NZ Greens Party Wants 40% Tax Hike For New Zealand's Wealthiest

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By Reissa Su | August 19, 2014 10:05 AM EST

The New Zealand Greens party has issued a challenge to other political parties in the country to support its campaign to end child poverty by increasing tax rates for the wealthy. The Greens plans to impose a 40 per cent tax on all income above $140,000 to help raise money to reduce child poverty. Reports said trust tax rates would also be raised to 40 per cent.

REUTERS
Reserve Bank of New Zealand dollar notes are pictured in Singapore in this June 22, 2006 file photo.

The Labour party did not oppose the Greens' proposal but said it already had the "right balance" when it announced a 36 per cent tax on income above $150,000. Labour leader David Cunliffe said he was confident that the party's policy will reduce child poverty in New Zealand.

Cunliffe added that Labour is "determined" to help the country's poor children. He said a balanced fiscal package is needed to pay off government debts and maintain surpluses every year.

The Greens announced their tax rate hike at an Auckland campaign launch. Party co-leader Metiria Turei told supporters that if implemented, the new tax rate will raise $1 billion from only three per cent of the population.

The increased revenues will help the country expand the Working for Families in-work tax credit to include students and beneficiaries. If successful, Turei said the change will give 150,000 families an extra $60 a week to their household budget.

The Greens also announced an extension of the Parental Tax Credit to beneficiaries with newborn babies.

However, despite the Greens' good intentions, the National Party said increasing tax rates may only result in a rising poverty rate. Steven Joyce, economic development spokesperson for National, said it would "slow down" New Zealand's economy and increase unemployment.

The Greens' policy was also criticised by the Auckland Chamber of Commerce for being a bad sign to businesses. The chamber executive Michael Barnett said the Greens would appear to be punishing businesses for creating jobs and achieving success.

Greens co-leader Russel Norman does not seem to agree when he said the richest 3 per cent of New Zealanders should feel proud to make a difference in helping impoverished children.  

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(Photo: REUTERS / Dennis Owen/Files)
Reserve Bank of New Zealand dollar notes are pictured in Singapore in this June 22, 2006 file photo.
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