John Key, leader of New Zealand's main opposition National Party, has announced his party's electoral tax package, which details changes to personal income tax rates and thresholds, and the introduction of an 'Independent Earner Rebate.'
"Taxes affect decisions to work, save, spend, or invest, so tax can have a big impact on economic growth and future prosperity. Our tax policy is one of responsible reform. People want to know that valued public services will be protected and that effort will be rewarded. Business wants to know that competitiveness will be maintained and that consumer confidence will be supported," Key commented on Tuesday upon announcing the tax pledges. The centre-right National Party is seeking to break the ruling Labour Party's long run in power at the general election on November 8.
According to Key, the package requires no additional borrowing, or cuts to frontline services to fund it.
"There is, in fact, a small saving to be made, of NZD283 million (USD166mn), which will be used to begin reducing the operating deficit," he claimed.
The 2008 package sets out a three-year programme of personal tax cuts beginning April 1 next year. It delivers rate and threshold adjustments that will see those on the average wage better off by NZD47 each week. This includes the tax cut introduced by the current government on October 1.
Key says that his party will also introduce a weekly rebate for independent earners. These are personal income-tax payers with an annual income between NZD24,000 and NZD50,000 and who do not receive any form of financial entitlement from the government.
The rebate in 2009 will be NZD10 per week (NZD520 a year) and will increase to NZD15 per week (NZD780 a year) from 1 April 2010.
"We have ensured that our 2008 package is appropriate for the current conditions. We have also ensured that it does not restrict future movement on rates and thresholds," Key said.
"Our medium-term goal is to deliver a three-tier personal tax system with the highest rate of no more than 33% on income above NZD50,000. This is what we will work towards as future economic conditions allow," he explained.
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