NZ Election 2020: Jacinda Ardern hits out at National for spreading 'misinformation' about Labour's tax policy

Jacinda Ardern has hit out at National for spreading "misinformation" about Labour's tax policy over Paul Goldsmith's claim the new proposed top tax bracket is just the beginning. 

Labour promised on Wednesday to introduce a new top tax rate of 39 percent on income earned above $180,000, but is promising no new taxes or any further increases to income tax, if it wins another term. 

Goldsmith, the National Party's finance spokesperson, said he believes Labour's policy is "just the beginning" and speculated that Labour would "eventually widen the net" and come after middle income earners.

Ardern hit back at Goldsmith on the campaign trail in Whakatāne when she was asked to characterise National's claim that Labour would eventually widen the net and come after middle income earners.

"Misinformation, misinformation," Ardern told reporters. "This is our policy, we have now released it, anything that comes from the Opposition is simply Opposition politics and sadly, it seems misinformation."

Ardern insisted what has been released is the "totality" of Labour's tax policy and said Labour wanted to give "certainty" to New Zealanders ahead of the October 17 election. 

"I hope alongside that people can see our commitment to retaining health, to retaining education, to keeping a lid on debt, and doing that in such a way that does affect only 2 percent of New Zealanders," she said. 

"What we will need to do is make sure that people are fulfilling the expectations. We have put extra money into IRD to track those who may be seeking to avoid our tax arrangements in New Zealand."

Prime Minister Jacinda Ardern hit back at National on the campaign trail in Whakatāne.
Prime Minister Jacinda Ardern hit back at National on the campaign trail in Whakatāne. Photo credit: Newshub

Labour's finance spokesperson Grant Robertson has been lashing out at National in the lead-up to the election over its un-costed policies, such as its anti-meth plan released on Monday. 

"If parties are going to be proposing new initiatives and new policies, and also trying to keep debt under control, they need to be able to explain how they're funding that, and that's what this plan does today," he said on Wednesday. 

National leader Judith Collins said on Tuesday she will release a fully costed fiscal plan after PREFU, the Treasury's economic and fiscal update, which comes out next Wednesday. 

Goldsmith said Labour's "first instinct" is to increase taxes and promised that National will not increase taxes or introduce any taxes if it wins in October. 

ACT leader David Seymour described Labour's policy as "divisive populism" and criticised how it is only expected to generate about $500 million a year, which "won't begin to repair the fiscal damage Labour has done".

Robertson said every extra dollar counts, and a couple of billion dollars over four years would "make a difference" to protecting essential services amid the COVID-19 economic crunch.  

Ardern acknowledged that the new tax bracket is not as high as Australia's 49 percent rate but she said Labour felt the 39 percent bracket was more appropriate for New Zealand. 

National's finance spokesperson Paul Goldsmith.
National's finance spokesperson Paul Goldsmith. Photo credit: Newshub

"You are right to point out this does put us at a lower tax rate than Australia, but keeping in mind that this is about choosing an option that is best for New Zealand and our times," she said. 

"This is a balanced approach - it means that we are affecting a small group, less than 2 percent, but we are at the same time bringing in revenue that will mean we can retain the high quality of health and education services and keep a lid on debt."

Her message to the 2 percent of Kiwis who will have to pay more tax is that she and her ministerial colleagues would be included if they win a second term. 

"My colleagues who are ministers are amongst those and we know that this is the right thing to do," she said. "It is about balance; it is about finding solutions for the times that we are in."

Green Party co-leader James Shaw said Labour has moved towards more progressive income tax, but is not addressing the growing wealth gap and inequality. 

The Greens have proposed two new top income tax brackets set at 37 percent on income over $100,000 and 42 percent on income over $150,000. 

They also want a wealth tax for those with a net-worth over $1 million.