Median barrier
In her column (NZ Herald, May 16), Nicola Willis claimed New Zealand's "squeezed middle" needs income-tax relief. But what National called "middle" isn't actually the middle.
For income purposes, the middle (or median) is the point where half of the population earns below that point and the other half
earns above. It most certainly isn't the average income for a household, which is the figure National uses to boost what it claims people would get in the party's tax cuts.
What's the difference between these figures? In 2021, the average household income was $110,451, while the median was $21,324 lower at $89,127. Half of all Kiwi households earn nowhere near the average household income.
This makes a vast difference to what they would get out of National's tax policy. Assuming two income earners on equal incomes in our median household, the median individual income becomes $44,563, and this means more than half of all Kiwis will gain no more than $2.15 per week from National's tax-cuts. Not much relief there.
But it gets worse. National wants to get rid of the Winter Energy Payment, so low-income households would actually end up worse off than now.
Jonathan Godfrey, Mangere.
Related, perchance?
Last week, we were talking about how overcharged we are in New Zealand because essential industries like groceries and building materials are not required to be competitive.
This week, we're talking about the direct result of that - industrial action by healthcare professionals because they can't afford to live.
R Irwin, Te Atatū South.
Relief for all
National finance spokesperson Nicola Willis is spot on when she says the first priority should be income tax relief for the squeezed middle.
I'd go a lot further. It is not the middle-income families who are hurting most. I suggest the fairest approach would be to provide all income earners, including pensioners and beneficiaries, relief by making the first $5000 tax-free. This would give all taxpayers a benefit of $750. It's not huge but would certainly help the middle and be of huge significance to those who are really suffering.
It would give the same benefit to all taxpayers and, while not earth-shattering for those on $150,000, it allows them to buy a couple of bottles of really good bubbles.
If she and her party were truly interested in reducing poverty she might commit to increasing this threshold by a thousand or more each year.
From National's point of view, it will not lose existing voters but might just get the attention of those who have never voted for the party.
If National's proposed budget can afford $1600 for the middle, surely it can afford $750 for all.
Rod Lyons, Kumeu.
Bigger than taxes
All the pressure for tax cuts in a time of major international turbulence and climate change is simply short-term foolishness.
Cutting taxes, mostly at the top, will do nothing to tackle the cost of living squeeze for most. Nor will it allow us to effectively tackle climate change, invest more in public healthcare and rebalance the waka.
It will simply put more money in the hands of those most highly paid. However, it is a good electoral bribe. The price will be public spending austerity, which at least ACT admits. This is not a time for short-term thinking, the stakes are too high.
Jeff Hayward, Auckland Central.
Conversion call
Here is a challenge for our world-renowned "Kiwi ingenuity".
Electric vehicles are great in theory and horrendous in financial terms. Why doesn't some ingenious Kiwi develop an electric motor which can simply be fitted into our existing cars to replace the undesirable petrol or diesel motors?
Surely having to wreck millions of current cars is going to create a major problem of disposal, quite apart from the wastage of their potential years of use.
Jeanette Grant, Mt Eden.
