Te Pāti Māori co-leaders Rawiri Waititi and Debbie Ngarewa-Packer announce the party's tax policy for the 2023 election. Photo: RNZ / Craig McCulloch
Te Pāti Maōri has announced its tax policies for the 2023 election, including new taxes on wealth, foreign companies, undeveloped land and vacant houses.
Co-leaders Rawiri Waititi and Debbie Ngarewa-Packer say their policies would redistribute wealth, changing a system that takes from the poor to give to the rich.
The policy includes adjusting income taxes, with a tax-free bracket for earnings under $30,000, and a new 48 percent tax on income over $300,000.
The party said this would mean a person earning $60,000 would keep an extra $6520 a year, and a person on $90,000 would keep an extra $6220 a year. They suggested take-home pay would increase for 98 percent of people.
They also promised a series of new taxes:
- Wealth tax: A 2% tax on net wealth over $2 million, rising to 4% on net wealth over $5m, and 8% on wealth over $10m
- Higher company tax: Reversing National's 2008 cut to the company tax rate, bringing it from 28% to 33%
- Foreign companies tax: Introducing an additional 2% tax on overseas-based companies' financial transfers
- Land banking tax: Introducing a 33% tax on land value increases, for land that remains undeveloped four years after purchase (with an exemption for Māori freehold land)
- Vacant house tax: A new 33% tax on the market value of properties that remain untenanted for six months or more
- Tax evasion crackdown: Investing $500m into the Serious Fraud Office and Inland Revenue to investigate the $7b lost to tax evasion every year
It came alongside the revival of the party's policy to remove all GST from all food.
The party estimated the changes overall would mean an increase of $16.4b to the government's coffers, although that assumed the wealth tax bringing in $23b and the $500m tax evasion package recouping the full $7b a year.
The estimates were based on analysis by party economic advisers using models from the Parliamentary Library and data from IRD, Stats NZ, the Tax Working Group, and Treasury Budget advice.
The party's policy document highlighted what it called a broken tax system that had led to the biggest wealth transfer in generations, "from hard working whānau to greedy property developers and landlords".
Read the full policy (PDF: 220KB)
Ngarewa-Packer blamed government inaction on housing, and the Covid-19 response.
"Now is the time for radical change. Our tamariki are literally hungry for it."
Waititi said the tax system was doing what it had been designed to: "Take money from the poor and give it to the rich".
"The richest 10 percent now own half the wealth in this country while the poorest half owns a mere 2 percent. On top of that, average people in Aotearoa are paying 20.2 percent in tax while the wealthy are only paying 9.4 percent.
"It's time we rectified this imbalance."
"We believe in an Aotearoa Hou where ordinary people don't have to subsidise the extravagant lifestyles of the rich. No one should go hungry while supermarkets are making record profits. No one should be homeless when there are enough vacant houses to house everybody. Whānau should not have to choose between paying their bills on time or taking their babies to the doctor."
The Green Party has also proposed a tax-free threshold on earnings under $10,000, increasing the rate for earnings over $180,000 to to 45 percent, and a 2.5 percent wealth tax on net assets over $2m.
But Labour - a much closer fit for both the Greens and Te Pāti Māori than the other major party, National - has ruled out capital gains or wealth taxes under Chris Hipkins' leadership.
'Labour Party policy by stealth'
Parties across the political spectrum have, however, cast doubt on how realistic that is, given Labour would likely need support from both left-leaning minor parties.
In a statement, National's campaign chair Chris Bishop said Te Pāti Māori's policy was a "radical high-tax agenda" that would "send a wrecking ball through New Zealand's economy".
"This is Labour Party policy by stealth," he said.
"Te Pāti Māori's comment that they want to go harder on wealth than on crime is a terrifying glimpse into what a re-elected Labour government would be like, where aspiration, hard work and success is cracked down on while criminals are given an easy ride."
ACT leader David Seymour said it would mean no-one doing business with New Zealand, and was "built over a $30 billion hole".
"If every dollar of return were to be taxed, there would be literally no reason to invest in New Zealand. Forget banks, forget infrastructure - New Zealand would be economically decolonised."
He said the biggest winners from the tax-free bracket would be accountants, "as people figure out how to shift their lifetime income into the tax-free bracket", and the foreign companies tax would increase prices on foreign-made goods and services.
"The economic illiteracy shown by Te Pāti Māori's tax policy shows how Labour could be even worse than they already are," he said.
