“Today’s Half Year Economic and Fiscal Update will confirm that New Zealand remains the most heavily taxed economy in the Asia-Pacific region”, says ACT Leader David Seymour.
“Government takes 32 percent of everything New Zealanders earn, more than its counterparts in Japan, Australia, South Korea and Singapore. This is important because people, ideas, and capital are mobile. If we overtax them, they will go elsewhere, and New Zealand will be poorer as a result.
“Both major parties are responsible for this situation – New Zealand has been the most heavily taxed economy in the region under both National and Labour governments.
“Five percent of New Zealand taxpayers currently pay a third of all income tax. That is deeply unfair. It’s wrong that if a person doubles their income from $50,000 to $100,000 their tax bill triples. At 28 percent, our corporate tax rate is well above the OECD average.
“Our tax system sends the message that if someone upskills, works, saves, and invests to earn more, the government will take more of it off them. And if they drag their feet, they'll pay much less tax and be given money for free.
“We need a tax system that is fair, aspirational and competitive. ACT’s flat income tax rate, and company tax rate, of 17.5 per cent is affordable and achievable.
“Under our plan, someone earning twice as much pays twice as much tax. Someone earning half as much pays half as much tax. Taxpayers would pay no more and no less than their fair share.
“The message will be clear: New Zealanders must make a contribution on every dollar, but their money is primarily their own. Government will not take progressively more of their money as a punishment for success.
“A company tax rate of 17.5 per cent will make us one of the most competitive jurisdictions in the world for investment. Reducing company tax by $5 billion a year instead of handing our corporate welfare is one of the most powerful things we could do to boost investment, productivity, and, ultimately, wages.
“For too long, the tax system has been used for political vote buying and social engineering. This is one of the reasons that productivity growth is weak and living standards are lower than they should be.
“ACT's plan would shift New Zealand from being a country where people try to vote themselves rich, to one where working, saving and investing will make them rich.
“ACT's goal is to make New Zealand the most attractive place in the world to work, save and invest. We want economic growth and opportunity for all New Zealanders and having the best tax system is part of achieving that goal.”