The lack of data around how much tax New Zealand's wealthiest pay came under the spotlight on Tuesday as Revenue Minister David Parker revealed his plans to create the foundation for what he calls a "fair" tax system.
He took a swipe along the way at New Zealand's data collection of tax rates of the top earners – describing the situation as "serious short comings of data", including "poor data on distribution of wealth".
The Revenue Minister also announced he would be introducing a bill to Parliament to set out tax principles that could inform future tax policy advice.
Parker began his speech saying there was "no secret plan to introduce a capital gains tax or wealth tax".
Asked why the top tax rate data had not been collected, Parker said he thought that "one of the reasons why countries around the world haven't gathered good data on this is there's some pretty powerful interests that quite like these answers being obscure".
"We haven't had that data in New Zealand for some decades, the problem has become more pressing around the world as wealth has become more concentrated into the hands of a few, it's time we find out what tax rates are paid effectively by different cohorts in New Zealand."
Parker said that New Zealand has "virtually no idea of what rate of tax is paid by the very wealthy."
Parker said the current survey data collected "effectively ignored the wealthiest", and called the NBR Rich List a better indicator of wealth than the surveys New Zealand has.
"I was still shocked to find the survey measures of wealth, the highest level of wealth they've even found in New Zealand is $20 million in a country of billionaires. That surprised me, how way-out it is."
On a response to the data, Parker said any information that arises from the inquiry should be available to all political parties by the time of the next election.
When pressed whether Labour would be announcing tax proposals at election 2023 based on the data collected, with a possibility of the data showing disparities between the wealthiest and income earners, Parker said, "we'll have to wait and see".
ACT leader David Seymour accused Labour of "planting the seed for increased taxation to fund their addiction to spending".
“Introducing more legislation and regulations around our currently very simple tax system will only create more bureaucracy and have accountants licking their lips. ACT says there is nothing fair about taxing the life out of hardworking Kiwis who are already suffering from sky high inflation created by Labour’s out of control spending."
Green Party's Julie Anne Genter called New Zealand's tax system "unfair... and it needs urgent attention".
She said IRD showed the wealthiest New Zealanders "pay just 12% of their total income in tax on average".
"This is partly because we tax income from work, but we don’t tax wealth. Wealthy individuals get their income from untaxed or lowly taxed sources.
"It is remarkable that it has taken the Government this long to figure out that the wealthiest few are not paying their fair share. Worse still, having finally recognised the problem, there are no plans to fix it – other than to spend months developing a set of fairness principles to guide the tax system."
Top Image: Person using calculator. (File photo) Photo: Jirapong Manustrong/iStock
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