Indexing tax brackets would help more than taxpayer funded GP visits

The Taxpayers’ Union points out:

A new Taxpayers’ Union briefing paper, Robbing Peter to Pay Paul’s Doctor: Why Tax Indexing Makes More Sense, shows the tax system is quietly making cost-of-living pressures worse through “bracket creep”, pushing workers into higher tax bands simply because of inflation — the Christmas Grinch pinching a little extra from Kiwi pay packets. 

Taxpayers’ Union Policy Analyst, Austin Ellingham-Banks, said:  

“Bracket creep has already seen the average Kiwi lose $238 since the income tax brackets were adjusted in 2024 simply because tax brackets haven’t kept pace with inflation. The loss is set to grow year after year if nothing changes.” 

“That $238 alone is enough to pay for four GP visits a year at average district prices, which exceeds the three visits Labour’s Medicard would offer. The difference is that indexation lets families decide how to use their own money, rather than funneling relief through a single, government-designed scheme that only applies if you happen to need a doctor.” 

“Indexing tax brackets is simple, fiscally responsible, and universal. It stops future inflation-driven tax hikes, avoids pushing unnecessary demand onto already stretched GP clinics, and gives households flexibility as costs rise.  

I am a strong proponent of indexing tax brackets to inflation. We index welfare payments to inflation so people on welfare keep their real income the same. We should do the same for people not on welfare.

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