United Future

This tax policy may be simple but its not fair when ( not counting income splitting which wont happen anyway) more than half the benefit flows to the top 15% of the population, and over a third to the top 5%. And while it is more equitable than the Business Round Tables recent proposals, the rich get even more in the hand from United Future than the BRT proposals. While even better than Cullens offering, ( and who is the Minister of Revenue?) should those on lower incomes be assisted more?

Great policy that will bring back integrity to the tax system. With the top tax level equal with the new business and existing trust level, it makes it a much fairer system also.

Together with the proposed income splitting and the charities rebate cap change last year, this is part of a positive move forward for this country that benefits all areas of NZ.

Every New Zealand taxpayer will be better off under this plan, with 58% getting a tax cut of more than $45 a fortnight. On top of that, about 42% of Kiwi households will win from our income splitting policy, which will add about a further $42 to $61 a fortnight to their tax cut.

Well done Peter. I think it's fair because the present tax rates and policy is not fair. My immediate impression is that this will also stimulate growth...would you like to comment on that?

Thanks John. This package will put more money into people's pockets, which will inevitably boost spending power and growth, and will also help some with debt retirement.

Here's story from Ben Thomas in today's National Business Review (could not have put it better myself!):

"HARD DUNNE BY

If they are ever inclined to editorialise about how the National Party needs to release more policy, the media should reflect for a moment on how they treat the policy announcements they already have.
Weekend papers downplayed United leader Peter Dunne�s tax policy announcement at the party�s conference on Saturday - the policy got about four sentences in one of the nationals. Dunne could feel a little miffed. His thoughts on the tax question are actually of considerable interest, because he�s not only the current Minister of Revenue but is lining up as a likely support partner for National post-election.
It�s become a symptomatic problem for United. While the Labour government expressly strived to �underpromise and overdeliver�, Dunne in contrast has over-delivered but failed to cash in.
In one sense, he has been surprisingly influential on the political discourse in New Zealand. Scan through budgets before Dunne�s infamous �worm-taming� performance and family-focused campaign of 2002. There�s no mention of �families�.
This year, the word was used 19 times in Finance Minister Michael Cullen�s speech (and only seven of these are references to the working for families policy itself). Labour adopted as one of its key planks �families young and old� and National can�t say enough about hard working New Zealand families.
There�s been obvious policy implications that have flowed from this rhetorical shift: working for families is the most prominent.
But parties can argue endlessly over who came up with what. Did Act, National or perhaps an earlier political movement first think up lower taxes, for example? Who was both first and harshest on Treaty claim time limits? Dunne can point to a more solid set of achievements than influencing, however.
Here�s a quick list of achievements from the current term:
-��� no cap on tax rebates for charitable donations (a core United Future policy in 2005);
-��� business tax lowered to 30 per cent;
-��� repealing the archaic sedition laws in coordination with other minor parties;
-��� extending daylight savings by two weeks;
-��� facilitating the anti-smacking compromise between national and Labour, by sponsoring the amendment.
That�s quite a laundry list for what�s been a two-person party since Gordon Copeland defected last year to (eventually) form the new Kiwi Party. Most new Zealanders will have been touched in some way by the reassuring hand of the member for Ohariu-Belmont, even if it�s only another two weeks of Saturday barbeques in April.
Given Dunne�s record this term on advancing United�s policy interests, there should be a much closer inspection of the party�s plans coming into this election. That�s particularly so where there may be an opportunity to influence what seems like a fairly bland National party agenda should the two parties end up together on the Treasury benches.
United�s income-splitting proposal (a long-time hobby-horse which was released as a discussion paper by IRD in line with its supply and confidence agreement with Labour) is a fairly modest tax scheme in terms of overall cost: about $350 million. It would be confined to couples with dependent children, unlike income splitting arrangements in some OECD countries. That�s intentional: it makes it not only more affordable, but means providing relief to families with dependents will avoid inevitable criticisms about middle-class subsidies for trophy wives and husbands.
It also allows Dunne to flesh out the content of what a �family� party stands for, when the phrase has been appropriated so comprehensively by political competitors.
(The policy, if working for families was retained at the same time, could seem a little like double dipping for couples where only one parent worked. However, the extra favours given to families with children haven�t come close to hitting any acceptability limit in the public consciousness yet.)
As far as income tax for individuals is concerned, United still supports shifts in income brackets:
-income up to $12,000 taxed at 10 per cent;
-income between $12,001 and $38,000 taxed at 20 per cent;
-income above $38,000 taxed at 30 per cet;
- Honoraria for volunteers up to $1,000 to be tax free.
On health, United has made announcements previously about wanting more involvement from the private sector to help service waiting lists.
In 2005, United supported selling down stakes of up to 25 per cent in some state owned enterprises to New Zealanders. That�s off the agenda now because the party feels that the problem of encouraging a �stakeholder society� in consumption-obsessed middle New Zealand has been at least partially addressed through things like Kiwisaver. That keeps it in line with the moderation of the developing centrist consensus between the two major parties.
Not, of course, that it�s a sure thing that Dunne will prefer National in post-coalition talks. He will undertake to negotiate first with the biggest party, but tribal roots run deep even in sensible centrists who left the Labour party 13 years ago. And Dunne�s best bet for getting media attention during the campaign is to keep alive a guessing game about who he will support.
After all, releasing and making policy hasn�t got him far with the weekend papers� editors."

Hi Peter, You are to be commended for these tax policies. Could you also please have a look at the new FIF rules? They are incredibly complicated, especially if one tries to diversify outside NZ and Australia. Even the IRD still has no workable guidelines on which investments are "allowed" an exemption. The rules and complicated paperwork mean that to avoid costly errors, expensive accountants need to be retained, and make the alternative of property investment look more attractive, which is not what we need in New Zealand.

Excellent tax policy, its simple and fair! A tax policy that benefits everyone. More money in people's pockets is positive for our economy if it stimulates spending, growth, and debt repayment.

Why shouldn't everybody get a boost from tax cuts, regardless of where they are on the income scale. We all have our own family, life and financial situations that are unique to us. Apart from these tax cuts, those on lower incomes are also often eligible for assistance in the form of Community Services Cards and Working for Families tax refunds. So, there is more help in place.

I see the always-forgotten middle-income earners finally seeing a bit of relief for all their hard work in this tax policy too. Well done!

And Income Splitting on top of that, with its overwhelming 90% support from public submissions, will benefit a great many families with dependent children.