The two in-service columns have carried load for thirty years
The architecture keeps GST and company tax precisely because they are proven structure. Here is their entire modern service record, from the Treasury's tax outturn data — alongside the personal income tax whose load they would inherit.
Source: Treasury Tax Outturn Data, monthly history to June 2025 (xlsx). Series are as collected by IRD and Customs, before eliminating tax the Crown pays itself; the audited FSGNZ figures net those out (FY2025: GST $42.1b collected → $29.55b consolidated; corporates $19.7b → $17.5b; individuals $62.5b → $61.8b). The shapes and growth rates are identical on either basis.
The world's cleanest consumption tax is already ours
The OECD scores every VAT on how much of total consumption it actually reaches — the VAT Revenue Ratio, where 1.00 means a single rate on everything with perfect collection. The OECD average is 0.58: most countries carve their VAT full of exemptions and reduced rates. New Zealand scores 0.96 — the cleanest in the developed world — which is why a below-average 15% rate raises a well-above-average share of revenue.
And because it taxes what people spend, GST is the pillar that pays the government for growing the economy: no rate change, no new law — the till simply rings more. Treasury's own forecasts show GST climbing from $29.6b to $38.6b by 2030 on the current rate, purely because the economy grows.
Sources: Treasury tax outturn data (net GST, as collected) · Treasury fiscal time series (nominal GDP, June years).
Sources: GST Act 1985; Taxation (Budget Measures) Act 2010; IRD Tax Technical. GST: 10% from 1 Oct 1986 · 12.5% from 1 Jul 1989 · 15% from 1 Oct 2010. Company: 48% to 1987–88 · 28% in 1988–89 · 33% from 1989–90 · 30% from 2008–09 · 28% from 2011–12.
Source: Half Year Economic and Fiscal Update 2025, Note 1 — Sovereign Revenue. GST rises ~$9b in five years with no rate change: that is the growth incentive on the government's own books. Corporate tax dips in FY2026 with the cycle, then recovers — the privilege charge breathes with profits, which is why it is the third column, not the first.
The privilege charge, by the numbers
Company tax raised $17.5 billion in FY2025 at a 28% rate — about 12.6% of all tax revenue, close to the OECD norm. The architecture keeps it and renames it honestly: a charge for limited liability, separate legal personality, and capital-market access — privileges that exist only by statute.
This is not a novel legal theory. Texas officially calls its corporate franchise tax "a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas." Delaware — legal home of most of the S&P 500 — bills every corporation an annual franchise tax for the charter itself, owed whether or not a dollar of business is done there. President Taft's 1909 message to Congress described America's original corporate tax the same way. The concession has always been priced; we just stopped saying so.
Two structural facts from IRD's own compliance work matter for the design:
- The base is concentrated: foreign-owned multinationals with turnover over $30m pay about $6.1b — roughly a third of all company tax — and IRD monitors around 800 significant foreign-owned groups. A small, visible, well-audited population.
- The privilege is popular: 756,821 companies sit on the register, each having chosen limited liability over trading with personal exposure. Nobody is conscripted into this tax.
Sources: IRD, Multinational Enterprises — Compliance Focus 2024, p. 3 · Companies Office statistics · Texas Comptroller — franchise tax · Delaware Division of Corporations — franchise tax
A tax whose base is one-third payable by ~800 large, audited groups is cheap to run and hard to hide from — the opposite of chasing millions of individual payslips.
Source: Treasury tax outturn data (corporates incl. NRWT, as collected). The architecture leans on land (stable) and consumption (steady) precisely so the cyclical pillar can breathe.
The $1.5 trillion foundation, already on the books
Stats NZ's national balance sheet separates land from the buildings standing on it. At December 2025, New Zealand's land alone — the unimproved dirt — was worth about $1.6 trillion, roughly $1.5 trillion of it outside government hands. That is more than twelve years of total Crown tax revenue, sitting in an asset that is valued by law every three years, cannot move, and cannot be hidden.
The arithmetic on the right holds today's values still — a real transition is staged over decades precisely because a serious LVT lowers land prices as it capitalises (that's partly the point: cheaper land for the next generation). Design exclusions — Māori freehold land, conservation land — narrow the base further; the 2018 officials' estimate with such exclusions was $3.8b gross per 1%. The destination is real; the road is long and must be pre-announced.
Sources: Stats NZ, national accounts (income, saving, assets and liabilities), Dec 2025 — non-produced non-financial assets by sector · Tax Working Group background paper (2018) · deeper history in the single tax provenance section
The 8.1% row is the historic single-tax proposal — everything on one base; this architecture stops at 4.4% and keeps GST and the privilege charge, so no single base carries everything.
New Zealand is already the outlier — in the wrong direction
Among 38 OECD countries, New Zealand takes the third-highest share of its tax from personal income — 41.7% against an average of 23.7%. We also run the third-highest VAT share and, uniquely with a handful of others, zero payroll social-security taxes — the separate wage levies most countries stack on top of income tax to fund their pensions (NZ Superannuation is paid from general taxation instead). Here, the payslip does all the work twice over.
Read that chart the architecture's way: the two pillars we propose to keep are the two places New Zealand already outperforms the world. The column we propose to decommission is the one we lean on nearly twice as hard as everyone else — while the base the OECD's growth studies rank least damaging, recurrent taxes on immovable property, carries less here than the rich-world average.
Source: OECD Revenue Statistics 2025 — New Zealand country note, 2023 data. Tax-to-GDP: NZ 32.9% (2024) vs OECD 34.1%.
The whole load path, before and after
The same $121 billion, two ways of carrying it. Nothing about the size of the state changes — only what it stands on.
One segment changes colour. That is the whole reform: the $66 billion column moves off payslips and onto land value — and every wage, every dollar of interest, every capital gain in the country becomes tax-free. Set the rates yourself in the load test.