Grant Robertson: A balanced plan for managing debt

The world is facing its most challenging battle in generations with an insidious and new virus as the enemy.

As we saw COVID-19 take hold overseas we knew we had to act fast to protect our people, which is why our Government took the extraordinary step of closing our borders so early in the crisis. Our team of five million fought hard and together we beat the first wave of the virus, but it did come with an economic cost. 

Cushioning the blow from COVID-19 meant we had to borrow money to support 1.7 million of our workers through lockdown with the wage subsidy. Because we went into the crisis in a strong economic position, our overall debt is still much lower than most other countries. 

Looking ahead we are now focussed on keeping a lid on that debt, while protecting the essential services like health and education that New Zealanders rely on. We are striking a balance by asking the top 2% of earners to pitch in a little more to help the whole country recover and rebuild.

The new tax rate of 39 cents will only have to be paid on income earned over $180,000, so this will only affect the top two percent of earners. For 98 percent of people there won’t be any change. It’s important to remember too that this is for individual income. So if a couple together earn over $180,000 but individually earn less than that amount, then there is no change at all to the amount they have to pay.

This is about sharing the load so everyone is doing their bit to help our country rebuild after our fight against the virus. It is also about being clear as to how we will pay for our commitments and keep a lid on debt. National are all over the place on this issue, with policies that will mean massive cuts to essential services. That is a risk New Zealanders don’t need right now.

Labour will also make sure that Kiwi businesses are operating on a level playing field, by closing tax loopholes so multinational corporations pay their fair share.

Right now we need stability and continuity. That is what this policy provides. 

Read more about our revenue policy here.

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