National's tax plan and how it will be funded revealed

National's tax plan would cost $14.6 billion over four years and be funded by four tax changes, along with other "reprioritisations" and "savings".

The tax changes would be a 15% foreign buyer tax on houses worth over $2 million, ending the commercial building depreciation tax break, closing a tax loophole to make offshore online gambling services pay tax and implementing user-pays immigration levies - from which tourist visas would be exempt.

Reprioritisations included reductions in "back-office functions" in government departments and reducing spending on public service consultants.

National leader Christopher Luxon said a family with children, on the average household income of $120,000, would be up to $250 a fortnight better off under National’s tax relief plan.

“New Zealand should be a country where if you work hard, you can get ahead. But after years of economic mismanagement by Labour, topped off by two years of rampant inflation, huge increases in interest rates, and a shrinking economy, most Kiwis are going backwards.

“In particular, the squeezed middle is being left behind. These are New Zealanders who work hard, sometimes juggling multiple jobs and family responsibilities, but inflation and high tax rates are eating away their incomes."

The plan, National's "Back Pocket Boost" would "increase after-tax pay for the squeezed middle".

It would take effect from July 1 2024 and would shift income tax brackets to compensate for inflation, expand tax credits to reach more modest income earners, introduce the FamilyBoost childcare tax credit and increase Working for Families tax credits for working families (from 1 April 2024).

“National’s changes to the personal income tax brackets are capped at $78,100 of income, meaning everyone earning over this amount will receive the same amount of tax reduction per week.

“Our plan is carefully targeted to ensure that those who will benefit the most are working New Zealanders. It’s about time they got some relief from Labour’s cost-of-living crisis and National will deliver that to them.

“It’s not right that someone on the minimum wage is so close to the 30% tax rate, that if they choose to work longer hours, those hours are currently taxed at 30%. National’s changes will mean a full-time worker on the minimum wage will only pay 17.5% tax on extra hours worked.

“Tax relief will be delivered through a combination of adjustments to tax brackets, increases in tax credits for those on modest incomes, tax rebates for childcare costs and increases to Working for Families payments.

“National’s prudent, fully-funded and balanced tax plan also reduces major cost pressures faced by working people by removing some current and planned petrol taxes and reducing the taxes on rental properties which have driven higher rents.

Brightline test

“We will roll back Labour’s extension of the brightline test from an unreasonable 10 years – which sees mum and dad investment property owners treated as speculators – to two years, restore interest deductibility for rental properties to reduce pressure on rents, and remove new taxes on commonly-used digital services such as food delivery apps."

The plan sat alongside National's intention to "rebuild and grow the economy in order to lower inflation and interest rates", he said.

"National will restore discipline to government spending, remove red tape on businesses, build the infrastructure needed to support growth including 13 Roads of National Significance and four major public transport projects, and deliver the education and skills needed to support a growing economy.”

National's finance spokeswoman Nicola Willis said the party would protect health and education spending and "ensure that money goes from the back-office to the frontline".

"We will increase spending in health and education every year in government and ensure that this spending delivers improvements for all New Zealanders.

“Government agencies and Crown entities excluded from the overall spending reductions include the Ministry of Health, Te Whatu Ora, the Ministry of Education, the Education Review Office, Oranga Tamariki, Corrections, Police, Defence Force, NZTA and Kāinga Ora.

“These agencies will still be expected to reduce wasteful bureaucracy spending, but any savings will be recycled into the frontline. All other agencies will be required to find savings and reduce spending."