Much disappointment but very few real surprises from National. Tax cuts across the board and loopholes tightened for residential property investment but no capital gains tax. GST goes up to 15% despite saying they wouldn’t do it. But nobody really believed that. We all know what elections are won on. Over inflated catch phrases masquerading as promises.
Who does this hit the hardest? GST hits low income earners and beneficiaries obviously. Household essentials have pretty much a base minimum price and it’s no lower for poor people than it is for the rich. Tax cuts? Not much real difference to a low wage earner facing increased GST on, well, everything. As for closing the loopholes on residential investment property? Wait and see.
One thing is certain: it's going to become easier for a rich man to pass through a property tax loophole than for a poor man to enter the kingdom of Godzone (whatever that is). The cost to landlords will be “absorbed” by tenants - the same people buckling under increased GST, who will make do with the crumbs that fall from the tax cut table.
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