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.”
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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