Mike Yardley: Don't tax us for your low-quality spending

Author
Mike Yardley,
Publish Date
Tue, 7 Jul 2020, 3:56PM
(Photo / NZ Herald)

Mike Yardley: Don't tax us for your low-quality spending

Author
Mike Yardley,
Publish Date
Tue, 7 Jul 2020, 3:56PM

Try as I might, the Prime Minister won’t give an inch on her taxation intentions.

If you were listening yesterday, did you notice that Jacinda Ardern sounded somewhat wistful when reconfirming that a CGT remains a non-starter?

But that’s where the specificity fast-ended.

Would she rule out a land tax? A company tax increase? Or an increase to personal income tax? She dodged any lines of enquiry. Nothing ruled in. Nothing out.

So what are we meant to make of it? It’s a political pea-souper.

I can’t tell whether Labour is still testing the waters and taking the pulse. Are they genuinely diffident on what to do, or are they strategically concealing their grand plans on tax until deep August?

Make no mistake, this will be a key narrative in the campaign.

Meanwhile, a ray of hope has emerged for cash-strapped businesses. ACC levies for business and the self-employed are now frozen for the next two years.

ACC has also been holding off sending out their invoices. If you were expecting to receive your levy invoice, like me, this month, ACC has pressed pause on the dispatch until October, to give people more time and flexibility to make their payments.

And ACC will hold the line on its levy rates by changing the organisation’s funding target from 105 per cent solvency for the levied accounts, to 100 per cent solvency. This is welcome, responsive, pragmatic stuff.

I’m self-employed and I find ACC’s annual levy invoice levy demand a considerable cost burden. It’s far bigger than my quarterly rates demand. So the fact that the levy will stay capped for two years provides some relief. It’s not a game-changer, but it will help the cause.

May that provide the vector for Labour’s wider deliberations on tax. Don’t jack up taxes during an economic crisis. Don’t add to the burden. Give us a break.

What’s the better alternative? Blitz the low-quality spending and accelerate economic growth to generate the revenue to deal to the debt.

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