New Zealanders Want an Earthquake Tax
April 4, 2011 New Zealand Taxation
The Green Party of New Zealand has revealed the results of a recently commissioned survey which shows that a large number of New Zealanders are in favor of a temporary tax to help fund the cost of rebuilding Christchurch.
In a press release issued on April 4th Green Party Co-leader Russel Norman publicized the results of a recent survey aimed at gauging New Zealanders’ opinions on the best course of action to deal with the economic impact of the recent Christchurch earthquake.
The government has estimated that it will see a NZD 5 billion impact from the earthquake and arising recovery costs. The Prime Minister John Key has revealed that the sum will be met with a drastic decrease to national spending along with increased government borrowing. Russel Norman commented on the plan, saying, “…borrowing carries a big risk of a credit rating downgrade, which would add significant deadweight costs right across the economy.”
The survey indicated that only 22 percent of New Zealanders support an increase to government borrowing, and only 29 percent back the idea of decreasing government spending. Overall, it was shown that nearly 57 percent are in favor of instating a income levy which will be used for recovery efforts. The Green party suggested that the tax should consist of a 1.5 percent charge on all incomes between NZD 48 001 and NZD 70 000, and a 3 percent levy on all higher incomes. It is estimated that the proposal would raise approximately NZD 1 billion per annum.
Russel Norman conceded that the government has already ruled out a earthquake levy, but said, “…John Key has shown in the past he’s willing to listen New Zealand, hopefully this poll, on top of the advice of several economic commentators, will shift his thinking.”
Photo by Shazster