Is now the time to move tax brackets?

National has expressed a desire to adjust tax brackets once the Government's books are in better shape. Photo / RNZ, Hingyi Khong

New Zealanders are paying more tax because of bracket creep, but is now the time to tackle it?

Today, Treasury will give its Pre-election Economic and Fiscal Update, revealing the state of the Government’s books heading into the election.

Finance Minister Nicola Willis, speaking as National’s finance spokesperson, earlier expressed a desire to adjust tax brackets once the Government’s books were in better shape.

She said she would have more to say about National’s tax plans after the update.

Fiscal drag, or bracket creep, refers to the way that, if tax brackets don’t move, rising incomes can push people into higher tax rates, even if the increases are only keeping pace with inflation.