New Zealand fiscal policy

The 20/7 series

A set of analytical notes on the proposed shift from direct taxation (income and company tax) toward a universal consumption base with a partial GST recovery rule—written for readers who follow public finance and political trade-offs closely.

The common thread across these pages is the same design question: how revenue, equity, and administration change when the state stops taxing declared income and profit and instead captures flow through a 20% GST with a 65% recovery rate on business inputs—effectively a 7% operational wedge—while aiming for a stable fiscal surplus. A dedicated note on multi-stage price cascading and tiered recovery sits before the risk framework in the reading order.

A standalone note on why no jurisdiction runs this exact stack, and how 20/7 compares to New Zealand, the Nordics, FairTax, Estonia, and VAT architecture, is in Global comparison and precedent.

For a compact, general-audience snapshot of the same idea—not part of the analytical reading order below—see 20/7 in brief.

Contents

  1. Global comparison and precedent
    Why the full formula is sui generis, close international relatives, partial-refund design versus VAT and turnover tax, and the efficiency–equity–sustainability verdict against NZ and Nordic baselines.
  2. Executive summary
    Blueprint in brief: mechanics, household and business effects, mitigations, and implementation horizon.
  3. Plain-language explainer
    Accessible walk-through of velocity-based taxation and the 65% recovery rule for a general policy audience.
  4. Conceptual guide
    From “productivity brake” to “velocity engine,” with tables on incentives and fiscal arithmetic.
  5. Sectoral impact assessment
    Exporters, services, border equalisation, and the role of oversight bodies under the pivot.
  6. Housing affordability stress-test
    Auckland-style build-cost tiering, blended land/build price effects, 20-year mortgage deltas, and weekly PAYE-offset framing.
  7. Cascading supply chains and tiered recovery
    Tax-on-tax through multi-stage B2B flows; absorption test and white list; 100% refund vs zero-rating; manual two-bucket vs automated e-invoicing; feeds directly into the risk framework.
  8. Risk management framework
    Price cascading and integration risk, social licence, phased transition milestones, and skeptic acid tests (informal economy, carousel and border imports, OECD optics, sticky prices)—read alongside the cascading note.
  9. Policy essay
    Argument-led overview: paycheck effects, administration, and implementation narrative.
  10. Evaluative report
    Long-form strategic analysis: Rogernomics lineage, mechanics, export paradox, equity, household tables, risks, and roadmap verdict.