Chris Luxon delivers a State of the Nation address from Auckland. Video / National Party NZ Facebook
A national government would reverse all taxes introduced under Labour, said party leader Christopher Luxon.
This includes the regional fuel tax, the proposed light rail tax, the extension of the light line, the removal of interest deductibility on rentals, the new income tax rate of 39% and the employment insurance plan.
The party would also adjust the three lower income tax thresholds to account for inflation seen over the past four years.
“The facts are raw – we have a cost of living crisis in New Zealand,” Luxon said today in his first state of the nation address in Auckland.
Luxon has criticized the Labor government for its lack of delivery – and for its spending.
He also attacked socialism as a political system, saying it “created misery”.
He said the Kiwis were frustrated and it was leading to a “division in society”.
The government was addicted to spending, he said.
All of this shoddy and untargeted spending “had serious consequences for the economy”.
“Inflation is at its highest level in three decades,” he said.
“With prices rising twice as fast as wages, Kiwi families are worse off than 12 months ago.
“Food prices are rising the highest in a decade, gasoline is over $3 a liter and rents are skyrocketing.”
Meanwhile, the average house price rose $400,000 under Labor, he said.
Increased spending made sense in 2020, but times had changed, he said. Instead of pulling out, Labor continued to “spend big”, he said.
He protests against the introduction of new taxes.
“It’s classic work – spend, spend, spend, then they tax you to pay,” he said.
“The National will repeal every one of these tax increases put in place by Labour.”
Luxon said inflation was “another stealth tax grab.”
“We have the perverse situation where someone with an average salary now has a marginal tax rate of 33%.
“And someone on minimum wage only has to work 44 hours a week to face a tax rate of 30 cents on the dollar.
He called on the government to adjust the income tax thresholds to take account of the inflation seen under labour.
This would see each of the first three tax thresholds immediately increase by around eleven and a half per cent, he said.
Under the proposal, the 10.5% tax rate would apply to the first $15,600 of income, not $14,000 as it currently does, he said.
The 17.5% rate would extend to $53,500 rather than $48,000.
And rather than the 33% tax rate reaching $70,000, less than the average salary, it would rise to $78,100.
Someone earning $55,000 a year would get $800 in tax relief a year.
A person on the average salary would earn $870 a year.
And anyone earning $78,100 or more would earn over $1,000 a year.
They would not touch the 39% threshold because it only recently came into force, he said.
It would cost just under $1.7 billion, he said.
They would be covered by the $6 billion in spending announced by Finance Minister Grant Robertson for this year’s budget, he said.
“Even after factoring in the $1.7 billion cost of these tax cuts, the remaining $4.3 billion would still be the largest allocation ever given to new spending initiatives,” he said. -he declares.
“Luxon’s different experience from most politicians”
Luxon began his speech by acknowledging the “unprovoked and senseless attack on Ukraine”.
“Their bravery inspired us all.”
Luxon, who as a new MP and leader remains unknown to many New Zealanders, said he came to politics with “a different background to most politicians”.
He talked about his upbringing and his parents. His father was a salesman, from whom he learned to have “ambition and never settle for mediocrity”.
From his mother he learned “people, relationships and from her I got my sense of humor”. She then worked as a psychotherapist and counsellor.
“From her I learned that life can be complicated, messy and difficult – and that we all have a responsibility to support those who make it hard.”
He said he was proud of his business accomplishments, but his “greatest achievement” was convincing his wife Amanda to marry him and their two children.
“Being a husband and father will forever be the role that defines me. Nothing else comes close.”
His first job was at McDonalds, and he worked in a drive-thru. After college, he joined Unilever.
“Living and working across the world for 16 years, I have seen the good and the bad of different political systems.”
He referenced how several Labor MPs said they were proud socialists.
“Whatever you call it, the Labor Party has shown us time and time again that it believes only it knows what is best for Kiwis and their communities.
“They don’t trust us to make decisions for ourselves and our families – they increasingly insist that politicians and bureaucrats in Wellington dictate things.
“I just don’t agree.”
He spoke of living in Moscow and developing a sense that “socialism – in terms of government control of daily life and lack of rewards for hard work – had failed miserably and in fact created misery”.
He spoke of his return to New Zealand and the management of Air New Zealand and its 12,000 employees.
“These experiences have shaped my belief that corporations have a responsibility to engage with the economic, social and environmental issues that will ultimately strengthen our society.”
He said he joined National because he wanted New Zealand to “achieve its full potential and help build a society where every Kiwi can thrive and move forward”.
“Where communities aren’t dictated by Wellington politicians.
“Where if you work hard you can afford to buy a house.
“Where we support those who do it hard.
“Where our public health and education systems are first class for all Kiwis.
“Where we protect our natural environment and play our part in climate change.”
He criticized the government, saying it was “just pirouette and no action”.
He spoke out against Labor policies, including Three Waters, said the government was “deeply suspicious of business” but ran a public sector that could not deliver on its promises.
Young people were shut out of the housing market as rent rose by $140 a week under the Labor regime. Climate policies were deteriorating, real wages were falling, education was declining and child poverty was on the rise.
“These are not signs of a nation at its best.
“These are signs of Labour’s low expectations and a lack of confidence in people’s ability to succeed.
“We lack confidence.
Luxon said he was a “proud advocate of free enterprise because of the good the system has done in creating opportunity and alleviating poverty.”
“The ladder of opportunity seems to be losing its lowest rungs. And it’s not true.”
He said he believed in a social safety net, but Labor’s approach was to “spend billions on social benefits which only succeed in making poverty slightly less painful. They reinforce learned helplessness, do not help Kiwis become self-sufficient”.
“It’s the subtle bias of low expectations.”
This did not work, the number of people receiving allowances had increased.
“It’s not caring or kind. It’s crippling.
“Being prepared to invest in the right places to ensure better long-term outcomes for New Zealand’s most vulnerable and to save taxpayers’ money in the long run is what Bill English has called ‘social investing’ .
“It will be back under National.”
Luxon said there was a need to move away from “Labour’s view that politicians control the economy” and back to Kiwis and business.
“I believe that practical and modern center-right political principles can help us address the social, environmental and economic challenges we face as a country.”
Luxon and his finance spokesman, Simon Bridges, crafted fiscal policies over the summer and since the start of the year have increasingly turned their attacks on the government to an economic front.
Bridges was not at Luxon’s state of the nation because he has Covid-19 – he confirmed he and the rest of his family were all infected. Bridges tested positive Thursday afternoon.
Luxon previously called for Auckland’s regional fuel tax to be scrapped, and National opposed other tax changes made by the government, including the new top tax rate, increasing the clear line test for the purchase of property and removing the deductibility of interest on investment property.
In recent weeks, Luxon has challenged Prime Minister Jacinda Ardern to question time over rising costs of living, including fuel prices, and the shortage of affordable housing.
Last week, Luxon challenged Ardern to name tools the government could use to reduce inflation – essentially prompting Ardern to promise to cut spending.
Luxon singled out the government’s decision to spend “billions on vanity projects like underground trams” as a particularly glaring funding choice.
Two weeks ago, Luxon gave a major speech on the government’s response to Covid-19, while addressing protesters’ concerns in parliament.
He said New Zealand had become “a divided society” under the Labor government and it was time to phase out vaccination mandates.
“The prime minister talks about a team of five million, but in fact she’s leading the most controversial government in recent memory,” he said.
“Tenants versus landlords. Business owners versus workers. Farmers versus cities. Kiwis at home versus those stuck abroad. Vaccinated versus unvaccinated.”
Ardern responded by saying his comments came “dangerously close to sympathy” with the protesters.
Since Luxon became leader of the National Party in December, there has been a steady growth in support for the party, largely at the expense of Act.
February’s Curia poll had Labor – up 1 percentage point – at 42%, just four points ahead of National with 38%. National gained 5 percentage points in January.