National Party finance spokesperson Paul Goldsmith has admitted to getting his facts wrong in a media release critical of the Green Party’s pledge to transform the welfare system.
Photo: RNZ /Dom Thomas
Yesterday, the Green Party unveiled its election promise to tackle poverty and ensure a payment of at least $325 a week for anyone not in full time work, financed by taxing the wealthy more.
The policy proposed taxing those who had a net wealth of more than $1m or $2m at 1 percent and 2 percent, respectively, on money that was over and above that amount.
Goldsmith subsequently put out a release stating that a wealth tax would be “particularly severe”. In it, he used the example of a business owner who had a house worth $1 million and a business worth $1m paying “$40,000 a year for the 2 percent wealth tax”.
However, the policy outlined that taxing would only occur on wealth that was over the $1m threshold, and would also take into consideration mortgages as well as shared ownership.
Goldsmith defended himself on Morning Report, saying the policy was vague on the thresholds.
“Right at the very bottom [of the documents], there was a table that made the point that what they’re talking about is a tax of over $1 million.
“I quite frankly admit I got it wrong … but when you look at the details in the press statement and all the policy documents it’s not clear as to where the threshold came through.
“I was moving in a fast-paced environment, trying to respond.”
He said that regardless of the blunder, it did not change their opposition to the policy.
“[The policy] will affect typically older New Zealanders who have saved but also small business owners who we need to be investing to create jobs and it’ll impact farmers of course and the whole lot of New Zealanders.
“Our simple view is that at a time when our economy is going down, we don’t need more taxes.”
There had been significant increases in welfare benefits over the past couple of years, he said. “Every society wants to be able to help those in need the most, and the best way to do that is to create jobs and provide jobs for people to work and those jobs require investment.”
“What we’re not clear on is to what extent the Labour Party want to do the same, and that’s what we’ll be asking over the next few weeks.”
Prime Minister and Labour Party leader Jacinda Ardern told Morning Report that they would be bringing out their own policy ahead of the elections.
She said the Greens’ policy made some “heroic assumptions”.
“It’s notoriously difficult to make assumptions about revenue but I think there are some fairly heroic assumptions in that policy.”
Asked whether she would support a wealth tax in principle, she said: “This is not my policy, we will have our own and I imagine it will look very different to that one.”
‘We will be fighting for it tooth and nail’
Green Party co-leader Marama Davidson told Morning Report the policy was not something they were willing to give up on in favour of another coalition government, but it was too early to speak about bottom-line policies.
“We will be fighting for it tooth and nail.”
Photo: RNZ /Dom Thomas
Two new tax brackets would also be introduced, for those earning more than $100,000 and $150,000.
She said the increased tax proposal wouldn’t hurt those facing job insecurity or redundancies in the face of the impacts of Covid-19.
“It’s only going to affect 6 percent in terms of the wealth tax … they are not going to be lining up for food with that 1 percent taken away.
“I think that’s brave, I think we have needed to understand we should be asking for people with wealth to chip in more, because we have enough here for everyone to be living dignified lives.”
As for older people or retirees who had assets but lacked cash, they could defer payments, Davidson said.
“We understand that many older people may have a home, for example, worth more than $1m and it is paid off, they don’t have a mortgage, but perhaps they’re living on Super or perhaps they’re moving to a retirement home and wish to put their home into a trust, you can defer payments.
“The trust also is liable for a wealth tax, but again, it is shared among all beneficiaries and trustees, so again only if each individual has more than $1m net wealth worth than we are asking them to chip in at 1 percent over and above that $1m.”
Davidson said KiwiSaver savings would also be included in the net wealth accumulation.
“We hope to see less incentive for using houses as merely tradable commodities, and start to see investments into more productive and sustainable industries and trades.”
Davidson said the policy was a good start on what the welfare expert advisory group had recommended.
“It goes further in a lot of ways, which is why we’ve added top-up payments to sole parents, and top payments for people with more than one child as well.”
Voluntary stay-at-home parents who had employed partners could also qualify for the scheme, but only if their partner earned up to a certain amount, Davidson said.
“So with the abatement rates we have worked out, say your partner could work full-time minimum wage and abatement at 30 percent above, so up to $756 thereabouts is what your partner could continue to earn and you are still guaranteed minimum income.”