Many New Zealanders are struggling with rising costs due to high inflation and increases in mortgage rates – both the result of mismanagement by government and the Reserve Bank.

At the same time, tax revenue and government spending has roughly doubled over ten years, but taxpayers seem to be getting less value for their money than ever.

It is time to streamline government spending and let New Zealanders keep more of what they earn.

New Conservatives' proposals, outlined below, will give everyone a tax cut, and provide additional tax relief for families with children. They are designed to encourage people to build families and to keep them together.

By cutting waste and improving efficiency, government can easily reduce spending by 10%, more than enough to pay for these proposals. 

First $20,000 Tax Free

A tax free threshold of $20,000 will give everyone a $2,500 tax cut.

Income Splitting

New Zealand's progressive tax rates mean for example that a family where one parent works 40 hours per week currently pays more tax than a family where both parents work 20 hours and earn the same amount in total. This system penalises families who choose to sacrifice a second income so that one parent can stay home and look after children.

We propose that families with children could divide their income between both parents for tax purposes.  This has previously been voted down by both National and Labour, so needs to be pushed by a third party.

Child Tax Credits

New Conservatives propose to implement a $2,500 child tax credit, available to each parent, for a total of $5,000 per child. This would replace the Working for Families "family tax credit" and "in-work tax credit".

Together with income splitting, this proposal:

  • Strengthens families financially.
  • Financially discourages fathers from abandoning their families.
  • Eliminates frequently raised concerns both by the Left about unfairness of the "in-work tax credit", and by the Right about abatement rates under Working for Families creating a high effective marginal tax rate, which discourages people from taking on an extra job, working overtime, or investing in training and career development.

Our proposal will provide significant tax relief for many New Zealanders, while ensuring that no one is worse off than under the current system.  However we recognise that under Working for Families many low income families already effectively pay no tax - the way to improve things for them is to get inflation under control and grow the economy, providing more job opportunities and higher wages.  It is therefore important for government to reduce unnecessary red tape and ensure policy encourages people to establish and grow their businesses. 


Also see our Family policy.


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