Joyce v Robertson finance debate tonight

Stuff are streaming a finance debate from 7:00 pm between Grant Robertson and Steven Joyce. This may be challenging for Robertson in particular after today’s tax u-turn.

Ok, I’m getting sick of it already, same old arguments flying to and fro.

Robertson has just interrupted Joyce about five times in a row stopping him from talking. Waste of time.

Joyce is still claiming there is a fiscal hole, but seems to have changed his slant somewhat.

Labour lose their nerve on tax

There’s been a lot already written and commented on today’s tax back down from Labour so I won’t go over it all, but it looks like they lost their nerve on their tax working group strategy.

Labour say they won’t implement any new taxes they haven’t already been announced until after the 2020 election, but if in government they may put legislation in place before the election, set to kick off in 2021.

Grant Robertson fronted the announcement. here’s his PR:

Labour committed to fair and progressive tax system

Labour is committed to a tax system where everyone pays their fair share and where we start to address the imbalances that have fuelled the housing crisis, says Labour’s Finance spokesperson Grant Robertson and Labour’s Revenue spokesperson Michael Wood.

“Today Labour has released its full tax plan, bringing together a number of previous announcements and more detail on the Tax Working Group. Given the amount of misinformation being spread, it is important that we have all the information in one place.

“Labour will not make any changes to personal income tax, corporate tax rates or GST.

“What we will do is reverse National’s proposed tax cuts and use the billions of dollars to make 70 per cent of families with children better off and invest more in health, education, housing and other public services.

“Our policy also cracks down on those who are exploiting weaknesses in the tax system by speculating in the housing market. Labour will end the practice of negative gearing, and extend the current bright line test that taxes the capital gain on the sale of a property other than the family home to five years.

“We are establishing the Tax Working Group to explore other options to make our tax system fairer, particularly in terms of the balance between taxing income from salaries and wages and property speculation.

“To be absolutely clear, under Labour the family home and the land around it will never be taxed. There will also be no inheritance tax.

“Labour will not shy away from the hard issues such as fixing the housing crisis and we are determined to do what is right, but we also know we must take New Zealanders with us as we do that.

“We have heard the call for New Zealanders’ voices to be heard. We will involve the public at every stage of the Working Group, as well as Cabinet and Parliament’s consideration of any changes that arise from it.

“We know it is important to get this right, so we will balance the need for certainty and urgency by ensuring that any potential changes will not come into effect until the 2021 tax year. This gives multiple opportunities for public input, and a general election before any new tax would come into effect.

“To avoid any doubt, no one will be affected by any tax changes arising from the outcomes of the Working Group until 2021. There will be no new taxes or levies introduced in our first term of government beyond those we have already announced.

“Other highlights of Labour’s plan include ensuring multinationals meet their tax obligations, a Research and Development Tax Credit and the fast tracked abolition of secondary tax as part of the Business Transformation Programme at IRD,” says Grant Robertson and Michael Wood.

Read our tax plan here.

Ardern ‘clarifies’ on land tax

More tax confusion from Jacinda Ardern yesterday, this time on whether some sort of land tax would be considered by their proposed tax working group.

RNZ:  Labour clarifies land tax position

Ms Ardern said Labour’s target was not the family home.

But when pressed by reporters, she suggested that guarantee only covered the building itself and not the land.

“Yes, that’s the complication of those various iterations,” she said.

“That’s why I’m saying to the tax working group – ‘I want the family home to be off the table, please work through the options that remain available to address home ownership and to address affordability and to make sure our taxation system is fair’.”

Ms Ardern was then asked again if she was leaving open the possibility of taxing the land on which the home sat.

“I’m saying that I don’t want there to be taxation applying to a family home,” she said. “The rest is for the working group to work through.”

So news reports came out saying that a land tax was potentially on the table.

A land tax generally takes the form of an annual levy based on the value of the land.

It was one of the recommendations – as part of a broader tax reform package – made by the 2010 Tax Working Group. It was rejected by the National government at the time.

RNZ themselves interviewed someone about how a land tax might work, and what it’s benefits could be:

An expert explanation of land tax

Michael Littlewood is an Auckland University Law Professor and tax expert. He joins Checkpoint to discuss how a land tax would work.

But since then Ardern has clarified.

Labour Party leader Jacinda Ardern has ruled out introducing any tax which would hit either the family home or the land it sits on, saying that’s “completely off the table”.

Ms Ardern has always ruled out introducing a capital gains tax on the family home.

She’s now gone further, saying she’d instruct the working group to stay away from any policies which would affect the home or the land on which it is built.

“My message will be very clear to them – do not bring me any recommendation that includes the family home or the land that a family home sits on.”

Ms Ardern said the tax working group could still consider the possibility of a land tax, but not one which would hit the land underneath a family’s house.

“That will not be up for consideration. It’s completely off the table.”

Some of Labour’s tax policy seems to be still evolving.

The big question is how much more it might evolve should Labour get into government.

Ardern (and Grant Robertson and Labour for a couple of years now) have been pushing the line that they want to wait to listen to experts before making decisions on tax changes, but when they get advice it will be too urgent to wait until the next election to get a mandate for changes.

Over the course of this campaign Ardern has been ruling out an increasing number of possible tax changes, so the tax working group may not have much to work with.

Ardern and Labour have also frequently mentioned the National flip on GST after the 2008 election as some sort of justification for deferring tax policy until after the election as if that would make a surprise tax package ok.

So far Labour have not responded to requests to publish possible terms of reference for their tax working group, nor will the indicate who might be appointed to the group.

Tax continues to be one of Labour’s biggest weaknesses in this campaign.

Robertson ‘best case’, Joyce ‘worst case’

It looks like the fiscal hole issue will continue to get a hammering today. Patrick Smellie says that it is a conflict between best case and worst case scenarios, with reality likely to be somewhere in between.

It has highlighted more than a hint of desperation in the National campaign, which is being led by Steven Joyce, but also shows that Grant Robertson doesn’t have a lot of money to play with.

Pattrick Smellie: It’s arithmetic, stupid!

Election campaigns mixed with forecasts of the future are a dangerous combination.

Now that the dust is settling, a somewhat banal conclusion is emerging: they’re both wrong, and the truth is likely to be somewhere in the middle.

Labour’s numbers are nothing like as compromised or wrong as Joyce claimed, but it requires some heroic assumptions about Labour’s ability to control all spending outside health and education to believe the numbers it’s published.

In other words, Joyce has claimed a worst case scenario. Robertson is claiming best case.

On that basis, it’s entirely reasonable to split the difference in the interests of trying to explain what’s at stake here, and to conclude that Labour’s forecasts will turn out to be anything between $4b and $6b short of its published fiscal plan, should it form a government after September 23.

If Labour turns out to be a spendthrift government, then Joyce’s alleged $11.7b miscalculation could prove to be too little.

Alternatively, if Labour turns out to be an unexpectedly tight-fisted government in a time of endless forecast Budget surpluses, its spending under-estimation might be far less than my punt of a $4b to $6b shortfall.

However, it is hardly unreasonable to expect Labour to end up spending more than forecast to stop the ship of state from springing politically unpalatable leaks. Public sector wage pressure, demographic demands on other public services and even the small amounts of inflation still pulsing through the economy will severely test the fiscal track that Labour has outlined.

That’s still a long way short of what Joyce claimed, but a problem for Labour’s fiscal credibility nonetheless.

So it looks like Joyce has sacrificed his own economic credibility, deliberately or not, in order to put the spotlight on Labour’s money manipulations.

However, it’s also likely to be a problem that a returned National-led government would face. National has already pledged about $400 million a year of the $1.8b a year it has available for new initiatives in each of the next four years, and on Joyce’s own admission, health and education routinely take the “lion’s share” of those new spending buckets.

In other words, National has probably just about run out of extra money to spend too.

That’s only a real problem for national if they want to keep throwing around election bribes. If they had stuck to ‘steady as we go’ they would be on stronger ground, relatively.

If Joyce now comes out and concedes he over-egged Labour’s fiscal pudding he could reduce the damage on National, leaving the spotlight on Robertson’s fiscal tightrope.

But if Joyce quadruples down he may drag National down with him.

Here is Joyce explaining his claims on RNZ yesterday:

Looks like Joyce stuffed up

Steven Joyce versus Grant Robertson plus a number of economists.

Looks bad for Joyce, for national, and for Bill English.

And by continuing to claim there is a hole they have kept digging a credibility hole of their own.

Economists have pointed out that Labour have left themselves with little economic room to manoeuvre, but their numbers largely stack up.

Joyce has left himself with no easy way out of this. A backfire, big time.

Not only does this look bad for National, it helps boost Robertson’s and Labour’s economic credibility.

The $11.7 billion hole continued

For many of the arguments that support Labour’s fiscal plan and slam Steven Joyce’s attack on it see The Standard –  Steven Joyce’s comprehension fail.

I also have a comprehension fail – I have no idea who is right and who is wrong, but I suspect that both Joyce and Grant Robertson are fudging some numbers and descriptions.

Hamish Rutherford at Stuff:  Does Labour have an $11.7 billion hole or a poor choice of words?

The latest move in the election campaign saw National launch a stinging attack on Labour’s economic credibility, which it said amounted to an “$11.7 billion hole”.

National has little to lose from doing so. Comparing fiscal plans is complex as they never follow a set template, probably because every political party uses confusion as a strategy.

And as it is easy to confuse on something this complex it seems likely that both sides will keep claiming to be right.

While Steven Joyce claimed there are four key errors in Labour’s plan, only one really matters, both because of its size, and because the error being claimed would be so extraordinary.

This is that Labour had signalled a series of generous increases in the “operating allowance” over the next years, without counting the cumulative impact.

The charge is that Labour is choosing to give parts of the public sector more money as soon as it is elected, then ignoring the reality that they will expect the money again next year, and the year after, and so on.

This simply never happens in the real world. Nurses who get a pay rise in 2018 expect that they will be paid at least as much for the same job in 2019, and will probably want some more.

Labour has sought to explain the difference as one of misinterpretation, which it accused Joyce of doing deliberately.

Grant Robertson fronted reporters saying that its figures already include the steady cumulative increases in different parts of the plan.

Spending on health and education, to cater to the inevitable increases in cost every year, Robertson says, will amount to $6.7b over five years.

The confusion? Semantics, apparently. If nothing else, Labour is guilty of a very odd choice of words.

Where Labour uses the term “operating allowance” it means something quite different to what Treasury, or anyone else, would assume it would mean.

Robertson actually admitted the term meant “leftover cash”.

Government forecasts are complicated, and involve a fair amount of sleight of hand, on all sides.

But the term “operating allowance” has a generally accepted meaning, at least insofar as once you allocate it, the bill will typically be the same or more, forever.

Labour claims that it has gone further than National has, and properly accounted for the rising, and inevitable, cost of demographic changes in New Zealand as the population grows more quickly.

But its choice of words is one which created the confusion.

As well as using a term which usually means something different, it leaves open the suggestion that Labour’s fiscal plan is presented in a way which is designed to make it seem much more generous than it actually is.

Confused? I am.

Do I care about this? Not much.

Campaign ‘promises’ come thick and fast, and I think most people don’t expect all the spending to happen when whoever gets into government has to actually find the money to do things.

Politik: Joyce looks like he may have got his sums wrong

The argument rests on a line by line table that is published in Treasury’s Pre Election Fiscal Update (PREFU). The first figure Joyce disputes is Labour’s estimate of its “Forecast New Operating Spending”.

He says that Labour has included its new spending only in the first year and failed to repeat the spending each year after that.

Thus, he argues, there is a $9.387 billion gap between what Labour has estimated and what it should actually be forecasting.

Certainly, Labour’s estimates look suspiciously low given that they are $4.775 billion lower than what the Government is proposing to spend and Labour is boasting about how it will spend more on health, education and police.

Labour’s economic consultants, BERL, says it boils down to an argument of where to put new spending in out years.

It says some Governments prefer to put the spending in “Forecast New Operating Spending” where the spending is known but not yet allocated (e.g. population adjustments for health and education funding.

“The Labour Party Fiscal Plan explicitly allocates these items to their relevant spending lines.

“This leaves the resulting ‘operating allowance’ as a clear measure of what is available for future spending for policies or initiatives currently unknown.

“In essence, the alleged ‘hole’ is a fiction arising from a disagreement over definitions.”

Understandably  Labour’s Finance spokesperson Grant Robertson was concerned about the headlines Joyce was getting with his claims and called an urgent media conference yesterday afternoon at Parliament.

“This is a desperate act from a flailing Finance Minister,” said Robertson.

No more clear to me.

BERL directory Ganesh Nana has just been interviewed on RNZ and stands by their figures (Labour used them to audit their numbers) and I’m still not much clearer.

Fiscal feud

Steven Joyce claimed their was an $11b ‘hole’ in Labour’s fiscal policy today, but Grant Robertson claimed it was a diversionary attack and his numbers stacked up.

Joyce:

$11.7b hole in Labour’s fiscal numbers

The Labour Party has an $11.7 billion hole in its fiscal plan that blows its debt out and breaks its own budget responsibility pledge, National’s Finance spokesperson Steven Joyce says.

“These are significant errors that raise questions about Labour’s whole spending approach and their fiscal competence,” Mr Joyce says. “Their spending numbers were already high and this makes them a lot worse.

“Labour’s recipe would lead to more debt, higher interest rates and a slower economy – not to mention the host of extra and unexplained taxes they would impose on households and businesses.

“All of this would cost jobs and eat into family budgets.”

The five errors are as follows, over four years:

  • Failing to roll out their operating allowances for each year into subsequent years ($9.4 billion).
  • Failing to allow for any increase in paid parental leave in their Family Incomes package despite saying they have included it ($567 million).
  • Counting additional BEPs multinational tax revenue when Treasury has already counted it in the PREFU update ($902 million).
  • Only including costs of their Family Package from 1 July 2018 when they said it would begin on 1 April 2018 ($289 million).
  • Further finance costs associated with extra borrowing ($580 million).

“The biggest error is their failure to continue each year’s operating allowances for additional expenditure into subsequent years. When operating expenditure is added, for example an increase in wages for police, that expenditure continues into following years. Labour’s operating allowances don’t allow for that.

“Once corrected, Labour’s spending plans result in net debt increasing by nearly $20 billion from current levels of $60.6 billion to $79.3 billion over four years.

“Labour was already increasing debt by $7 billion from current levels by their own admission, but this takes it to nearly $20 billion. This would be an irresponsible level of debt increase at this stage of the economic cycle. New Zealand should be reducing debt now, not increasing it, so we are ready for the next rainy day.

“They also would break their fiscal responsibility rules as net debt would not fall below 23.5 per cent of GDP by the end of the forecast period, in fact it would be higher than it is now, and get nowhere near their own plan to reduce debt to 20 per cent of GDP by 2022.

“That level of spending and increased debt can only lead to one thing – higher interest rates for Kiwi mortgage holders.

“Labour’s true spending plans as revealed in this analysis confirms that behind the leadership change we are dealing with the same old irresponsible tax, borrow and spend Labour Party.

“Labour needs to withdraw its fiscal plan and re-work its proposals.”

Robertson:

Joyce gets it wrong on Labour’s Fiscal Plan

Labour’s Fiscal Plan is robust, the numbers are correct and we stand by them despite the desperate and disingenuous digging from an out-the-door Finance Minister, says Labour’s Finance spokesperson Grant Robertson.

“Steven Joyce has embarrassed himself. This is a desperate, cynical stunt to create a diversion. Our plan has been approved by BERL and they continue to stand by this plan. We stand by this plan. These numbers are robust and I refute Joyce’s allegations.

“Our operating expenses are above the line and are clearly stated. For health and education, which represent the lion’s share within any year’s operating allowance, there is around $6.7b for health, and around $1.8b for education, both clearly stated in our Fiscal Plan.

“This is a desperate act from a flailing Finance Minister. He knows that we have accounted for our expenditure in health and education going out into future years, He’s being disingenuous and trying to mislead the New Zealand public. I’m sure they’ll see through it.

“We have quite clearly put in the spending requirements to meet the promises we have made. Our fiscal plan adds up. We are absolutely clear that we have the money to meet the commitments that we’ve made.

“I challenge Mr Joyce. Is he going to fund health and education for the cost pressures of inflation and demographic changes? He needs to be up front with New Zealanders, because that’s what we’ve done.

“Labour’s Fiscal Plan details funding for housing, health, education, transport, police and other priorities, while running surpluses and paying down debt. We can afford to do this because we have put those priorities ahead of National’s plan for tax cuts that deliver $400m a year to the top 10 per cent.

“National has serious questions to answer about their own fiscals – they haven’t allowed $8.5b for cost pressures in health and education. They haven’t funded their GP policy properly. They haven’t said where the money for their $11b of capital spending will come from.

“We’ve been transparent, which is something that the National Party has never been. We’ve produced a detailed fiscal plan, they’ve produced a double-sided piece of A4 that lists their campaign promises,” says Grant Robertson.

Response to Steven Joyce’s claims:

Failing to roll out their operating allowances for each year into subsequent years ($9.4b)

  • National have made a simple mistake – Labour has put the money that National hides within the operating allowance in the accounts. Doing it this way is more transparent as New Zealanders can see how much more money will be going into the system.
  • National on the other hand has not done this, In 2018/19 National will have to provide $650m for inflation in health and education alone. Once you take this from their operating allowance they have less available than Labour.

Failing to allow for any increase in Paid Parental Leave in their family incomes package despite saying they have included it ($567m)

  • The money for this is incorporated within the Families Package Line within the Fiscal Plan. This has always been Labour’s position – and we have led the debate on PPL for the past three years.
  • The costing is based upon the MBIE advice to Ministers that was provided to the Select Committee that examined Sue Moroney’s original Bill.

Counting additional BEPS multinational tax revenue when Treasury has already counted it in the PREFU update ($902m)

  • Page 202 of Vote Revenue shows that for every dollar spent on investigations $7 of discrepancies are found. This has been a consistent message from IRD in select committees and in their publications. We are going to provide them with $30m of additional revenue for investigation activities so that they properly assess multinationals’ taxation statements.

Only including costs of their Family Package from 1 July 2018 when they said it would begin on 1st April 2018 ($289m)

  • Both versions of the Fiscal Plan have been clear that the Families Package will commence on the 1st July 2018. We will need to pass legislation to make this happen and to undo the $400m tax cut for the top 10 per cent of earners.
  • The website of the Labour Party did have a statement saying under the Families Package when it was first announced that it would be 1 April. But in terms of the numbers in the fiscal plan they have not changed at all, it has always been 1 July 2018.

Further finance costs associated with extra borrowing ($580m)

  • This is an erroneous figure. If indeed we were missing $11b in spending then we would need to find that finance cost. However, as is clear from P.14 of the Fiscal Plan we have accounted for the additional finance costs that our fully costed programme would deliver (see line “additional finance costs”).

I have no idea who is right.

It’s unlikely to be a coincidence there is a leaders debate tonight. We may get an idea who is confident about their calculations/assertions by seeing who avoids this and who pushes it tonight.

Seeing through Labour’s tax transparency

One of Labour’s biggest weaknesses in the last three weeks of the campaign is tax – what they may or may not tax, especially regarding Capital Gains Tax.

Just after she became Labour leader Ardern spoke on Q+A (6 August):

JESSICA MUTCH: Capital gains tax – yes or no?

JACINDA ARDERN: I will not be campaigning on that this election.

JESSICA MUTCH: So no for a capital gains tax.

JACINDA ARDERN: But let me be transparent, though, here. I won’t be campaigning on it in the next seven weeks. I don’t think anyone would expect us to generate a policy like that in seven weeks. But I’m very clear on is that we are giving a mandate to a tax working group, as we’ve always been clear that we will, to look at the way we tax assets and wealth in New Zealand. 

JESSICA MUTCH: So laying the groundwork for post-election?

JACINDA ARDERN: Yeah. That work will be done after the election. We do not tax assets and wealth the same way as other countries do. If we want to look at inequality, then it is necessary that we do that. But I will not be doing that in this seven weeks.

Ardern has pretty much stuck with this line, repeating ‘transparency’ often but always deferring to a future tax working group.

On one hand it is understandable that Ardern doesn’t want to be rushed into making significant policy decisions when she has been suddenly thrust into the heat of an election campaign. Theoretically decisions like this have to be run through the party policy development system.

But on the other hand this lack of certainty leaves Labour wide open to claims and confusion. Even her deputy was confused.

Yesterday from Stuff: Jacinda Ardern tells Kelvin Davis off over capital gains tax comments

In a confused interview with the AM Show, Kelvin Davis appeared to know little of the detail of Labour’s tax stance and seemed to resile from that comment in the next breath.

Labour has faced tough criticism over its decision to establish a tax working group after the election, but not reveal to voters beforehand whether they intended to implement a capital gains tax or any other taxes.

This election, the party is refusing to rule in or out the possibility of capital gains tax at all.

It was the weak spot for Ardern in Thursday night’s first TVNZ leaders’ debate

Ardern said she was “absolutely clear” on the fact Labour would hold a working group, but refused to answer how far Labour was intending to go with its conclusions and suggested tax changes were more likely to occur in the first term.

“I’ve absolutely maintained our right, and my right as leader, to make sure when that tax working group reports back that I am able to act in Government in the best interests of New Zealand to try and address the housing crisis.”

Apparently not clear to Davis though.

Davis was asked during an earlier interview if Labour would put the outcomes of its tax working group to the country at the following election – Davis replied: “I can’t answer that”.

Pressed again he said: “my understanding is we’ll campaign on it in the next election”. Asked to firm up that answer, on whether Labour would slip it during their first term or take it back to voters to decide, Davis reverted.

“Look, I’m not going to answer that question,” he said.

“Because right now I don’t know, we’ve got to have the working group make their decisions and we’ll come to the country with whatever they produce.”

Ardern said she had not seen the interview, but Davis was “now very clear on our position”.

Like the voters, as clear as mud.

And Ardern is likely to get hammered on this over the next three weeks unless she finds some different lines. Ones that demonstrate transparency rather than just claiming to be transparent.

As transparent as treacle.

Duncan Garner: Hey Jacinda Ardern, what’s your secret tax plan?

They’ll also tax. Tax, tax, tax. And repeat. On water, petrol and tourism. And maybe on capital gains.

If Ardern wants to be PM, she must tell voters more about this capital gains tax (CGT). Would it start in her first term? Would she seek a fresh mandate by putting it in front of voters in 2020?

Whatever she does she should keep her deputy, Kelvin Davis, away from talking about it. He’s a liability. Labour needs to get him up to speed quickly.

So, when, why, what? Would a CGT cover the sale of small businesses and farms?

Voters have every right to feel like there’s a secret agenda on tax.

Sam Sachdeva: Ardern again under gun over CGT

“I’ve been absolutely clear and have absolutely maintained my right as leader to make sure when that tax working group reports back that I am able to act in government in the best interests of New Zealand to try to address the housing crisis,” Ardern said.

Asked why she would not take the issue to another election for a mandate, Ardern cited National’s example when it came to power in 2008 and commissioned a tax review, ultimately leading to an increase in GST. “He [Bill English] saw fit to act on that as he saw fit in the best interests of New Zealand. The difference is that he wasn’t quite as open about intent before the election.”

Fair enough criticising National’s change of stance on increasing GST – but pointing out another party’s campaign deceit and subsequent u-turn is hardly a good way of giving voters confidence that Labour won’t do likewise, a similar somersault.

“I don’t want to be in a position where that working group comes back and there’s some ideas in there that could make a difference for that next generation to get into housing and to deal with some of the inequity in our tax system and to have to sit on that for another couple of years just doesn’t feel right to me.

“My view is though that certainly voters still get a way to feed back to us whether they think we are right or not. There will be another election probably 18 months within us acting on that review and if they don’t agree with what we’ve done, I’m sure they will tell us that.”

She denied it was a way of introducing a capital gains tax without having to say she was going to do so. “No, because I’ve been really clear with people. I expect to get scrutiny over that but I would rather be transparent around our direction of travel than say nothing at all.”

It was a government’s prerogative to act on the information a tax working group would give it. “But of course I’m setting out a few values, a few expectations going in; my expectation that it would never be on the family home and our major driver for this that it be around affordability issues, particularly in Auckland.”

Ardern is being clear in advance on the aspects of tax that suit her to be open about now, but refuses to be clear on others. This is cherry picking transparency.

Last week Alex Tarrant wrote about ‘Labour’s exclusion of family homes and income tax change aversion isn’t fit for a party wishing to fairly tax assets, wealth and income’

On Three’s The AM show on Thursday, Robertson was drawn into his views on whether New Zealand needs a better capital gains tax regime.

“I personally support a better balance in our tax system and I’m going to wait till we see the expert working group. But I don’t believe at the moment that someone who goes to work every single day, pays tax on every dollar that they earn, is being treated fairly compared to someone who flips an investment property and makes a profit on that.”

Robertson keeps repeating that. He must know that selling an investment property for profit is already taxable as income.

Take Robertson’s comment that the main cause of inequality growth in New Zealand over the past few years has been to do with asset inequality. Well, I’m sorry Grant, but New Zealand’s housing stock is worth $1.03 trillion. It’s the major component of our net worth. And about two-thirds of that housing stock is owner-occupied (which is the non-political way of saying ‘family home’).

If we want to ensure fairer tax treatment across assets, wealth and income, then you cannot just rule out capital gains or imputed rents made/unpaid on two-thirds of a trillion dollars’ worth of residential property holdings from the debate.

Perhaps Ardern needs to show some leadership and come out and be clear about Labour’s intentions on tax, some real transparency.

Otherwise she risks getting hammered on this in the remaining three weeks of the campaign, when voters start to look past her charisma and consider what a Labour led government would actually mean for them.

Claiming transparency when it is clear she is fobbing us off may be what ends up defeating Ardern and Labour.

Ardern has had a huge challenge stepping up in the heat of a campaign. I think many voters will be evaluating whether they think it is too soon for her to be Prime Minister or not.

Seeing through her claims of transparency could make the difference.

Finance debate impressions

The finance debate in Queenstown last night was not broadcast on mainstream TV so I thought that the audience would be small, but going by the surge in hits here due to the debate there seems to have been a lot of interest.

Stuff Live have a lot of points from the debate.

My overall impressions:

Steven Joyce – a knowledgeable and competent performance generally but struggles to be convincing on housing issues, the government’s big problem. Probably gained and lost few votes.

Grant Robertson – also a competent enough performance, knows his lines well. His big problem was emphasised several times, whether Labour would introduce a Capital Gains Tax or not.

  • Robertson keeps saying Labour is being transparent by not saying what they will do.
  • He says they have been transparent since 2015 on waiting for a tax working group to ‘advise’ at some time in the future, but two years is ample time to have got advice from tax experts.
  • He admitted it will be a political decision.
  • He keeps using the example of National increasing GST after saying they wouldn’t, which suggests an intent to do something different to what they are saying.

James Shaw – a very competent performance from him but the quietest and least prominent. He comes across as knowledgeable and reasonable (whether you agree with his policies or not). He won’t have harmed the greens and may have helped. However the Greens would benefit from having a stronger more charismatic co-leader.

David Seymour – promoted ACT policies well, spoke strongly and well, joked, and kept needling Peters with some success. He usually got a good response from the crowd. He won’t have harmed ACT’s chances but has a battle improving them – his performance will have helped.

Winston Peters – but I think he came across far too doom and gloom and cranky. He preached doom for the country unless he gets to run it, but wouldn’t commit to what he might do on a number of things, including CGT and whether he would go left or right. A number of petty attacks, especially against Seymour. A blustering bullying bullshitting old school politician who contrasts a lot with Jacinda Ardern. I doubt he would have increased his fan base last night.

Debate reports

ODT: Tax main debate topic

On a capital gains tax, Mr Gower asked New Zealand First leader Winston Peters if he would stop the Labour Party introducing one during potential post-election negotiations between the two parties.

Mr Peters avoided the question, instead telling Labour finance spokesman Grant Robertson that he should tell the public before the election what rate the tax would be.

On an international tourist tax, Green Party leader James Shaw said his party had a different version to that announced by Labour on Monday, but he was confident any border levy up to about $50 a head would make no difference to tourist numbers.

Mr Peters said the Government should instead return the $1.5billion in annual GST receipts from tourism back to the regions where it was generated.

On the question of a bed tax, Finance Minister Mr Joyce said it was unnecessary because local councils, such as those in Queenstown Lakes and Auckland, effectively already had them in the form of targeted rates on businesses benefiting from tourism.

Mr Peters said he favoured the idea as a last resort if the Government failed to return more of its GST take to the regions, while Mr Shaw said he supported a recommendation for a national bed tax contained in last year’s McKinsey report, and also wanted campervans to be taxed.

But Mr Seymour said Act opposed bed taxes, and councils should instead be able to keep half the GST receipts on construction activity in their districts.

Newshub: Female candidates a sticking point at ASB Great Debate

ACT’s David Seymour, Labour’s Grant Robertson and Green’s James Shaw all amped up the popularity of their female politicians, at the end of the finance debate in Queenstown on Wednesday night.

Newshub:  David Seymour to Winston Peters on pension scandal: ‘Give them the file’

ACT Party leader David Seymour has called for New Zealand First leader Winston Peters to release his original form applying for the pension, after it was revealed he was receiving more than he was entitled to for seven years.

“I know that secret files don’t get out of the Government’s computers and into journalists’ inboxes by mistake,” Mr Seymour said at the ASB Great Debate in Queenstown on Wednesday night.

“One of the best things we could do is Winston, mate, just give them the file, so we can know it really was just a minor administrative error and we can all move on.”

It’s since emerged a number of National Party members were told about Mr Peters’ pension problems, as part of the ‘No Surprises’ policy. National finance spokesperson Steven Joyce, also at the debate, “categorically den[ied]” that a National member was involved in the leak.

Mr Peters argued they shouldn’t have been told at all, as it wasn’t relevant to the Government.

It wasn’t the only clash between Mr Seymour and Mr Peters during the debate, which saw another party representative joke the two were “like a couple of Chihuahuas”.

At one point Mr Peters scornfully pointed out Mr Seymour was talking big talk considering what his party was polling – 0.6 percent, according to the latest Newshub-Reid Research poll – and called him “a National party puppet”.

At another, Mr Seymour criticised Mr Peters’ many “bottom line”, his rules to working in a coalition with any party.

“He’s got more bottom lines than a 100-year-old elephant,” Mr Seymour cracked.

But Mr Peters was the one with the final laugh: “Mr Seymour, let me tell you: I will be there after the election and you won’t be.”

Stuff:  Winston Peters and David Seymour let it rip at debate

1 News: Watch: ‘Chinese sounding name argument’ hits a nerve in finance spokesmen’s debate

National’s Steven Joyce hit back when Labour’s Grant Robertson argued foreigners are speculating on NZ houses.

 

Election 2017 – Finance debate

Tonight there us an election finance debate in Queenstown from 7.00 – 8.30pm. The change of mind by one person to participate has increased media interest (it shouldn’t have made any difference). Those taking part:

  • Steven Joyce (National)
  • Grant Robertson (Labour)
  • James Shaw (Greens)
  • David Seymour (ACT)
  • Winston Peters (NZ First)

Topics: immigration, housing, tourism, the retirement age, inequality, employment and water.

Time: 7:00 p.m. to 8:30 p.m.

The debate will be broadcast with live video on the RadioLIVE and Newshub Facebook pages:

The ASB Great Debate is being hosted in Queenstown, with Newshub’s Patrick Gower as the MC.

There will be a catch-up audio broadcast on RadioLIVE beginning at 8:30pm.

Stuff will be live blogging and have a preview: Live: The big finance debate

We’re going to be live blogging through the night on this one and also bringing you some live stand-ups because what makes this particularly interesting tonight is that Peters is showing up. It’s understood Peters wasn’t going to be here because he refuses to debate Seymour but the leak of his superannuation overpayment has changed all that.

Being here gives Peters the opportunity to debate Joyce (remember Peters is blaming the National Party for leaking his overpayment and doesn’t believe Joyce that he didn’t know about it). So in short, expect some fireworks.

No doubt Seymour will do his best to wind up Peters over the course of the evening as well. They were on the same plane down to Queenstown and some of us on that flight were slightly alarmed about how that might turn out (for the record they didn’t speak to each other).


It was advertised to start at 7 pm. Live streaming started just after 7:10, to a peech by someone from the ASB. And the last 10 minutes the mayor of Queenstown has been speaking. He has just now finally stopped at 7:25 pm.

Starting with an opening statement from each MP.

James Shaw first. He says government should be solving the great problems of the time, and new Zealand has been run by grey administrators. He is giving a very general election speech, going through the three key Green policies. He got to the second, fixing a busted system of poverty. Then he ran out of time.

Winston Peters starts by saying how much the others in the campaign are throwing money around like 8 arm octopusses, without a hint of irony. He says we need a dramatic change of direction with economic and social change required.

Steven Joyce starts by positively promoting how well business is doing. He is targeting business but also mentions families. National’s main thrust. A fairly good speech for a business audience.

Grant Robertson talks about ‘the opportunity facing New Zealand”. “If we invest properly in our people…we will be able to seize those opportunities”. He claims New Zealand is in a “productivity recession”.  He pushes the three years free education not just for university but also trades.

David Seymour says we are heading towards bankruptcy and if the election doesn’t get here soon the country will run out of money. Not just financial bankruptcy but also intellectual bankruptcy. A few swipes at National. “We have to fix our RMA”. He’s got a few facts and figures. He claims to be 16 points ahead in the Epsom electorate so says a part vote won’t be wasted.

Then a diversion to the Super leak.

Joyce categorically denies any Minister leaked.

Shaw says he it is very said we are going through a series of scandals. Big cheer.

Robertson agrees and says that is not what this debate is about to bigger cheers.

Peters goers over all the claims he has made over the last few days. He has been allowed to hijack the finance debate. Major accusations. Polite shot applause. Nothing gained by letting him rehash.

Now something key to Queenstown – housing. But each MP is allowed to give a speech which is saying nothing much new.

Robertson carefully talks about cracking down on speculators to a Queenstown audience.

Peters gives his usual spiel, subdued applause.

Shaw gives a reasonable speech, promotes CGT, reasonable applause.

Seymour gives one of the strongest speeches and criticises National more than Labour, strong on reforming the RMA. He promotes half GST on construction to local government. His speech gets strong applause and laughter.

Peters then attacks Seymour saying he is giving a valedictory speech.

Robertson is asked to rule out CGT on businesses and farms – he defers to ‘getting the best advice possible’. Joyce slams him for not being up front, Robertson has a response ready – back to national raising GST, but that’s risky territory promoting the idea of a post election somersault.

Peters sounds very whiny about how bad things are, but he won’t commit to any policy positions. Asked about stopping Labour imposing a CGT and he says he was a Treasurer once.

Robertson again asked on CGT on businesses – he again avoids it. Audience groans.

Seymour and Peters going hammer and tongs again, Seymour digging on peters not deciding if he would stop a CGT or not, or whether he would go left or right, and saying businesses want certainty. Peters bites and rants and says Seymour won’t be back in Parliament after the election.