Call for immigration tax in New Zealand

by Ray Clancy on March 10, 2017

A new tax should be introduced in New Zealand for people who have moved from abroad to help fund the extra cost of public services and infrastructure which are needed to cope with the country’s immigrant boom, it is claimed.

Tax expert Mark Keating, a senior lecturer at the University of Auckland Business School, said a poll tax levy on immigrants could fund specific costs resulting from the population increase.

In 2016 New Zealand’s Treasury estimated the extra spending required on hospitals, schools, roads and other infrastructure to cope with population growth, which is largely driven by immigration, at $100 billion over 10 years.

Specifically it said $1 billion is needed to pay for water, roads and other infrastructure and $530 million over six years on expanding and redeveloping schools.

‘These figures suggest that New Zealand’s existing population of taxpayers will shoulder a huge additional tax bill to settle and assimilate its record number of new immigrants,’ said Keating.

‘New Zealand is a desirable country with excellent infrastructure and public services. Immigrants get to share in all these benefits, so why shouldn’t immigrants also contribute to them,’ he added.

Keating suggests a flat immigration fee of $10,000 to $15,000 per immigrant would provide a source of additional revenue to offset increased costs. But he acknowledges that there would have to be exceptions for some categories of immigrants such as refugees or those filling skills shortages.

‘Imposing a tax on most other migrants in return for their right to share in everything New Zealand has built up would be both reasonable and fair,’ he pointed out.

In the year to January 2017 there were 89,670 permanent and long term arrivals to New Zealand, excluding refugees, Australians and returning New Zealanders. At $10,000 per arriving person, that would generate $896,700,000. At $15,000 per migrant, it would total $1.345 billion.

Keating explained that there are already instances where the Government imposes fees and charges on immigrants such as the arrival tax on non-residents of $22 to fund tourism infrastructure. The Green Party continues to advocate a larger fee be imposed on visiting tourists to pay for environmental projects.

‘At present, our Government simply gives away New Zealand residency and passes the increased cost of building the necessary infrastructure on to current residents. Rather than continuing to be too squeamish about charging immigrants for residence or citizenship, perhaps we should embrace the idea and tax them appropriately,’ Keating argued.

He admitted that there are negative historic association of past poll taxes on immigrants. Under the Chinese Immigrants Act of 1881 New Zealand imposed a tax on all Chinese immigrants but it was abandoned in 1944 as it was deemed to allow undesired immigrants to buy their way in to New Zealand in return for paying a fee to the Government.

‘Obviously targeting poll tax on racial grounds is indefensible. But shorn of its racial over-tones, what is wrong with taxing all would be immigrants regardless of which country they come from for the right to move to New Zealand?’ he concluded.

{ 1 comment… read it below or add one }

Joe April 10, 2017 at 8:03 pm

So, maybe we should tax all Kiwi’s as soon as they come of age? I mean, after all, didn’t they spend most of the first 15 years of their lives using public schools, infrastructure, and healthcare without paying into the system? I know the counter argument “but their parents paid the tax for them!”

Exactly, they only start paying into the system once they are adults/income earners, and theoretically, what they earn is not only enough to continue paying their way but also paying the way for their children.

Now look at a migrant moving to NZ. They have spent their whole life using the public schools, infrastructure, and healthcare of another country. They are moving to NZ having put no prior burden on the public system. So, as soon as they arrive they are earning and paying taxes they are essentially paying their way at the same rate a Kiwi will have when first starting to work.

I also find it convenient that Keating left out that Skilled Migrant Applicants already pay a levy of around $3,000, not including other applications fees. He keeps framing his argument like there is no system in place and we need to start one.


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