10 Sep 2020

What Wellingtonians think of the Labour Party's tax plan

7:26 am on 10 September 2020

The Labour Party's plan to make the highest earners pay more tax has been mostly panned by people on a variety of income levels in the capital city.

New Zealand currency

Labour's tax plan would see the top 2 percent of earners pay 39 cents on each dollar over earned over $180,000. Photo: 123rf.com

The party's policy is for a 39 cent tax on each dollar earned above $180,000 which it said would affect the top 2 percent of earners.

Those earning $200,000 a year are estimated to pay an extra $23 a week in tax

Labour said its new policy would bring in $550 million a year, money it said was desperately needed to help weather the 1-in-100-year economic shock brought on by Covid-19.

In the suburb of Karori, resident Maree winced when she thought about going without that cash.

She lost her job because of Covid-19, and she and her partner are just getting by on her partner's income - which is in the new proposed bracket.

"We could just survive with me not working, but now [we] are going to have to re-look at things, and maybe ... get back into the job market sooner than thought."

But she said there were few jobs going in her field right now because of the pandemic.

Another resident, Sarah*, said while $180,000 might seem like a lot - it did not go far in the big city.

"I think 180k, if you are a single income ... it doesn't seem fair.

"It is a lot of money, but then house prices have skyrocketed. We used to live in Australia and the food prices [here] are double, and power bills are double what we paid over there. Yet we earned a lot more money over there."

She said she was not buying Labour's pledge not to raise income taxes again or introduce any new ones in its next term if elected.

"It's just another reason not to trust a Labour government. I don't think they are being completely transparent, I think that they will increase taxes for many other pay brackets after the election."

Meanwhile, Maree said she understood sacrifices were needed in these difficult times - but it would not be easy.

"We'll take it on the chin, because that is kind of what the country needs right now is we need to fund all the things so we can keep fighting Covid and get on with it.

"We will sort it out, we are very fortunate in that way, but it is definitely going to affect us."

Elsewhere in Wellington many people spoken to by RNZ said they were happy to hear the top earners could be chipping in a little extra.

Western suburbs resident David said: "richer people have a greater social responsibility to the greater good of the people.

"Good on Labour, or good on any [party] that has the courage to [increase taxes for the well off].

But there was dismay from others who thought Labour had blown a chance to do something big.

One woman did not mince words.

"I'm very very disappointed ... [because] it is all [such] small thinking.

"I think they are tinkering and they are not looking at the really big issues. And the big issues are all the buggers who don't actually ... pay tax at all because of their various trusts and so on."

In the southern suburb of Newtown, Joel Ewan said the policy epitomised Labour's approach - big talk about transformation that failed to fully deliver in action.

"That's kind of their classic thing isn't it - they could have gone a bit further but they're a bit scared to.

"Like the capital gains thing, they were sort of going to do it then they chickened out because they did not want to alienate a bunch of people.

"I feel like that's kind of what people expect them to do, it would be nice if they were a bit more radical."

If elected, Labour plans for the policy to come into effect by next April.

*name changed

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