If Labour win the New Zealand election they will impose a top individual tax rate of 39% (income over $180,000). If National win, they will not cut personal tax rates, but will index the tax brackets (an effective tax cut). The Australian Government has legislated tax cuts to be phased in, with phase 2 effective from July 2022.
How do the New Zealand Labour Party planned tax rates compare to the planned new rates in Australia? In Australia, even with these tax cuts, the marginal rate for income over $45,000 will be 32.5%, 37% over $120,000 and 45% over $180,000.
So, many people assert that Australian tax rates are higher than those in New Zealand. In fact, effective tax rates in New Zealand are higher – up to an income level of around $146,500. Thereafter the Australia effective tax rate is higher. So for approximately 97% of New Zealand taxpayers, they pay higher tax than their counterparts in Australia on the same income (ignoring currency differences). Plus the GST rate is 15% in New Zealand compared to 10% in Australia.