26 Jun 2014

Labour to hit tax avoiders

9:15 am on 26 June 2014

The Labour Party is promising it would crack down on tax avoidance to help get the Government books into surplus.

David Parker.

David Parker. Photo: LABOUR PARTY

In its alternative Budget released on Wednesday Labour said it will run surpluses if it leads the next government.

A Labour-led Government would earn more tax introducing a capital gains tax and increasing the top personal tax rate to 36 percent on income above $150,000, affecting the top 2 percent of income earners.

Labour's Finance spokesperson David Parker said it would also crackdown on the two ways people and companies avoid tax.

He said one is illegal tax avoidance and Labour would put more effort into catching tax evaders.

The other way, he said, involved multi-national companies avoiding pay their fair share of tax in the countries in which they earn income.

Mr Parker said Labour is not prepared to wait for an international agreement to be reached to stop that practice and a Labour-led government would take steps to ensure those companies pay more tax in New Zealand.

'Tax and spend'

Senior Government Minister Steven Joyce has described Labour's alternative budget as 'tax and spend'.

Mr Joyce said Labour's policy would mean fewer job opportunities and more people leaving the country for Australia.

Lower tax rates helps retain highly-skilled people in New Zealand, he said.

Finance Minister Bill English questioned how Labour will run surpluses, repay debt and continue to spend.

Meanwhile Green Party co-leader, Russel Norman said Labour's alternative Budget is not incompatible with the Greens' approach.

"It's important that we retain a debt reduction plan after National built up so much debt. We'll also be looking at tax rates and where tax rates should change, particularly the upper rate".