National’s tax cut policy

Just when it looked like Labour were comfortably PR managing their way to a comfortable election victory, playing ultra-safe with a minimal policy approach, and National looked to be going through the motions heading for a big defeat, the campaign has been shaken up a bit with a promise of tax cuts for everyone.

National were obviously waiting for the PREFU release (Pre-election Economic and Fiscal Update – economy “better than predicted”) on Thursday, announcing their Economic & Fiscal Plan yesterday, with most attention given to short term tax cuts aimed at stimulating the economy.

This seemed to rattle Labour, with both Jacinda Ardern and Grant Robertson reacting.

Ardern said tax cuts were “irresponsible”:

“What they have announced today is unaffordable and is raiding from a fund that has to be available to make sure that we as a nation can keep responding to the challenges of Covid, not deliver unaffordable tax cuts.

This is a bit rich. Labour have already spent something like $50 billion propping up the economy, and have a $14b fund set aside to dish out as they see fit.

“Now is just not the time for tax cuts and I genuinely believe New Zealanders will look at the environment right now and agree with that.

“What we need now is really careful economic management, we need certainty and we need a plan and that’s what we’ll deliver.”

There’s nothing certain about our short and medium term economic future.

Minister of Finance Grant Robertson:

“It beggars belief that in the middle of a pandemic the National Party is planning to gut the money set aside to protect New Zealanders in case of another major outbreak of Covid-19,” he said in a statement after the announcement.

“We carefully put aside $14 billion to look after New Zealanders’ health and wellbeing and now National wants to put that at risk. This policy reeks of desperation as National races to borrow money to pay for a $4000 temporary tax cut for Judith Collins.”

The responses from Ardern and Robertson reek of rattledness.

National’s announcement.


National will cut taxes for middle New Zealand

National’s massive tax stimulus package will put more than $3000 extra into the pockets of hard-working Kiwis on middle incomes, National Party Leader Judith Collins says.

You can read a copy of National’s Economic & Fiscal Plan here.

Ms Collins has announced the next National Government will let Kiwis keep more of what they earn by lifting the bottom tax threshold from $14,000 to $20,000, the middle threshold from $48,000 to $64,000 and the top threshold from $70,000 to $90,000.

These changes will be in place from December 1, 2020 until March 31, 2022. The total cost of this over the 16-month period is estimated to be $4.7 billion.

“Today we are facing the biggest economic downturn the world has seen since in living memory. But with the right leadership and economic plan we can grow our economy and keep Kiwis in jobs,” Ms Collins says.

“To keep our economy ticking, New Zealanders need money to spend. National will deliver temporary tax relief that puts more than $3000 – or nearly $50 a week – into the back pockets of average earners over the next 16 months.

“This will give Kiwis the confidence to go out and spend, which will be crucial for our retail, tourism and hospitality businesses to survive this economic crisis.

“New Zealand is facing a much longer and more painful economic shock than earlier forecast. We need a serious plan for economic growth to get us back on track.”

National’s Finance spokesperson Paul Goldsmith pointed to higher taxes as Labour’s only plan to get New Zealand out of this economic hole.

“No country has ever taxed its way out of a recession – and this is a big one we’re in now.”

As well as tax relief for households, National will double the depreciation rate for businesses that invest in new Plant, Equipment and Machinery over the next twelve months. This will bring forward the amount a business can claim in depreciation for new investments, which will stimulate investment by increasing the return on capital.

Doubling the depreciation rate is expected to cost $430 million a year for five years, while increasing tax revenues in out years.

“Our stimulus package has been fully-funded and costed, and is included in our independently reviewed Economic and Fiscal Plan released today,” Mr Goldsmith says.

“National’s plan carefully balances the need to drive economic stimulus, increase investment in core public services and restore government debt back to prudent levels.

“Labour, on the other hand, has announced it will increase taxes during a recession. The contrasting approaches to the economy at this election could not be clearer.

“Judith Collins and her strong National team will bring the leadership, experience and vision needed to get our country back on track.”

You can read a copy of National’s Economic & Fiscal Plan here.

You can view a copy of National’s Personal Tax Relief Policy here.

You can view a copy of National’s Double Depreciation Rate Policy here.


See RNZ: National promises $4.7bn in tax cuts in economic and tax policy

Obviously this policy would benefit me, by a few thousand dollars. I’m not sure it’s the best approach over the next year or two, but at least it’s reasonably even, it means all tax payers would pay less tax for 16 months (that makes for a messy part taxyear), and every one of us could decide what to do with the extra take home pay.

It does seems a better approach to Labour ‘picking winners’ and ‘corporate welfare’ of dishing out millions of dollars to selected businesses, which puts competing businesses at a disadvantage. I guess they plan to continue to do that with their $14 fund they don’t want given to workers.

Funny to see Labour favouring some corporates while National taking less from workers, that shows how muddled politics is these days.

This announcement is unlikely to swing the election (I’m still very undecided), but going by Labour’s responses it has them a bit worried. At least it livens up a lacklustre campaign.

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41 Comments

  1. Blazer

     /  19th September 2020

    Standard Nats policy….tax cuts for the better off….and peanuts for the great unwashed.

    Reply
    • John J Harrison

       /  19th September 2020

      Blazer, and quiet right too.
      If one risks their family home to establish a business and create jobs as opposed to someone bludging off the state then he who earns the most and pays more tax should quiet rightly receive the most benefit.

      Reply
      • Blazer

         /  19th September 2020

        Why do things the hard way!
        ‘‘Property records show Ndarowa sold his Pokeno home in April for $1.091m (he had bought it for $335,000 in November 2015).-stuff

        $750,000 profit less landscaping…apx-$3000 a week profit over 5 years.

        That and immigration is what NZ GDP has relied on for…tooo long.

        Reply
        • John J Harrison

           /  19th September 2020

          Blazer, well that certainly would not be allowed in North Korea – the workers paradise, would it ?

          Reply
          • Fight4nz

             /  19th September 2020

            I didn’t know that. You’re saying even the North Koreans have worked out property inflation is not a basis for running an economy?

            Reply
            • John J Harrison

               /  19th September 2020

              Fight4nz, when we are “ blessed “ with Labour who had the economy on the skids pre – Covid then wise investors turn to bricks and mortar to protect their families and hard won assets.
              In a democracy you can trade when you have a willing seller and a willing buyer.
              Strange to some, I know.

            • Duker

               /  19th September 2020

              https://www.stuff.co.nz/national/politics/300074099/judith-collins-says-no-tax-cuts-from-national-this-
              So a flip flop from Collins NOW.

              Whats the chance if they win the election there will be another flip flop and the tax cuts cancelled
              thats what happened after the 2008 election National indroduced tax cuts early on and then cancelled them 6 months later at Budget 2009

              She cant be trusted

          • Blazer

             /  19th September 2020

            August 2020-Stuff….

            ‘It has been an eventful week for Goldsmith. He’s faced down attacks from the Government over his goal of reducing New Zealand’s core Crown debt-to-GDP ratio to 30 per cent in a decade – attacks Goldsmith labelled as “scaremongering”. Then, on Wednesday morning, Goldsmiths’ leader, Judith Collins ruled-out tax cuts for National’s election platform’

            ‘RULED OUT TAX CUTS’!—-typical=its our go to vote grabber…whatever the…weather.

            Reply
            • John J Harrison

               /  19th September 2020

              Blazer, National were not privy to the government’s books in August, they had to rely on Robertson ‘s positive and misleading statements.
              However, when the PERFU and GDP numbers were eventually disclosed decisions had to be made based on the FACTS and not the optimistic rhetoric.
              Thus the need for a fiscal stimulus based on the fact that individuals know best when it comes to their own money – not bureaucrats who have proved to be abysmal failures.
              When the facts change so does one’s position.

            • Fight4nz

               /  19th September 2020

              You do know that the PREFU showed GDP better than forecast?
              So the new FACTS were hey we can have a splurge?

            • Tax cuts were reinstated as a policy because we are now in a recession which we were not in when National was in charge.

              Do try to keep up.

            • Fight4nz

               /  19th September 2020

              So if this was a business in trouble, good management would reduce revenue.

            • Duker

               /  19th September 2020

              KC Collins aid in Aug – no tax cuts this election. Even ruling out Bridges bracket creep tax cut
              What is your nonsense about no recession, every one knew there was one happening based on preliminary figures.

              And of course Nats didnt produce a whole tax cut policy in ONE DAY from Thur figures to Fri announcement

              16 months time limit is just fakery. Whats the chance of the Nats then putting taxes up again ?
              Its not going to happen as after an election they will cancel the proposed ‘temporary’ tax cuts

            • Blazer

               /  19th September 2020

              National managed to run year on year DEFICITS….do keep up.

              One trick ponies…now desperate.

          • Blazer

             /  19th September 2020

            Is working hard and saving money a good idea…John?

            Reply
          • Well, I’d say so. You are welcome to differ.

            Pokeno has reinvented itself; there was a very good chance that it would fade away and become a ghost town with the new road. So good luck to anyone who hung in there, like this man.

            Reply
        • The tax cuts are for everyone, but if you earn more and pay more tax, you will have more given back.

          Reply
          • Duker

             /  19th September 2020

            Tax cuts for every one ?

            The highly paid get three bites , the raising of the first level , the raising of the second level and the raising of the 3rd level as thats how taxes are paid

            Reply
            • The advantage of tax cuts over wage rises is that people have more money, employers don’t have to pay out more (and the risk of sinking lid policy is avoided) and, human nature being what it is, people are likely to spend more.

            • Duker

               /  19th September 2020

              Middle and higher incomes dont spend it . The banks have already seen account balances rise.
              Reserve Bank statistics show New Zealanders increased the amount in their bank accounts by another $1.2 billion last month and the annual rate of saving is now at its highest level in nearly three years; business lending, however, has dried up
              https://www.interest.co.nz/banking/106819/reserve-bank-statistics-show-new-zealanders-increased-amount-their-bank-accounts
              Another $1.2 bill for August alone

              They say its only temporary , just like the promise which will disappear after the election just like John Key did after 2008.

  2. Most people realise we do need to pay some tax to keep the country running but realise governments have a poor record on picking winners and there is a hell of a lot of government waste.
    I give you eleven point seven million dollars to a Green School in Taranaki given because the Government feel bad about stuffing the oil business!
    We reckon some of that tax is better spent by us!

    Reply
    • Fight4nz

       /  19th September 2020

      What do you base this claim the there is a hell of a lot of waste by government on? 1 example of a school? And an exceedingly poor example at that. None of the reaction was keep that money, it was don’t spend on a private school, spend on the woefully under resources public schools. The schools sacrificed for hollow claims of a wonderful surplus and, you guessed it, election time tax cut bribes.
      It’s astounding how many will ignore or forget their own mantra “ there’s no such thing as a free lunch “

      Reply
    • Blazer

       /  19th September 2020

      I take your 11.7million and raise you…Saudi sheep farm for Saudi billionaire compliments of Murray and NZ taxpayers.

      Govt stuffing the oil biz is utter b/s.

      Reply
    • Fight4nz

       /  19th September 2020

      One thing I would give credit to Bill English for is , when he did at least 1 tax cut, he went for fiscally neutral. This is just lolly scramble stuff which will be either frittered away or go into making housing even more unaffordable.

      Reply
  3. John J Harrison

     /  19th September 2020

    Well, Ardern would say that wouldn’t she ?
    Reviewed by NZIER this policy is an excellent example on how to give our shattered economy the boost it needs.
    Unsurprisingly it is also a policy our Aussie cousins are following.
    It’s totally lame of Ardern to state that this fiscal stimulus is “ irresponsible “ when everything she has touched or funded has turned to custard costing us 10’s $ Billions.
    The circa 200 “ working groups “ set up to do the job her party was responsible for in 9 years of opposition and made up of Labour “ luvvies “ is the epitome of how useless this hapless government is.
    The money wasted on the PGF , Kiwibuild, the 1 Billion tree fiasco, sanction less beneficiary payments etc.
    The cumulative total is eye watering.
    The tax cuts are a mere bagatelle compared to Ardern’s fiscal irresponsibility but at least will keep people in jobs and give our economy the much needed boost it so desperately needs.

    Reply
    • Fight4nz

       /  19th September 2020

      Do you have any figures to show this waste of 10’s of billions you claim? Say PGF projects that are costing what and failed how? Isn’t Kiwibuild a failure because few houses got built, will be sold by now, so cost is? How is the 1billion trees a fiasco? Sanctionless benefits?
      Incidentally how much has retaining payments into the Cullen fund made us? I note we drop out of that again to fund tax cuts. That’s not what I call sound economic management.

      Reply
    • Duker

       /  19th September 2020

      Same number of working groups was set up by National in the 9 months after the 2008 election ( based on the Beehive announcements)..the name working group was ‘invented’ by National at that time.
      Ive previously listed dozens of them here

      Reply
  4. NOEL

     /  19th September 2020

    Election promises. Yup all parties offer the world at elections.

    Reply
  5. Blazer

     /  19th September 2020

    Halting payments to the Cullen Fund is Nats 101 policy…..bribe today…let someone else worry about the…future.

    Reply
    • Alan Wilkinson

       /  19th September 2020

      National: it’s your money, work out your own future.
      Labour: we’ll take your money and give it to our friends.

      Reply
      • Fight4nz

         /  19th September 2020

        National: (in the style of Suzie Cato) hey everybody it’s Santa National here. You like to spend money don’t you? And I bet you’re very clever at it aren’t you!
        But Miss why are your friends getting more than us? And since you stopped all those services now we have to buy them from your friends too. So they get ours anyway.
        Yes. Well Johnny those people are special. They are what we like to call rich. And they give us lots of presents especially at election time. It’s all so very much fun. And they don’t want to be having less money and end up needing services like you Johnny, or sleeping in their car. So it’s very important that we all listen carefully when they say they will avoid tax legally and need certainty about their future even though none of actually knows the future.
        So let’s all enjoy our tax cuts and paying higher school fees and medical bills and rent and everything will be marvellous.

        Labour: the most cost effective way to buy is in bulk with bargaining power. Especially essential services. Economics 101. So let’s pool a fair portion of everyone’s income to make sure there is a basic level of first world quality of life available to everyone. And those who actually work hard can reap the benefits of that, not only the ones born into a position of privilege.

        Reply
        • Alan Wilkinson

           /  19th September 2020

          Funny how food is never an essential service?

          Funny how those who reap the benefits are mostly overpaid bureaucrats and their crony capitalist hangers on.

          Reply
          • Duker

             /  19th September 2020

            “Funny how food is never an essential service?”

            False . Supermarkets were practically the only large shops open during level , and the reason was ..

            Reply
            • Alan Wilkinson

               /  19th September 2020

              Well, who would have thought? So why isn’t the Govt buying it in bulk and distributing it to the grateful masses?

        • Kimbo

           /  19th September 2020

          Labour: the most cost effective way to buy is in bulk and with bargaining power. Especially essential services…

          Yes, I recall Annette King saying in the years leading up to the 2017 election that those were the very reasons why Labour’s Kiwibuild policy would be a stunning success and an economical way to provide the “essential service” of affordable housing.

          And yet despite 2019 being designated the “year of delivery” Kiwibuild seems to have been despatched down the memory wormhole by Labour this year. How strange… 😳😂

          Reply
          • A Waikato prefab house company is flourishing and has expanded; it’s had to buy a large piece of land next to the original factory. Its houses are well-designed, low maintenance, very affordable and don’t all look like clones. Phil Twyford expressed interest but then forgot the longish conversation…but the company has had the last laugh.

            Reply
          • Duker

             /  19th September 2020

            Theres not the demand from home buyers for Kiwibuild as was thought.
            Thats why the bottom 5% of the price range had been abandoned by the normal home builders.

            Once the ‘twenty somethings’ were seen as the ‘ first cheap home’ buyer demographic but it seems in the bigger cities they put renting and lifestyle first including travel. Of course all people in lower incomes have no hope of buying anything even in the bottom 5% of the price.
            Perhaps for them there could be a rent to own scheme for those houses … Kiwirent

            Reply
          • Fight4nz

             /  19th September 2020

            Kiwibuild was piss poor.
            And you are right not maintaining much memory space. Crowded out by historical fiasco, Southern Response. Somehow real costs manoeuvred out of year of “surplus”, expanded with court actions, and falling due now. 🤫

            Reply

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