A Fair Tax System

Kiwis can’t live a dignified, productive life without financial security.

We’re all working hard, but too many of us are struggling to afford the basics necessary for a good life. Things like groceries, power, rent or mortgage and even some savings for emergencies shouldn’t feel out-of-reach for so many.

Instead, let’s build a fair economy. Where every Kiwi has the financial security to afford the essentials, work is rewarded and those Kiwis doing it toughest are fairly supported.

Phase 1 of our fair tax policy has four parts:

1: Save

A tax-free threshold of $15,000.

2: Shift

Five new brackets will replace the current tax thresholds.

3: Switch

A land value tax at 0.75% of the value of urban residential land, paid annually.

4: Support

Supporting Kiwis doing it toughest.

This will result in $5.8 billion of income tax cuts

Taken together, the tax-free threshold and new income tax rates will deliver higher incomes directly to Kiwis across all income levels:

• At $30,000, you’ll have an extra $1270 a year
• At $50,000, you’ll have an extra $1020 a year
• At $70,000, you’ll have an extra $3020 a year
• At $90,000, you’ll have an extra $4120 a year
• At $110,000, you’ll have an extra $3720 a year

The new income tax rates on income over $180,000 will contribute to the funding for our Teal Card policy.

In paying for this tax cut, we have an opportunity to confront the biggest handbrake on productivity and economic fairness in New Zealand – our dysfunctional housing market.

Learn more about each step:

1. Save

A tax-free threshold of $15,000. This raises incomes for everyone and makes a real, immediate difference for the 1.7 million Kiwis on low-medium incomes. Australia does this already, and we should too.

2. Shift

Five new brackets will replace the current tax thresholds.

3. Switch

We will use bold tax reform to re-orient our economy towards productive work and away from unproductive land ownership with:

A land value tax at 0.75% of the value of urban residential land, paid annually.

• Commercial, rural, conservation and Māori land would be excluded.
• Superannuants could opt to defer payment until there is a change in ownership of the property.
• The tax switch is estimated to raise approximately $7 billion p.a. - making our three-part plan fiscally neutral.

We recognise that a Land Value Tax is a big policy change for a culture and economy based on home ownership. But it’s the right thing to do. Our dysfunctional housing market is slowly separating our country into have & have not’s and holding back our economic potential. We owe it to the generations of Kiwis who come after us, to change it now.

4. Support

Alongside our save, shift and switch plan for a fair tax system, we will also introduce a series of targeted welfare reforms to ensure those Kiwis doing it toughest are supported fairly, including:

• Removing unfair and unreasonable sanctions on benefits, such as your relationship status determining benefit allowances.
• Increasing income support for disabled people by $400 million.
• Improving accessibility to support for disabled people through more streamlined processes.
• Wiping all Ministry of Social Development debt ($2 billion) to immediately ease the financial burden on low-income Kiwis.
• Extending the In-Work Child Tax Credit to all children of low-income families ($500 million).

We believe that these changes can be achieved and in place by 2026, at which point we will focus on Phase 2, which takes us to our long-term goal of a Universal Basic Income (UBI).