Taxing times.

The model also allows people to work out how the tax situation and family income assistance for people in their circumstances have changed this century.

The provision of tax relief in this year’s New Zealand budget has closed part of the tax gap with Australia. Yet while this relief kept pace with recent changes in Australia, the growth in the tax gap over the earlier part of this century largely remains unaddressed.

While incomes remain higher in Australia than in New Zealand, Australia will remain an attractive country for Kiwi workers to relocate to. Given the commitment in Australia to reviewing the tax system (including family income assistance) to attract and retain workers in competitive global labour markets, the competition for workers with Australia is only going to become more important for New Zealand.