Vernon Small: Labour’s tax U-turn long overdue
Labour’s move to push any additional tax rises out beyond the 2020 election is not too little, but it remains to be seen if it is too late.
A 1 News-Colmar Brunton poll out tonight will confirm whether the attacks on the previous policy by National have had an effect in line with the sudden 10 point gap National opened in the NewshubReid Research poll earlier in the week.
But either way it had become a crucial call to get the party’s campaign back on an even keel.
Uncertainty around what the working group would throw up, particularly inheritance taxes and taxes on the family bach, was stalling and reversing Labour’s momentum. Yes, National had played it for all - and beyond all - it was worth but this is an election campaign. They should have expected nothing less.
Now Labour can try and get the Jacindarama show rolling again in the last crucial days before September 23.
The essence of Labour’s announcement yesterday, beyond some clarification of what the tax working group would look at, is to say that whatever it recommends – and whatever a Labour-led Government decided to pick up – may be passed into law before the 2020 election but would not take effect until April 2021.
That does give voters the chance to look at the changes proposed and give a renewed mandate.
It is not wildly different from former leader Andrew Little’s promise to seek a renewed mandate from the public for any changes.
The other option for Labour was to release detailed terms of reference for the working group, though that may have taken too long and still left questions unanswered.
By making this announcement Jacinda Ardern and Grant Robertson have made a much smaller target of themselves.
But it took National finance spokesman Steven Joyce no time to point out Labour would still go ahead with its previously announced tax changes, including the promise to reverse National’s personal tax cuts due in April, water levies, a tax on overseas visitors and allowing councils to impose a regional fuel tax.
What it does show is that Ardern’s radar has been off on these tax issues.
It was the same, but less significant, with the water levy.
Her first call was to leave it open, but with an assurance it would only be a few cents. Within days labour was forced to put an upper limit on the price of irrigation water - 2 cents per 1000 litres.
It didn’t make the problem go away as far as farmers are concerned but it did turn the heat down with the majority of voters.
She may have won a lot of support back to Labour, but she may have learned in the process that voters may give you their trust, but they also like to verify it - and that includes a clear statement of what policies you will bring in - so they can hold you to account.