National has dumped two taxes it had been actively considering, with party leader Christopher Luxon ruling out both an accommodation levy and a bank tax as part of what he calls a new “no new taxes” election pledge.
National had previously committed only to “no new taxes on working people”.
“This is about no new taxes, and I can’t be clearer,” Luxon said.
“Tax is a defining theme for this election, and the choice for Kiwis is clear. It’s either a National government promising no new taxes, or a Labour and its prospective coalition proposing at least nine new taxes.”
The accommodation levy would have put a charge on hotel and Airbnb stays, with revenue expected to help fund events and tourism infrastructure.
The so-called bed tax has been heavily promoted by Auckland Mayor Wayne Brown and in Queenstown. Luxon had previously committed to exploring the idea as Prime Minister.
But speaking today, he said: “What we’ve determined is there was no other way that it wouldn’t flow on and actually hit a Kiwi family or a couple going out to a for a weekend away in Queenstown or in Auckland.
“We understand the real challenge that many of our regional centres are facing with the pressure of tourism and the cost of tourism, and we will look to support the mayors, the councils, and those regions. But we’re not going to do it through levelling a tax.”
In response, Brown said the move was “deeply disappointing” and “raises serious questions about the Government’s commitment to the regional deal” it signed.
Meanwhile Labour hit back at the pledge announced today, arguing National was asking voters to accept cuts without saying where they would fall.
It is not the first charge National has stepped back from in the past six months.
In June, Energy Minister Simeon Brown ruled out funding the Government’s planned liquefied natural gas import facility in Taranaki with a levy on power bills — a proposal which Labour had squarely branded a “gas tax”.
Energy Minister said the Government is working “through the detail” of how the facility will be paid for. (Source: 1News)
Bed tax infeasible without raising costs on NZers – Willis
Willis said today that National had determined “there is no way to do an accommodation levy without increasing costs on Kiwis booking a weekend away.
“We’ll look at how existing mechanisms could be used to support councils with the costs of tourism,” she said in a media release.
Meanwhile a ruling out of additional taxes on banks was a notable shift for Willis, who had previously raised the idea of more fairly taxing large financial institutions.
“We’ve got to make sure the banks are taxed fairly” she said in May. “As a minister in this Government, I am still actively considering the taxation of banks and what that looks like.
“As National Party finance spokesperson, if this Government isn’t able to make further decisions on that, then I do expect that we will take our policies to the campaign.”
ANZ chief executive points out the bank already pays a billion dollars in tax. (Source: 1News)
Willis said today: “I have looked at what the banks are being taxed at now and measures for changing that, and there are no other measures that I can see won’t result in additional costs for Kiwis.
“So, what’s changed is my concern that there isn’t a mechanism that won’t be end up being borne by everyday people on their mortgage or their bank fees.”
Auckland mayor ‘deeply disappointed’ by tax backdown
The accommodation levy, or “bed tax”, had been heavily pushed by Wayne Brown, who heralded its inclusion for consideration in his city deal with central government.
Brown said the proposal did not originate with him but came from Auckland’s hotel and accommodation sector.
“A bed-night levy is a user charge, not a general tax. Taxes are unavoidable, you can avoid this by just not staying in a hotel,” he said.
He said the levy would mean “no additional rates or taxes on Aucklanders” while allowing the city to attract more events, support businesses and to grow the regional economy.
Brown said the Prime Minister had signed the Auckland regional deal in April, committing the Government to investigate and explore a bed-night levy next year.
“National now appears to have walked away from that commitment,” he said.
The first-of-a-kind agreement in New Zealand sets out a plan for greater cooperation over coming decades. (Source: 1News)
“The regional deal is an agreement between the Crown and the council.
“It should not be something one party can simply disregard.”
Brown said he would raise the issue when he met ministers on September 9 for a quarterly review of the deal’s progress – joined alongside by deputy mayor Desley Simpson and planning committee chair Richard Hills.
Congestion charge, fuel hikes still on table
Today’s announcement was not expected to affect other government proposals that may incur extra charges, such as future congestion charging or planned fuel tax hikes — but the latter of which were “highly unlikely” to go ahead next January, Luxon said.
On congestion charging, finance spokesperson Willis said it had already been legislated and that it would only apply to people who were subject to it.
Auckland Mayor Wayne Brown wants a peak hour payment of up to $5 on two choked stretches of city motorway (Source: Breakfast)
“Time of use charging has already been legislated for, in fact, almost unanimously by the whole Parliament,” she told media.
“That scheme is something for councils, and critically, is only to be paid by those who are using roads at that particular time with all revenue used to further transport investment.”
Willis promised National could continue to invest in the frontline public services without introducing new taxes.
“Labour spent up large in government, racked up $120 billion more debt and kept taxes higher with nothing to show for it. It is proposing the same mistakes again and Kiwis will be left paying the price for years to come,” she said.
“National has brought the government books under control through disciplined spending and by creating the settings to support economic growth. That work means we don’t need to reach for new taxes to pay for frontline public services.”
Labour campaign chair Kieran McAnulty said the party had to spell out the trade-offs.
“National has told New Zealanders what it won’t do. Now it needs to tell them what it will do,” McAnulty said in a media release today.
“If you’re ruling out revenue, you have to cut spending. So what are you going to cut? More nurses? More hospital services? More frontline workers? More support for families?”