WOMEN AND THE TAX WORKING GROUP

Abstract

The impact of the tax system on women and men is not the same. Women earn less than men, have lower levels of savings, and derive more of their income from wages than wealth. This means that progressivity is particularly important for women, and the taxation (or non-taxation) of savings and capital is particularly relevant to men.

To provide a basis for discussion of the way in which the New Zealand government’s Tax Working Group (‘TWG’) was invited to consider the issue of gender, and how the recommendations in its final report would impact women, this article provides an introduction to the differences between men’s and women’s experiences of the tax system. These include the relationship of the tax system with the transfer system, and the gendered difference in treatment for non-compliance in each system.

This article examines the recommendations in the TWG’s final report and explains how gender was reflected. It also critically examines the background paper, ‘Taxation and Gender’, that was provided to the TWG. The paper offered just one substantive point for discussion: ‘Does the Group agree with the Secretariat’s overall judgement that childcare costs should not be deductible?’ The limitations of this focus are discussed. This article suggests that the restricted view of gender and tax in the background paper reflects a broader lack of understanding of gender issues across the New Zealand public sector. It reflects on how this situation came about and considers how it might change.

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THE ENVIRONMENT IS NOT AN EXTERNALITY: THE CIRCULAR ECONOMY AND THE TAX WORKING GROUP

Abstract

The final report of New Zealand’s Tax Working Group (‘TWG’) is unusual for this type of inquiry. Rather than restricting its consideration to equity, efficiency and other usual tax criteria in the context of the existing economy, the TWG final report signalled aspirations for a paradigmatic shift in the way the economy is constituted and functions. As well as seeking to incorporate Te Ao Māori (a Māori worldview) and Treasury’s Living Standards Framework, the TWG embraced the radical environmentalism of the circular economy model. As the 2030 achievement target for the United Nations Sustainable Development Goals (‘SDGs’) draws closer, it is increasingly pertinent for policy advisors to ensure their proposals and recommendations align with the SDG ethos. Tax policy is no exception, and the TWG’s explicit consideration of sustainability, wellbeing and the circular economy may suggest an attempt to take New Zealand’s commitment to the SDGs seriously. However, despite its espousal of these features, the TWG’s recommendations for the greening of taxation were modest.

This article considers what the key features of a tax system for a circular economy might be, and assesses the TWG’s recommendations against that model. Particular attention is paid to the New Zealand context, including an economy that is currently greatly dependent on the export of primary products, notably dairy.

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STRIVING FOR INTERGENERATIONAL WELLBEING

Abstract

New Zealand’s most recent Tax Working Group (‘the TWG’) differs from previous tax review groups due to the unique frameworks upon which they based their assessments. The final report of the TWG used Treasury’s Living Standards Framework (‘LSF’), with its goal of ‘intergenerational wellbeing’, alongside both a traditional tax assessment framework and Te Ao Māori principles.

This article seeks to explore whether and how the frameworks used by tax review groups in New Zealand have influenced the conclusions they have reached and the recommendations they have made. In particular, this article considers how the LSF influenced the TWG to reach conclusions that previous groups considered but did not get ‘over the line’. The conclusion is that the LSF was highly influential upon the outcomes of the TWG. The TWG placed greater weight upon equity, the environment and distributional outcomes. The result of this change in emphasis was recommendations that are weighted in favour of social and environmental issues over economic growth.

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