Christopher Luxon says "it's not the wealthy that are the problem" after two new reports found the richest Kiwis effectively pay lower rates of tax than other earners.
Today, Inland Revenue (IRD) and Treasury released the findings from two inquiries looking at how much tax high-wealth individuals pay across all income sources, and another on what the general population pays.
The National leader said the Government's economic management was to blame. (Source: 1News)
Speaking this afternoon, the National leader responded to the release of the reports by attacking the Government, where he said: "Labour is softening us for a tax grab".
"Let's be under no illusion. The reason why this Government wants a tax grab is because they've been addicted to spending and they've had abysmal economic management."
The IRD report gathered information on 311 of the country's wealthiest families - many of them with a net worth of more than $50m.
The mean estimated net worth of the families surveyed was $276 million in 2021.
Treasury found the general population pays an effective 20.2% tax rate across all income sources. The IRD found that high-wealth individuals, by comparison, pay about 9.4%.
Luxon was put on the spot by reporters this afternoon at Parliament who challenged him on whether he agreed with the report's findings.
"The top 2% of New Zealanders are paying about 26% of all our income tax, and I think that's entirely fair. Our economy is crying out for investment and capital to grow the economy," he told reporters.
"Be under no illusion. It's not the wealthy that are the problem here, the problem here is the Government that had economic policies that led to massive inflation in asset classes that are nominal, they haven't always been realised.
"Remember, the gains are only realised when the assets are sold."
Figures from Inland Revenue - to be released today - will showcase how much tax the wealthiest New Zealanders pay. (Source: Breakfast)
The IRD's report said the wealthiest people in New Zealand tended to earn more of their income through investments rather than salaries or wages.
Luxon said the Government's spending was to blame and instead called for a tax break for "working New Zealanders". He refused to say whether rich Kiwis needed a tax hike.
"The people that are being treated unfairly is the middle working class New Zealanders and they're the people that need a tax break."
More tax cuts have been part of Luxon's economic policy since March 2022. But last year, the National leader was forced to sideline plans to effectively repeal the Government's 39% top tax rate on those making over $180,000 — citing inflationary pressure.
When directly asked whether the tax system is fair today, he responded: "It's really grossly unfair we've got a Government that has mismanaged the economy so badly that they've created the asset inflation we've seen, the inequality we see today."
Earlier, Revenue Minister David Parker said the reviews weren't an attack on the rich.
"To be clear, this work is not about chasing tax avoiders, nor is it about attacking the rich. Wealthy New Zealanders are usually hard-working and creative people who comply with current rules. They have assisted IRD with this inquiry, and I am grateful for that," he said.
"The excellent work in this survey will enable future discussions on tax policy to be based on solid evidence."
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