National’s latest campaign ad lays out the clear choice facing New Zealanders in this election, Campaign Chair Steven Joyce says.

‘Delivering for New Zealand’ builds on National’s first ad ‘Let’s Get Together’, and the successful rowing team ads from the previous election.“New Zealand is making great progress and has some huge opportunities over the next three years,” Mr Joyce says.

“National’s vision is to build a stronger economy that can deliver more for New Zealanders.

“We can keep the country moving forward with Bill English and his strong National team, or change to an unstable group of left-leaning parties with unclear policies that would set back the progress our families and businesses are making.

“By working together, we are lifting family incomes, making record investments in the infrastructure our growing country needs, and improving public services like healthcare and education.

“Only a Party Vote for National will keep a strong, National-led Government focused on a consistent plan to keep growing the economy and delivering more for all New Zealanders.”

The new ad is available at: https://www.national.org.nz/forward

The National Party will commit to implementing a further Family Incomes Package in the next term of government, subject to certain fiscal conditions being met.

“Our strong economy means the Budget 2017 Family Incomes Package will provide a positive boost to after-tax family incomes on 1 April of next year,” Finance Spokesperson Steven Joyce says. 

“We are committed to delivering more for New Zealand families in the next term of government, subject to maintaining our strong plan which is allowing New Zealand companies to compete and succeed on the world stage.”

“The best indications from today’s PREFU announcement is that a similar sized Family Incomes Package to the current one would be possible from 2020, unless the economy performs better than expected,” Mr Joyce says.

The first Family Incomes Package will deliver an average of $26 a week to 1.34 million working families from 1 April 2018 through a combination of tax threshold changes, increases in Working for Families tax credits, and increases in the Accommodation Supplement. The Package will also provide an additional $13 a week per couple for 750,000 superannuitants.

Mr Joyce laid out a number of key conditions to be met for a second Family Incomes Package to proceed. These are:

• Maintaining the Government’s debt targets of reducing net debt to 20 per cent of GDP by 2020 and 10-15 per cent of GDP by 2025
• Meeting the Government’s spending commitments and forecasts for building infrastructure and improving public services laid out in Budget 2017.
• Funding any Family Incomes Package from cash surpluses and not from additional borrowings 

The Pre-election Fiscal Update showed that cash surpluses beyond current and future budget spending commitments would commence from the 2020 financial year.

Mr Joyce says that a second Family Incomes Package would have a similar emphasis to the first package that commences 1 April next year.

“We would want to focus particularly on lifting the incomes of low to middle income families, look to simplify further the tax and transfer system so people can more easily see the link between their work and their earnings, and continue to lift the lower tax thresholds as incomes grow,” Mr Joyce says.

“The average wage is predicted to grow from $58,900 at March 2017 to $65,700 over the next four years. It is very important that we aren’t taxing middle income earners at 30 cents in the dollar. ”

“National has shown it can lift incomes and invest in public services and infrastructure. Under our responsible programme we can continue to do both.”

Mr Joyce said that the ability to have an ongoing conversation about boosting family incomes is only possible because of New Zealand’s strong and growing economy.

“Whether it’s investing in better public services, investing in infrastructure, or boosting family incomes, every budget initiative is only possible because our small and medium-sized businesses operate in an economy that allows them to compete successfully on the world stage.

“It’s crucially important that keep encouraging them to compete and succeed and not weigh them down with poorly thought through new taxes and polices that would stall the economy and stunt growth,” Mr Joyce says.

A slightly softer growth forecast is the main feature of largely unchanged Pre-election Fiscal Update compared to the Budget forecasts three months ago, Finance Minister Steven Joyce says.

“The softer growth New Zealand has experienced in the six months to March flows through to a lower starting point in the 2017/2018 year,” Mr Joyce says.

“The net effect is that growth is slightly lower through the forecast period – averaging 3.0 per cent over the next four years rather than the 3.1 per cent predicted in the Budget.

“The other notable change is that Treasury expects the labour market to be tighter over the next four years, with lower unemployment and stronger nominal and real wage growth.

“Treasury forecasts unemployment to drop to 4.3 per cent by June 2020 and for the average annual wage to increase from $58,900 at March 2017 to $65,700 by 2021, a $1300 per annum improvement on the Budget forecast.”

Other changes to the forecasts include:

A smaller balance of payments deficit across the forecast horizon Lower CPI inflation, especially in the 2017/18 year Net government debt falling below 20 per cent of GDP in the 2020/21 year. New Zealand Superannuation Fund contributions remain scheduled to resume in that year.

Most other elements of the forecast remain very similar to budget predictions, with nominal GDP, migration levels and budget surpluses largely unchanged, although the timing of budget surpluses has changed.

“The Budget surplus is expected to be $2.1 billion higher in the year just finished,” Mr Joyce says. “However Treasury expects the lower growth forecast to result in surpluses that are $1.8 billion lower over the next four years. The net effect is about even.

“The Government’s strong fiscal management means that New Zealand is one of the few OECD countries to be posting fiscal surpluses. This hard-won position is underpinning the Government’s strong economic plan which is delivering jobs and steady real wage growth for New Zealanders.”

The large infrastructure spend committed to in Budget 2017 means that residual cash remains broadly in balance until the 2019/20 financial year.

“There is limited room for any additional expenditure beyond what is already proposed in these forecasts until the 2020 financial year when there is expected to be a $1.7 billion cash surplus.  Anything significant in the meantime would involve more borrowing or raising additional tax revenues,” Mr Joyce says.

The PREFU forecasts include the following budget spending commitments:

•         $7 billion in additional operating expenditure over four years in Budget

          2017 which commenced on 1 July 2017.

•         $1.7 billion per annum ($6.8 billion over four years) operating

           allowance to be allocated for Budget 2018, increasing by 2 per cent

           each subsequent budget.

•         $32.5 billion in total capital infrastructure investment between 1 July

           2018 and 30 June 2021.

•         $6.5 billion over four years ($2 billion per annum in out years) for the

           Government’s Family Incomes package commencing on 1 April 2018.

“Government annual operating expenditure in these forecasts increases from $77 billion to $90 billion over the next four years, which is sufficient for significant ongoing improvement in the provision of public services,” Mr Joyce says.

Labour’s true tax agenda is starting to appear with comments by senior Labour MPs Phil Twyford and David Parker in the last eighteen hours, National Party Campaign Chair Steven Joyce says.

“This morning on TV3’s ‘The Nation’ programme Labour’s Housing Spokesperson Mr Twyford once again refused to answer whether Labour would introduce a comprehensive capital gains tax in the next three years if elected. However he spent some time saying how much they really wanted to,” Mr Joyce says.

“He also gave a sense of the scale of it – saying Labour wanted to use a capital gains tax to reduce house price to income ratios to about three to four – which would mean a halving of Auckland house prices.

“That would take a punitive capital gains tax and a massive increase in interest rates. It would be massively disruptive to the New Zealand economy.

“Mr Twyford’s language is the same as the Greens’ on housing last year with their talk of cutting house prices in half.

“Meanwhile last night Water Spokesperson David Parker was threatening farmers at a meeting in Ashburton with a much higher water tax rate if they didn’t toe the line.

“A number of people at the meeting reported Parker saying ‘don’t push us on the numbers or we will take the tax higher’ and ‘I’m not here to negotiate – don’t push me’ or it will be doubled.

“And it’s apparent this threat was not a one-off – with another group reporting the same threat being made by Parker earlier last week.”

“A regional fuel tax, a massive capital gains tax, and a bullying water tax,” Mr Joyce says.

“It’s becoming clearer why Labour wants to hide its true tax plans.

 “They need to be upfront with New Zealanders on tax.”

The Labour Party is once again being shifty on tax, and needs to come clean with voters on its policy on capital gains tax and land tax before the election, National Party Campaign Chair Steven Joyce says.

“This morning Labour Leader Jacinda Ardern refused to rule out introducing a Capital Gains Tax during the next three years if elected,” Mr Joyce says.

“She said she wouldn’t campaign on it but would use a tax working group to implement it.

“Her exact words were the Labour Party ‘won’t be held back on being able to act on what that group finds’. 

“This is the same approach MP Phil Twyford took at a public meeting in Wellington last week.

“People attending the meeting reported Mr Twyford saying ‘it’s a tough ask to sell the capital gains tax when you’re in opposition, it’s easier when you have an army of public servants’.

“At the same meeting he said that a comprehensive capital gains tax, a land value tax and an asset and wealth tax were all on the table after the election.

“When it comes to new taxes, Labour can’t help themselves.

“They have form – they’ve already tried to fudge their new water tax,” Mr Joyce says.

“New Zealand is currently doing well because people have confidence in economic policy and the Government is not constantly adding new taxes.

“Labour is obviously worried about telling voters what its actual tax plans are.

“They need to stop fudging and be upfront.”

The Labour Party’s proposed water tax would hit regional economies hard by picking on farmers, horticulturalists and wine growers, National Party Campaign Chair Steven Joyce says.

“Regions like Bay of Plenty, Hawke’s Bay, Gisborne, Nelson, Marlborough, Canterbury and Otago would be big losers from a policy that taxes water used by food producers that create a lot of the jobs in those regions”, Mr Joyce says.

“On top of that there is no detail in the policy. Labour needs to explain to New Zealanders clearly who would get to charge, how much would they charge, and who gets all the money,” Mr Joyce says. “They are asking for a blank cheque from farmers.

“Given this proposal is another re-heat of one put up three years ago, you’d think they would have had time to work out some of the details by now.

“Or are they just too scared to tell regional New Zealand what it would actually mean.

“The true cost of this tax would be borne by hard-working New Zealand families who would pay more for their weekly shop including things like milk, fruit and veges.”

Mr Joyce says that today’s announcement proves once again why Labour have dropped their “fresh approach” slogan. 

“This comes hard on the heels of Labour confirming it would impose a regional fuel tax in Auckland. Two extra taxes in one week shows there is nothing new about this Labour Party. More taxes will increase living costs, slow down the economy and stop job growth,” Mr Joyce says.

“New leader but the same old Labour Party.”

Climate Change Minister Paula Bennett and Finance Minister Steven Joyce have welcomed the release of the Productivity Commission’s issues paper for the inquiry into how New Zealand can maximise the opportunities and minimise the costs and risks of transitioning to a lower carbon economy.

“New Zealand has set ambitious targets to reduce our emissions through the 2030 Paris Agreement Target,” Mrs Bennett says. “Although we’re a small player, we’re globally connected and trade-dependent. This inquiry will help us to meet our targets to 2030 and then look beyond that to address long-term climate change effects.”

“This is an important piece of work that will guide us all on how to maximise the benefits and minimise the costs of a lower emissions economy,” Mr Joyce says.  “It’s crucial for New Zealand’s future that we make policy decisions informed by economic analysis so we achieve our climate goals while maintaining and lifting the prosperity of kiwi families at the same time.”

“A big focus of our response will be harnessing the benefits of some rapid technological advances our scientists are making.  The Productivity Commission will look at how New Zealand’s regulatory, technological, financial and institutional systems, processes and practices can help to encourage adoption of these new technologies,” says Mr Joyce.

The low-emissions economy issues paper is available HERE.

The closing date for submissions is 2 October 2017.

The Labour Party might have changed its leaders but where it wants to take New Zealand hasn’t changed, National Party Campaign Chair Steven Joyce says.

“By resurrecting a decade-old idea of charging Aucklanders another tax it’s now clear why they had to abandon the “fresh approach” line,” Mr Joyce says.

“Regional Fuel Tax was Labour Party policy back in 2007 and it has been rejected by voters many times since then. It’s about as tired as R&D tax credits.

“Labour would make Aucklanders pay at least another 10 cents a litre every time they fill up their tank and that’s just for starters. That would have a real impact on the cost of living for hard-working Aucklanders.

“And it would probably spread around the country. Last time around, Wellington and Canterbury were lining up for regional taxes too. There is also no national price so fuel companies could easily transfer the cost to motorists around the country.”

“Labour needs to be clear what the maximum additional tax per litre would be,” Mr Joyce says.

“National has shown that by careful financial management governments can live within their means and also invest in large projects in Auckland like Waterview, the Western Ring Route, the CRL, the Southern Motorway widening. And a whole lot of other big projects around the country.”

“The newly-opened Waterview tunnel and the Western Ring Route are making positive differences to journey times to and from the airport and across the network. There will be more benefits for motorists as the other projects come on stream.”

“Labour’s airport to city rail link policy is also re-heated as they committed to that timetable in the Mount Roskill by-election and then committed to it again with the Greens in March of this year,” Mr Joyce says.

“It’s telling that the first move of the new Labour leadership team is to propose another new tax.

“Labour is determined to put their hands deeper into the pockets of hardworking taxpayers. A new leader but the same old tax and spend Labour Party.”

Finance Minister Steven Joyce and Revenue Minister Judith Collins have today announced the Government’s final decisions on proposals to address base erosion and profit shifting (BEPS).

“The new measures will significantly strengthen our tax rules and our ability to ensure that multinationals are taxed fairly and on the basis of their actual level of economic activity in New Zealand,” Mr Joyce says.

In combination the new measures will:

• Stop foreign parents charging their New Zealand subsidiaries high interest rates to reduce their taxable profits in New Zealand.
• Stop multinationals using artificial arrangements to avoid having a taxable presence in New Zealand.
• Ensure multinationals are taxed in accordance with the economic substance of their activities in New Zealand.
• Counter strategies that multinationals have used to exploit gaps and mismatches in different countries’ domestic tax rules to avoid paying tax anywhere in the world.
• Make it easier for Inland Revenue to investigate uncooperative multinational companies.

“These changes will result in an estimated $200 million a year in additional tax being paid by multi-national companies,” Mr Joyce says. “The Government budgeted for $100 million annually in out-years for additional multi-national tax, and these decisions mean that will be increased by a further $100 million annually from Budget 2018 onwards.”

“These decisions have been arrived at after weighing up public feedback on three government discussion documents relating to: hybrid mismatch arrangements; interest limitation rules; and transfer pricing and permanent establishment avoidance,” Ms Collins says.

“For the most part, the proposals will proceed as originally devised but in some instances, public feedback made a good case for refining the scope of proposals or for fleshing out technical detail. We’ll carry out further targeted consultation on such matters of technical detail (including draft legislation), without reducing the effectiveness of the proposals.”

“It is very important that every company operating in New Zealand pays their fair share of tax,” Mr Joyce says. While most multi-national companies follow the rules there are some that attempt to minimise or eliminate their New Zealand tax obligations. The proposals target these multinationals.

“I’m confident that the policy decisions we’ve made will tackle these BEPS activities without reducing the general attractiveness of New Zealand as an investment destination.”

“As we’ve done in the past for BEPS matters, we’re releasing reports and Cabinet papers detailing our key decisions. We are also releasing the public submissions we received,” Ms Collins says.

It is expected that the BEPS measures will be included in a tax bill to be introduced by the end of the year, for enactment by July 2018.

The documents released today can be found at www.taxpolicy.ird.govt.nz

Finance Minister Steven Joyce has welcomed the release of the Productivity Commission’s issues paper for its new inquiry into measuring and improving the productivity and efficiency of core public services in the State sector.

“It is important that those delivering core public services maintain a constant focus on lifting the productivity of their sectors,” Mr Joyce says. “I expect that government agencies will be willing partners and work closely with the Productivity Commission to support this inquiry.”

“As a result of Budget 2017 an additional $7 billion will be spent in public services for New Zealanders over the next four years. These are big numbers. It’s crucial that we chase and achieve productivity gains from all of our expenditure just as the private sector does.”

“One of the core aims of this inquiry is the development of state sector productivity measures that are both useful and used. Measurement is crucial for decision-makers at all levels to be able to understand and demonstrate the value that is being delivered, as well as to identify where we can do better.

“It is my expectation that public services continue to focus on lifting productivity so we can do more to help New Zealanders with each dollar of taxpayers’ money.

“I look forward to seeing the valuable contribution that government agencies and other stakeholders make to this inquiry.”

The paper Measuring and Improving State Sector Productivity is available HERE.

The closing date for submissions is 8 September 2017.