Green Party co-leader James Shaw told Newstalk ZB’s Mike Hosking this morning that lifting children out of poverty is something that needs to be done before a low carbon, sustainable economy can be achieved.
”I would argue that it’s very difficult to argue for investment in say, vehicle recharging infrastructure around the country when you’ve still got kids who are going without food on the table,” said Shaw.
”Having an inclusive society that takes everyone with us, that doesn’t leave anyone behind is a necessary precondition for a transition to a low carbon, sustainable economy,
”I don’t think you can divorce those things.”
Asked how this tax policy is different from the parties in 2020, Shaw said the public’s tolerance had changed.
”People’s tolerance for living in a society that leaves so many children without decent clothes, or food and in some cases a roof over their head – their tolerance for that, I think is at an end,” said Shaw.
”I don’t see another party that has such a comprehensive plan for ending poverty in this country... If you don’t like our plan show us yours,” he said.
The Green’s hiked other income taxes too, although these are paired with income tax cuts at the lower end of the scale. People earning less than $125,000 would pay less tax, those who earn more than $125,000 would pay more.
The 33 per cent tax rate would be lifted to 35 per cent, although the threshold for paying that rate would be $75,000, rather than $70,000 as currently.
The party would drop the 39 per cent threshold to income earned above $120,000, meaning far more income earners would begin paying it.
The tax changes also included tax cuts for people on more modest incomes. Income earned up to $10,000 would not be taxed at all, which would give most income earners a $1500 tax cut.
The party took a leaf from National’s tax policy and hiked the other income tax thresholds, which would deliver a tax cut to people on lower incomes.
The party would also hike the corporate tax rate from 28 per cent to 33 per cent, which is where the rate stood under the last Labour Government. New Zealand already has one of the highest taxes on corporate profits in the world - although it is still lower than Australia’s, which is currently 30 per cent.
Shaw said yesterday he believed New Zealand had sufficient wealth to end poverty.
“I am sick of the politics of excuses. Everything we need to make life better for people in Aotearoa exists,” Shaw said.
“What’s missing is the political willpower to use it. The time is now to lift every single family out of poverty and to pay for it with a fair tax system.
“Our fully-costed plan will make sure everyone can pay the bills, put food on the table, and keep the house warm.”
The tax changes were paired with an “Income Guarantee”, which the party said would create a minimum level of income of at least $385 per week for individuals, $770 for couples, and $735 for a single parent.
This would be achieved by a radical overhaul of Working for Families, which would be replaced with a single payment for parents or caregivers of $215 every week for the first child, and $135 a week for every other child, with an extra $140 a week for every child under three years.
Like Working for Families, the Income Guarantee payments would abate once people began earning a certain level of income, but the threshold at which the payments abated would be much higher, meaning people kept more income support for longer.
The rate at which the payment abated would also be lower, meaning a smoother transition out of income support.
The Working for Families abatement threshold will be increased from the current $42,700 to $60,000. This is higher, in real terms, than when the threshold was last adjusted in 2017-18.
The abatement rate will change to 18 per cent from the current 27 per cent to ensure the payments reduce at a much slower rate.
The party promises to overhaul ACC into what it calls an “Agency of Comprehensive Care”, which would offer far broader coverage.
The Greens say if anyone has to stop working, they will receive a minimum payment of 80 per cent of the fulltime minimum wage.
Co-leader Marama Davidson said the income guarantee policy “will give everyone peace of mind that they can always afford the weekly shop, pay the rent, or cover unexpected costs - even when times are tough”.
The Greens also promise big increases to student income support. In the party’s first Budget of the next term, they promise to remove eligibility tests from current income support.
In the second, they promise to lift that income support to a universal $385 per week payment to all students.
National’s Finance spokeswoman Nicola Willis decried the plan as “fairy-tale economics” and a “massive tax grab”.
“Marama Davidson and James Shaw are proposing one of the highest wealth taxes in the world. It would gut the country of investment and opportunity as businesses flee offshore or simply shut up shop,” Willis said.
“You can’t tax your way to a stronger economy. And it is only through a strong economy that we can lift incomes, solve the cost of living crisis and afford the public services that all Kiwis deserve.
“New Zealand already has a benefit system that provides a safety net for people who fall on hard times. Marama Davidson’s policy simply increases benefits by up to 31 per cent – to be paid for by a massive tax grab on productive assets.”
Act leader David Seymour said the policy was an “envy-fuelled series of tax hikes” that would “make New Zealand a poorer nation”.
“By making it harder to accumulate and protect your assets The Greens seem to want a more primitive society. The great irony is poorer countries struggle to invest in environmental protection, but you’ll notice the Greens are barely about the environment anymore anyway.”
Seymour said there were many normal and legitimate reasons to use trusts.
“It is middle New Zealand who use trusts for a variety of reasons. For example, parents concerned that their children might lose their inheritance in a future divorce might protect their assets in a trust. Small business owners trying to make a living for themselves might protect their house from creditors by putting it in a trust, so that if their business goes wrong their children have somewhere to sleep.”
