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TOP eyes Parliament with $6.35B tax cut and tax on property

Thomas Coughlan,
Publish Date
Sun, 2 Oct 2022, 3:04pm
Raf Manji, leader of The Opportunities Party, TOP. Photo / Supplied
Raf Manji, leader of The Opportunities Party, TOP. Photo / Supplied

TOP eyes Parliament with $6.35B tax cut and tax on property

Thomas Coughlan,
Publish Date
Sun, 2 Oct 2022, 3:04pm

TOP is hoping a $6.35 billion tax cut package will help it win a place in Parliament at the next election - the third it will have contested since it was founded by Gareth Morgan in 2016.

New leader Raf Manji hopes that this, and a new strategy to run in the Christchurch electorate of Ilam, will give TOP a chance to enter Parliament in 2023.

Manji said TOP would create a tax-free income tax threshold, meaning every dollar of income earned up to $15,000 would not be taxed at all. A recent Treasury estimate reckons that would cost the Crown $5.2b.

This would be paid for by an annual tax on residential land values of 0.75 per cent, replacing the current bright-line test, which is a partial capital gains tax. The tax would exempt rural, conservation and Māori land and superannuitants could defer paying it in recognition of their small disposable incomes. TOP reckons the tax could collect $6.75b to $7.5b annually.

TOP also proposes slight adjustments to the rest of the income tax system, nudging up tax thresholds and creating a 20 and 35 per cent tax rate and keeping the 39 per cent top tax rate.

Overall, a Treasury calculator estimates ordinary income earners would be better off under the proposal, with even people earning more than $200,000 paying a lower marginal rate than now.

Manji said the package was designed to "rebalance the economy" and reverse unhealthy social and economic trends.

"Aspects of our society are rapidly becoming unrecognisable, and unacceptable, to most New Zealanders and will require a radically different political solution," Manji said.

"The evidence of the last two decades shows us that the formulaic policy responses from governments of the left and right – whether it be benefit reforms or tax cuts – have not worked."

"Without a fundamental rebalancing of the way revenue is gathered and income distributed in this country, the problems of unaffordable housing and poverty will not be solved," he said.

Manji also announced a proposal to cancel $2b in debt owed by beneficiaries to the Ministry of Social Development.

The party said it would be a "one-off" cancellation.

"People are caught in a vortex of unaffordable living and are unable to progress with this huge burden of debt around their necks. Meanwhile, the Government has overseen a huge upwards transfer of wealth due to their Covid-19 policies," Manji said.

The party also announced a $3b Community Housing Development Fund to help community housing providers build more housing. TOP reckons it would build 6000 to 10,000 new dwellings.

Manji is a former two-term Christchurch city councillor and rose to national prominence in his role supporting victims of the 2019 mosque attacks.

He previously ran as an independent in the electorate of Ilam in 2017, coming second to the electorate's long-serving National MP Gerry Brownlee.

After wrapping up at council, Manji moved to Wellington, where TOP is based, and where he launched his policies on Sunday.

But Manji confirmed on Sunday he would head back to Ilam for the 2023 election, a move revealed by the Herald. The electorate is seen as being an open contest in 2023.

Brownlee lost the seat to Labour's Sarah Pallett in 2020. Pallett may struggle to hold the seat in 2023 if the nationwide swing against Labour is mirrored in the electorate.

Manji said winning Ilam was achievable and it would help dispel fears that a vote for TOP would be "wasted" if the party failed to cross the 5 per cent threshold.

"If we win Ilam, every single vote will count, so that will be our focus and the team is ready to go," Manji said.

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