Tax policies 'taking people backwards' : Labour

Labour's Social Development spokesperson Carmel Sepuloni. Photo: RNZ (file)
Labour's Social Development spokesperson Carmel Sepuloni. Photo: RNZ (file)
The coalition government's new tax policies will be taking working people backwards, the Labour Party says.

From today, landlords can write off 80 percent of their mortgage interest, increasing to 100 percent in April 2025.

At the same time, the minimum wage is increasing 2 percent, from $22.70 per hour to $23.15.

Despite this, the wages of lower-paid workers would still lag behind inflation,  Labour's social development spokesperson Carmel Sepuloni, says. 

"This government's measly 2 percent increase to the minimum wage means lower-paid workers will again fall behind inflation and go backwards in real terms.

"Wages are not keeping up with the cost of living. The recommendation was that the minimum wage should be increased by 4 percent, and sadly, we had a minister who wanted to go below even 3, even 2 percent.

"That means the money that people have in their hand is not supporting them to be able to keep up with the cost of living."

The changes meant benefit rates would also increase, with a couple on Jobseeker support with children receiving an additional $56 every fortnight, while single parents would see their support rise by $44. 

Couples receiving superannuation would receive an extra $71.

However, because the rise was tied to wage increases rather than inflation, Sepuloni said the changes would worsen the situation for those receiving benefits.

"Someone on Jobseeker support would be $50 a week worse-off, while someone on a disability benefit will be $60 a week worse off by 2030, which is between $2600 to $3120 less a year.

"The Children's Commissioner a few years back, said ensuring benefits rose when wages did was one of the most important things that we could do to address child poverty in this country."

She said with the new tax policies, even the support that was available for those struggling would become more difficult to access.

"Those on Jobseeker benefits are having to re-apply for support much more often.

"These changes - alongside reducing carers' access to disability support and not committing to funding school lunches for kids - will see many people getting or saving less."

The policies were all about choice, she said. 

"Landlords or disability funding; tax cuts or the school lunch programme; proper minimum wage increases and a policy that would lift children out of poverty.

"This April 1 we wish we could say the choices this [government] is making are a joke. But taking working people backwards and making support harder to get certainly isn't funny to us."