Note: This policy is currently under review following the release of the Green Party's Climate Change Policy.
It's time for fresh thinking on tax. Arguments go back and forward about how to tax our incomes but no one seems to ask if there is an alternative. No one except the Green Party.
Ecological tax reform is a simple idea: shift taxes off work and enterprise, and onto waste, pollution and scarce resources. Those who waste and those who pollute, pay more. Clean business pays less and everyone pays less income tax. It's common sense if we want a sustainable economy, and it's happening now in many European countries.
Ecological tax reform is gradual process, and needs to be worked through with all concerned. That's part of Green thinking too. But we have clear proposals on how to start with a new idea for income tax cuts and proposals for investing more in our nation.
A new idea for income tax cuts
$15 per week extra in the hand.
We will remove all income tax on the first $5000 of income, for everyone. We will do this in three stages over the next three years. Low-income people will feel the benefit most; everyone will get something.
As a result the Government will take just over $1 billion less in income tax. We will replace this revenue with money from eco-taxes.
Helping our nation create its own destiny
Aotearoa New Zealand needs to invest more in its future. We propose that some extra revenue is raised through eco-taxes to help our country develop sustainably.
We also see ending the dedicated super fund as part of ecological tax reform. Instead of putting $2 billion a year at the mercy of international stocks and bonds, the Greens want to invest in New Zealand so, among other things, we can pay super out of a stronger economy in the future
This means investing in preventative health, better education, scientific research, and strengthening our infrastructure — including basic steps like regaining control of the rail network and maintaining it properly.
Eco-tax Reform - how it can happen
Stage 1 - Polluter pays
Raise around $300m per year by making diesel users pay their fair share —
Research tells us as many people die from vehicle related air pollution as die in road crashes every year. Taxes on petrol and diesel vehicles both help fund transport. But only petrol has extra tax to help recognise other social and environmental costs like pollution.
Stage 2 — Promoting Sustainability
- Waste to landfill: Landfill taxes have been used for many years in some countries. Taxing waste gives a strong incentive for cleaner production, reuse and recycling.
- Natural Resource Rentals: Many natural resources are part of the commons but are sold for private profit under licence or quota. Resource rentals are a way of ensuring the people get something in exchange.
- Toxics: A levy on hazardous substances and pesticides, in proportion to their toxicity. This money will be used to fund the clean-up of contaminated sites and pay for organics research.
Stage 3 - Ecological Tax Reform Commission
The Greens will quickly set up a Commission to develop a strategy for further ecological tax reforms. It will look at:
- all existing taxes and possible new eco-taxes; for example other forms of pollution or energy.
- ways to make the tax and income support systems work together better; including ideas such as a Universal Basic Income and reducing the punitive tax rates on people who move from benefits to paid employment.
The Commission will:
- work with the community and business to find the best way to proceed;
- develop recommendations for Government;
- oversee the transition programme;
before being wound up.
Common Question and Answers about Ecological Tax Reform
Q. What about people on low incomes?
A. The income tax cuts well outweigh the effect of the proposed eco-taxes on low-income households. And the Commission will have equity as a key part of its brief. Also eco-taxes mean conserver saves — so those who use relatively little, pay less.
Q. If there's less pollution won't there be less tax?
A. Over time some pollution will fall but energy use, for example, will always be with us. In the short term, tax rates can be raised. In the long-term, less pollution, a cleaner economy and more investment in health mean lower costs as well.
