Winston adds to National’s tax cut credibility problem

Written By: - Date published: 2:18 pm, September 27th, 2023 - 26 comments
Categories: act, Christopher Luxon, election 2023, national, nicola willis, nz first, same old national, winston peters - Tags:

There is this sense that what looked inevitable a couple of weeks ago, a National Act Government following the election, is now not such a clear cut thing.

Leading up to the election National and its puppet proxies had accumulated a huge war chest funded essentially by the same people, those with a level of privilege the rest of us can only dream about, but somehow who think deserve and need even more.

The campaign conditions have been perfect for the opposition.  After Covid and the Ukraine fueled International economic crisis and the floods that devastated large parts of the country earlier this year people are really fed up.  They want change.  They yearn for change.  They seek change.  Any sort of change from the status quo.  And for many of them arguments about how the actual cause of the problems are not this Government’s fault do not matter.

National’s messaging has been very disciplined.  Ever the last election it has been incessantly negative.  Everything is awful and the Government is to blame.

So it is not surprising that Labour is struggling.  And it has not helped that Labour has not been brave enough.  Hipkins is a believer in the importance of political triangulation, not the importance of standing on principle and this has affected morale.

But the party itself has a very sold list of achievements.  Check this out if you need the details.

And it has successfully led us through a one in 100 year pandemic, a terrorist attack, and two devastating storms.  I shudder to think how things would have gone if the other parties had been in charge.

National has until recently taken full advantage of people’s feelings of grumpiness.  And a few weeks ago the polls were showing it.

National however has managed to score a spectacular own goal by advocating for tax cuts funded by policies that have attracted considerable attention and extreme cynicism.  Too many experts say that the policies do not make sense.

Its credibility has taken a blow.  As shown by the contents of polling released last night by Newshub.  From Jenna Lynch:

Our latest Newshub-Reid Research poll reveals a majority doesn’t think the party can pay for its campaign centrepiece – tax cuts.

Luxon simply cannot bear passing by a head without checking for hair. It conjures memories for one couple of an embarrassing trait of a former National leader.

“It might be following on from John Key with the ponytails,” one woman said.

There’s a lot of fun and games on the campaign trail.

But there’s no fun and games when it comes to the finances.

National’s been under an immense amount of pressure to release the modelling around its tax plan. It pledged to pay for tax cuts in part by introducing a foreign buyers tax bringing in $740 million.

Several economists have rubbished the numbers.

Asked if he thought Kiwis believe National can pay for its tax cuts, Luxon said: “Absolutely yes.”

“Yes Kiwis know that we can pay for our tax cuts.”

But, no, they don’t.

We asked in our latest Newshub-Reid Research poll, do you believe National can pay for its tax cuts?

A majority – 53.8 percent – said no, while only 29.9 percent thought they could.

The worse news is even 29.4 percent of National’s own voters don’t think they can pay for their tax cuts, though the majority does.

I suspect this incredulity is directly related to National’s slide in the polls.

The problem for National is that as its popularity slides and its dependence on NZ First increases people are realising that a National-Act-NZ First coalition would truly be a coalition of chaos.

Winston Peters has cast major doubts about whether a National-Act-NZ First Government would put through any of National’s tax cut proposals.

From Thomas Coughlan at the Herald:

New Zealand First leader Winston Peters says he wants to see National’s detailed tax costings ahead of forming any government with the party.

Current polling shows NZ First may be needed for National and Act to get over the line and form a government after the election.

National has come under fire in recent weeks for its proposed foreign buyers’ tax, which would levy a 15 per cent stamp duty on the sales of homes worth more than $2 million to non-tax residents.

But economists have criticised the policy, saying the revenue assumptions are unrealistic. National wants to get $2.9 billion from the tax over four years to fund its $14.6b tax plan. But economists warn the actual revenue could come in $2.1b short, leaving National with the choice of borrowing to fund the tax plan, or ditching part of it.

“To the best of my efforts, I can’t work out how the fiscals work, and nor can any economist,” Peters told the Herald.

This is the country’s former treasurer speaking.

Peters previously said that National’s plan was not a formula for economic recovery and just last week said that now was not the time for tax cuts.

And he also does not think that Willis’s weekend performance answered any questions.  Again from the Herald:

Peters said he watched National’s finance spokeswoman Nicola Willis on Q+A last weekend, when Willis brandished a copy of the party’s tax plan to show the public the quality of what National had released, but he was unconvinced.

“I looked at it later on, and I didn’t think anybody got an answer, so maybe they’ve gone back to do some calculations and we’ll find out,” Peters said.

“There’s $500 million missing,” he said.

He expressed a preference for a $14,000 tax-free threshold, something which the Greens and Te Pāti Māori have also advocated for.

He also thinks that the proposed tax cuts for landlords is lacking in detail and again expressed reservations with the proposal.

Peters was open to National’s decision to bring back the full deductability of interest costs from tax bills for landlords.

“If it is to help speculation, that will be disastrous. If it is to help accommodation costs coming down and being passed on to the tenant, then that is a matter someone could explain to me how they will do that,” he said.

But he warned the plan was “short of detail”.

He opposes the lifting of the age of eligibility for superannuation, which National and Act back.

Essentially there is no existing support for any of the cuts that National wants to make, apart from the beneficiary bashing that NZ First has signed up to enthusiastically.

If National have to rely on Peters to get its tax cuts through there will be a cost.  And it will be messy.

26 comments on “Winston adds to National’s tax cut credibility problem ”

  • Comments are now closed

  1. Tricledrown 1
    27 September 2023 at 2:40 pm

    Tax cuts will lead to inflation so the tax cuts will be sucked up by price increases and subsequent interest increases to cool inflation the only winners will be those on high incomes the so called squeezed middle will continue to get screwed with big mortgage payment increases.Young home buyers no chance to get on the property ladder.

  2. Ad 2
    27 September 2023 at 2:45 pm

    Winston is setting the electorate up for another 1996 and 2017 "who will he go with" dance.

    So I have a sneaking suspicion Hipkins will change his mind about NZFirst once the votes are completed. They are more sympatico on paper and as people than they care to believe or state.

    No Parliamentary term is worth sitting out if you've got a choice and and chance.

    • Chris 2.1
      27 September 2023 at 3:49 pm

      Interesting hearing Key say Hipkins "is a man of his word" – all part of the deception game aimed at putting voters off NZF.

    • bwaghorn 2.2
      27 September 2023 at 5:23 pm

      Na they'd both lose all credibility, and the country would rightly be exceedingly angry, they've ruled each other out end of story.

      That being said I think national is looking more incompetent by the day on tax , potaka is being mocked on social media as we speak for his nutty bar story, they're going to snatch defeat from the Jaws of victory .

      • Belladonna 2.2.1
        27 September 2023 at 7:15 pm

        Hipkins may have ruled Winston out – but I don't believe it's truly the case the other way around, Winston can always find a loophole to wriggle through if it benefits him.

      • Sanctuary 2.2.2
        28 September 2023 at 9:46 am

        If Seymour sees advantage in playing the long game as an uncompromising nascent strongman and refuses to work with Winston Peters, then it would be very easy for Hipkins to do a deal with Peters and present himself as going back on his pre-election statements for the good of the country.

  3. Tiger Mountain 3
    27 September 2023 at 3:11 pm

    Great column Micky. There is so much unfocused anger out there, along with post COVID fallout. COVID could be mentioned more often–would you have wanted your gran or partner to die? The Ardern led response significantly made sure that did not happen as difficult as it was.

    The tide seems to be turning slightly, and those of us that want a Labour, Green, TPM Govt. have to keep the messaging up wherever we might operate or what our networks are.

    Chris Hipkins was anointed rather than elected by the Party at large, and that created a major problem for this General Election–more Cap’n’s calls, particularly on Wealth Tax. NZ Labour would likely be comfortably anticipating victory now if he had made a call the other way.

    So lets be optimistic, 4.9% NZ First, a narrow victory to Labour/Green/Te Pāti Māori, Hipkins replaced and the list of progressive reforms implemented…but there are indeed many other scenarios possible too.

    I was looking forward to quietly enjoying my gold card years but now it looks like ’81 Tour all over again if NActFirst attain office and start hammering the working class (regardless of ethnicity) and Māoridom in particular.

    • Belladonna 3.1
      27 September 2023 at 7:20 pm

      would you have wanted your gran or partner to die?

      While this may be factually true (the Covid strain pre-vaccination was much more deadly than the current variants); most people quite simply don't have the science background to understand/explain this. For them, it's the case of 'I had Covid, no big deal, no worse than the flu. What was all the fuss about'

      • Drowsy M. Kram 3.1.1
        27 September 2023 at 8:39 pm

        I had Covid, no worse that the flu, and I understood what all the 'fuss' was about.

        If Aotearoa NZ's Covid-19 death rate (637 per million) had been closer to, say, the UK (3397) or the US (3332), then maybe a few more Kiwis would understand what the fuss was all about, but possibly not that many more – we can be a determinedly ignorant bunch.

        https://ourworldindata.org/coronavirus/country/new-zealand?country=NZL~GBR~USA#cumulative-confirmed-deaths-how-do-they-compare-to-other-countries

        So, while not wanting to minimise the tragedy of losing 3000+ Kiwi lives to Covid-19, basically I agree with you – most Kiwis didn't and don't understand just how 'lucky' we were – thanks to circumstances and a government that prioritised health.

        All things considered, we 'got off' lightly.

      • Incognito 3.1.2
        27 September 2023 at 10:21 pm

        The flu kills Kiwis

        • Belladonna 3.1.2.1
          28 September 2023 at 8:11 am

          Yes, and we don't shut down the country every year. Even though deaths from flu were at zero during the Covid lockdowns (because flu couldn't get into the country either)

          • Descendant Of Smith 3.1.2.1.1
            28 September 2023 at 8:44 am

            Humans have evolved to influenza due to the flu pandemic in 1918. Basically we evolved by having susceptible people dying and taking their susceptible genes out of the gene pool – while it remains a problem it most likely won't ever be a pandemic again. It would take quite a significant mutation.

            (Most people seem to think the influenza virus evolved to become milder – it did not and as a rule viruses do not do this.)

            COVID-19 was a corona virus not an influenza one and one for which we could have played the same game and had many more deaths. We chose not to and frankly the New Zealand public supported that position as did the main political parties Those that did not were very much a minority – albeit a very vocal one.

            "Nor are there many documented instances of viruses whose virulence has abated over time. The rare, classic example is the myxoma virus, which was deliberately introduced to Australia in the 1950s from South America to control invasive European rabbits. Within a few decades, the virus evolved to reduce its virulence, albeit only down to 70 to 95 percent lethality from a whopping 99.8 percent. (It has since ticked up again.)

            But myxoma stands nearly alone, Parrish says. For instance, he notes, there is no evidence that recent human pathogens such as Ebola, Zika or chikungunya viruses have shown any signs of becoming less pathogenic in the relatively short time since jumping to humans."

            https://www.smithsonianmag.com/science-nature/how-viruses-evolve-180975343/

          • Incognito 3.1.2.1.2
            28 September 2023 at 9:59 am

            Never mind

  4. Mike the Lefty 4
    27 September 2023 at 3:27 pm

    Note that Luxon promised to REDUCE the cost of living.

    The taxes he needs to cut to do that are general petrol excise tax and GST (and perhaps the tax on alcohol to make all the National Party piss ups a bit cheaper)

    We all know he won't do that.

    Income tax reductions will only help people pay for the increases in the cost of living a little bit, with those at the top getting a lot more to help pay for it than those at the bottom. Plus there is the chance that tax cuts in themselves might keep inflation rates up.

    It is amazing how so many economists are coming out and saying that National's tax policies are both flawed and error ridden, whilst although not exactly excited about Labour's – at least conceding that they are more plausible and accountable.

    National's self-described "best managers of the economy" label looks dumber every day.

    Economic charlatans – that is what National are.

    • Drowsy M. Kram 4.1
      27 September 2023 at 4:30 pm

      Economic charlatans – that is what National are.

      Charlatans in deed – scummy scammers of the first order – "bottom feeders", imho.

      Projected revenue of $740 million per year from Willux's foreign buyer tax? Pull the other one. If it seems to good to be true, don’t worry – Willis has promised to resign.

      Scam activity rises 13%, but Kiwis becoming 'more scam savvy'

      Nigel Latta Turns Spotlight On Scammers And Psychology Of Scams [23 June 2023]
      "New Zealanders like to think they’re a savvy bunch – in fact, 90 per cent believe they can spot a scam – but the losses tell a different story.
      …
      "The more people can understand the way scammers try to exploit their emotions, the greater the chance of preventing scams.
      …
      Episode two examines investment and buying and selling scams…

      • Dennis Frank 4.1.1
        28 September 2023 at 9:14 am

        I agree but still hope the scam will be exposed soon. A competence test for sceptics is what we have now. Financial credibility demanded, yet not supplied: a classis supply & demand situation which neolibs will expect Market Forces to magically produce the goods.

        If that deity with a surname delivers, we'll get exposure of the truth. If not, then it's just another market failure for the neolibs to not learn from.

  5. Chris 5
    27 September 2023 at 3:52 pm

    "National's self-described "best managers of the economy" label looks dumber every day."

    Yes it does, but where's Labour's attempt to tell the public the truth about who historically have been the best managers of the economy?

  6. James Simpson 6
    27 September 2023 at 4:15 pm

    Why do people keep talking about a coalition with ACT and NZ First in it. There is as much chance of that happening as there is Greens and NZ First being in coalition. 0.04032% chance.

    The leaders of both ACT and the Greens will never go into government for government's sake. For ACT they need substantial tax cuts and cuts to government services. For Green they need meaningful climate action and poverty reduction. NZ First will never allow any of those things to happen. For that reason there will never be either of those coalitions.

    They will sit on the cross benches if that situation ever came up.

    • Chris 6.1
      27 September 2023 at 5:14 pm

      I think you're half right – the half that says the Greens wouldn't even consider being in a coalition with NZF in it.

      • James Simpson 6.1.1
        28 September 2023 at 9:21 am

        You think ACT will go into coalition with someone that won't allow them to cut tax and public services?

        No chance.

        There are only two principled parties in New Zealand. The Greens and ACT. Their principles are fundamentally different, but they are both in politics for the sole purpose of advancing those principles. They won't go into into government for the sake of it.

        National, Labour and NZ First differ. They are in politics for power and will do whatever it takes in pursuit of that power.

  7. AB 7
    27 September 2023 at 5:34 pm

    Prediction: ACT under 5% and Paul Goldsmith inadvertently plays a blinder in Epsom to beat Seymour. Luxon seen leaving late on election night on a chartered AirNZ flight to take up a role with Liz Truss's favourite nutter think tank, the IEA in London. He has the whole plane to himself and all the cabin crew refer to him as "boss" and "leader". David Seymour goes bush in Northland to rediscover his Ngapuhi roots and comes out in 2032 as a committed TPM candidate. Winston lives on till 2078 contesting all 18 elections between now and then – in 2050 he is made Lord Peters of Whananaki – his coat of arms shows a pinstripe suit emblazoned with ballot papers and a dead snapper.

    History unrolling before our eyes.

  8. Ffloyd 8
    27 September 2023 at 7:06 pm

    Our young neighbours across the road said that they will be voting for Labour because Chris Hipkins looks honest and the other one doesn’t.
    Good on them. I think Chris and Grant are honest as well.

    Just saw Oppos little financial genius not answering questions about her own costings but immediately going into full on attack on Labour.

    Not called out on it. Labour needs to put out a full page advertisement detailing all the successes they have had.

  9. Thinker 9
    28 September 2023 at 7:50 am

    Luxon confirming he's willing to go with Winston will surely have the effect of both increasing Winston's vote (now that he's got credible potential) and dropping National's vote (some will sense it as a desperate move, given National's past criticisms).

    That would then create a greater probability that Luxon will need to do a 3-way handshake.

    However, Willis has staked her colours to the mast regarding the tax cuts. Rightly so, because they have set themselves up with a Faustian Bargain for the votes of those who put themselves before their childrens' futures. The tax cuts have to happen.

    So, National is going to have to look for other sources of funding to pay for the cuts, which is likely to hurt those who are not its traditional voting base – workers, public servants, beneficiaries.

  10. Patricia Bremner 10
    28 September 2023 at 9:40 am

    This is the pivotal moment imo. Luxon is not smart enough or principled enough.

    He says a great deal without giving the why of his position.

    When pushed it was 'the law is settled',(abortion) and he would choose Peters to exclude Labour, if the right needed that to keep Labour out of government. He forgets Act might not agree, and Peters also may have even greater leverage after last night, as he is now the injured suitor.

    The left will be uplifted by last night. If you did not watch, please do.

  11. SPC 11
    28 September 2023 at 12:19 pm

    National has form on tax cuts.

    1.Promising to end the surtax in 1990 and keeping it 1991

    2.In real time cutting benefits because of the budget but also ending the estate tax 1991 – because rich families should be able to pass on all their wealth.

    So the decision to continue to claw back from those on super and reduce those on benefits to poverty, was made at the same time they ended the estate tax on wealthy families – thus of a deliberate effort to end an egalitarian New Zealand and run a class system (elite, managed middle class and those under occupation (tenants, exploited labour, precariat).

    3.In 2008 promising a tax cut .

    4.Unable to afford the plan, they increase GST in 2009 to finance it.

    5.They make promises based on a plan that does not stand scrutiny in 2023

    They are dependent to a degree on ACT and NZF partners agreement when finding a way to make their budget work.

    They are also dependent on Treasury staff remaining silent about National's but the books have got worse and are worsening – so things have changed.

    ACT would target those on super for saving – something NZF would block.

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    Foreign Affairs Minister Winston Peters will represent the Government at Anzac Day commemorations on the Gallipoli Peninsula next week and engage with senior representatives of the Turkish government in Istanbul.    “The Gallipoli campaign is a defining event in our history. It will be a privilege to share the occasion ...
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  • Minister to Europe for OECD meeting, Anzac Day
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  • Comprehensive Partnership the goal for NZ and the Philippines
    Prime Minister Christopher Luxon held a bilateral meeting today with the President of the Philippines, Ferdinand Marcos Jr.  The Prime Minister was accompanied by MP Paulo Garcia, the first Filipino to be elected to a legislature outside the Philippines. During today’s meeting, Prime Minister Luxon and President Marcos Jr discussed opportunities to ...
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  • Government commits $20m to Westport flood protection
    The Government has announced that $20 million in funding will be made available to Westport to fund much needed flood protection around the town. This measure will significantly improve the resilience of the community, says Local Government Minister Simeon Brown. “The Westport community has already been allocated almost $3 million ...
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  • Taupō takes pole position
    The Government is proud to support the first ever Repco Supercars Championship event in Taupō as up to 70,000 motorsport fans attend the Taupō International Motorsport Park this weekend, says Economic Development Minister Melissa Lee. “Anticipation for the ITM Taupō Super400 is huge, with tickets and accommodation selling out weeks ...
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  • Cost of living support for low-income homeowners
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  • Government backing mussel spat project
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  • Clean energy key driver to reducing emissions
    The Government’s commitment to doubling New Zealand’s renewable energy capacity is backed by new data showing that clean energy has helped the country reach its lowest annual gross emissions since 1999, Climate Change Minister Simon Watts says. New Zealand’s latest Greenhouse Gas Inventory (1990-2022) published today, shows gross emissions fell ...
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    1 week ago

  • Earthquake-prone buildings review brought forward
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  • Thailand and NZ to agree to Strategic Partnership
    Prime Minister Christopher Luxon and his Thai counterpart, Prime Minister Srettha Thavisin, have today agreed that New Zealand and the Kingdom of Thailand will upgrade the bilateral relationship to a Strategic Partnership by 2026. “New Zealand and Thailand have a lot to offer each other. We have a strong mutual desire to build ...
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  • Government consults on extending coastal permits for ports
    RMA Reform Minister Chris Bishop and Transport Minister Simeon Brown have today announced the Coalition Government’s intention to extend port coastal permits for a further 20 years, providing port operators with certainty to continue their operations. “The introduction of the Resource Management Act in 1991 required ports to obtain coastal ...
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  • Inflation coming down, but more work to do
    Today’s announcement that inflation is down to 4 per cent is encouraging news for Kiwis, but there is more work to be done - underlining the importance of the Government’s plan to get the economy back on track, acting Finance Minister Chris Bishop says. “Inflation is now at 4 per ...
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