Labour leader Andrew Little says that any Labour policies can be funded out of existing and forecast revenues and tax rates won’t be changed.
In an interview on The Nation Little made commitments of sorts on not raising taxes:
We are not planning on any tax changes for the 2017 election. We will finely calibrate what we do once we see what the Government does in its foreshadowed tax changes, which we assume will be in this year’s budget, but who knows?
They are not planning any tax changes now but who knows what they might plan after the budget?
So we are focused and we are talking to New Zealanders about and I will make commitments to New Zealanders about the problems that are here and now. And the commitments that we’re making – all of them – can be funded out of existing tax revenue. That’s what we’re focused on. That’s we’re campaigning on.
So we will have to wait and see how Labour proposes to finance it’s policies. They have already talked about:
- Resuming contributions to the Super fund and leaving the increase in costs of Super as they are.
- Funding more police.
- More health funding.
- More education funding.
- Increase social housing and state housing
- Kiwibuild will build 100,000 new houses over 10 years (eventually self funding)
- Labour said it would bring in three years of free post-school education over a person’s lifetime costing $1.2 billion a year by 2025 (the first year funded from money earmarked by the government for tax cuts).
So if National announce tax cuts or threshold adjustments Labour would overturn them or use them to fund policies?
Lisa Owens: Another thing is the Children’s Commissioner. He wants the Government to commit to a target of lowering the number of children in severe hardship by 10% over a period of 12 months. Will you commit right now to meeting that target?
Andrew Little: Ye—Two things we’re going to do. We will have a child poverty measure that we’re going to commit to, and I’ve already said every budget we will report on how we’re going against that measure, and we are absolutely determined to reduce child poverty in the way that the Children’s Commissioner is talking about.
…Yeah, because I think his figure is roughly 150,000-odd, and lowering that by 10% – I mean, yeah, if we can’t do that and we’re not prepared to commit to that – and I say we are – then, you know, we’ve got something seriously wrong going on.
That hasn’t been costed yet.
And it has to be remembered that Labour will need at least NZ First or Greens (or both) to form the next Government. They will want some of their own policies in the mix. Policies that are likely to cost extra money.
Any policy costings by Labour are pointless on their own. The cost of a change of Government needs to include likely NZ First and Green policy costs on top of Labour’s own.
It’s even possible that Labour will put forward a “no tax increase” policy but then ditch that in post-election negotiations with NZ First and Greens.
Financial credibility is likely to be a major election issue. Little will have to have some good answers to the inevitable questions of affordability of policies of a Labour led coalition that Labour may only have half the voting power in.