Judith Collins defends giving more tax cuts to higher earners, saying they 'can't' go to everyone

Judith Collins says the money will go to those who will use it most.
Judith Collins says the money will go to those who will use it most. Photo credit: Getty

Judith Collins has defended giving higher tax cuts to New Zealand's top earners, saying the policy will circulate money through the economy.

In an interview with RNZ on Thursday Collins said the National Party's proposed tax policy will "put money in the pockets of people who will spend it".

The 16-month tax cut would see those earning up to $90,000 save $56.10 in taxes a week while the minimum earners (up to $40,000) would have just an extra $8 per week in the bank.

People in the middle, earning approximately $60,000 annually would see the largest proportional benefit, with an extra $46.50 in their pockets every week.

When asked why someone on a middle income needs or deserves more money than someone on a lower income, Collins said the policy focuses on people who have full-time employment.

"That's who's going to benefit most," she said.

When it was pointed out that some people earning less than $40,000 were likely working two jobs to try and stay afloat, Collins said that "may be true". 

"What's important is that we can't give these [tax cuts] to everybody - that's why it's important we have targeted people who are middle income, in work, currently working full time - that's who's going to get the most benefit out of it."

What about the housing crisis?

In the same interview, Collins refused to say house prices should drop, despite them currently sitting around seven times the average household income median.

Instead, she insisted the issue was with supply and said more houses need to be built - while refusing to accept that the sale of state houses through nine years of a National Government has contributed to difficulties with public housing. 

"That is total rubbish - if that was the problem they would have been on a statehouse waiting list before we left office," she said. 

The waiting list for public housing has ballooned over the last three years to nearly 14,500. 

Collins says the issue has nothing to do with the fact that National sold more than it built but admits the previous Government should have tried to make up for the losses. 

"We should have had more houses built faster to deal with the fact that we were bowling really old, dreadful houses that needed to be bowled but we should have done it faster."