National’s tax policy has been called "voodoo" by Labour's Grant Robertson, with James Shaw, David Seymour and Winston Peters also expressing their disappointment.
The new policy is centred around “reprioritisations” and “savings” and would see a 15% foreign buyer tax on houses worth over $2 million, ending the commercial building depreciation tax break, closing a tax loophole to make offshore online gambling services pay tax and implementing user-pays immigration levies - from which tourist visas would be exempt.
Reprioritisation included reductions in "back-office functions" in government departments and reducing spending on public service consultants.
National leader Christopher Luxon said a family with children, on an average household income of $120,000, would be up to $250 a fortnight better off under National’s tax relief plan.
The policy hasn’t gone down so well with New Zealand’s other major parties, who have all expressed their disappointment with what's on offer.
Finance Minister Grant Robertson called the policy "dodgy," saying cuts to public service "will make families worse off".
"Their tax and burn plan will also pour petrol on the housing market that Labour has worked hard to rein in,” he said.
“National’s cuts to the public services are more than double those the Government announced on Monday. National will be asking for 8% cuts in many agencies, and therefore, they will not be able to protect frontline services. Despite what they say, the fine print of their document says health and education will be cut to find savings."
He believes they are relying on foreign buyers, calling it "some voodoo costings".
"The plan relies on more and more foreign buyers coming into the New Zealand market every year, despite putting a tax on them. It also beggars belief that there are that number of homes available every year to be bought up by foreigners to fund National’s tax cuts.”
'Cynical ploy'
Green Party co-leader James Shaw said the policy was “a cynical ploy to do the absolute least for middle-income earners in order to get away with tax cuts for the wealthiest few.”
“National has shown yet again that they don’t care at all about those with the least. Under National’s plan, people on the lowest incomes would miss out while high-income property speculators can continue to line their pockets. There are not even crumbs in this policy for students and people on benefits.
“National’s plan includes enormous tax cuts for people who play the property market, which we know drives house prices higher and squeezes first home buyers.
They also blasted National’s plan to roll black National’s plan to toll back the bright line test from 10 years to two years, calling it a “handout for property speculators”.
“It is ripping money away from everyone else in order to support the wealthiest few, and will be the worst possible news for first home buyers who want to be able to buy a place to put down roots.”
He said the Greens policy of implementing a wealth tax was a “costed solution”.
ACT leader David Seymour, and potential coalition partner for National, doesn't believe the new policy changes anything.
“National’s tax policy confirms there won't be any real change without ACT. Their tax cuts promise about half as much as Labour’s Michael Cullen promised 15 years ago, this policy could easily have been announced by Labour,” he said.
“National criticises Labour for spending an extra billion dollars a week, but they are promising to spend an extra $980 million a week.”
He wants to see reductions in government spending. ACT also wants to change to a two-rate tax system where the top tax rates for companies, trusts and individuals are at 28%.
New Zealand First leader Winston Peters said National is basing the country’s economic future on immigration and house prices, saying the policy “is not a formula for economic recovery”.
“They are clearly relying on mass immigration and a mass foreign buy-up of Kiwi homes to fund its tax cuts - and their 'squeezed middle' will be squeezed further,” he said.
He said bringing down the brightline test will mean “the housing market will spiral out of control - with empty properties being flipped for massive profits.
Peters also believes the country’s infrastructure, housing, living costs and wages won’t be able to handle National’s immigration plans.
“Low wages and high costs means we will see a flight of mainly young Kiwis out of our country.”
“This is circa 2014 all over again - a speculative consumptive economy, not a sound wealth-based, export-growth, added value way forward.”
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