Christoper Luxon has wiggled his way around questions over whether he would remove the highest tax rate if National was elected.
Luxon joined AM on Wednesday to discuss his proposed tax changes which would see the brackets increased to match inflation.
Currently Kiwis are taxed 10.5 percent on each dollar earned up to $14,00 a year, 17.5 percent for $14,000 to $48,000 a year, 30 percent for $48,000 to $70,000 a year and 33 percent for $70,000 to $180,000 a year. Labour also introduced a new tax rate in 2020 of 39 percent for income over $180,000 a year.
The National leader says the brackets are out of date and changing them to meet inflation would make a difference to Kiwis who are struggling to keep up with the cost of living.
"All that's happened is our tax brackets or our tax thresholds, over time they become too low and people get caught in higher tax brackets," he told AM.
"All we are doing is saying, 'Hey look, why don't we take the tax brackets, adjust them by inflation that means that New Zealanders actually get to keep some of that money'."
When asked how these changes would help lower-income families, given a minimum wage worker will only be making $2 more a week, Luxon said while no one will get rich off it, every little bit makes a difference.
"The perverse situation is that we have average income workers here in New Zealand who are actually in a 33 percent tax bracket. You can be a minimum wage worker and you can work four extra hours, 44 hours a week, and all of a sudden you're at the 30 percent bracket. So it's just a very practical common sense thing to do.
"Our tax thresholds haven't changed for a long time, there's been a lot of inflation, people are getting caught in higher brackets."
But Luxon wavered when asked whether National would remove the highest tax rate.
When asked directly if he would remove it, he said: "There's two things here. What we are saying is there is a proposal for the Budget in May because Grant Robertson is going to go off and spend $6 billion of new money, we are saying take a third of that and give it back to New Zealanders because they know how to spend it better than you.
"The second part of the proposal, in our first term what we have said is that we will just reverse the tax grab that Labour's put in place since it has come to power. That will be in the context obviously of a full fiscally costed up plan that we will go to the election with.
"What we are saying is in principle we are going to remove the tax increases Labour has put in place since it has come to power."
When asked to clarify whether removing the tax increases included the top bracket, he said the planned tax changes will help average income earners.
"Someone earning $60,000 to $70,000, which is the average wage in New Zealand, is going to get about $870 back a year. Someone earning $57,000 is about $800 a year and the maximum it gets to is about $1000 if you earn over $79,000. If you're earning $70,000 to $80,000 even - you don't feel rich in this country at the moment.
"I appreciate it's not a massive amount of money but what it is a principal saying, 'Hey inflation has actually been eating away at our tax brackets, we should just very simply reset those brackets'."
While Luxon wouldn't give a straight answer over whether the bracket will be removed, his State of the Nation speech on Sunday suggested it would.
In his speech, Luxon vowed to repeal every extra tax hike or added levy the Labour Government had imposed since 2017, which would include the highest tax rate. It would also see Auckland's fuel tax removed and the removal of the 10-year extension to the "bright-line test".
National's call for tax relief was rubbished by the Government with Finance Minister Grant Robertson saying, it's clear "National would leave New Zealanders worse off".
"New Zealanders have heard the same tired old story from National Party leader Christopher Luxon today that fails to give any new ideas for our future," Robertson says.
"The speech shows once again that National will not face up to the hard decisions that come with being in Government."
Robertson says the maths doesn't add up and the plan would mean cuts to important services.
"Christopher Luxon wants to cut taxes, reduce debt, and keep on spending. This is the same fiscal 'Bermuda triangle' that got Paul Goldsmith in trouble, and nothing seems to have changed for National.
"Let's be clear, what National outlined today will mean cuts to important services. They need to front up to Kiwis and say which health, education and housing services they will slash to make that happen.
"The reality is that Christopher Luxon's proposals will just make things worse. There will be more congestion on Auckland's roads, it will be harder for first-home buyers to buy a house and those on low incomes will fall further behind."
National has since denied there is a fiscal hole in its plan.
