are necessary if we want to provide some much-needed relief to Kiwis and shake New Zealand out of its post-Covid funk. All it takes is a government who can control its spending.”

ACT would also reduce the middle income tax rate down from 30c to 17.5c in the first year. A nurse with one child, for example, earning $70,000 would receive around $2300 in tax relief.

“ACT stands for real change, our proposals would give a $2000 tax cut to someone on the average wage.”

*Additional reporting by NZ Herald

Take your Radio, Podcasts and Music with you