Labour’s tax increase is nothing more than a symbolic move to tax hardworking New Zealanders that will do little except erode the integrity of our tax system, National’s Shadow Treasurer Andrew Bayly says.

“The new tax threshold will, supposedly, only affect the top 2 per cent of earners and raise just $95 million in its first year – a drop in the bucket compared to the $110 million the Government is borrowing per day.

“So in the 24 hours it has taken to pass this legislation through Parliament, the Government has already borrowed more money than this tax will generate in its first year.

“When it comes to the Covid-19 recovery, it’s hard to see how this will shift the dial. The reality is, you can’t tax your way out of a recession.

“Revenue Minister David Parker knows this, which is why he’s also rushing through invasive new powers for the Commissioner of Inland Revenue to gather taxpayers’ information.

“The absurdity of this is that the Attorney-General – David Parker – warned Parliament these new powers would breach New Zealanders’ human rights. The whole process is a shambles.

“Labour’s claim that this is a ‘progressive tax’ ring hollow. The biggest beneficiaries of this policy will be accountants and tax lawyers.

“The 11 per cent differential this will create between the top marginal rate and the company tax rate of 28 per cent is concerning. Significant lack of alignment between these two rates encourages retention of earnings within companies, rather than distribution to shareholders.

“Kiwis who work hard to get ahead in life and amass some wealth to pass on their children are the only ones who will pay the price for Labour’s lack of ideas to grow the economy.”