The Times Australia
The Times World News

.

The first 100 days of tax policy bode well for National’s supporters – others might be worried

  • Written by Lisa Marriott, Professor of Taxation, Te Herenga Waka — Victoria University of Wellington

Ahead of the 2023 election, it was clear there was not a lot in National’s tax policies[1] to benefit the least well off. Nothing has happened over the first 100 days of government to change this assessment.

From a progressive perspective, it is clear New Zealand has elected an austerity government. The National-ACT-NZ First coalition is prepared to impose swingeing cuts in the public service[2] and curtail welfare[3] to meet its promises of income tax relief[4] for some.

We won’t know what the tax cuts will be until the Budget on May 30. But early indicators are they will be squarely aimed at National’s voting base.

Three men talking in front of podiums
The coalition agreements between National, ACT and NZ First mean some of National’s pre-election tax policy has not survived. Hagen Hopkins/Getty Images[5]

What did (and didn’t) survive negotiations

The foreign buyer’s tax proposal[6] did not survive coalition negotiations with NZ First. We have also heard little more about taxing offshore gambling[7]. Perhaps the government has realised this is easier said than done[8].

Cost recovery from immigrants[9] was another proposed revenue source. Strictly speaking, this wasn’t a new idea. A review of immigration fees and levies[10] commissioned by the Labour government in 2022 identified several ways to increase the price of some immigration services, many of which have been implemented. All is quiet on this policy as well.

Read more: The government’s first 100 days have gone largely to plan – now comes the hard part[11]

Another component of National’s tax proposals was removing the depreciation allowance[12] on commercial property. This was an unusual idea for National and we suspect it will not become law.

The phased-in return of mortgage interest deductibility for residential rental property[13] owners is included in the National-ACT coalition agreement. However, the provisions are more generous than those originally proposed by National and are now retrospective, with a 60% reduction in 2023-24, 80% in 2024-25 and 100% in 2025-26.

This will reduce government revenue and potentially result in tax refunds for residential rental property owners in 2023-24, who will be allowed a 60% interest deduction, rather than 50% under the existing legislation. The announcement in December 2023 that the bright-line test will be reduced to two years[14] from July 1 2024 will further reduce tax revenue.

The Clean Car Standard was an initiative of the previous government to address vehicle emissions. Research suggested households that would benefit the most[15] from vehicle and fuel efficiency standards were low-income ones. Despite strong support[16], the clean car discount scheme was repealed in December 2023 as well.

Read more: 'They're nice to me, I'm nice to them': new research sheds light on what motivates political party donors in New Zealand[17]

The scheme provided rebates for zero- or low-emission vehicles, and additional fees for high-emission vehicles. New Zealand was already late to the party when this policy was introduced in April 2022.

In 2022, electric and hybrid vehicles accounted for around one-third of all new car registrations, which increased to 41% in 2023[18] (26.5% hybrid and 14.5% electric). Sales of electric vehicles in December 2023 (before the removal of the discount) were nearly 14 times higher than those in January 2024.

Electric or hybrid vehicle owners will also start paying road user charges from April 1, 2024. While the government campaigned on no new taxes, extending the tax base does not appear to qualify as a new tax.

Likewise, the recently announced increase in car registration fees[19] to fund a massive road-building programme is not being considered a tax increase by the government[20].

The government has also announced fuel tax increases[21] – scheduled to start in 2027. National ministers have responded to criticism by saying the eventual tax increase will not be in this political term.

The Budget should provide clarity

The Taxation Principles Reporting Act 2023[22] mandated reporting based on specified principles. While there is never full consensus on what good tax principles are, this act would (or should) have resulted in greater transparency on at least some tax measures. However, it was repealed in December 2023.

To reiterate, until the Budget, we won’t gain a full understanding of the government’s tax objectives.

Action taken in the first 100 days of the government has given us a reduction in tax transparency, beneficial tax treatment for residential landlords, reduced incentives for consumption of low-emission vehicles, some clear areas where expenditure will be slashed, but little clarity on how tax cuts will be funded.

While we can’t yet know the full details of tax policy, the expenditure side indicates the poor and the environment will be worst affected, while residential rental property owners will benefit.

References

  1. ^ not a lot in National’s tax policies (theconversation.com)
  2. ^ swingeing cuts in the public service (www.rnz.co.nz)
  3. ^ curtail welfare (www.stuff.co.nz)
  4. ^ promises of income tax relief (www.aljazeera.com)
  5. ^ Hagen Hopkins/Getty Images (www.gettyimages.com.au)
  6. ^ foreign buyer’s tax proposal (www.1news.co.nz)
  7. ^ taxing offshore gambling (www.bellgully.com)
  8. ^ easier said than done (www.stuff.co.nz)
  9. ^ Cost recovery from immigrants (newsroom.co.nz)
  10. ^ review of immigration fees and levies (www.mbie.govt.nz)
  11. ^ The government’s first 100 days have gone largely to plan – now comes the hard part (theconversation.com)
  12. ^ removing the depreciation allowance (www.nzherald.co.nz)
  13. ^ mortgage interest deductibility for residential rental property (theconversation.com)
  14. ^ reduced to two years (www.beehive.govt.nz)
  15. ^ benefit the most (www.beehive.govt.nz)
  16. ^ strong support (www.nzta.govt.nz)
  17. ^ 'They're nice to me, I'm nice to them': new research sheds light on what motivates political party donors in New Zealand (theconversation.com)
  18. ^ 41% in 2023 (www.canstar.co.nz)
  19. ^ increase in car registration fees (www.thepress.co.nz)
  20. ^ tax increase by the government (www.1news.co.nz)
  21. ^ fuel tax increases (www.times.co.nz)
  22. ^ Taxation Principles Reporting Act 2023 (www.beehive.govt.nz)

Read more https://theconversation.com/the-first-100-days-of-tax-policy-bode-well-for-nationals-supporters-others-might-be-worried-225259

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Duke of Dural to Get Rooftop Bar as New Owners Invest in Venue Upgrade

The Duke of Dural, in Sydney’s north-west, is set for a major uplift under new ownership, following its acquisition by hospitality group Good Beer Company this week. Led by resp...

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...

The Role of Your GP in Creating a Chronic Disease Management Plan That Works

Living with a long-term condition, whether that is diabetes, asthma, arthritis or heart disease, means making hundreds of small decisions every day. You plan your diet against m...