May 30, 2018 10:00am by David Farrar

Guest Post: Roger’s Policy Recommendations

Following on from the earlier guest post, these are the policy recommendations for New Zealand’s situation from Sir Roger Douglas:

A tax-free income of $52,000 for single taxpayers or $65,000 for one-income families (cost $15 billion)
A tax of 24 cents in the dollar on income above $52,000. (cost $5 billion)
A corporate tax rate of 20 cents in the dollar. (cost $ 4- 41/2 billion)
Yearly savings of $18,200 per year on incomes above $52,000, slightly less for those on incomes below $52,000 (Super $6,240, Health and Risk $11,960).
Savings paid for by personal tax reductions 50% (9,100), employer 35.7% (6,500)(In lieu of lower company taxes, no super or ACC contributions) individual 14.3% (2,600). (In lieu of ACC and kiwi saver contributions)
Savings and contributions indexed to an appropriate index.
A guaranteed minimum income for low-income families (replacing working for families).
Healthcare – Savings
$8,660 each year (inflation adjusted to go into individual’s Health Fund.
$12,480 each year to go into one-income families’ Health Fund. NZ wide savings of $15 billion a year)
Healthcare – Expenditure – A chronically ill fund to be established with contributions from savers and government.
– A catastrophic insurance policy to be taken out each year by every New Zealander for events costing $20,000 or more.
Healthcare – A government underwrite.
Healthcare during retirement – objective to retire with a fund of at least $80,000 (real) after 25 years, $150,000 after 40 years of contributions. Any balance at death goes to surviving spouse or estate.
Superannuation
$6,240 savings per year (indexed to wages).
Savings (earning a real 4%) likely to have a fund size of $750,000 after tax on retirement, given 40-50 years of employment.
NZ wide savings of $10.2 billion a year
Risk Cover (unemployment, sickness and accident compensation)
$3,300 savings a year.
A catastrophic insurance policy to be taken out each year.
A government underwrite.
No variance in rate of payout if out of work (e.g. ACC same as sickness).
Any balance in account on retirement goes into individual’s Health Account.
Education – an education tax credit for every child whose family wants it.
Housing and Infrastructure
Use 10% of gross yearly savings equal to three billion dollars for housing and infrastructure.
Policies to ensure sufficient land is zoned for section development.
Out of Work Beneficiaries
Special training for those who need it (compulsory).
Reformed management structure for out of work area.
Retirement
Age of retirement to move from 65-70 over 20 years –
Opportunity to retire before 70 if individual is prepared to use own savings to do so.
Existing government pension to continue at age 70 as it is today.
Privileges
Middle class privileges withdrawn.
Corporate welfare privileges withdrawn.
GST rate of tax increased by 2½%.