Whats up with this imbo

You may notice a difference in your net pay next pay day - a few changes to Income Tax are happening from 1 April 2010, so it’s important that you are aware of these changes and what they mean for you.

These changes are:

-Increase to ACC earners levy and threshold
-Child Support deduction changes
-New secondary tax code
-New tax rate for ‘lump sum’ payments i.e. your bonus!
-ACC Earners Levy and ACC Income Threshold
-All employees must pay an ACC earners levy to cover the cost of non-work injuries. IRD collect these on behalf of the Accident -Compensation Corporation (ACC).

The earners levy deduction is increasing from $1.70 to $2.00 per $100 of earnings. Additionally, the maximum earnings on which the earners levy deduction is payable has increased from $106,473 to $110,018 per annum. The following table shows the combined impact of the changes in ACC Earners levy and thresholds, with the above mentioned changes in PAYE rates and thresholds:


Income thresholds Old Tax Rate* NEW Tax Rate*
$0 to $14,000 14.2% 14.5%
$14,001 to $48,000 22.7% 23.0%
$48,001 to $70,000 34.7% 35.0%
$70,000 to $110,018 39.7% 40.0%
$110,108 and over 38.0% 38.0%

* This rate includes PAYE and the ACC earners levy

CHILD SUPPORT deduction changes
If you have Child Support deducted from your pay, that value could change effective April 2010, as IRD are re-calculating your contribution rate, based on your prior year earnings. Any enquiries about this should be made directly to IRD.

New Tax Code SB - Secondary Bottom
The table below applies to people who already have a primary source of income, and who take on a second job. The PAYE to be deducted from your secondary employment income will depend on the secondary tax code you selected on your tax declaration form (IR330), per the income brackets below.
In order to qualify for the new low secondary rate you must reasonably expect that your taxable income for the year will be $14 000 or less.


Tax Code If annual income from all source is likely to be Tax Rate Tax Rate incl ACC Levy
SB $0 to $14,000 inclusive 12.5% 14.5%
S or S SL $14,001 to $48,000 inclusive 21% 23%
SH or SH SL $48,001 to $70,000 inclusive 33% 35%
ST or ST SL More than $70,000 38% 40%

New “LUMP SUM” tax rate
In line with the new secondary bottom tax code, a new threshold now exists for Lump Sum [also known as ‘extra’] payments. Lump sum payments include annual or special bonuses, redundancy payments, exit inducement payment, gratuities or back payment. Overtime or any regular payments are not lump sum payments.

PAYE is calculated on these payments at a flat rate using income thresholds.

What’s your tax rate when receiving a “lump sum”?
It’s all based on your annualised income bracket. Here’s how to determine what rate you would be taxed at when receiving a lump sum payment:

Combine the total of the lump sum payment and the grossed up annual value of your income for the previous four weeks. The resulting value highlights your LUMP Sum tax bracket, per the table below.

Example: If you get a $4,000 STI Bonus and your last four weeks earnings were a total of $3,520, the calculation looks like this:

Annualised income [13 x $3 520] $45,760
Add the BONUS payment $4,000
Total $49,760

In this example the income level is between $48,001 and $70,000, so PAYE rate that is applied to the Bonus is 35% [35 cents in every dollar].

In summary…
1. Everyone will have a slight reduction in net pay because of an increase in tax, due to:

a result of the increase in ACC earner levy from $1.70 to $2.00 per $100 gross.
if you earn between $106,473 & $110,018 you will have increased tax, which is because of the increase in threshold for ACC earner levy.
2. If you currently have Child Support deductions taken from your pay, you could see a change in the amount of these from April 2010.

So basicly National lowers taxes then increases the ACC levy :no:

Quote:So basicly National lowers taxes then increases the ACC levy

Unless i'm reading this wrong, I don't see anything about taxes being lowered, just that taxes will increase to cover the increase in ACC earner levy

^^ as in last year when they cut taxes -- I think they were gonna cut them again this year but I think the decided not to.

They want to raise GST as well

Oh right, I didn't even realise there was a tax cut last year...

anyway, I don't know whats up with the GST increase, but I hear that ACC cost's have gone up alot recently, which is why the levy is going up.
What sucks is my compulsory ACC payment, just in case I get hurt plugging in network equipment -_-


Sorry to sidetrack but; I think NZ's main problem is that we don't have the population to support the things people want (good healthcare/education/public transport/high speed Internet) without having pretty high taxes. But then I see a plan to mine a small patch of the 20,312 square kilometres (1/13 of total land area) of national parks, which would generate several billion dollars, 40% of which will probably end up paid as tax (not to mention all the economic stimulation and jobs generated) which would pay for a pretty decent amount of healthcare, ACC, etc. But I fully expect it to fall through on principle, regardless of the actual environmental impact being insignificant.

Thoughts/opinions?

I think it's pretty disgraceful to promise tax cuts in an election saying that the government has room for cutbacks, implement those tax cuts, and then raise taxes again. A large part of the National Party's platform during the election was based on tax breaks for New Zealand, and now the government is excusing this behavior by saying that they need more income. The recession began long before our current Prime Minister came to office and it's not very difficult to predict tax revenue shortfalls when job growth is in the negative.
Raising taxes is one thing, but political ideologies aside, breaking an election promise is the most harmful behavior a political party can do. Democratic representation is almost entirely based on campaign promises, and it should be the responsibility of the voter to use their voting power in a way which keeps politicians honest.

P4 Wrote:Sorry to sidetrack but; I think NZ's main problem is that we don't have the population to support the things people want (good healthcare/education/public transport/high speed Internet) without having pretty high taxes.

I see that P4, being one of these 'people', has effectively just voiced his support for a system of high taxation to provide social benefits for New Zealand citizens. Unexpected...

What do you mean by 'these people'? you could at least say what exactly your stereotyping me as.

While I agree that raising the taxes shortly after lowering them is a little bit disgraceful, I think its fair to note that the effects of the recession were not evident during the election campaign when these promises were made. Although, the question I will put forward is, would you rather the taxes weren't raised and ACC just started not paying out as much to people in need?

I also think its a little bit disgraceful that you take my comments and crop them to suit. If that was the end of my opinion on this subject I would have started a new paragraph

I think of taxation kind of like addressing the symptoms, your not going to tax someone into prosperity. So you can increase tax revenue by boosting the economy or by sucking it out of the economy. The problem with sucking it out of the economy is that the economy (and thus tax revenue) doesn't grow as fast and you get a problem a later on. I then pointed to an example of how the government is trying to boost the economy, which then flows on to the jobs/healthcare/high speed internet but it wont happen due to arbitrary environmental issues.

and I was after thoughts/opinions on the environmental issue.
is relying on 'eco-tourism' enough to provide an economy and thus all the services we need in this country?
is there really a problem with a small hole in the side of a hill, that you can only see by chartering a scenic flight, or tramping through kilometres of bush that (lets be honest) mostly looks the same?

ozmodeon Wrote:I see that P4, being...high...social benefits for New Zealand citizens. Unexpected...

P4 Wrote:I also think its a little bit disgraceful that you take my comments and crop them to suit

It's quite clear that this didn't happen. It's difficult for you to argue that your quote saying that New Zealanders (of which you are one) want the government to provide benefits that require additional taxation has been altered in any way to prove a point that you didn't intend.
You follow this up with a suggestion that demonstrates a way in which the government could obtain additional tax revenue at what seems like an exaggerated rate of 40% that has already been proposed (and at 40% you can claim that you don't support higher taxes?). Then you say how you expect that plan to fail, meaning that New Zealanders will still need to cover these costs with additional taxes, effectively nullifying what was said in the previous sentence.
You then ask for thoughts and opinions, one of which I was kind enough to provide. It would seem my response, though justified by your own request, was not well received.
It seems even more evident that my comment was correct and was not taken out of context by the fact that you follow your retort with a correction that explains the error regarding your position in the message that I responded to.

I think that an increase in population would be good for the economy and an increase in tourism. But raising GST will have the opposite effect. Most people that immigrate here will be earning a low wage when they first enter or even when they are students they have to pay so much more than citizens. Raising the GST is just making the cost of living higher and not really affecting the rich as much. I think the main reason everyone is leaving and no one is entering is because the cost of living is too high.

It was so obvious that they weren't going to be able to afford those tax cuts... America was mass wigging about economy when the elections were on and you'd have to be pretty rube to think it wouldn't affect NZ. John Key is a pretty big dbag if you ask me.

The problem when you have business people running the country, is that they try and run the government like a business and... its not. The government is there to help the people -- to prevent companies and corporations from ripping citizens off to strengthen to make sure that all people have as high a standard of living as possible.
Given this, in some cases it should acceptable for institutions to run at a loss (while not an overly significant one) if they provide worthwhile benefits for the nation. The profits can be recouped later on or by other areas that are making a significant profit.
Schools and healthcare are good examples. Schools educate our children better educated children are better workers and providing healthcare to people that in some circumstances would go bankrupt having to pay hospital fees
Look at what Labour did with student loans for example, they made them interest free (an election promise) for as long as you stay in the country. This meant that students didn’t come out of university with a debt that couldn’t be paid off because the annual interest was more than the repayments but it also kept them in the country – increasing our skilled workers.
As far as I can see (although not particularly surprising) National’s policies tend to help rich people more while the poor and middle class suffer more. This is a business mentality that doesn’t consider the majority of people in the county. At the end of the day National may be able to say – hey we balanced the budget and the government is making a profit but what when you look at the state of the people in the country you will find that:

Those people who were poor are now poorer
Those people who were on the low end of the middle class are now poor
Those people who were middle class are now on the lower end of the middle class
And so on
But the rich people – well they’re still rich – in fact now they’re richer
Widening the gap between the rich and poor and putting more stress on the middle class is something that is detrimental to the nation. After all, they are the ones that keep the nation going. More stress means more of them will be more likely to get into accidents – which means more ACC payments to them.