Looking at National’s Back Pocket Boost

New Zealand should be a country where, if you work hard, you can get ahead. But after years of economic mismanagement by Labour, topped off by two years of rampant inflation, huge increases in interest rates and a shrinking economy, most Kiwis are going backwards.

The squeezed middle is being left behind. The New Zealanders who work hard, sometimes juggling multiple jobs and family responsibilities, still can’t get ahead because inflation and high tax rates are eating away at their incomes.

National’s Back Pocket Boost increases after-tax pay for the squeezed middle from 1 July 2024 by:

• Shifting income tax brackets to compensate for inflation
• Expanding tax credits to reach more modest income earners
• Introducing the Family Boost childcare tax credit
• Increasing Working for Families tax credits for working families (from 1 April 2024).

Under National’s Back Pocket Boost, New Zealanders will be better off by:

• Up to $250 more per fortnight for an average-income family with children
• Up to $100 more a fortnight for an average-income household with no children
• Up to $20 more a fortnight for a full-time minimum-wage earner, and lowering the tax they pay for additional hours worked
• Up to $26 more a fortnight for a superannuitant couple.

Our plan is fully costed through re-prioritisation and targeted revenue measures.

These include:

Reprioritisations:

• $594 million on average per year reduction in spending on back-office functions in government departments, excluding non-core and frontline agencies
• $400 million on average per year reduction in government spending on consultants
• $590 million on average per year Climate Dividend, returning taxes raised on climate polluters to Kiwi families rather than giving subsidies to large corporates.

Targeted revenue measures:

• $740 million on average per year from introducing a 15 per cent foreign buyer tax on purchase of houses worth over $2 million
• $525 million on average per year from ending the commercial building depreciation tax break
• $179 million on average per year from closing a tax loophole and ensuring offshore gambling operators delivering online gambling pay tax
• $123 million on average per year from moving to user-pays immigration levies, excluding tourist visas

We will protect health and education spending and ensure that money goes from the back office to the frontline. We will increase spending on health and education every year in government and ensure that this spending delivers improvements for all New Zealanders.

Government agencies and Crown entities excluded from the overall spending reductions include the Ministry of Health, the Ministry of Education, the Education Review Office, Oranga Tamariki, Corrections, Police, Defence Force, NZTA and Kainga Ora. These agencies will still be expected to reduce wasteful bureaucracy spending, but any savings will be recycled into the frontline. All other agencies will be required to find savings and reduce spending.

People know they can trust National with the economy. It’s been a tough couple of years for New Zealanders, but National will rebuild our economy and reduce the cost of living so that people can get ahead.