National is well in to panicked negative campaigning now. One of their main attacks is to try and spread fear about Labour and tax. Good to see them called out on it:
National has introduced an average six new taxes every term over the last nine years, but Bill English is promising there won’t be any more.
The party has been attacking Labour’s tax policy – or lack of it – hard over the past few weeks, calling their opponents’ promise of a tax working group “vague and confused” and taking every opportunity to claim they’ll introduce a bevy of new taxes.
Since taking the reins in 2008, National has introduced at least 18 new taxes and levies – six of them on petrol. Others include:
• raising GST (after promising not to)
• a tax on employer KiwiSaver contributions
• new student loan and Family Court fees
• the bright line capital gains tax on flipping houses
• a border clearance levy
• including GST on digital purchases
• removing tax refunds for kids doing part-time work.
Here’s a list from 2014 with more detail. And here’s another excellent analysis:
Brian Fallow: National Scrooge v Labour spendthrift? No, not really
Labour’s fiscal plan commits it to spend $14.5 billion more than the present Government has budgeted over the four years to June 2021. This is operating expenditure and does not include capital items like resuming contributions to the Cullen fund earlier than National or priming the pump of KiwiBuild.
The bulk of it is in the three big-ticket items in any Budget: $4.7b more for health; $3.8b more for social security and welfare; and $3.7b more for education, including the tertiary education package it announced this week. Because it has a slightly higher debt track, it also has to allow for $600 million more in interest costs over the next four years.
So where is the extra $15.1b to come from?
Nearly half of it ($7.4b) comes from a higher revenue track, 85 per cent of which is the result of scrapping the tax threshold adjustments that Finance Minister Steven Joyce announced in May and which are scheduled to kick in on April 1 next year.
[Labour’s] revenue would be $7.4b, or 1.6 per cent higher. That does not look like an increase under the weight of which the economy would crumple.
Ah, but that does not take into account any changes arising from Labour’s planned review of the tax system, its critics would say.
It is, of course, a bit rich of National to be scornful of the plan for a tax working group, when that is exactly what it did in 2009.
And if you think the tax system needs some significant changes – and it does – then it makes sense to be a bit careful about how to go about it.
The tax working group approach of picking all the best brains and publishing the advice from officials, academics and tax practitioners ahead of any final report and political decisions is simply good process.
It should not be subverted by shoving microphones in front of Jacinda Ardern and asking her to rule out this or that and, if she does not, going “Aha! That must be the sinister secret plan! Labour must come clean.“
I’ve put that in bold because it’s the best comment ever written on the level of reporting on the issue so far.
It is axiomatic that the broader the base, the lower rates can be, and New Zealand’s tax base is too narrow.
In any case, changes to the tax system would have to be accommodated within the fiscal rules Labour and the Greens have agreed. … That suggests changes to the tax system would be broadly revenue neutral, a matter of redistributing the tax burden – hopefully to something fairer and less distortionary – rather than increasing it relative to the size of the economy.
In short, National’s attacks on Labour over tax are pure hypocrisy and spin.
Before National goes on about Labour raising taxes
New airport tax
They lied pic.twitter.com/TJ1HOy9Ag1
— Elephant in the room (@LetsfixthisNZ) August 11, 2017