Greens announce income guarantee and wealth tax policy

Written By: - Date published: 6:31 pm, June 11th, 2023 - 65 comments
Categories: Economy, greens, political parties, poverty, tax, uncategorized - Tags:

From the Green Party website:

The Green Party has today announced a new Income Guarantee for every New Zealander.

“Our Income Guarantee will give everyone peace of mind that they can always afford the weekly shop, pay the rent, or cover unexpected costs – even when times are tough,” says Green Party Co-leader Marama Davidson.

“The Income Guarantee is a commitment to every New Zealander that no matter what, your income will never fall below $385 per week, after tax. For couples, our Income Guarantee will be at least $770, and a single parent will always have an income of at least $735.

“It will work by cutting taxes for people on the lowest incomes, making sure anyone out of work or studying has enough to live on, topping-up the incomes for those raising tamariki, and making sure there is extra help for anyone who is sick or disabled.

“The Income Guarantee is fully funded through fair and simple changes to the tax system that unlock the resources we need. Every dollar will come from those most able to contribute, while those on the lowest incomes will pay less. Overall, the Ending Poverty Plan will result in tax cuts of between $16 and $26 a week for 3.7 million New Zealanders.

“The Income Guarantee means families will always have enough kai, or to buy the shoes and warm clothes that children need. Students will no longer have to skip meals to make ends meet and can focus on their study. And if something happens that stops people from working, there is a guaranteed income that’s enough to live on.

“It is a transformational new way of doing income support that will lift every family out of poverty,” says Marama Davidson.

Green Party Co-leader James Shaw added:

“It should not be the case that in a wealthy country like ours there are thousands of people who cannot afford to put food on the table, or where kids have to take days off school just so they can work to help their families cover the basics. But for hundreds of thousands of our friends, our neighbours, our colleagues, this is what life looks like.

“What we do to prioritise the lives and livelihoods of those who need our support the most should be the measure of every political party. In fact, I would argue that any party that stops short of promising to lift every family out of poverty, is actively choosing to make life harder for thousands of people.

“I am sick of the politics of excuses. Everything we need to make life better for people in Aotearoa exists. What’s missing is the political willpower to use it. The time is now to lift every single family out of poverty and to pay for it with a fair tax system.

“Our fully costed plan will make sure everyone can pay the bills, put food on the table, and keep the house warm,“ says James Shaw.

Notes

The Green Party will guarantee a decent income for all – at least $385 for individuals, $770 for couples, and $735 for a single parent.

The Income Guarantee will be achieved through:

  • A tax-free threshold of $10,000. Anyone earning under $125,000 will pay less tax as a result of the Ending Poverty Together plan
  • A payment of $385 to anyone out of work or studying – with an extra $135 each week for people caring for kids on their own
  • Replacing Working for Families with a single payment for parents or caregivers of $215 every week for the first child, and $135 a week for every other child, with an extra $140 a week for every child under three years.
    • The abatement threshold will be increased from the current $42,700 to $60,000 so people can earn more before their payments start being reduced
    • The abatement rate will change to 18% from the current 27% to ensure the payments reduce at a much slower rate
  • Transforming ACC into an Agency of Comprehensive Care so if anyone has to stop working, they will receive a minimum payment of 80% of the full-time minimum wage

The Income Guarantee is fully funded through simple changes to the tax system:

  • A 2.5% Wealth Tax on assets – things like properties or shares – worth more than $4 million (minus mortgages and other debt) for couples and $2 million (minus mortgages and other debt) for individuals. This will not affect most family homes or retirement savings
  • A Trust Tax of 1.5% so people cannot just move their money into a trust to avoid the Wealth Tax
  • A new top rate of income tax of 45% on income over $180,000, so the top earners contribute more
  • A new corporate tax rate of 33%, returning corporate tax to what it was before National came into government in 2008.

Click here for more information.

65 comments on “Greens announce income guarantee and wealth tax policy ”

  • Comments are now closed

  1. Gareth Wilson 1
    11 June 2023 at 7:37 pm
    • A Trust Tax of 1.5% so people cannot just move their money into a trust to avoid the Wealth Tax

    Just to be clear, that's about a million dollars every year from the $74 million dollar Ngapuhi Runanga Trust, right?

  2. Alan 2
    11 June 2023 at 8:06 pm

    Poor old Chippie, his Ministers stuff up and now he has to deal with this.

    For example, the hardworking plumber from west Auckland owns a house worth a million dollars, he has it in trust.

    The Greens think he is a rich prick and want him to pay another $15,000.00 in tax each year, he has to generate another $25,000.00 in work to cover this.

    After working hard for say 20 years to get himself and his family into this well deserved position, he is going to be very aggrieved, and so are the thousands of other voters in his situation.

    This policy will see a rearrangement of the deck chairs on the good ship Labour/Greens/TPM and a rush of votes to the right from the plumber and all his mates.

    [Stop your trolling!

    If the house is in a trust then the trust owns it – it is a trust asset. It also has nothing to do with Chris Hipkins. I could go on responding to your trolling, and other commenters will probably also waste their time on your troll comments, so this is your warning – Incognito]

  3. Corey 3
    11 June 2023 at 8:40 pm

    Now this is what I'm talking about Greens. F**k yeah. Lessgo.

    I had absolutely written the Greens off. For years they've seemed only interested in identity politics and social issues rather than economic reforms.

    I was hopelessly depressed about this election, it seemed it was going to be a fight between alienating "woke" identity politics vs Ruthenasia 2.0 and predicting Ruthenasia 2.0 to obliterate idpol.

    This is shocking. I support everyone of these policies and this has changed my vote from a TOP protest vote.

    Hopefully, their housing policies are just as attractive.

    If they fight on a populist and reformist left wing platform they could clean up.

    And good for James Shaw for attacking Labour for being useless and for making a choice to be useless… They should attack Labour brutally, from the left, Act is going it to National from the right

    • Craig H 3.1
      11 June 2023 at 8:56 pm

      This has a lot of similarities to their 2020 policies. Hopefully they can form a Labour-Green government and implement some (or all) of this.

  4. Craig H 4
    11 June 2023 at 9:14 pm

    Not that I think corporate tax rates shouldn't necessarily go up, but Labour dropped the corporate rates to 30c in 2007 after consulting with businesses. https://www.legislation.govt.nz/act/public/2007/0097/4.0/DLM1523192.html – clause 2 (the link is to Schedule 1 of the Income Tax Act 2007 as enacted).

    • Incognito 4.1
      11 June 2023 at 9:37 pm

      Indeed, that seems a factual error: Labour dropped it from 33 to 30% in 2007 (effective 1 April 2008).

      National dropped it to 28% in 2010, AFAIK.

  5. Mike the Lefty 5
    11 June 2023 at 9:30 pm

    Let's remember that a lot of trusts are set up by rich pricks simply to avoid paying tax.

    Rich pricks can afford to pay more tax, but they don't want to and they believe the National and ACT ideology that they shouldn't have to.

    That's why they bankroll National and ACT because they will get the payback if their favourites win.

    • Incognito 5.1
      11 June 2023 at 9:42 pm

      That’s inaccurate. People, not just ‘rich pricks’, set up trusts for all sorts of reasons that are perfectly reasonable, valid, and legitimate.

      • Mike the Lefty 5.1.1
        11 June 2023 at 9:54 pm

        Note I said "a lot", not "all".

        I know there are trusts that are set up for honourable reasons, but there are a lot set up by people for the express purpose of avoiding tax, despite what they might say.

        Perhaps you might think that is reasonable – I don't.

        • Incognito 5.1.1.1
          11 June 2023 at 10:08 pm

          Yes, all good.

          My point is that it is not helpful to label other Kiwis as ‘rich pricks’ because it plays into National & ACT’s narratives of ‘massive tax grab’ and ‘envy tax’.

          If the policy & arguments are compelling enough then this sort of lazy language is not necessary and it has no place in constructive debate, IMO.

      • KJT 5.1.2
        12 June 2023 at 5:13 am

        A lot of trusts are set up so the beneficiaries can avoid paying what they owe.

        To subcontractors, (Tradies), suppliers, long term spouses, IRD, and liabilities for shoddy work. Developers who took Christchurch council to court, so they could develop parts of East Chrisrchurch, spring to mind.

        Hardly a socially beneficial or moral purpose.

        Ironically not available as an option to small businesses and tradies who have themselves and at most, a couple of employees. Even if you can afford to set up a trust. Unless you look like a large well capitalised firm, despite it too often being "smoke and mirrors", you have to give personal guarantees to get credit and also meet liability under the building ACT.

  6. Incognito 6
    11 June 2023 at 9:48 pm

    All the Greens need to do now is to make voters aware and mobilise them to actually turn up and vote. Arguably, the voters who stand to benefit the most from the Greens’ tax policy are the ones least likely to vote. Smart politics!

    • UncookedSelachimorpha 6.1
      12 June 2023 at 12:03 pm

      "Arguably, the voters who stand to benefit the most from the Greens’ tax policy are the ones least likely to vote."

      Unfortunately, that is true. Mobilisation is the only hope!

  7. Patricia Bremner 7
    11 June 2023 at 10:01 pm

    Greens getting to the fundamentals.heart

  8. Tom Day 8
    11 June 2023 at 10:03 pm

    As someone that earns 340k working overseas and paying 115k in tax already in NZ as tax resident, this policy would break the camels back and I would depart NZ. 2 of my NZ Co- workers already set up in other countries when Labour increased the top tax to 39% on 180k and they have been laughing ever since. This is a very short sighted policy from the Greens and especially with Australia lowering their tax rates next year. In my case I would be looking at Brazil as my lifestyle would improve and at the same time pay considerable less in tax. To those that think good riddance just think if there is too many people thinking like me NZ will be in very serious financial trouble.

    • weka 8.1
      11 June 2023 at 10:31 pm

      it's not so much as good riddance as I don't think NZ can afford to prioritise the feelings of people who earn $225000 in the hand per year and object to paying an extra $10,000 in tax when there are so many kids being raised in poverty because of our unfair taxation system. It’s more like you are welcome to stay but you have to pay a fair share, and if you don’t want to then you are fortunate to have those choices.

      • Tom Day 8.1.1
        11 June 2023 at 10:46 pm

        10,000 dollars extra I wish, with the Greens making 75k to 120k 35% and 120 to 180k 39% and 180 and above 45% its abit more than that.

        • weka 8.1.1.1
          11 June 2023 at 10:53 pm

          how much is it?

          • pat 8.1.1.1.1
            12 June 2023 at 12:06 am

            around the 10k you stated

            • Tom Day 8.1.1.1.1.1
              12 June 2023 at 2:01 am

              If you take all the tax banding adjustments its roughly a 12% increase overall, so it's way more that 10,000 you and Weka don't seem to realize the actual amount in taxes the so called well of would be liable to pay. That's why there is this ill informed call by lefties to pay tax fairly yet they have no grasp of the consequences of their so called fair demand. That's why people will up and leave.

              • KJT …
                12 June 2023 at 4:54 am

                People are "upping and leaving" because NZ is not the good place to live it once was. When we had decent wages, and, incidently a 60%top tax rate plus inheritance and other taxes.

                Currently there are low taxes on those who have gained the most from the society generations of high tax payers, including myself, have built up in the past. This shows in a massive infrastructure deficit and a lack of Government investment in the future, exacerbated by money flows to house hoarding and unproductive speculation in existing assets.

                Successful countries have almost a 50/50 split between Government and private shares of the economy. Ours at 30% is showing in our decaying infrastructure and generations abandoned to poverty and lack of hope.

              • KJT …
                12 June 2023 at 5:43 am

                I wonder if you will come back for healthcare or in time to collect the super that those of us who continue to remain NZ tax residents, pay for?

                Will your mates still be laughing, if they end up old and/or sick in those. "low tax" countries? I bet they will return.

                Also probably a safe bet that, like me, you benefited from New Zealands past tax funded training and education. Do you think it is ethical to avoid contributing to that for future generations in NZ?

              • KJT …
                12 June 2023 at 8:13 am

                Noting that the skilled workers we are most short of, fall below the $125k where the Greens will have them paying less tax. Even GP's are on not much more. Under $145k unless they own a practice.

                According to federated farmers and the hospitality employers union, we are desperately short of "skilled workers" prepared to work 70 hours a week for minimum wage. Sic.

                • PsyclingLeft.Always …
                  12 June 2023 at 8:48 am

                  According to federated farmers and the hospitality employers union, we are desperately short of "skilled workers" prepared to work 70 hours a week for minimum wage. Sic.

                  Fkn aye. Expect to see that lie pushed to the max from now on. There was a TV "news" item on recently

                  Unable to find Kiwis, employers are hiring from overseas

                  https://www.1news.co.nz/2023/06/08/unable-to-find-kiwis-employers-are-hiring-from-overseas/

                  ….had all of that…listen to the tyre co boss …

                  A re hash of ol' sir Key and Bill English' slur lie about Kiwis.

                  And your point about the $125000. IMO that most of NZ are below $ 125000..If not well below it. They must vote Green…or Labour.

                  Nact will screw NZ.

              • weka …
                12 June 2023 at 5:43 pm

                If you take all the tax banding adjustments its roughly a 12% increase overall, so it's way more that 10,000…

                I did a spreadsheet with each bracket and based on you annual income. Am I missing something here? Tax increase for you would be around $13,000

                .https://thestandard.org.nz/greens-announce-income-guarantee-and-wealth-tax-policy/#comment-1953768

                you and Weka don't seem to realize the actual amount in taxes the so called well of would be liable to pay.

                That's why there is this ill informed call by lefties to pay tax fairly yet they have no grasp of the consequences of their so called fair demand

                Maybe, but you haven't explained it either. It looks like an emotional reaction to paying more tax, which might be understandable but I'm not yet convinced that an increase of $13,000 is out of bounds.

            • weka 8.1.1.1.1.2
              12 June 2023 at 9:37 am

              that is what I get (just under $13,000). Can someone please check my maths? This is for a $340,000 salary, excluding things like ACC.

    • weka 8.2
      11 June 2023 at 10:37 pm

      this is the gist of it,

      #BREAKING we’ve just announced our Ending Poverty Together plan, centred around an Income Guarantee of at least $385 per week, so everyone has enough to cover life’s essentials.

      https://twitter.com/NZGreens/status/1667668740706824192

    • SPC 8.3
      11 June 2023 at 11:38 pm

      Sure, act in your own best interest. But this is why I do not support those not citizens voting.

      • Tom Day 8.3.1
        11 June 2023 at 11:55 pm

        I'm a NZ citizen who works on average 12 hour shifts for up to 300 days straight overseas, and I would refuse to pay the roughly 40,000 extra in tax the Greens would want. I fully believe I pay my fair share of tax. During covid I failed to get a MIQ spot in the lottery yet the MP from Mexico managed to bring his boyfriend in, the IRD still required me to pay the tax due yet I failed to get home, I'm still furious over it. To the extent that if a Labour or Green electioneering activist pays me a call they better be prepared for a bit of harsh criticism.

        • SPC 8.3.1.1
          12 June 2023 at 12:16 am

          There are those who have gone overseas to earn more (and have to live there to do so), and we do not increase our wages to match.

          So why should we try to keep high paid people here happy with lower taxes than overseas?

          Most OECD nations have a higher income tax rate than 39 cents and 45 cents is par.

          They also have CGT, land taxes, stamp duty, estate and wealth taxes.

          Leaving our own tax revenue base low is not the way to remain a first world nation.

        • PsyclingLeft.Always 8.3.1.2
          12 June 2023 at 8:25 am

          Mr Furious. An idea. Why don't you just live in the place that you work 12hr/300 days? Is it not such a great place? Economically? Culturally? Quality of Life? What do the other people who actually have to live there feel about it…the Natives and the situation where you take all "your" money away from their country and community ?

          While doing whatever it is you do. For 12hrs/300 days….

          Never mind about giving some harsh criticism to NZ Labour/Green Activists…..have a chat to some of your "300 day" workplace countries Activists. See how you go : )

    • That_guy 8.4
      12 June 2023 at 11:45 am

      For every person who claims that they are going to leave because of the reasons you state, there is another person who claims they are going to leave because of crumbing health infrastructure, underfunded schools, and because highly unequal societies aren't much fun to live in for anyone (including the rich).

      Many of those people earn plenty of money and pay plenty of tax.. I'm one of them.

      So you want to pay bargain-basement tax rates and live in a quality society. Societies are like watches: You get what you pay for, and the cheap ones tend to break.

      I am comfortable paying more tax because I see it not as waste, but the cost of living in a functional society. And I want to pay that cost. And yes, if NZ turns into a highly unequal, gated-community, two-tier society, I will strongly consider moving to a high-tax country and taking my extremely valuable skills with me.

      So that's the other side of the coin.

    • UncookedSelachimorpha 8.5
      12 June 2023 at 12:52 pm

      Depends if you think your relationship with a country is simply a financial transaction. My income varies a lot, but likely I might be slightly worse off (net) under the Green's scheme. Very happy to take that on, in return for a healthier society, no poverty, and a GMI safety net if I ever want it.

      Brazil? Low tax, but high poverty, high violent crime, dreadful Covid 19 response, tap water is dodgy, 8 year lower life expecancy than NZ….you gets whats you pays for, I guess.

    • Drowsy M. Kram 8.6
      12 June 2023 at 2:32 pm

      2 of my NZ Co- workers already set up in other countries when Labour increased the top tax to 39% on 180k and they have been laughing ever since.

      Sounds like your two co-workers are better off than you are – they'll be millionaires soon, if they aren't already – good for them.

      And whatever works for you – go for it. Some people get a kick out of money, but it seems such an impoverishing priority. Imagine if everyone made money their top priority – how long would that last?

      https://www.cnbc.com/2020/10/19/even-millionaires-make-this-money-mindset-mistake-says-harvard-psychologistheres-the-real-cost-of-it.html

      Why the politics of envy are keenest among the very rich
      The result is "a quarter-century of intermittent lobbying, cajoling and threatening when it comes to his net worth listing". In 2006, the researcher responsible for calculating his wealth writes, "when Forbes estimated that the prince was actually worth $7 billion less than he said he was, he called me at home the day after the list was released, sounding nearly in tears. 'What do you want?' he pleaded, offering up his private banker in Switzerland. 'Tell me what you need.'"

    • Incognito 8.7
      12 June 2023 at 7:49 pm

      You’re comparing yourself to a camel!? Seriously?

      Why don’t you move to Brazil regardless? Do you need a little nudge from the Greens?

      You work hard, you earn a decent income, you may have to pay a wee bit more income tax in NZ. So, what’s the big problem?

  9. KJT 9
    12 June 2023 at 4:59 am

    One loophole is "net" of mortgages etc.

    "Private Capital" tends to load up assets they buy with debt, power companies are one example, which makes you wonder how much many of those "investers" are really contributing.

    When you can reduce your tax bill just by taking out a bigger mortgage?

    Not sure how to solve that one fairly.

    • Cricklewood 9.1
      12 June 2023 at 7:55 am

      Pretty much nailed it, the very wealthy already leverage debt on assets to reduce tax liability.

      Won't take long for a whole bunch of paper only mortgages to appear or some other equally inventive way of getting around the tax. Unless there is a tidy way to remove avoidance it's very likely it wont raise what you expect.

      • UncookedSelachimorpha 9.1.1
        12 June 2023 at 12:40 pm

        I don't doubt there will be avoidance schemes – but you can't simply use debt to make assets vanish in smoke. When you borrow (liability) they give you money (asset). So net effect is zero (interest payments aside).

        • Cricklewood 9.1.1.1
          12 June 2023 at 12:57 pm

          Sort of, but that debt can be used to purchase an asset in another juristiction. Basically we'll see signicant capital flight.

          People who own a 10 million dollar house wont pay 2.5 percent of that year on year.

          • SPC 9.1.1.1.1
            12 June 2023 at 4:53 pm

            If they pay tax on their foreign asset wealth, no gain is made by doing this.

            What someone might do is acquire debt and place the asset into a trust – reduce the tax on the wealth to 1.5%.

    • Craig H 9.2
      12 June 2023 at 9:56 am

      The wealth tax policy listed is net wealth, so if it is brought in, mortgages will reduce wealth tax.

      In theory interest on loans taken out for purchasing shares is deductible by individual taxpayers, although I don't know how many people actually make use of that provision.

    • weka 9.3
      12 June 2023 at 10:11 am

      When you can reduce your tax bill just by taking out a bigger mortgage?

      so people would rather pay tax to the bank than the government?

      • Cricklewood 9.3.1
        12 June 2023 at 11:45 am

        A mortgage can be taken with all sorts of entities, you will get the very wealthy mortgaging (on paper) to an offshore shell company for example.

        The great difficulty with wealth taxes is that the very people you are trying to target have the means to avoid paying them. Including shifting capital out of the country or essentially become non resident.

        • weka 9.3.1.1
          12 June 2023 at 11:50 am

          A mortgage can be taken with all sorts of entities, you will get the very wealthy mortgaging (on paper) to an offshore shell company for example.

          sorry, that still needs explaining. Does the paper mortgage not have interest?

          • Cricklewood 9.3.1.1.1
            12 June 2023 at 12:30 pm

            Potentially not, or it might have say interest only terms but the rate is artifically low, for example to help me into my first home I had a mortgage with my parents identical to the mortgage with the bank but the interest rate was much much lower. It was set at the OCR if I remember correctly.

            A mortgage is essentially a security over property usually related to a loan. Who provides that loan and its terms are something seperate.

            If you are looking at the Greens propsal, they are proposing to raise the funds by taxing our existing wealth. An alternate option could be to dramatically lower tax with the aim of attracting more taxable capital much as Ireland has done.

            • weka 9.3.1.1.1.1
              12 June 2023 at 12:52 pm

              I'm still not getting the first bit sorry.

              The last paragraph I suspect is incompatible with shifting to a steady state economy (at least pragmatically).

              • Cricklewood …
                12 June 2023 at 1:13 pm

                Basically its not just banks that can issue a mortgage and the terms of a mortgage are entirely at the discretion of the parties involved. You will essentially see a proliferation of 'on paper' mortgages held with offshore entities.

    • UncookedSelachimorpha 9.4
      12 June 2023 at 12:39 pm

      Errr… when you take out a mortgage, you use the borrowed money to obtain an asset? In which case, net zero difference in assets?

      • Cricklewood 9.4.1
        12 June 2023 at 1:07 pm

        The debt would be an asset to whoever holds it, to the homeowner ther liability to an asset tax would be calculated on the value of the asset less any related liabilites.

        If the entity that owns the debt isnt domiciled in NZ for tax purposes then they wouldnt be captured by an asset tax.

  10. Tiger Mountain 10
    12 June 2023 at 7:11 am

    One way or another it has to be a Labour/Green/TPM Govt. on October 14. If that can be achieved the roll back of Rogernomics will be on the agenda at last. A generational shift is coming that the greybeard/Bal’head pundits seem determined to ignore.

    ACT and Natzos innards will have turned to water after Mr Shaws announcement.

  11. Patricia Bremner 11
    12 June 2023 at 7:48 am

    It takes courage to challenge the status quo. There will be wrinkles to iron out, but the tenor makes my heart singyessmiley

  12. That_guy 12
    12 June 2023 at 10:51 am

    Great stuff. The Greens seem to have turned a corner. I hope.

    Now, the questions for every other political party are:

    1. Do you believe child poverty is a political choice, or a natural and unavoidable outcome?

    2. If you do believe it is a political choice, what's your plan to put an end to it?

  13. Dean Reynolds 13
    12 June 2023 at 11:40 am

    It's fantastic to finally have a political party with the balls to reintroduce a first world tax system. Our current third world tax system has produced a third world economy & a third world society, charactersied by entrenched poverty, homelessness, lawlessness, etc.

    David Parker's recent IRD/Treasury investigation has let the tax genie out of the bottle & proved beyond argument that NZ's greed merchants aren't paying their way. The Green's tax policy will put poverty at the centre of the election campaign & force NACT to explain why they want to increase wealth inequality. The Greens tax policy is a huge turning point in our fight to restore a Social Democratic society.

    • Tiger Mountain 13.1
      12 June 2023 at 12:06 pm

      yes
      the politics that shall not be named! Rolling back the almost 40 year NZ neo liberal state has to happen.

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