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Wednesday, April 1

National’s tax cuts from a bygone era

The Government’s tax changes – that take effect today– help those earning more than $100,000, increasing the poverty gap, Green Party Co-Leader Russel Norman said today.

"They are targeting the biggest tax cuts to those who need them the least - those who earn the equivalent of a cabinet minister’s salary – when it’s those at the bottom who most need the support," Dr Norman said.

The International Monetary Fund research is very clear that a stimulus package works much better if it targets tax cuts to those at lower income levels. High income earners tend to save the tax cuts while lower income earners spend them, Dr Norman said.

"Green Party policy is that the first $10,000 earned is tax free so everyone gets the same size tax cut.

"Tax cuts in general don’t stack up versus spending on public transport projects and green infrastructure investments."

Investing in Green New Deal infrastructure projects such as public transport would create jobs and put New Zealand in a far stronger position than tax cuts designed before the last election, before the global financial crisis, and which don't address the climate crisis.

"You get a much bigger bang for your buck if you spend government money on green infrastructure, rather than big tax cuts for those on more than $100,000, but the Government doesn’t want to for ideological reasons.

"The Government’s KiwiSaver changes are also counter-intuitive. We are a country with a massive savings problem. Why would you reduce the incentive to save?

"We need Green New Deal policies to give New Zealand the infrastructure we need, create jobs and leave us in a stronger position than before. We can have our cake and eat it too if we plan wisely with our country’s interests at heart."

Dr Norman advocates the Green investment strategy adopted by US President Barack Obama, rather than the dinosaur fossil-fuelled approach on which the Government is pinning New Zealand’s future.

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