National's Tax Policies

The incoming National Government has the following stated tax policies:

2008:  Transitional Relief Package

Provide a transitional relief package for people who are made redundant and have been in the same job for at least six months.

This includes:

• A Working for Families top-up equivalent to the In-Work Tax Credit;
• An increase of $100 in the maximum weekly accommodation supplement.

This assistance will be available until they get another job and their circumstances improve, or for up to 16 weeks.

Personal Tax

Tax Rates

National's tax package sets out a three year programme of personal tax cuts.  Including the recent tax cuts of 1 October 2008, there will be further tax cuts on 1 April 2009, 1 April 2010 and 1 April 2011.

Full tax tables and tax rates between now and 1 April 2011, are shown below:

	From 01/04/09	From 01/04/01	From 01/04/11
$0 - $14,000	12.5%	12.5%	12.5%
$14,001 - $48,000	21%
$14,001 - $50,000		20%	20%
$48,001 - $70,000	33%
$50,001 - $70,000		33%	33%
$70,000 +	38%	37%	36%

Independent Earner Rebate

National will introduce a tax rebate for people who earn $24,000 a year or above, and who are not receiving a benefit, Working for Families payments, or New Zealand Superannuation.  This rebate will be $10 per week from 1 April 2009 and $15 per week from 1 April 2010.  The rebate abates over $44,000 so that from 1 April 2009 a person that earns over $48,000 and from 1 April 2010 a person that earns over $50,000 will not receive anything.

Kiwisaver

Under National, the bulk of the scheme will remain unchanged.  People who join KiwiSaver in the future will continue to receive contributions from the Government and matching contributions from their employers.

National propose to make three changes to KiwiSaver:

Reducing Minimum Contributions

From 1 April 2009, the minimum contribution rate for employees in KiwiSaver will be 2% of gross salary.  Employers will also be required to make minimum contributions of 2% of gross salary for each of their employees who are KiwiSaver members.  Employees and employers will be free to contribute at a higher rate if they choose to.  National will keep the member tax credit, which will match members' contributions up to $1,040 a year.  The tax credit will match employees' contributions at the minimum contribution rate.  Employers' minimum contributions will remain tax exempt.

Removing the Employer Tax Credit

Discontinue the tax credit that is currently paid to employers whose staff are enrolled in KiwiSaver.  This change will take effect on 1 April 2009.

Removing Discrimination Against Employees Who Can't Afford To Join

National will repeal recent legislation which potentially discriminates against employees who can't afford to join KiwiSaver and amend the KiwiSaver Act to ensure that when an employee joins KiwiSaver, the compulsory contribution from their employer is a genuine addition to their normal pay.