Port Hills tax cuts: $3.79!

[Ruth Dyson is concerned about the Government's tax cuts. She has worked out how much we will be getting in the Port Hills, and finds the policy expensive, unfair and underwhelming.]

This month many New Zealanders received tax cuts. I am concerned however about the facts of this tax policy for our electorate.

For New Zealand as whole, the top 10% of wage and salary earners get 42% of the tax cuts, while the the bottom 20% get just 2%. Looking at people on a $1,000,000 salary (according to the IRD, there are around 650 people who earn $1m or more), these have just received around $1,000 per week extra.

But what about the Port Hills? In our electorate the median wage is $25,500 per year. This means a tax cut of $3.79 a week after accounting for the GST increase.

The cost of providing all of this is just over $4b per year, or $14.3b over 4 years. After accounting for the greater revenue due to the increase in GST to 15%, the government will still need to borrow around $1b to fund tax cuts.

When I bring up the argument around fairness, some say the top earners pay a disproportionate share of the tax therefore deserve tax cuts. I don't buy into this, because whilst the top 10% of tax payers do pay a disproportionate amount of the tax, they also earn around 32% of all income.

But it comes back to the question of 'what sort of society do we want to live in?' New Zealand has a pretty good standard of living. For example, our schools are well resourced and our hospitals are first world. Due to universal superannuation, we have the lowest level of geriatric poverty in the OECD (we have 2%, Australia has 24%), and our Accident Compensation system is generally acknowledged as a great model.

All these services are paid for from tax revenue. The more money that is spent on tax cuts, the less there is to provide the essential services that New Zealanders have come to expect.

In the Port Hills, as elesewhere, these tax cuts will increase the gap between the few that have a lot and the many who are struggling with increased costs associated with the increase in GST, the Emissions Trading Scheme and 4.5% inflation.

The sort of city I wish to live in is one where every citizen is valued for who they are, not how much they earn. This is what I will fight for as long as I represent you in parliament.

[Image cred­it: http://www.flickr.com/photos/23327787@N08/3477537829]