Labour does U-turn on tax timing
‘‘But in terms of the poll, there won’t be much difference between me and Steven [Joyce] talking about that because we both know it’s close.’’ Labour’s Grant Robertson
Labour has done a handbrake turn on its tax plans, promising that it will not bring in extra new taxes until after the 2020 election.
The move came after sustained attacks by National on the vagueness of its rival’s tax policy and a political poll that showed the party falling far behind.
But, as the polls continue to whiplash, a new survey suggests it might not have been that crucial for Labour to act – although the party believed it was being hurt by the issue.
A 1 News- Colmar Brunton poll yesterday showed Labour on 44 per cent with a solid lead over National on 40 per cent, meaning Labour could govern with either the Greens or New Zealand First’s support.
Labour finance spokesman Grant Robertson yesterday called a surprise press conference to say any recommendations from its planned tax working group (TWG) would not take effect until 2021 to give the public a chance to assess them before voting.
‘‘We will undertake the work and we will take it through to legislation. But no outcomes from the tax working group will come into force until the 2021 tax year – that is April 1, 2021,’’ Robertson said.
But Labour would press ahead with the other policies it has announced – including cancelling National’s planned April 1, 2018, tax cuts; extending the bright-line test when capital gains tax is changed on investment properties to five years; and introducing water and tourist levies.
The change represents a backdown by Labour leader Jacinda Ardern, who had said she wanted the flexibility to introduce changes recommended by the TWG, such as a capital gains tax on investment properties, in her first term to address the housing crisis.
But yesterday she said she had listened to public concerns and the new policy balanced the urgency to solve the housing crisis with giving voters certainty.
Prime Minister Bill English said it was not much of a backdown because Labour was still committed to cancelling tax cuts already legislated but not yet in effect.
‘‘They haven’t moved on income taxes. The current law of New Zealand is that on the first of April someone on the average wage will be about $1000 a year better off, thanks to tax cuts,’’ he said.
Finance Minister Steven Joyce said Labour had begun a ‘‘long march back but they’ve got a way to go’’.
‘‘They’ve postponed the introduction of two taxes but have reaffirmed their intention to impose a water tax, regional fuel tax, tourism tax, income tax increases, and bringing farming into the ETS (emissions trading scheme),’’ he said.
But the polls are showing an increasingly confused picture with the election just eight days away.
The polls from the two main TV channels are now diverging wildly, with 1 News consistently showing a lead for Labour, while Newshub-Reid Research last had the National Party 10 points ahead and able to govern alone.
But the parties’ internal polling puts the numbers much closer, with strategists still describing the race as ‘‘neck and neck’’.
Speaking at a Stuff finance debate last night – shortly after the poll was released – both Joyce and Robertson agreed they were not putting too much stock on either.
‘‘But, in terms of the poll, there won’t be much difference between me and Steven talking about that because we both know it’s close,’’ Robertson said.
Stuff’s own poll of polls has National ahead but with the gap remaining tight.
It puts National on 43.3 per cent, Labour on 38.1 per cent, NZ First on 7.8 per cent and the Greens on 7 per cent.
This figure is a rolling average taken across the polls by Roy Morgan, 1 News- Colmar Brunton and Newshub-Reid Research.