Maureen Pugh, National List MP
Since Labour came into office food prices are up more than 13 per cent; the average rent is up $140 a week; and it costs $45 more to re-fuel an average car.
The average house price is up almost $400,000 under Labour. Rising interest rates mean costs on a $600,000 mortgage are up $7200 in the last 12 months, and they’re only going to continue rising from here.
The rural heartland is being hit hard by rampant inflation; we have seen huge increases in the cost of finance, labour and transport, and farm supplies like feed and fertiliser have had meteoric price rises.
With prices rising twice as fast as wages, the average Kiwi family is worse off than they were just a year ago – but high inflation means income tax and GST are higher.
We’ve got the terribly unfair situation where someone on the average wage now has a marginal tax rate of 33 percent. And someone on the minimum wage only has to work a 44 hour week to face a marginal tax rate of 30 cents on the dollar.
Budget Day is less than two months away. The finance minister could use a portion of his record $6 billion additional spend that is over and above pre-Covid levels, to adjust income tax thresholds to account for the inflation.
Because NZ Superannuation is indexed to the average after-tax wage our superannuitants would also benefit. The ‘couple’ rate for NZ Super would increase by around $520 a year. No cuts to health, education or police would be necessary.
It wouldn’t mean a budget with no new spending. It would be met from the finance minister’s record $6 billion new spending allowance – and he would still have three quarters of that allowance left to fund new initiatives or pay down debt, which would still be a record amount of new spending.
In fact the remaining $4.3 billion would still be the biggest-ever new budget spending allowance in New Zealand’s history.
