Bridges botches tax plan accouncement

Simon Bridges launched an economic plan today that was high on rhetoric but low on specifics. The lack of detail left a vacuum that has been quickly filled with a focus on a sloppy (at best) statement on average earnings tax rates.

In his speech:  National’s economic plan for 2020

We will announce our full tax plan that will see people on the average wage better off and keeping more of what they earn.

People on the average wage shouldn’t be paying almost 33 per cent in the dollar.

People on ‘the average wage’ have little or none of their earnings taxed at a rate of 33%. Many others have pointed out that average wage earners are taxed closer to 17% overall on earnings.

Alex Brae at The Spinoff:  Good news for Simon Bridges: his big tax idea is already happening

Bridges said during the announcement that in a future announcement he “will announce our full tax plan that will see people on the average wage better off and keeping more of what they earn.” So let that be announced.

And then he declared: “People on the average wage shouldn’t be paying almost 33 per cent in the dollar.”

So what is the average wage then? Stats NZ figures from last year put the median weekly income at $1016, which added up per annum comes to a shade under $53,000.

So what is the effective tax rate for someone on the median wage? Fortunately, IRD has a calculator which can tell you exactly this information. Here it is:

Calculated out, someone on the median wage ends up paying about 17% of their income in income tax.

There is another potential way of calculating it though, which could bring it closer to the mark. Stats NZ’s latest Quarterly Employment Survey shows an average income of $1,243 a week, or $64,650 a year. The difference is over ‘medians’ or ‘means’ – either the middle number selected in a set of numbers, or the sum total of a collection of numbers which is then divided by the number of numbers, which can be heavily skewed by upper outliers.

Such a figure would create a whole new share of tax being paid – you can see that here:


So in either case no earnings are taxed at 33%, let alone all of them.

This is either highly ignorant of Bridges, or the alternate assumption is that he has tried to deliberately mislead.

The National media release:  National’s economic plan for 2020 and beyond

National Leader Simon Bridges has today outlined National’s economic plan heading into election 2020.

“National understands the economy and how it impacts on New Zealanders day to day lives.”

Big whoops.

Either way it looks poor, and is an embarrassing way to try to present National as competent on economic matters.

Here are their bullet points.

Only National has a strong economic plan. This includes;

  • Keeping taxes low
  • Keeping debt low and being responsible managers of the economy
  • Growing incomes and lowering the cost of living
  • Investing more in core public services
  • Creating more jobs and opportunities for all New Zealanders.

The Measures we will use to hold ourselves accountable include;

  • Lifting New Zealand’s economic growth back to at least three per cent per annum
  • Lifting New Zealand’s GDP per capita growth to the top ten in the OECD
  • Reducing the after-tax income tax gap with Australia
  • Reducing the number of New Zealander’s who feel they have to leave for opportunities overseas
  • Reviving business confidence so that businesses feel like they can take more risks and create opportunities for you and your family.

“National will release a full package of policies leading up to the election which will address tax, regulation, infrastructure, small business and families.

A lot more care will need to be taken over the full package, but today’s announcement has set things off badly for Bridges.

Labour opposition leaders have been slammed in the past for fluffing economic policy announcements, by media and by National.

Bridges deserves similar scrutiny and criticism on this performance.

 

 

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8 Comments

  1. duperez

     /  17th February 2020

    ‘This is either highly ignorant of Bridges, or the alternate assumption is that he has tried to deliberately mislead’? No biggie. Did he say it? Then for some it will be true.

    If Ardern said it? Those same ones who will believe it since Bridges said it would’ve been on about lack of competence, out of her depth and so on.

    Reply
  2. Zedd

     /  17th February 2020

    looks like Bridges’ A is on the line.. he ranted constantly about ‘roads of NATIONAL significance’ & 10 northland Bridges.. BUT when this Govt. got in, they realised:

    1) they were ‘Ghost roads of political B-S’.. no actual funding in the budget !
    2) NO bridges in northland from Bridges

    I just wonder how long before he gets dumped.. best before 19/9 methinks 😀

    OD HS NM simon

    Reply
  3. Pot, kettle sort of stuff.

    Reply
  4. Duker

     /  17th February 2020

    Bridges is thinking of people on $450,000 per year who would be ‘close’ to the 33%

    Low taxes , increased services, more infrastructure and keeping debt low.,…..of course . It easy when you put it like that

    Reply
  1. Bridges botches tax plan accouncement — Your NZ – NZ Conservative Coalition

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