New Zealand’s wealthiest people can afford to pay more tax
04 Aug 2020
The Public Service Association supports calls by Tax Justice Aotearoa for a more progressive tax system, with increased taxes on the wealthiest New Zealanders used to fund services that benefit all New Zealanders.
Decades of systemic underfunding have undermined the capacity of New Zealand’s health and education systems to deliver for our communities, and left our infrastructure increasingly unable to perform.
Tax Justice Aotearoa is calling for a new tax rate of 50% on every dollar of personal income over $150,000 per year, an annual levy of 2% on net wealth over $2 million (once debts are subtracted), and a more transparent tax system that holds everyone accountable and challenges tax avoidance by the super-wealthy.
The PSA says its own election campaign for universal basic services strongly aligns with the efforts of other progressive organisations, and the union’s policy proposals would be supported by a fairer tax system.
"Not many people would call modern Australia some sort of radical far-left experiment, but the richest Australians pay significantly higher income tax than the richest New Zealanders. The one percent have avoided paying their fair share for too long," says PSA National Secretary Glenn Barclay.
"We believe all New Zealanders have a right to free education, free healthcare and free public transport, and if we increase taxes on the minority of people who can easily afford it, we can in turn increase support for the much larger group of New Zealanders who urgently need it."
Australians pay 45% tax on every dollar of personal income over $180,000 AUD (about $193,000 NZD).
New Zealanders pay 33% tax on every dollar of personal income over $70,000.
This means someone paid $700,000 a year pays the same income tax as someone earning ten times less, if they earn over $70,000.
The super-rich routinely find ways to avoid even the minimal tax obligations New Zealand expects of them.
"The richest one percent of New Zealanders own 20% of this country’s wealth, and they can obviously afford the best accountants in the business. They take advantage of loopholes to ensure their money is not classed as taxable income, but instead as other currently untaxed forms of wealth and capital," says Mr Barclay.
"This must change. Most ordinary working people don’t have a choice about paying our tax, it goes out of the pay check automatically. The super-rich should not get to play by a different set of rules to the rest of us."
A recent poll by Newshub and Reid Research asked voters whether the richest New Zealanders should be expected to pay a higher tax rate, and the most popular answer was ‘yes’.