Treasury investigated quake levy

Treasury and Inland Revenue did investigate a taxpayer levy to pay for the rebuilding of Christchurch, according to budget documents. Photo / Mark Mitchell

Treasury and Inland Revenue investigated a taxpayer levy to pay for the rebuilding of Christchurch, budget documents released today show.

The Green Party is still pushing the case for a levy, although the Government rejected the idea mainly because it needed about $5 billion up front and decided to borrow it.

Treasury reported to the Government that in Australia a levy was imposed after the Queensland foods at a rate of 0.5 per cent on all taxable income between A$50,000 ($64,600) and A$100,000, and 1 per cent on income over A$100,000, which raised A$1.8b in a year.

It said if that was applied in New Zealand it would raise only $250 million, and to raise significant revenue through a levy it would have to be imposed at a higher rate or at a lower starting income threshold, or both.

A flat one per cent levy on all taxable income would raise roughly $1.2b, it said.

The Greens, who haven't given up, said today Christchurch City Council was imposing an earthquake levy on those who could least afford it - the city's ratepayers.

"The Government's plan is to put its $5.5b share of the rebuild cost on the nation's credit card and hope for the best," earthquake recovery spokesman Kennedy Graham said.

"We know we're in for a financial challenge but if we share it in an equitable way we can rebuild Christchurch into a vibrant eco-city, something for future generations to be proud of."

The Green's levy proposal would raise $5.4b over five years.

People earning between $48,000 and $70,000 would pay up to an additional 1 per cent income tax and those earning over $70,000 up to an additional 2 per cent.

- NZPA