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The first 100 days of tax policy bode well for National’s supporters – others might be worried

Ahead of the 2023 election, it was clear there was not a lot in National’s tax policies to benefit the least well off. Nothing has happened over the first 100 days of government to change this assessment.

From a progressive perspective, it is clear New Zealand has elected an austerity government. The National-ACT-NZ First coalition is prepared to impose swingeing cuts in the public service and curtail welfare to meet its promises of income tax relief for some.

We won’t know what the tax cuts will be until the Budget on May 30. But early indicators are they will be squarely aimed at National’s voting base.

What did (and didn’t) survive negotiations

The foreign buyer’s tax proposal did not survive coalition negotiations with NZ First. We have also heard little more about taxing offshore gambling. Perhaps the government has realised this is easier said than done.

Cost recovery from immigrants was another proposed revenue source. Strictly speaking, this wasn’t a new idea. A review of immigration fees and levies commissioned by the Labour government in 2022 identified several ways to increase the price of some immigration services, many of which have been implemented. All is quiet on this policy as well.


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Another component of National’s tax proposals was removing the depreciation allowance on commercial property. This was an unusual idea for National and we suspect it will not become law.

The phased-in return of mortgage interest deductibility for residential rental property owners is included in the National-ACT coalition agreement. However, the provisions are more generous than those originally proposed by National and are now retrospective, with a 60% reduction in 2023-24, 80% in 2024-25 and 100% in 2025-26.

This will reduce government revenue and potentially result in tax refunds for residential rental property owners in 2023-24, who will be allowed a 60% interest deduction, rather than 50% under the existing legislation. The announcement in December 2023 that the bright-line test will be reduced to two years from July 1 2024 will further reduce tax revenue.

The Clean Car Standard was an initiative of the previous government to address vehicle emissions. Research suggested households that would benefit the most from vehicle and fuel efficiency standards were low-income ones. Despite strong support, the clean car discount scheme was repealed in December 2023 as well.


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The scheme provided rebates for zero- or low-emission vehicles, and additional fees for high-emission vehicles. New Zealand was already late to the party when this policy was introduced in April 2022.

In 2022, electric and hybrid vehicles accounted for around one-third of all new car registrations, which increased to 41% in 2023 (26.5% hybrid and 14.5% electric). Sales of electric vehicles in December 2023 (before the removal of the discount) were nearly 14 times higher than those in January 2024.

Electric or hybrid vehicle owners will also start paying road user charges from April 1, 2024. While the government campaigned on no new taxes, extending the tax base does not appear to qualify as a new tax.

Likewise, the recently announced increase in car registration fees to fund a massive road-building programme is not being considered a tax increase by the government.

The government has also announced fuel tax increases – scheduled to start in 2027. National ministers have responded to criticism by saying the eventual tax increase will not be in this political term.

The Budget should provide clarity

The Taxation Principles Reporting Act 2023 mandated reporting based on specified principles. While there is never full consensus on what good tax principles are, this act would (or should) have resulted in greater transparency on at least some tax measures. However, it was repealed in December 2023.

To reiterate, until the Budget, we won’t gain a full understanding of the government’s tax objectives.

Action taken in the first 100 days of the government has given us a reduction in tax transparency, beneficial tax treatment for residential landlords, reduced incentives for consumption of low-emission vehicles, some clear areas where expenditure will be slashed, but little clarity on how tax cuts will be funded.

While we can’t yet know the full details of tax policy, the expenditure side indicates the poor and the environment will be worst affected, while residential rental property owners will benefit.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.