Taxation:
Taxation:
The New Zealand National Party will work to promote efficient government spending alongside lower tax rates in order to grow a more productive economy for New Zealanders. The National Party believes that while reasonable rates of taxation are necessary for good government to function, we should seek to reduce the negative impact they have on everyday New Zealanders. This means reducing the burden government has on the taxpayer by advocating for a lower rates of taxation, and respecting the taxpayer when assessing any proposed changes.
To this end, the National Party will continue our policy of tax cuts for lower and middle income earners. In previous governments, National presided over substantial tax cuts to all brackets and also worked to implement the tax-free income bracket. If re-elected, National will cut personal income taxes by $780,000,000 through an adjustment of our tax brackets. The threshold for the highest tax bracket, currently taxed at 30%, will be moved from $70,000 per year to $74,000 per year. The second highest tax bracket, taxed at 25%, will move from $48,000 to $54,000. This will put more money back into the pockets of hard-working families and will work to grow the economy.
National will also work to merge the ACC petrol levy with regular fuel excises in order to simplify New Zealand's taxation system. The ACC petrol levy is effectively taxation by stealth and is an unnecessary complication when the same funding could come from existing fuel excises. If re-elected, National would raise regular fuel excises by 6c per litre and abolish the ability for ACC to set petrol levies, creating a simpler tax system for New Zealand. In addition to this, National would introduce excises on newly-legalised drugs like cannabis or hallucinogenic substances. The sale of cannabis would be taxed at 25% and hallucinogenic substances would be taxed at 40%, which would raise more than $210m annually.
• Cut personal income taxes for middle earners by $780m.
• Merge the ACC petrol levy with regular fuel excises.
• Tax newly legalised drugs such as cannabis and hallucinogenic substances.
The National Party believes that regulation is necessary to alleviate market externalities, but we recognise that it is inherently bad for business and the economy. Therefore, a balance must be found that considers both the interests of consumers and that furthers economic development. The National Party will work to cut unnecessary regulation, but promote reform where the benefits to the consumer outweigh the cost to the economy. One instance of this is the low fixed charge for energy consumption. The low fixed charge is a daily fee between 30c and $2 to cover the fixed costs of energy consumption, with half going towards the lines company and half towards the retailer. However, the actual fixed costs are typically much higher and this means that energy companies increase the variable charges in order to cover costs. In turn, this affects lower income households which typically have larger families and use more electricity. While well intentioned, the low fixed charge disproportionately affects lower income households and if elected, National would abolish it. In addition to this, National would pass the Sale and Supply of Alcohol (Off-Licencing) Amendment Bill in order to fix issues around the sale of alcohol. This bill would allow for businesses located inside another business' premises to apply for a liquor licence, and would also fix an issue where rising tobacco excises have made certain businesses ineligible for their licence.
The National Party would also introduce new plans to privatise state-owned enterprises, following the success of the mixed-ownership model under the Key Government. That National government reduced the government stake in a number of state-owned energy companies to around 51% in order to raise revenue to reduce New Zealand's sovereign debt. Since then, studies have shown a proportional increase in the dividends received by the government, once again proving the benefits provided by the private sector in regards to efficiency and quality of service. If re-elected, National would reduce the number of government-owned shares in the Genesis, Mercury and Meridian Energy companies to exactly 51%. In turn, this would raise an estimated $7m. Additionally, National would complete the privatisation of Air New Zealand by selling the remaining government stake of 51.95% to Kiwi investors. The $1.3bn raised from the sale of Air New Zealand would go towards our planned investment in Kiwi infrastructure.
• Reduce the government’s share in partially-privatised energy companies to 51%.
• Sell Air New Zealand to Kiwi investors and use the proceeds to pay for infrastructure projects.
• Pass the Sale and Supply of Alcohol (Off-Licencing) Amendment Bill.
• Abolish the low fixed charge for energy consumption.
The New Zealand National Party believes that responsible finances are one of the most important obligations a government has to its citizens. With ballooning debt and an unchecked deficit, government is often incapable of achieving even its most basic commitments to its people, and this is worsened in times of economic instability. In the previous two terms of government, National has paid off our public debt by more than $8bn - reducing New Zealand's sovereign debt to $38bn. That's why the National Party is making a pledge to maintain our balanced budget should we receive a third term in government. We will continue to reduce New Zealand's public debt by contributing a substantial portion of our surplus for this expressed purpose.
• Maintain a balanced budget.
• Continue to reduce New Zealand's public debt.