Inside TOP's new $7b land-tax-for-income tax switch plan, with extras
Raf Manji details TOP's residential land value tax plan to raise up to $7.5b a year, to pay for $6.35b of tax cuts for middle income earners & $900m of low income support; Plans to win Ilam
TLDR: The Opportunities Party (TOP) has proposed a big tax switch to discourage investment in land and increase after-tax incomes for those on low-to-middle incomes.
Leader Raf Manji, a former Christchurch City Councillor, detailed the plan in a ‘hoon’ interview I recorded in the podcast above this afternoon. The full package was announced yesterday afternoon.
The fiscally-neutral package includes:
an annual 0.75% tax on the value of residential land to raise $6.75b to $7.5b per year and replace the current brightline tax on capital gains for landlords;
to fund $6.35b of tax cuts for middle income earners by having a tax-free threshold for all income earned below $15,000, along with three tax rates of 20%, 35% and 39% for those earning from $15,001 to $80,000, from $80,001 to $180,000, and above $180,000; and,
$900m of support for families and those with disabilities by extending the in work tax credit in Working For Families to children of beneficiaries at a cost of $500m, and by increasing disability allowances by $400m per year.
“The evidence of the last two decades shows us that the formulaic policy responses from governments of the left and right – whether it be benefit reforms or tax cuts – have not worked.”
“Without a fundamental rebalancing of the way revenue is gathered and income distributed in this country, the problems of unaffordable housing and poverty will not be solved.” Raf Manji
TOP also proposed benefit system changes, including:
the cancellation of $2b of debt owed by beneficiaries to the Ministry of Social Development (MSD); and,
the removal of sanctions penalising people for their relationship status and discouraging part-time work.
Manji said TOP also wanted to encourage new housing supply and to discourage leveraged purchases of rental properties by;
creating a $3b Community Housing Development Fund to support 6,000 to 10,000 new homes;
rebating GST on building materials for new builds and infrastructure to councils to encourage consenting; and,
making landlords have a 100% deposit to buy another rental property.
Plans for Ilam
Manji stood for the Christchurch electorate of Ilam in 2017 and won 23% of the vote behind then-National electorate MP Gerry Brownlee. First-term Labour MP Sarah Pellett won it from Brownlee in 2020 and Brownlee has since decided to stand as a list-only candidate in next year’s election.
Manji told me in the interview above he was hopeful of winning the electorate, which could help TOP bring an extra three to seven MPs into Parliament on his coat-tails. He said he would be happy to have ‘cups of tea’ with either of the main parties.
He said TOP would not want to join any of the two main parties in a formal coalition, but would prefer to sit on the cross-benches after agreeing a limited supply-and-confidence agreement with either Labour or National.
Ka kite ano