About some numbers

8 12 2007

In this entry, I’ll write about some numbers that I encountered after I started living in New Zealand, I must emphasise that these numbers are true as of today, 8 Dec 2007. I’m sure they will change over time.

This entry is meant to highlight some of my own observations in the system here, in comparison to a system I have experienced before. Not to complain about anything.

The personal income tax:

up to $38,000 – 20.8 cents
$38,001 to $60,000 inclusive – 34.3 cents
$60,001 and over – 40.3 cents
 
*I excluded details like ACC earner’s levy, which makes little sense to readers.

Hmm… it seems to diminish the motivation to negotiate for a pay increment if one is already earning more than 60K, because for every 10K one gets, only about 6K can be brought home.

Well, I’m not sure it is fair to say this, but it does sound very much like a welfare state to me.

Kiwi Saver, something similar to CPF, but it’s optional, and the money contributed is invested.

– 4% or 8% of employees income, employer contribution is 1%, phased in 1% yearly from 2008 till it’s 4%. Tax breaks are given to both individual and employers to encourage participation. Response is quite good.

There are other details which I did not find out, because the % sounds a bit pathetic to me. Besides that, there is also things like Super Annuation which I also did not find out.

Numbers related to banking:

Savings account: 8%

Term Investment/Deposit (something like FD): 8.5% to 8.75% for 6 months

All interest earned are subjected to personal income tax based on a system shown above. For example, if one is already earning more than 60K a year, all the interest earned from the savings will be subjected to a 39% income tax.
 

The GST is 12.5%

Health care (I must say I don’t really have all the details, I think the following are what I know):

  1. GP visits, subsidised rate of about $35 for the consultation, prescription is $15 each (some capping apply, don’t know the details). Interestingly there are no things like government operated Polyclinics (which provide significantly cheaper services), but all GPs are part of the system. 
  2. Hospital care is usually free.
  3. If a lab test is ordered by the GP (eg. a blood test), it’s also free
  4. Expenses related to having babies in the hospital – Free (As far as I know)
  5. Senior citizen care – I think it’s cheaper than 1 above, I’m not too sure.

Conclusion 

For a “young” bachelor like me, the whole system does not benefit me a lot, because I do not expect a baby soon, do not see a doctor very often, no family to support (as far as the tax man is concerned), and if my income is a little on the high side, I’m worst off due to the high income tax rates. No wonder so many people are crossing the Tasman Sea.

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