Compare policies to see what your vote could do for your finances
Do you vote on your back pocket? A good chunk of the country does. What matters to them financially, rather than socially or environmentally, results in what gets the tick at the ballot box.
However, what is financially important to different people varies widely. For a property investor, for example, it could be capital gains tax. For a young couple it might be first-home subsidies and parental leave. A struggling young family might also be against compulsory KiwiSaver because they say they can't afford it. For a retired person the big financial issue might be the cost of doctor and dentist visits.
THE MAJOR POLICIES: Scroll down for our interactive
So I decided to look at some of the big back-pocket issues and what the parties are offering. It's impossible to cover everything, but I asked the nine main parties what they thought their top offerings to people's back pockets would be.
Capital gains tax (CGT)
If you're a property investor there's a good chance your anxiety levels are high this election. Labour and the Greens want to introduce a 15 per cent capital gains tax on realised gains on investment property, shares and businesses to curb property speculation. If you're a first-time buyer you might hope that a CGT will bring house prices down and/or make homes easier to buy because you're competing against fewer buyers. Some economists argue that a CGT could divert investment to growth industries away from property investment, benefiting the country and making the tax system more robust and free of tax dodges. Labour also plans to ring-fence rental losses, meaning landlords can't claim them against other income. My colleague Mary Holm is writing more about the CGT in her column on page B12.
KiwiSaver will be altered and altered again by governments and there are a few changes on the blocks this election. Do you want it to be compulsory? Labour and United Future do. Labour says it would gradually raise employer/employee contributions from 6 per cent to 9 per cent from 2016. NZ First wants to enrol each newborn in KiwiSaver and allow him or her to use those savings for tertiary education. The Greens want a public option for KiwiSaver saving up to $142,000 in fees by using a single default government provider.
New Zealand Superannuation
The retiree vote is always a political football. Retirees are being wooed with a number of offers including free doctor visits for the over-65s from Labour and three free doctor visits a year for SuperGold card holders from NZ First, and free primary care (for everyone) from internet-Mana. United Future is offering free annual health checks for the over-65s and the Conservatives four to six free GP visits a year. NZ First wants to make sure "Section 70" people who have overseas pensions deducted from NZ Super receive a fair deal. One out-of-the-ordinary policy is United Future's FlexiSuper. Under this policy retirees can choose the age they start receiving NZ Super. They could take it from age 60, but if they hold off until 70, they'll get a higher weekly payment. The party also wants the rate of NZ Super tied to both increases in the consumer price index and the average wage. For a much longer summary of how NZ Super and KiwiSaver could be affected by the election outcome look at Mary Holm's article from last weekend at tinyurl.com/MaryHolmSuper
It would be easy to write a book on what the parties are offering directly and indirectly on housing. National has offered to double the KiwiSaver first-home buyers' subsidy from $10,000 for a couple to $20,000 on new homes and allow more of savers' money to be withdrawn at the time of home purchase. Labour says it will build 100,000 new affordable homes, which would be a bonus for economically strapped first-time buyers. National wants to reform the Resource Management Act (RMA) to speed up consenting and to curb development contributions levied by councils on developments. But its present partners United Future and the Maori Party are against the proposed RMA reform. Act wants to scrap the RMA completely. In the background parties are claiming that their foreign investment policies will make housing more affordable. Labour/NZ First/Greens will ban/restrict/limit non-resident buyers of existing/all homes. National says it will keep mortgage interest rates lower than the Opposition would by limiting government speeding.
National says with more "strong fiscal and economic management" wages will increase on average by $6600 to about $62,000 over the next four years. Many other parties are offering an increased minimum wage with Labour setting it at $16.25 an hour, NZ First $17 and the Maori party $18.80. If you or members of your family are on minimum wage you'll benefit hugely from an increase. If you're a business owner, you might see this as an economic disaster.
I'm sure we all cringe when our power bills arrive. Labour promises to reduce power prices by about $300 a year and establish NZ Power as a single buyer of wholesale electricity to bring prices down using market power. United future wants the power bills of over-65s subsidised over the winter; it wants all homes insulated. The Greens have an NZ power plan, which is expected to save households $300 a year, and its solar homes loan scheme is aimed to help consumers break free from energy companies.
National kept us all waiting for its tax cut policy, which turned out to be tax cuts for low- and middle-income earners "maybe if the economy allows it". Labour wants to introduce a top rate of tax of 36c on income over $150,000. The Greens want 40 per cent above $150,000 and the trust tax aligned to the top rate. Labour says it's likely to offer tax cuts in a second term. If it's goodies you're after then Act's promises may be the most enticing. The party wants to drop the top rate to 24 per cent immediately and the company tax rate to 20 per cent. Further cuts for both these taxes are planned by 2020. The argument is that it will increase the growth rate from 2-4 per cent a year. Labour is offering to remove secondary tax for people with two jobs. NZ First wants GST removed from food and rates.
Under Labour all new parents earning less than $150,000 will get $60 a week for the first year of their baby's life (or six months if they receive paid parental leave). The payment will be extended to age 3 for low-income families. Paid parental leave will be extended to six months by Labour. National wants to extend parental leave by four weeks and increase the parental tax credit by $70 a week, for 10 weeks. The Conservatives are offering a family benefit of about $50 a week to all parents with preschoolers.
Other small, but interesting offers for your back pocket include:
• A variety of offers of free doctors' visits for children. (National, Labour, Greens, NZ First, Maori, internet Mana, Conservatives.
• A government-owned bank to invest in eco-friendly projects. (Greens)
• Halve the price of broadband. (Internet-Mana)
• A rent-to-buy scheme for families with children. (Greens)
• Establish a new state agency for residential development land and offer 2 per cent interest rates for five years on that land. (NZ First)
• 100 per cent loans to build modest homes on multiple-owned Maori land. (Maori Party)
• Allow higher-density housing. (Conservatives)
• Low-interest loans from KiwiBank for low- and middle-income people and build 10,000 new state homes a year. (Internet Mana)
• Cut ACC levies on vehicles. The average vehicle levy will fall by $135. (National)
• Free tertiary education and student loans -- details not yet announced. (Internet-Mana)
• Free dental care for pregnant women (Labour); and for students, beneficiaries and retirees (Greens); free eye, hearing and dental care for everyone. (Internet Mana)
• Housing accommodation supplement paid direct to landlords. (Maori Party and Conservatives)