The Public Service Association says Labour’s announcement of a new 39% tax rate on income over $180,000 is a step in the right direction that makes more funding possible for healthcare, education and income support for struggling New Zealanders.

The union notes, however, that the proposed tax increase will cover only those taxed under PAYE. This excludes many of the wealthiest New Zealanders, who often report personal incomes well below $180,000.

"We’re pleased to see Labour policies that can help shift New Zealand in a more equal direction, and we know PSA members will be happy to see more money available for essential public and community services," says PSA National Secretary Glenn Barclay.

In 1999 Finance Minister Michael Cullen introduced a 39% tax rate on income over $60,000 a year.

John Key’s National Government later introduced tax cuts for the wealthy in 2008 and 2010, reducing the top rate to 33% on income over $70,000 a year.

The PSA is disappointed to see no consideration of a tax focused on the wealth and assets of the super-rich.

"While we welcome this policy, it’s important to be realistic about it as well. Even factoring in inflation, this policy still represents only a partial rollback of National’s tax cuts for the rich," says Mr Barclay.

"We think politicians need to propose bolder policies to deal with rampant inequality and ensure New Zealand’s social safety net is fully funded and resourced. It’s a shame Labour isn’t yet prepared to reverse all the harmful tax policies of the past, but it’s still good to see proposals for positive change."

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