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Hung Parliament Following New Zealand Election

by Mary Swire, Tax-News.com, Hong Kong

28 September 2017


The future of New Zealand's tax policy direction hangs in the balance after neither frontrunner won decisively in the September 23 election.

The third place New Zealand First Party has said that it won't yet make a decision on whether to form a coalition with National or Labour and the Greens until all votes are verified on October 7.

While 61 seats are needed for a parliamentary majority, the National Party is expected to scoop 58 seats to Labour's 45. New Zealand First is expected to secure nine seats and the Greens seven. Therefore, either could form a government with National but a tripartite deal would be needed for a Labour-led coalition.

This means that National or a Labour-Greens coalition may need to cede to the demands of New Zealand First. Its manifesto included a pledge to remove secondary tax for workers (levied on those with more than one job); tie PAYE income tax thresholds to inflation; and exempt basic food items from goods and services tax. The party has also said that, from April 1, 2019, it would reduce company tax rates over three years to 25 percent, allow immediate 100 percent deductions for spending on capital goods, improve research and development tax relief, and introduce a 20 percent tax on income from exports.

TAGS: tax | value added tax (VAT) | goods and services tax (GST) | tax thresholds | food | tax rates | New Zealand | inflation | services

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