NEW ZEALAND MINISTER DEFENDS RECORD AGAINST INEQUALITY CLAIMS
12 Jul 2013 11:19
WELLINGTON, July 10 (Bernama) -- New Zealand Finance Minister Bill English on
Wednesday defended his government's record against claims it is presiding over a
wealth gap that is growing faster than that of many developed countries, Xinhua
news agency reported.
"The government has maintained a redistributive tax and income support system
that supports low and middle income families and helps New Zealanders through
times of need," English said in a published speech to the Trans-Tasman Business
Circle in Wellington.
At any particular time, a large number of households effectively paid no tax
as the income tax they paid was exceeded by the amount they received in welfare
benefits, tax refunds, paid parental leave and accommodation subsidies, he said.
The New Zealand Treasury estimates that households earning more than 150,000
NZ dollars (US$117,518) a year -- the top 12 percent of households by income --
would pay 46 percent of gross income tax this year, but this amounted to 76
percent of net income tax once welfare, tax refunds and other benefits were
taken into account, he said.
By contrast, households earning under 60,000 NZ dollars a year -- half of all
households -- were expected to pay 11 percent of net income tax.
"When we take income support payments into account, as a group they will
actually pay no net income tax at all," English said.
"That's because the 2.7 billion NZ dollars of income tax they are expected to
pay will be more than offset by the 8.1 billion NZ dollars they will receive in
Last month, the Organisation for Economic Co-operation and Development (OECD)
recommended that the New Zealand government introduce a capital gains tax in
order to rebalance the country's widening wealth gap and curb speculation on the
In its Economic Survey of New Zealand 2013, the Paris-based organisation of
developed nations said per capita incomes were "well below the OECD average" and
suggested "the main structural challenge will be to create the conditions that
encourage resources to shift towards more sustainable sources of prosperity. "
In August last year, the Ministry of Social Development issued a report
saying that inequality had decreased significantly from 2009 to 2010, before
rising in 2011 "to its highest level ever."