Unfortunately politics far too often involves both sides of an argument talking about completely different subjects.
There has been a classic example occur this morning.
The NZCTU came out with calculations of what National’s tax cut would mean to the wealthy and ordinary workers. They did this by the usual methods, using Treasury data and relying on National’s proposed
From their press release:
Top income earners and property investors would gain $5.8 billion, more than half of the entire tax cuts proposed by the National Party according to new analysis by New Zealand Council of Trade Unions Economist Craig Renney.
“It’s hard to understand why in a cost-of-living crisis that disproportionately harms the poorest, you would design a package that is so heavily skewed to those who need it the least. More than half of taxpayers would receive either $2 a week or nothing at all,” said Renney.
“For every dollar in tax cuts that goes to the bottom half of income earners, more than two million New Zealanders, National wants to give ten dollars to the top 5% of income earners and landlords.”
“This is a question of priorities. If the Government is going to spend $11 billion, it should be focusing that money on public services like health, education and housing or on boosting incomes for families who need it, not a tax package focused on the well-off.”
The analysis used National’s proposed tax policies and data from Treasury and IRD to calculate who would receive the benefit of those policies. These policies include the income tax bracket changes, the removal of the top rate of 39% and the property tax changes.
The total cost of these changes in terms of lost revenue is $11 billion over three years.
The proposed tax bracket adjustments and removal of the top tax rate delivers significant gains to those earning over $129,500 – who are the top 5% of income earners.
The top 5% of earners would receive $3.3 billion in income tax cuts over three years. Property investors stand to gain $2.5 billion from the axing of interest rate deductibility and ring fencing of losses, and cutting the bright line test back to two years.
“When you add it all together top income earners and those who own multiple properties end up with the lion’s share of the income benefits of National’s tax cuts – $5.8 billion or 53% of the gains,” said Renney.
“If Christopher Luxon was Prime Minister he would gain around $54,000 over three years, or $349 a week, quite apart from the gains from the properties he owns. A minimum wage worker would gain $2.15 a week – not enough for a loaf of Tip Top White.
Remember that figure, $349 per week for Luxon compared to $2.15 per week for a minimum wage worker. I suspect we will hear that comparison regularly during the next 12 months.
Luxon was asked about this figure this morning by Corin Dann on Radio New Zealand.
It was put to him that it was not very fair. His response was:
I get the Government wants to distract and deflect a lot around what is going on with their economic management but this is a government that has raised $15,000 per household in extra tax and is spending a billion dollars more in government spending each and every week.
Nice attempted distraction Chris. Accuse your opponent of doing exactly what you are doing even though it is a third party that has raised this issue.
The conversation then went like this:
Dann – Do you accept their numbers?
Luxon – No, but what I say to you is the core part of our tax policies, you and I have been talking about this since February March, is to inflation adjust the tax thresholds …
Dann – And you have made that point many times but it is that top tax rate which is the issue which you are facing criticism, albeit from Unions. They have looked at your numbers, they have crunched them, they argue that it is going to be $349 per week.
Luxon – Corin what we are talking about is a principle. We are not changing the tax system in New Zealand. It is a progressive tax system. The top ten percent of taxpayers pay over 40% of our income tax in this country. We are saying in the interests of trying to help New Zealanders immediately with a good idea that other countries around the world have done immediately, just inflation adjust tax thresholds. With respect to lower income earners just remember tax isn’t the only thing we can do to support those people. And you have seen that well with respect to working for families, there is the accommodation supplement, there are other tools that the Government has and does use to support those lower income workers. We’re saying just take the current progressive tax system for goodness sake and do what many developed countries around the world have done.
Dann’s comment “albeit from Unions” speaks volumes. I wonder if he would say the same thing about commentary from Employers’ organisations.
And Luxon kept talking exclusively about adjusting the tax rates and not about the other part of National’s policy, which has been repeated by him many times and as recently as a month ago, which is to do away with every new tax Labour has instituted including the top tax rate.
The media needs to keep asking him this question and demand that he answers it.
Is it fair for the Prime Minister to get a tax cut of $349 per week while a minimum wage worker would receive only $2.15 per week.
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