Apparently the NZ Budget announced today is the biggest change to the tax system in 25 years. It doesn’t seem like much of a change more just adjusting the dials of an old and broken system.
The key adjustments are:
The personal income tax rate changes from 1 October 2010 are:
- Up to $14K – tax rate goes from 12.5% to 10.5%
- $14K to $48K – tax rate goes from 21.0% to 17.5%
- $48K to $70K – tax rate goes from 33.0% to 30.0%
- $70K+ – tax rate goes from 38.0% to 33.0%
GST will rise to 15% and company tax will drop to 28%.
If you really wanted to make radical changes to the system this is what I would do:
Taxation:
- Flat tax rate – equal for both individuals and businesses
- No GST
- Capital Gains Tax
- No Working for Families or middle class welfare
Transport:
- Build and upgrade highways but introduce tolls on most major roads
- Encourage people onto public transport by building more railways and introducing light rail into busy bus corridors. Make fares much cheaper than driving until a critical mass is achieved and slowly phase out the subsidies once things are paying for themselves.
Education:
- Free public education until the age of 25 including university or polytech study
- Universal Student Allowance to everyone in full time study in public post secondary education living away from home
- No funding to private schools – if parents want to send their children there they can pay for it entirely
- Increase funding for Research
Healthcare:
- Free doctors visits and hospitals
- Remove ACC
- Introduce Private Health Insurance for accidents with various options around cover but ensure everyone is eligible to be covered
State Owned Enterprises:
- Sell all SOEs operating in a commercial environment such as TVNZ, and Air New Zealand.
- Other SOEs do not pay tax as overheads in giving money to an SOE and then taxing it back is just silly.
Defense:
- Focus on Search and Rescue and Peace Keeping
- Increase funding for equipment to ensure state of the art equipment is used
