During a speech at Victoria University, Revenue Minister David Parker announced that he intended to propose a new bill dubbed the Tax Principles Act that would inform future tax policy advice. The bill would make mandatory regular reporting on the tax system, hopefully leading to greater transparency.
In announcing his plan, Parker called for fact-based discussion rather than a political debate on the issue and hoped that the legislation could be passed before the end of the parliamentary term. He reiterated that this was not a secret plan on the part of the government to introduce a capital gains tax or wealth tax.
Parker took issue with the gaps in data collection related to the tax rates of top earners. He said that New Zealand had no idea what tax rate was being paid by the very wealthy. This was despite knowing the rates paid by wage and salary earners and small business owners. He said the country had poor data on the distribution of wealth and capital incomes.
When queried about why there was a lack of data on the top tax rates, Parker stated that he believed there were some powerful interests behind the obscurity. He said that as more of the world’s wealth became concentrated in just a few hands, there was a pressing need to find out what tax rates were being paid.
Parker added that current survey data had ignored the wealthiest and that the NBR Rich List was a better indicator of wealth. He noted the absurdity of the survey measures of wealth that found the highest level of wealth in the country being $20 million in a society of billionaires.
The Green Party’s spokesperson, Julie Ann Genter, is urging the government to do more, noting that Inland Revenue (IRD) and Treasury research indicate that the wealthiest Kiwis were paying just 12% of their income in taxes.
ACT leader David Seymour has however criticized Parker’s statements, alleging that they suggested Labour was making moves towards increasing taxes to keep up with what he termed their addiction to spending. He highlighted the fact that the minister was alleging an unfair tax system at a time when the government had collected $14 billion more in income tax revenue due to increased inflation. Seymour said there were better ways to resolve the issue and affirmed that ACT would lower income tax rates for those earning over $70,000 to 17.5% and remove the top tax rate of 39%.
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