Christopher Luxon has been forced to defend his party's tax policy after analysis found for every $1 in cuts the bottom half of earners get, the top 5 percent gets $10.
The research, which was carried out by the Council of Trade Unions (CTU), found National's tax policies heavily benefit the wealthiest Kiwis.
For example, the policy would give someone earning the Prime Minister's salary of $471,049 a year a whopping $54,000 back over the three years of the next Parliament, while Kiwis earning the minimum wage would get just under $350 over the same period.
If elected National has promised to adjust tax brackets to account for inflation between 2017 and 2021.
The party would also scrap the new highest tax bracket of 39 percent for income over $180,000 a year, bin the extension of the bright line test and reintroduce the ability for landlords to deduct interest costs from their tax bills.
Speaking with AM on Wednesday, National leader Christopher Luxon said the policy is about helping reduce extra tax being paid because of inflation.
"The major component of our tax policies that we've announced this year is to say, 'Let's just take the inflation, the thresholds that exist for tax today and then move them up by the amount of inflation'," Luxon told AM co-host Melissa Chan-Green
"That means for someone on the average income, they're going to get about $800 to $1000 per year just by making sure that we inflation-adjust tax thresholds."
Luxon said the plan isn't radical and tax brackets are already adjusted for inflation yearly in many places.
"It happened in the US last week, it happens every year in the US. It's happened in Germany, France, Spain and 10 other countries in Western Europe, including Ireland.
"Most countries just sit there and say, 'When you've got high levels of inflation it's unfair that people get caught up in what we call bracket creep'. So that's the guts of what we're saying is, 'Hey, for the squeezed middle, the people in the middle on average incomes, we could give them $800 to $1000 a year.'"
But Chan-Green questioned Luxon's claim, pointing out the policy would benefit wealthy New Zealanders much more than the squeezed middle.
"It is all very well saying $800 to $1000, and that sounds like a fair bit of money back in your pocket but when you look at the discrepancy between that and high-income earners yourself, for example, if you were Prime Minister, you would get an extra $349 a week but someone who's a minimum wage worker would get $2.15. I mean, how does that help the cost of living crisis when that person wouldn't even be able to buy a loaf of bread with that?" Chan-Green questioned.
But Luxon hit back saying the policy isn't about wholesale changes to the tax system but about accounting for inflation.
"We're not talking about wholesale changes to the current tax system. We're just saying back in February or March, as we start to see inflation take root in the economy, our idea and the spirit of wanting to propose a really decent, practical idea the Government should feel free to adopt was just to say, 'Look, you've got to be able to inflation proof those tax thresholds.
"We still have a progressive tax system. You have to remember the top 10 percent of income earners in New Zealand pay about 42 percent of our total income tax. So we're not changing the principles of that system, we're just saying, 'Take the current system today and at least be fair to people'."
While the party isn't making significant changes to the tax system it is scrapping the top tax rate - which isn't an adjustment to account for inflation.
Luxon said his plan was a "much better way to get tax relief" into Kiwis' pockets than the Government's "rinky-dink" cost of living payment.
"That's been going out to investment bankers and French backpackers and dead people. This is a much more enduring solution to actually what we're dealing with, which is rising levels of inflation," Luxon said.
While the Government is yet to reveal its tax policy for the election it has already taken several measures to minimise the impacts of inflation including a $350 cost of living payment for Kiwis earning $70,000 a year and under.
The Government also cut the cost of public transport, slashed 25 cents per litre off the fuel excise tax and cut road user charges.
However it came under fire after it was revealed the first cost of living payment went to several ineligible Kiwis such as those living overseas. In response, the Government introduced tighter screening tests for the second and third rounds of the payment.
