Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill - First Reading

DAVID SEYMOUR (Leader—ACT): I rise on behalf of the ACT Party in support of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill. This is a bill that takes in a number of very interesting matters of taxation policy and when I think about them—

Grant Robertson: Tell us about them.

Netflix tax should be offset with tax cuts

The Government should offset any revenue produced by its ‘Netflix tax’ with cuts to company or personal tax rates, says ACT Leader David Seymour.

“If this tax is really about levelling the playing field for local businesses, and not just another revenue grab, then National should have no problems offsetting the cost of this tax through tax cuts elsewhere,” said Mr Seymour.

Surplus shows no excuse for stealth tax hikes

The government’s return to surplus means it can no longer justify relying on bracket creep to inflate revenue, says ACT Leader David Seymour.

“Despite the Government’s improving financial status, household tax bills continue to rise as inflation pushes income into higher tax brackets,” said Mr Seymour.

Ditch provisional tax

"Labour are correct to pick up on the ideas in the IRD green paper the government released in March, and call for archaic provisional tax regulations on small businesses to be ditched," says ACT Leader David Seymour.

"Small business people have long complained that paying tax based on the previous year's earnings, rather than this year's can create a cashflow nightmare.

"Provisional tax is out of date and unnecessary in the age of digital financial transfers.  The IRD needs to recognise its impact on the cashflows of small businesses.

Budget could have cut company tax

The Budget should have provided a vision of progressively lower taxes for business, says ACT Leader David Seymour.

“The best thing the government can do to create job opportunities is forecast a welcoming environment for business and investment.

“New Zealand has one of the highest company tax rates in the OECD, even compared to famously egalitarian nations like Denmark and Sweden. We need to step up our game if we are to attract job-creating business and investment.

Tax burden continues to rise

“The Government missed a golden opportunity to end stealth tax increases by indexing tax brackets,” says ACT Leader David Seymour.

“The average household is $1036 worse off since the tax changes of October 2010 – a figure that’s increasing each year.

“This Budget was the perfect moment to index tax brackets. With inflation bordering on zero, the effect on government fiscal plans would be relatively small.

Scrap provisional tax? Yep

The provisional tax system should be scrapped, says ACT Leader David Seymour.

“Having to estimate volatile incomes is unfair on taxpayers, especially given the penalties that occur if you get it wrong.

“I am pleased to see the government recognise that the use of technology allows provisional tax to be managed much more like PAYE – calculated as you earn income.

ACT’s plan to boost wages

ACT Leader David Seymour is proposing a programme of one per cent per year reductions in the company tax rate.

Company tax would drop by a percentage point each year for eight years, to a target of 20%.

“In Budget 2015, the Government should be signalling continuous improvement in our business environment, and this proposal does that,” said Mr Seymour.

ACT’s proposal would reduce revenue by around $170-180 million each year, which could be funded by a share of existing planned net expenditure growth and the phase-out of existing corporate welfare.

National looks after everyone but taxpayers

“National is parading its indexation of welfare payments while refusing to do the same with tax brackets,” says ACT Leader David Seymour.

“Benefits were adjusted for inflation today. What about the workers? Tax brackets should be adjusted too.

“This fiscal year, a person on the average income will pay another $378 in tax as inflation pushes them into higher brackets, even if they have no increase in real spending power. They have already paid an extra $649 since 2010.