Death and Taxes
Death and taxes have long been references as the two certainties in life. Three reports this month have highlighted the excessive tax appetite of the Ardern/Peters government.
The Government has hiked the petrol taxes three times in their first year and another three increases are planned that will add another 10c a litre over the next two years. It rubs salt in the wound that Labour promised no new taxes.
Prime Minister Jacinda Ardern was disingenuous last week in slating fuel companies for “fleecing” New Zealanders and claiming the increase in tax was only 6.8 cents per litre. She failed to include the increase in petrol excise tax of 3.5 cents/litre introduced on 1 October and the new 10c/litre regional fuel tax. The combination of tax and levies now makes up over half the cost and is the reason we pay much more than Australia where petrol is $1.59 per litre.
The increase in petrol taxes has been compounded by a falling kiwi dollar. The Government needs to accept some responsibility for this too. Its economic policies of banning overseas investment, ending oil and gas exploration, increasing taxation and record strikes have seen business confidence plummet and the kiwi dollar fall.
Petrol taxes have been raised in the past but never as quickly or by so much. An historic comparison shows petrol per litre was 91c in 1999, $1.77 in 2008, $1.96 in 2017 and is now $2.48. That equates to an 8% a year rise under the Clark Labour Government, a 1% per year rise under the Key/English National Government and a 25% rise in the first year of this Ardern/Peters Government!
The increases in fuel tax come in the same week as the Government reveals a $5.5 billion surplus for 2017/18. This equates to over $3,000 per household. It shows there was no justification for the hike in fuel taxes or repealing National’s income tax reductions.
National tax changes focusses on lower and middle income earners by increasing the 10.5c rate band from $14,000 to $22,000 and the 17.5c rate band from $48,000 to $52,000. These would have put $26 a week into every Nelson household on 1 April 2018. Tax reductions are a good way of increasing household incomes without adding to inflationary pressures.
The debate over tax is going to get louder for three reasons. Firstly, inflation means we now have many middle income families paying the top rates of income tax. Secondly, the Government is wasting huge sums on poor quality spending to buy Winston Peter’s support and with its dozens of working groups. Thirdly, the Government keeps adding new taxes with the new fuel tax, the new tourism tax and the proposed capital gains tax.
The Government needs to get the message that New Zealanders are not just an ATM machine for their new and increasing taxes. You can help by adding your name to National’s petition - stopthefueltax.co.nz