I’m glad to see Labour is stealing a march on the lazy Nats and building an alternative economic vision ahead of the Budget. It looks to be just the vision New Zealand needs, built on the twin planks of economic sovereignty and a fairer distribution of wealth.
Phil Goff will outline the vision in a major speech next week but there are already a few hints.
The first is either reducing GST back to 12.5% or taking the GST off food. Both would have about the same cost. Labour has previously argued for a single low rate of GST but the increase to 15% heightens the case for exempting food to provide relief to ordinary Kiwi families. Other countries manage just fine having no sales tax on food, there’s no reason we can’t do the same here. It’s not hugely complicated or expensive for businesses. In Australia, the government issues rulings on what is covered and what isn’t and businesses are entitled to rely on that advice.
Labour is considering tightening the rules on foreigners buying land, another old favourite of the Left. We can’t keep selling our assets abroad. Sure, we get the short-term gain but we get long term loss. We get a wad of cash now but lose the profit stream from the asset in the future. Land is a particularly important economic asset because they’re not making any more of it.
The idea of improving national savings is along the same lines: we have two choices in this world, we can live beyond our means now and finance it by selling off the family silver or we can save now for a richer tomorrow.
Listen to David Cunliffe’s very good interview on Radio NZ this morning (I especially like the way he dealt with Geoff Robertson’s jibes with good humour)