Jacinda Ardern’s ruling Labour Party said it would raise taxes for top income earners if it is returned to power in New Zealand’s elections next month, as the government looks to pay off debt accumulated due to its Covid-19 pandemic response.
Ardern’s Labour Party, comfortably ahead in the election contest according to opinion polls, said it plans a new higher tax rate of 39 per cent for people earning over NZ$180,000 (US$118,908), which would only affect 2 per cent of New Zealanders.
“Our plan strikes a balance as we recover from Covid-19,” Finance Minister Grant Robertson said in Wellington.
The new policy is forecast to generate annual revenue of NZ$550 million (US$365 million), he said.
It still puts New Zealand at the bottom third of income tax rates within OECD countries, and Robertson said the tax is lower than neighbouring Australia which has a tax rate of 47 per cent for income above A$180,000 (US$130,000), including a 2 per cent Medicare levy.
The highest tax rate in New Zealand is currently 33 per cent for income over NZ$70,000 (US$46,000).