The Opposition has been left floundering after National encroached further into the centre with last weeks budget, which included substantial tax cuts and housing assistance.
Andrew Little in particular has had trouble responding, but the Greens also caused some opposition embarrassment after they voted for the family tax package while Labour opposed it.
Little has tried to criticise small parts of the package, unconvincingly. His first attempt to oppose question Bill English over the budget in Parliament was underwhelming – see Little versus English on the budget.
Vernon Small writes: Opposition all at sea after Joyce’s ‘non-election year’ Budget
The Budget was a lot of things, though a visionary document wasn’t really one of them.
However, before we get too high and mighty about the absence of the “vision thing”, it’s worth bearing in mind what it did achieve – especially with an election looming.
Because it melded income assistance, a billion and a half of tax cuts, a side dish of debt reduction, a 3 per cent growth outlook, a big infrastructure spend and some extra – though probably not enough for many – for stretched public services.
Most spectacularly it seems to have thrown the Opposition – but for Winston Peters’ usual chutzpah – into a counter-productive spin.
Labour leader Andrew Little’s iPad-assisted first speech was a tame and lame affair, which wound up before its allotted time.
See Andrew Little’s budget response.
The Greens managed to undermine the sense of unity they have been so keen to build with Labour, through a Memorandum of Understanding and their Budget Responsibility Rules (BRRs), by voting for the centre-piece of Steven Joyce’s Budget without discussing it with Labour or giving them any prior warning.
This appeared to breech their MoU:
2 (d) We agree to a “no surprises” policy that means we give each other prior notice and the details of major announcements and speeches. This includes matters where we disagree.
3 (b) We support each other’s right to express alternative views, whilst acknowledging our responsibility to discuss our position with each other before public debate.
Small:
The way the parties voted on the incomes package was largely academic, since their speeches made their positions clear. But for powerful symbolic and tactical reasons they simply had to vote the same way.
It was a memorial to misunderstanding and a failure of political management not to get those two simple ducks in a row. And it was a blunder the Government exploited during the Budget debate, and will continue to exploit to exhaustion.
Outside of election the budget is the biggest political event of the year (of any year), so Labour and the Greens should have been prepared for it and how they would deal with it jointly.
At a more fundamental level the Budget’s family income package seemed to put Labour into a quandary.
Little has long stressed Labour’s tax plan was to move on housing and speculation ahead of the election – and part of that was his keynote speech to the party congress earlier in May – while leaving any major changes for consideration by a post-election working group review.
In simple terms, it was an attempt to inoculate the party against any charges that it planned to bring in new and higher taxes to fund its spending plans.
The surplus, debt and fiscal parameters, set up by the BRRs with the Greens, were designed to underpin that message.
And then along came Joyce’s Budget, which seemed to throw Little off course on Tuesday.
In an interview with Susie Ferguson on Radio NZ – that he consistently seems to fluff – he got down into the weeds, discussing small groups who would miss out or get less than others, rather than concentrating on Labour’s main attack theme – that the Budget increased inequality and put far too much into tax cuts and far too little into income support at lower levels.
By that morning’s media stand-up in Parliament he was tighter on message, but then he threw the party’s tax strategy into doubt by failing to rule out other tax increases.
Little has got better at reciting well rehearsed party lines, staying on message and diverting to his messages, but he has not mastered the art of thinking on his feet during interviews.
Whether this is a fundamental inability, or a lack of depth and breadth of knowledge, or a lack of confidence, it is seriously impeding his attempts to look like a credible Prime Minister-in-waiting.
At that point Joyce – he who denied an election-year motive in his Budget – and Bill English must have steepled their fingers and reclined their office chairs with satisfied smiles. They had all the ammunition they wanted to paint a picture of a divided Opposition with a waffly stance on tax.
Labour has the opportunity to right the ship in the next few weeks, when it releases its own families package-cum-alternative Budget.
It will have to be a thorough, well thought through policy response, expressed clearly. Little will need to improve markedly, especially in being prepared to respond to the inevitable questions and examination of the policy.
A stream of frontbenchers for Labour have criticised the accommodation supplement as evidence of the Government’s failed housing policy, but they are likely to wave that through.
Their attacks on the Working for Families element suggest they will proffer a big lift there.
But it is not just a case of unwinding and redistributing the $2 billion of tax threshold changes.
The party has already committed to increasing paid parental leave, more police, the early resumption of payments to the Cullen superannuation fund and three years of fee-free tertiary study at a cost of $1.2 billion by 2025. (There is some more cash available from Labour’s slower debt repayment plan, but that is further down the track.)
Labour have so far avoided specifics in policies that will cost a lot of money, to an extent understandably prior to knowing what would be in the budget.
Ideally they would have been prepared for a quick and comprehensive counter to the budget. Instead they seem to have been woefully unprepared.
Now Labour will have to hope the budget tax, housing and benefit package doesn’t grow on voters as something worthwhile for many to expect.
They will have to come up with a credible alternative that attracts support, and one that is extremely thorough because it is certain that it will be examined and critiqued minutely.
And Little and Grant Robertson will have to be very well prepared to answer and explain thoroughly and clear and unambiguously.
Selling their key policy against a fairly well received budget will be a real test of their abilities and capabilities. It will be much more difficult for them than sniping at government policies and plans.
Labour in particular have given the impression they have been left floundering “all at sea” by the budget. They have a big challenge to be seen to be on firm fiscal footing.
