National's Proposed Tax Cuts "Destructive" - Tax Justice Aotearoa

National’s proposed tax cuts announced at the weekend have been described as destructive by Tax Justice Aotearoa and not the way to address the real issues facing the country.

“At a time when we are dealing with the pandemic and its aftermath, when we are dealing with increasing inequality and the growing challenges climate change brings us, we should not be introducing tax cuts,” said Glenn Barclay, Chair of Tax Justice Aotearoa. “The main drivers of inflation are the supply chain issues being experienced by the country and it is a feature of most developed countries. Tax cuts will not be an effective response, they would be a destructive one.”

“The power of public expenditure has been clearly demonstrated during the pandemic so far,” said Glenn Barclay, “without it we would have suffered significant loss of life and businesses would have been far more badly affected than they were. Now the government will need to continue to assist communities and provide essential services to enable us to recover in a just and fair way.

Tax Justice is also highly critical of Chris Luxon’s proposal to do away with the ten-year extension to the ‘bright line test’, first introduced by National and then extended by Labour, and to end interest deductibility for landlords.

“We really need a comprehensive capital gains tax, but in lieu of that the bright line test is at least a small step to greater fairness in the housing market and in the tax system,” said Glenn Barclay. “The end to tax deductibility recognised that housing was not just a business like any other, but is a fundamental human right.” 

“Paying taxes is an extension of the collective commitments we have shown during the pandemic as part of the team of 5 million,” said Glenn Barclay. “We contribute our taxes to keep our public services going. Through our taxes we keep the wheels of our health system turning, we keep our infrastructure robust and safe, and maintain and build our education and social service systems. But our tax system is also a way to help drive greater equality. We need a fair tax system that is genuinely broadly based – that taxes wealth as well as income – and National’s proposals head in the wrong direction.”

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