As a country we’re deep in debt and our economy is struggling. We need to be able to change both of these things fast. But the Government’s prescription of selling our valuable assets to overseas investors is short-sighted and will leave us worse off in the long-term.
That’s why Labour has announced an alternative plan to secure a prosperous, long-term future for all New Zealanders – one that charts a course for a stronger, more resilient economy but which will allow us to keep our valuable assets for the benefit of future generations.
Labour recently announced its plan for a fairer tax system, in a bold set of policies designed to give the vast majority of New Zealander’s a tax cut, drive economic growth and pay off debt. There are four major announcements in the package.
Firstly, a comprehensive, not retrospective, capital gains tax (excluding the family home) will be introduced. This will mean that New Zealanders who derive income from capital gains will be treated the same as wage and salary earners. This will affect fewer than 10 per cent of New Zealanders in any one year.
Currently, if someone receives a $40,000 salary, they pay tax on every single dollar they earn. If, however, someone sells a rental property for $40,000 profit, they don’t pay a cent in tax. The same applies for investments. At the moment interest on money in the bank is taxed, whereas investment in property is not. That isn’t fair.
Secondly, Labour will establish a $5,000 tax free zone. That’s worth around $1000 a year for a two-income family, including superannuitants. We think it is only right that all hardworking New Zealanders, no matter how much they earn, receive a fair and equitable tax cut.
Thirdly, Labour will reintroduce a top tax rate at 39% for all those earning over $150,000 per year. This will affect around 2% of New Zealanders.
Finally, Labour will take all GST off fresh fruit and vegetables. Over the past year fruit and veges have increased by almost 16 per cent. National’s increase to GST in October last year only made it harder to make ends meet. Labour’s policy will take the pressure off family budgets and help Kiwis make healthy choices.
We have gone for a bold and fair set of tax policies as a real alternative to National’s short-term approach of selling off our assets. Our policy announcement will allow us to pay off government debt, keep our assets and grow the economy while giving hardworking Kiwis a break.
We know how important it is to get the economy moving again, to create jobs, and to give all New Zealanders hope for a brighter future. The tax policies we have announced in recent weeks are part of a much wider plan to get our country back on track.
We’re also going to be re-introducing incentives to encourage businesses to invest in research and development, and we’ve got more policies in key areas like health and education in the pipeline.
New Zealanders can trust Labour to deliver. During nine years in government Labour balanced the books. We paid back the massive debt previous governments had accumulated and generated surpluses that were invested in vital infrastructure such as roads, schools and hospitals.
We also set money aside to pay for the baby boomer’s retirement, delivered on our promises of interest free student loans, extra help for families, paid parental leave, and cheaper doctor’s visits.
The contrasting approaches between Labour and National couldn’t be starker. Labour has a bold plan for a more prosperous future. National is governing for the short-term. Kiwis deserve so much better, and under Labour, they’ll get it.