The Green Party's policy of raising the top tax rate to generate close to $1 billion to tackle child poverty is not about penalising the rich but sharing the benefits of wealth more fairly, co-leader Metiria Turei says.
If the Greens got into Government, they would want to create a new top tax rate of 40 per cent for those earning above $140,000, Ms Turei announced at the party's campaign launch in Auckland.
The new top tax rate would affect only 3 per cent of all taxpayers, but the revenue raised would make "the world of difference to the hundreds of thousands of children living in poverty", she said. The tax threshold was set at $140,000 so MPs' salaries were captured.
"Our tax system is the key to solving poverty and reducing inequality. Our top rate of income tax is the seventh-lowest in the OECD. Even at 40 per cent, we'll still have one of the lowest top tax rates in the OECD."
The Greens would also harmonise the trust tax rate with the top income tax rate, and introduce measures to make it harder for people to avoid paying their fair share of tax — generating close to $1 billion a year, she said.
The revenue generated would be invested in:
A new Children's Credit that would give an extra $60 a week to families currently missing out — at a cost of $400 million a year.
A non-discriminatory Parental Tax Credit of $220 a week in the first weeks of life for the poorest children - costing $29.4 million a year.
A $500 million-a-year investment in children's health and education to reduce the harm caused by poverty.
Ms Turei said New Zealand children growing up in poverty were three times more likely than those who are better off to be admitted to hospital, five times more likely to die of cot death and 27 times more likely to get rheumatic fever, and die earlier.
"Child poverty can be eliminated. We have the tools and techniques. It is now simply a matter of choice.
"I want to be clear. The Green Party has no bone to pick with wealth — the problem in New Zealand is not that some people earn more money, it's that the benefits need to be shared more fairly."
The launch was attended by Man Booker prize-winner Eleanor Catton and Phoenix Foundation singer Samuel Flynn Scott, who urged people to give their party vote to the Greens.
Catton said she was lucky to have grown up with a family who loved the outdoors and believed that mining in national parks and deep-sea oil drilling were disasters waiting to happen.
"I want my children and my children's children to be proud of the steps I took on their behalf to protect this country and what matters about it. That's why I'm giving my party vote to the Greens."
National's Associate Finance Minister, Steven Joyce, said more taxes would result in a slower economy and fewer jobs. "Keeping with the plan is the best way of helping people."
The Greens' proposed 40 per cent top tax rate would affect many hard-working New Zealanders, including school principals, doctors and many small business owners, Mr Joyce said.
"We've been here before. A 40 per cent tax rate is damaging to the economy because it increases tax avoidance, penalises hard work and sends some of our best and brightest offshore.
"Just when the economy is heading in the right direction ... the Greens want to go back to the old tax-and-spend approach that clearly didn't work in the lead-up to the [Global Financial Crisis]."
• 40% — top tax rate for those earning above $140,000
• $1 billion to be spent fighting poverty