To set aside 10-33% of your income for tax purposes is a big ask from our government. Many argue that the percentage is too high, but at the same time we need to understand that this money is funding many services like road repairs and hospitals. Today we will have a look at a few examples of how your contribution is helping other Kiwis.
How much the Kiwis pay in taxes?
Based on the NZ Stats report, the median income for a Kiwis is approximately $997 per week. That gives approximately $50,000 of the taxable income. If you have carefully read our blog then you know that the ACC payments differ based on the industry, so let’s assume that you work in an averagely safe industry. Once we take into considerations these assumptions, you will contribute approximately $700 to ACC and $8000 in Income Tax.
Where the money is spent?
Each person can have a different view on the priorities where to spend money. We are not going to judge if the money is spent wisely or not. The only thing we want to point out is the 3 main expense categories for the 2018/2019 tax year.
- Social security and welfare – 28.9B
- Health – 18.1B
- Education – 14.6B
How far does your contribution stretch?
One bed in the intensive care unit costs approximately $5000 per day. On average you are funding 1.6 days of helping someone to survive.
At a very rough estimate, it costs $400k to seal 1km of a road (just sealing existing roads). On average you are funding 20 meters of newly sealed roads per year. Without congestion, it would take you just 1.4 seconds to drive its length in the city.
The annual expenditure for a primary school student is around $10,600 per year. On average you are funding 0.75 primary school students per year.
MPI provides $1,300 grants to plant 1ha of the forest. On average you are funding 6.15ha of the forests per year.
Tax payments are just a part of the equation
Each person is contributing to the economy in multiple ways. Not only the taxes count. Whenever you are opening your wallet and spending money, putting it in the saving account or putting it in your KiwiSaver, you are helping the local economy.