The latest changes to the Australian tax rates now means that all Australians earning less than $250,000 pay less in tax than we do in NZ. And that’s before we even look at higher wages, and less indirect taxes.
The table above shows how much tax Australians and NZers will be paying at each income level. Also what the effective average tax rate will be.
If you have an entry level job at $20K, Dr Cullen takes 18.2% off you, while Mr Costello will take only 6.8% giving you an extra $2,300 to spend.
At the average wage of $40K, Dr Cullen takes 20.2% and Mr Costello only 14.6%.
At $80K, Dr Cullen takes 28.1% to 22.3% for Costello. That’s an extra $4,000+.
Now let us look at what a Finance Minister who does not hate tax cuts can do over time.
Now remember in looking at the above table, that Australia has had far smaller surpluses as a % of GDP than NZ, yet have managed to cut taxes consistently.
Low income Aussies have had a 40% reduction in the tax they pay. Those on our average wage of $40,000 have had a massive 28% reduction in tax.
In fact everyone earning under $150,000 had has a 20% or greater reduction in tax.
NZ has had a golden opportunity to lower taxes over the last few years – at times when it would not have been inflationary and we had the second best best fiscal position in the world.
Thanks to Dr Cullen we have lost the opportunity to stay competitive with Australia, and to give hard working Kiwis some of their own money back.