Collins claims average wage earner will pay $1060 a year more in tax under Labour

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1 NEWS

National's revenue spokesperson Judith Collins has accused Labour of misleading New Zealand workers by saying they won't increase income taxes.

The former Police Minister says it was a 'team effort' that led to the pledge to increase police ranks by over 1000 staff.

Judith Collins.

Source: 1 NEWS

Ms Collins says Labour would force someone on the average wage to pay $1060 a year more in tax.

She says under the current law, the bottom two tax thresholds will increase from April 1 next year, meaning annual earnings of up to $22,000 will be taxed at 10.5 per cent, and earnings between $22,001 and $52,000 will be taxed at 17.5 per cent. 

"These changes were made in response to rising incomes, and go some way to countering the effects of fiscal drag on low and middle income earners, where they otherwise move into higher tax brackets as their income increases," Ms Collins said. 

"In pledging to reverse the current law, there is absolutely no doubt that Labour is seeking to increase income taxes," she said. 

If Labour is elected and proceed with their changes, people on incomes of $52,000 a year or higher will be paying $1060 more income tax per year from April than will currently be the case, Ms Collins said. 

"National doesn’t believe that someone on the median wage should end up with a tax rate of 30 cents in the dollar. Without our approach, that's what would happen," she said. 

"Labour needs to be upfront with New Zealanders. Under Labour income tax is going up." 

Ms Ardern said it's "patently incorrect" that Labour will increase income tax, as claimed in an ad released by National today.

Labour has said it will set up a tax working group if it wins the election and then decide which of its recommendations to implement.

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