Inland Revenue weighs up ways of hiking taxes to pay for ageing population
The Inland Revenue is supportive of lifting the GST rate from 15%, if required.
Inland Revenue is flagging its view that Kiwis will likely need to pay more tax in the future to cover rising costs associated with an ageing population.
The tax department notes that by 2060, a quarter of the country's population is expected to be over the age of 65,
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NZ Herald
8 hours ago
- NZ Herald
Inland Revenue weighs up ways of hiking taxes to pay for ageing population
The Inland Revenue is supportive of lifting the GST rate from 15%, if required. Inland Revenue is flagging its view that Kiwis will likely need to pay more tax in the future to cover rising costs associated with an ageing population. The tax department notes that by 2060, a quarter of the country's population is expected to be over the age of 65,
Scoop
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Are Coffee Prices Heading Down? Don't Hold Your Breath
Global coffee prices might have fallen but there's a warning that it might not mean you pay any less in your local cafe. RaboResearch data shows arabica coffee prices dropped 17 percent in the last three months and robusta, often used to make instant coffee, dropped 30 percent. It said this was due to improved production forecasts and diminishing demand. Global coffee demand is expected to drop 0.5 percent in 2025. A surplus of 1.4 million bags is projected for the 2025/26 year, primarily in arabicas. RaboResearch then also forecasts a much bigger surplus the following year, particularly if Brazilian weather is normal. Infometrics chief executive Brad Olsen said the price declines were encouraging but did not necessarily mean New Zealanders would see coffee prices fall. "Given the full increase in global coffee prices hasn't fully hit Kiwis' morning caffeine hit yet there might not be real relief for New Zealand coffee prices." He said while World Bank data showed arabica coffee prices were down 3.1 percent in May from the peak in February they were still 2.3 times the May 2019 price. Robusta was down 9.8 percent from the peak but the same margin up on 2019. "Stats NZ data shows that instant coffee prices in May 2025 were 14 percent higher than a year ago, and only 36 percent higher than in 2019 - so less than a tenth of global coffee price pressure has hit directly. With not as much of the original hit from coffee prices hitting local prices, we might not see a lot of relief. If anything, forward ordering of coffee means we might still see further price increases trickle through as beans are imported after being ordered before recent price falls. "Café operators have clearly been trying to absorb as much of coffee price rises as they can to limit how many people might stop buying at higher prices. Stats NZ data also shows takeaway coffee prices are up just 3.8 percent per year in May, despite the large increases in both coffee and dairy prices, suggesting cafes are taking the hit on their margins rather than pass price increases on as much." Café and roastery owner Richard Corney, of Flight Coffee and The Hangar, has been warning that retail coffee prices are unsustainably low. He said if prices had kept up with the increase in café costs in recent years, a flat white would be selling for $7.
Scoop
20 hours ago
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Tax Justice Aotearoa Welcomes IRD Discussion Document On Tax Reform
Tax Justice Aotearoa has welcomed the release of Inland Revenue's draft Long Term Insight Briefing, which looks at the possible future directions for New Zealand's tax system. The discussion document suggests a stable core structure of main bases that 'comprehensively taxes the factors that are sought to be taxed', coupled with the ability to 'change rates on main bases to change the level of revenue.' 'We welcome the release of the draft LTIB as a useful contribution to the debate about what kind of tax system we want for the future,' says Glenn Barclay, Chair of Tax Justice Aotearoa. 'Tax has become a hot topic and this document demonstrates some of the challenges we face.' 'We look forward to hearing more from the IR officials and giving the public the opportunity to question their thinking at our upcoming briefing event*,' says Glenn Barclay. 'This is part of the consultation process so everyone who would like to make a submission on the LTIB should come along.' The LTIB notes the fiscal challenge we face as a country as expenditure increases, largely as a result of an ageing population. 'Tax Justice Aotearoa agrees with this observation but an ageing population is just one of the many problems we have stored up for ourselves by failing to invest in both social and physical infrastructure - the challenges of poverty and inequality, as well as climate change adaptation and mitigation also come to mind', says Glenn Barclay. The LTIB also demonstrates that New Zealand is an outlier in the extent to which it relies on tax revenue from labour income and GST and that we under tax capital income. 'These are the taxes that impact most on working people and the poor,' says Glenn Barclay. 'We need to address this imbalance by ensuring those who can afford to pay more are required to do so, and also that the regressive nature of GST can be addressed. The permanent GST-offset credit suggested by the LTIB, is a proposal worth considering.' "There are limitations to the document, for example it does not address the interface between the tax system and the Working For Families tax credit, which is a fraught issue for those who are dependent upon WFF, but we look forward to the debate that the document will provoke,' says Glenn Barclay. Note: * Tax Justice Aotearoa will be hosting speakers from Inland Revenue at one of its 'Tax on Tuesdays' events on Tuesday 1 July at 12.30pm* - members of the public are welcome to attend. It will be a hybrid event with an in person session at Rutherford House in Wellington, which will be live-streamed. Where: Rutherford House Lecture Theatre 2 (RHLT2), 33 Bunny Street, Wellington. When: 12.30-1.30 pm Tuesday, 1 July 2025
