National’s 18 new taxes

Written By: - Date published: 9:35 am, September 4th, 2017 - 14 comments
Categories: national, spin, tax - Tags: , , ,

National is well in to panicked negative campaigning now. One of their main attacks is to try and spread fear about Labour and tax. Good to see them called out on it:

Bill English promises no new taxes

National has introduced an average six new taxes every term over the last nine years, but Bill English is promising there won’t be any more.

The party has been attacking Labour’s tax policy – or lack of it – hard over the past few weeks, calling their opponents’ promise of a tax working group “vague and confused” and taking every opportunity to claim they’ll introduce a bevy of new taxes.

Since taking the reins in 2008, National has introduced at least 18 new taxes and levies – six of them on petrol. Others include:

• raising GST (after promising not to)
• a tax on employer KiwiSaver contributions
• new student loan and Family Court fees
• the bright line capital gains tax on flipping houses
• a border clearance levy
• including GST on digital purchases
• removing tax refunds for kids doing part-time work.

Here’s a list from 2014 with more detail. And here’s another excellent analysis:

Brian Fallow: National Scrooge v Labour spendthrift? No, not really

Labour’s fiscal plan commits it to spend $14.5 billion more than the present Government has budgeted over the four years to June 2021. This is operating expenditure and does not include capital items like resuming contributions to the Cullen fund earlier than National or priming the pump of KiwiBuild.

The bulk of it is in the three big-ticket items in any Budget: $4.7b more for health; $3.8b more for social security and welfare; and $3.7b more for education, including the tertiary education package it announced this week. Because it has a slightly higher debt track, it also has to allow for $600 million more in interest costs over the next four years.

So where is the extra $15.1b to come from?

Nearly half of it ($7.4b) comes from a higher revenue track, 85 per cent of which is the result of scrapping the tax threshold adjustments that Finance Minister Steven Joyce announced in May and which are scheduled to kick in on April 1 next year.

[Labour’s] revenue would be $7.4b, or 1.6 per cent higher. That does not look like an increase under the weight of which the economy would crumple.

Ah, but that does not take into account any changes arising from Labour’s planned review of the tax system, its critics would say.

It is, of course, a bit rich of National to be scornful of the plan for a tax working group, when that is exactly what it did in 2009.

Hypocrites.

And if you think the tax system needs some significant changes – and it does – then it makes sense to be a bit careful about how to go about it.

The tax working group approach of picking all the best brains and publishing the advice from officials, academics and tax practitioners ahead of any final report and political decisions is simply good process.

It should not be subverted by shoving microphones in front of Jacinda Ardern and asking her to rule out this or that and, if she does not, going “Aha! That must be the sinister secret plan! Labour must come clean.

I’ve put that in bold because it’s the best comment ever written on the level of reporting on the issue so far.

It is axiomatic that the broader the base, the lower rates can be, and New Zealand’s tax base is too narrow.

In any case, changes to the tax system would have to be accommodated within the fiscal rules Labour and the Greens have agreed. … That suggests changes to the tax system would be broadly revenue neutral, a matter of redistributing the tax burden – hopefully to something fairer and less distortionary – rather than increasing it relative to the size of the economy.

In short, National’s attacks on Labour over tax are pure hypocrisy and spin.

14 comments on “National’s 18 new taxes”

  1. Barfly 1

    You forgot they increased prescription charges $3 increased by 67% to $5

    “expected to raise an additional $40 million per year”

    Stated at the time by Tony Ryall

    • DSpare 1.1

      Also the systematic underfunding of the health system by billions of dollars can be seen as a tax paid in human misery. Similarly with the asset sales of state housing at a time of housing crisis. But these taxes don’t appear as accounting items on spreadsheets, so it is very easy to pretend that they don’t exist.

      forecast core crown health expenditure in 2017/18will be $17.096b. The cumulative difference between core crown health expenditure and required core crown health expenditure to maintain 2009/10 levels (once growth due to inflation and demographic changes are taken into account) will have increased to $2.342b…

      [Excluding] $279m of funding for “Equitable Pay for Care and Support Workers”…from the 2017/18 figures would [mean] a cumulative difference with required expenditure since 2009/10 of $2.621b.

      https://d3n8a8pro7vhmx.cloudfront.net/nzlabour/pages/8181/attachments/original/1496806582/2017_Estimated_Core_Crown_Health_Expenditure__May_2017.pdf?1496806582

    • Tricledrown 1.2

      Doctors Fees for the poorest.
      Fire service levy .

  2. Andrew 2

    “the bright line capital gains tax on flipping houses”

    Though that is not a “new” tax and it’s not a “capital gains tax” either. It is the arbitrary boundary between investment and trading.

    Buying houses with the intention of selling them for profit has always been taxed at the sellers marginal tax rate. It was brought in because the old intention test was too subjective. The increase in price is taken as income and taxed accordingly. It is clearly not a new tax, rather a strengthening of the rules around the old one.

  3. Dean Reynolods 4

    Tax is the price we all pay to live in a civilised society.It’s time the middle class, who demand all the benefits of a civilised society, stopped whining & obsessing about tax

  4. how many of those new taxes of National’s only apply to poor people (raising GST) or even prevent poor people getting the services that they need (raised prescription charges)?

    • Antoine 5.1

      GST doesn’t only apply to poor people? Nor does anything else on the list??

      A.

      • Tricledrown 5.1.1

        GST hits poor families as it is a flat tax creating more inequalities.
        Rich people have more opportunities to avoid GST.

        • Antoine 5.1.1.1

          It may be regressive, but it doesn’t ‘only apply to poor people’.

          Contrariwise, some on the list only apply to rich people (e.g. ‘the bright line capital gains tax on flipping houses’)

      • Alan 5.1.2

        GST has a much bigger effect on poor people as it is a bigger chunk of their income. An extra 2.5% out of an already stretched budget can be enough to break it!

  5. Stuart Munro 6

    The Gnats want to create a narrative around tax to drown out housing, poverty, migration, corruption and their innumerable other manifest failures. Don’t humour their deceit.

  6. mosa 7

    What about the $25 charge levied if you need a physiotherapist that is ACC related.

  7. lloyd 8

    The debate needs to be about regressive versus progressive taxes.
    GST is regressive because it takes a higher portion of a poorer person’s income than a richer person’s income.. You don’t pay GST on your overseas spending, nor on money you deposit in your bank account.
    Progressive taxes are taxes that take more from the rich than the poor. If National want to reduce the number of children in poverty while balancing the books, they will have to tax the rich harder. Capital gains taxes are generally more progressive in nature.
    The rich need to understand that sharing their money through society will ultimately give them a better lifestyle. An equitable society is much safer than an unequal society. The life expectancy of the rich should be longer better in an equitable society.

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  • Climate Change: Australia in denial
    Australia is burning down again, and meanwhile its natural disaster minister is denying climate change:Australia’s minister responsible for drought and natural disasters, David Littleproud, has said that he doesn’t “know if climate change is manmade”. Clarifying earlier comments that the question is “irrelevant” when considering the Coalition government’s response to ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Philippines activist speaking on the Duterte tyranny
    Auckland Philippines Solidarity is excited to host Professor Judy Taguiwalo for a speaking tour of NZ in September. She is a well-known activist in the Philippines and was a political prisoner under the Marcos dictatorship. Professor Taguiwalo briefly served as a Cabinet member under President Duterte but was forced from ...
    RedlineBy Daphna
    2 weeks ago
  • Disgust
    I have no special insights to offer on the Labour sexual assault coverup. All I have is disgust. Disgust that an organisation could fail its people so badly. Disgust that they punished the victims rather than the perpetrator. Disgust that its party hacks are apparently blaming the victims for demanding ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Speak Up for Women calls out Greens’ censorship
    This open letter to the Green Party was penned after an opinion piece by Jill Abigail, a feminist and founding member of the party, was censored by the Greens’ leadership. (Redline has reprinted her article here).The intolerance of the Green Party leaders and their acceptance of the misogyny of gender ...
    RedlineBy Daphna
    2 weeks ago
  • Member’s Day: End of Life Choice, part 3
    Today is a Member's day, and David Seymour's End of Life Choice Bill continues its slow crawl through its committee stage. They're spending the whole day on it today, though the first hour is likely to be spent on voting left over from last time. After that they'll move on ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Flight to Los Angeles turned back after passengers decide they don’t want to go anymore
    An ambitious plan to fly to Los Angeles petered out into a brief sight-seeing trip and a desire to return home and get some sleep before work tomorrow. Air New Zealand has confirmed a flight to Los Angeles last night was turned back about a quarter of the way into ...
    The CivilianBy admin
    2 weeks ago
  • Indigenous Futures: defuturing and futuring – an analytical framework for policy development?
    There appears to be consensus – by omission – that the concept of indigenous futures should be accepted at face value. So I scavenged the internet to see if I could locate an academic descriptor or a framework around how we think about it as a concept, and whether it ...
    EllipsisterBy Ellipsister
    2 weeks ago
  • Cadbury rumoured to be releasing the Pineapple Trump
    Here’s another novelty chocolate to shove in your gob, New Zealand Cadbury could be seeking to make itself great again with a rumoured new release: Pineapple Trumps, a spin on its classic chocolate-encased pineapple treat and do-it-yourself tooth remover. The global confectionery manufacturer and bumbling “before” character in an infomercial, ...
    The CivilianBy admin
    2 weeks ago
  • The coming resource war.
    During my time in the Pentagon I had the privilege of sitting down with military leaders and defence and security officials from a variety of Latin American nations. Sometimes I was present as a subordinate assistant to a senior US defence department official, sometimes as part of a delegation that ...
    KiwipoliticoBy Pablo
    2 weeks ago

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