Whilst Australia newspapers are blaring the headline, "Australians flattened by biggest Tax Increase in World", if you look at the OECD figures released yesterday from its publication called, "Taxing Wages" (where that Aussie headline was sourced) it reveals a startling fact. Whilst Australia had the biggest increase in the tax wedge (i.e., the amount of taxes taken from your wage as a proportion of gross wages) for the average worker out of 40 developed countries (NZ is third highest) when it comes to families, NZ had the largest increase of all. If you look at column (4) in Table 2 below, the annual change in the 2022-23 year in the Family Tax Wedge in NZ was over 3%, with Poland second at 2.8%.
So what's going on? It was all due to tax bracket creep. Former PM Hipkins & his side-kick Finance Minister, Grant Robertson, hiked family taxes by more than any other developed nation by sliding hard-working Kiwi families into higher tax brackets. How did this happen? Our out-of-control money-printing Reserve Bank engineered high inflation (and a recession), which eroded our standard of living and pushed more salaries over $48,000 (so started to pay taxes at a rate of 30%) and over $70,000 (so starting to pay taxes at 33%), and so on. Our higher wages didn't keep up with inflation, even though we were being taxed more on them.
Hipkins & Robertson, who is now VC of Otago University on $629,000 per annum & so is insulated from the problems of ordinary people, punished hard-working families, cutting reducing their incomes by more than any other country, as they tricked us into thinking our taxes were not being raised, whilst doing the opposite with insidious tax-bracket creep. The OECD numbers vindicate National's decision to reverse the effects of tax-bracket creep by giving tax relief to families, which the Main Stream Media has so strongly attacked.
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