Opposition split on tax cut vote

The Budget tax cut plan has split the Opposition, with Labour voting against the changes and the Greens and NZ First voting in favour.

Speaking after a post-Budget breakfast in Wellington, Labour leader Andrew Little said the Greens were an independent party and could do what they wanted.

While Labour and the Greens have a memorandum of understanding and an agreement on a joint set of Budget responsibility rules (BRRS), Little said not too much should be read into the fact the two parties were voting in opposite ways on the tax package.

‘‘They’ve made their political judgment on the basis of this Budget at this time.

‘‘But both our parties have pretty clear agreement about the level of discipline required in fiscal management.’’

Labour took a different view on whether the package was well targeted and well prioritised, he said.

‘‘You can vote different ways and that (BRRs) document retains its integrity.’’

Greens co-leader Metiria Turei said voting for the tax changes was a ‘‘line call’’.

The Family Tax Credit was the only credit that beneficiaries got ‘‘and they are the ones that need it the most’’.

‘‘I won’t oppose more support for the families that have always had the least and need the most.’’

She said the new abatement rates ‘‘were terrible and the tax cuts were ridiculous but the family tax credit, small as it is, will help.’’

The Greens had no choice but to also vote for the threshold rate change because of the way the bill was structured.

Little would not be drawn on his plans for tax thresholds, but said the Budget package was poorly targeted.

Five times as much went to the tax part of the package than the Working for Families element.

‘‘This is not our tax package. It’s poorly directed.

‘‘You’ve got $1.9 billion going into a tax package that still gives huge benefits to hundreds of thousands of high income earners and you’ve still got $307m which goes to Working for Families, which is actually a better targeted policy, but just not enough into it.’’

He said Labour would support changes to Working for Families and increases to the accommodation supplement.

However, it was concerned at the accelerated abatement rate and the lower abatement threshold that would apply to Working for Families payments.

Labour would look again at its Best Start policy, to support families on poverty, in light of the Budget changes to Working for Families.

Little said Finance Minister Steven Joyce’s first Budget was clearly an election year document.

‘‘Tax cuts can only be seen as an election bribe and one heavily targeted at the well off.’’

Upper income earners got the most benefit and the poorest, earning under $14,000, get nothing from the tax package.

He and Bill English did not need a $1000-a-year tax cut, which they would get from the package.

‘‘When you use Budgets for sugar hits it means you miss the chance to make other more important changes.’’

Little said the Budget did not address the ‘‘chronic’’ housing shortage. Labour would build affordable homes.

‘‘We won’t have 40,000 homeless in New Zealand.’’