The Alliance Party is calling for a major overhaul of New Zealand’s taxation system to assist low to middle income earners, and to pay for free access to high quality public goods including health and education. Continue reading
The Alliance Party has congratulated the Labour Party on adopting its capital gains tax policy.
Alliance Party co-leader Kay Murray says Labour should have introduced the capital gains tax during its last term in office.
This may have helped make housing more affordable during the so-called housing boom during the last Labour Government.
National’s budget announced today is pushing New Zealand further down the road of inequality and social breakdown, says the Alliance Party.
Alliance Party spokesperson Victor Billot says the budget achieved two key goals for National: redistributing wealth from the needy to the greedy, and starving social spending.
“For most people, the so-called tax cut will have vanished by the time they get to the end of the first aisle in the supermarket.”
He says that what is most disturbing is the budget gives someone like John Key hundreds of dollars a week extra but leaves the most vulnerable families in New Zealand with nothing.
“The priorities of this National Government are to shovel cash at people like the Prime Minister who will be laughing all the way to his mid winter break in his Hawaii condo.”
“Yet the thousands of struggling families working shift work, long hours, for low pay, get a few coins.”
He says the budget is literally taking food out of the mouths of children from poor families to pay for flash restaurant dinners for CEOs.
“The increase in GST is essentially immoral at a time of mass unemployment, and food and housing costs going through the roof.”
Mr Billot called on the Maori Party to step away from their coalition with National which was permitting this attack.
“If they don’t make a stand now, they will have allowed the most blatant attack on low income communities both Maori and Pakeha to proceed.”
The Alliance has a tax plan that is aimed at creating a balanced and equal society that had a long term future.
Income tax would be heavily reduced on lower incomes, and raised on high incomes, a progressive tax system that would relieve the worst pressures and poverty in New Zealand.
The Alliance would phase out GST and replace it with a Financial Transactions Tax, an increasingly popular alternative.
The Alliance would also introduce a capital gains tax, to tax speculation rather than productive work.
The Alliance Party has joined with Socialist Worker to launch a petition this Saturday 22 May campaigning to remove GST off food and introduce a Financial Transactions Tax.
The campaign will champion tax changes that will benefit grassroots New Zealanders.
The campaign will be built around a petition sponsored by both the Alliance Party and Socialist Worker, which requests parliament to:
1. Remove GST from food; and
2. Tax financial speculation.
“These two demands will address imbalances in the tax system, which sees grassroots people having to pay tax on one of life’s necessities, food, while financial speculation goes untaxed,” says campaign coordinator Vaughan Gunson.
“This imbalance will be made worse when the National government delivers the 2010 budget, where GST will almost certainly be increased to 15%,” says Gunson.
“Our campaign will be launched at street petition stalls around the country just two days after the budget announcement, we can expect a lot of support,” says Gunson. “The majority of New Zealanders believe taxing food is wrong.”
“Taxing financial speculation through the introduction of a small percentage Financial Transaction Tax (FTT) would easily fund the removal of GST on food,” says Gunson. “At the same time an FTT would help discourage financial speculation, which destabilises the economy and causes untold harm to ordinary people, as the global financial crisis has proven.”
For more information and comment contact,
The Alliance Party is supporting a new campaign to introduce a tax on banks and finance institutions that is creating waves in the UK.
The new campaign is called the “Robin Hood Tax” and proposes a financial transactions tax that is about “turning a crisis for bankers into an opportunity for the world.”
Alliance Party spokesperson Victor Billot says the Alliance is advocating a Financial Transactions Tax for New Zealand that is basically the same as the Robin Hood tax.
A Financial Transactions Tax would be charged on all withdrawals or purchases at a rate of 0.02 % or 2 cents per $100. This would have no impact on ordinary people but only on large financial transactions.
The Financial Transactions Tax or “Robin Hood tax” could contribute towards the phasing out of GST, a regressive tax that hits ordinary people hard.
Mr Billot says the Robin Hood tax is the way ahead, not John Key’s proposed increase in GST which is about “robbin’ the people.”
He says that it’s not surprising given John Key’s background in the corporate finance sector in the UK, which played a major role in the global economic crisis, that he prefers taxes to be paid by the majority while letting a small minority dodge their responsibilities.
Mr Billot says it is repulsive that John Key’s plan to cut the top rate of income tax could see the Prime Minister get potentially hundreds of dollars extra a week, directly subsidized by rises in GST which would hit families hard on basics like bread and fresh vegetables in supermarkets.
Alliance Party Economic Development Spokesperson Quentin Findlay says the Alliance would introduce more direct taxes to make the tax system fairer for the vast majority of New Zealanders.
Mr Findlay was responding to the statements of Prime Minister, John Key who had confirmed that the Government was looking at increasing the level of GST to 15 percent and lowering personal taxation on higher incomes.
“GST is an unfair and regressive tax and increases in GST will hurt lower income workers and beneficiaries regardless of the Government’s statements that they would be compensated.”
Mr Findlay says that people were being misled into believing that by lowering direct taxes and increasing indirect taxes (like GST) that they would be better off.
“People are being told to focus on their PAYE tax and are ignoring the increasing percentage of money that they are paying in indirect taxation like GST. The result is that lower and middle income earners are paying far more in tax and are carrying a far heavier tax burden than they would under a progressive tax system advocated by the Alliance.”
Mr Findlay said that the Alliance believed in a ‘fair’ tax system and that could only be achieved if people paid taxes in proportion to what they earn.
“The first step is to increase the number of taxation bands at the upper level and create a progressive tax system. The second step is to reduce and eventually eliminate taxes like GST which penalise lower and middle income people.”
Mr Findlay said that the Alliance endorsed concepts such as a land tax, a capital gains tax and a financial transaction tax, which could be levied across financial transactions. A Capital Gains tax in particular was common in other democracies, except here in New Zealand.
“The very fact that other Governments such as the UK’s Gordon Brown are considering various types of transaction taxes and has given his support to the Tobin Tax concept is a positive step.”
The Government’s proposals and those of the Taxation Working Group are designed to ensure that speculators and New Zealand’s wealthy do not pay their way and have others pay it for them, Mr Findlay said.
The Alliance believes in a fair tax system and that means making those people pay their way through direct taxes.
For further information contact Alliance Party Economic Development Spokesperson Quentin Findlay on 021 326 443
The proposed rise in GST makes the Prime Minister John Key “Robin Hood in reverse” says the Alliance Party, which probably means he is playing the role of the Sheriff of Nottingham – robbing from the poor to help the rich.
Alliance Party spokesperson Victor Billot says an increase on GST to 15% to offset tax cuts for the wealthy is taking money from the pockets of struggling families on the breadline.
The rise in GST will subsidize unaffordable income tax cuts to people such as John Key, and indeed all MPs, whose incomes are far above the average.
Mr Billot says the idea that GST increases are somehow going to encourage savings amongst working people is bamboozling.
“He obviously doesn’t understand the difference between a family struggling to ‘consume’ food, rent and power bills, and a family who are ‘consuming’ unnecessary top end luxuries.”
Mr Billot says amongst the “anti tax” rhetoric there seems to be a lack of appreciation that without taxation, New Zealand and indeed civilization itself, would collapse.
“The great gains in public health, education, welfare, infrastructure and services of the past century have all been funded through taxation, and are now at threat by irresponsible Government’s beholden to powerful private interests.”
The lack of any serious moves on a capital gains tax was also a major failure.
Mr Billot says that major business figures have recently called for capital gains tax and even currency movement taxes, so these policies were quite mainstream.
“However, as National seems to represent the unproductive speculation sector that is whom their policies are helping.”
“What has happened to the affordability of housing under National and Labour in the last few years is a national disgrace, the full effects of which are only beginning to be seen.”
The Alliance proposes a major change in New Zealand’s tax system, phasing out GST and reducing income tax on lower income earners through a stepped progressive tax system.
Progressive income tax would mean higher taxes paid by those who can afford it (such as John Key), a capital gains tax on investment property (not family homes) and also a financial transactions tax on movement of money that would only affect larger transactions.
“A tax system for New Zealand’s future“, the report from the Government’s Tax Working Group, is predictable and flawed in its negative, anti-social focus.
Alliance Party co-leader Kay Murray says that a lot of effort seems to be going into promoting ways of making life more comfortable for well off people who don’t want to contribute their share of taxes to keep New Zealand running.
She says it appears the Tax Working Group, comprised of high income males, is recommending a tax system that benefits high income males.
“There seems to be little recognition of the positive role taxation plays in creating a progressive society where all people can reach their potential and the worst excesses of poverty and insecurity have been ended.”
Ms Murray says the idea that reducing taxes on the already wealthy will make New Zealand a better place to live is a discredited and anti-social idea.
“With all the noise about New Zealand catching up with Australia, then perhaps we should follow the Australian example, where the marginal income tax rate on earnings over $180,000 is 45 cents in the dollar.”
“Tax is required for a civilized society, ensuring public health care and education, and ensuring unemployment, sickness and old age are not the personal catastrophes they were in the bad old days the National Party wants to return to.”
Ms Murray says low income and middle income earners certainly stand to lose from such measures as increasing GST and lowering the top tax bracket.
She says the Tax Working Group should not be setting out to cave in to individuals whose goal in life was getting a free ride at everyone else’s expense, but to close loopholes and ensure that the tax base could support a secure and fair society.
Ms Murray says that the Alliance supports a progressive tax system that would reduce the tax burden on low to middle income earners, phase out GST and introduce a capital gains tax on investment property and a financial transactions tax focussed on large movements of money.
In addition, the Alliance had a fully costed budget for its policies including tax tables, unlike many other parties.