The National Party’s admittedly soft touch promise to index income tax brackets to inflation every three years has failed to make it into either of their coalition agreements.

Indexation would ensure that working New Zealanders keep paying the same in tax in real terms, and the abandonment of this policy will mean that working Kiwis pay a higher and higher proportion of their income in tax with each passing year.

Commenting on this development, Taxpayers’ Union Policy Adviser, James Ross, said:

"National's promise of tax relief amounts to nothing more than a return of stolen income attached to a promise to keep on stealing.

“The inflation tax steals more and more from hardworking Kiwis every year. The nation voted at this election for tax relief and fiscal responsibility, but at the very first hurdle this Government has reneged on its promise and failed to deliver.

“Kiwis earning the median wage are paying 18.7% of their salary in just income tax, whereas someone on the exact same income in real terms when the brackets were last adjusted in 2010 paid 15.4%. This means someone earning no more money in real terms will be paying an over 21% higher income tax rate thanks to bracket creep.

“This stealth tax has allowed for runaway Government spending by gifting guaranteed tax hikes every year to waste-hungry politicians, side-stepping democratic debate in the process. National’s U-turn goes to show struggling Kiwis can just expect more of the same moving forward.”

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