National has promised no new taxes. However, this has as much credibility as the promise of having tantric sex with a eunuch. But let’s contemplate this really difficult situation for a moment. How are they going to keep government spending below a certain percentage of GDP and keep core Crown debt under a certain level, for example? No new taxes will create fiscal sinkholes, won’t it? Not necessarily.
The National-led coalition’s solution to filling fiscal sinkholes is to cut spending in certain areas so that they can spend more on the things they like. They call it cutting wastage and making things more efficient. In practice, it means cutting jobs in the Public Service, increasing the minimum wage much less than inflation, applying punitive penalties to beneficiaries, etc. One masterstroke of evil genius was Brooke van Velden’s call to screw many thousands of woman workers (and a few male one as well) by cancelling 33 pay equity claims in one fell swoop.
So, you see, no new taxes are needed and where Willis, there’s’ a way.
To further emphasise the coalition’s ideological allergy against tax they have mandated a 20% budget cut of the IRD, which means that 100s of workers stand to lose their jobs.
Labour’s long-term strategy has been to play a game of small targets. They have proposed only one new tax, and a minor one at that, a Capital Gains Tax (CGT). They have been adamant that this is the only tax they’ll be introducing and campaigning on. Not to be outplayed by Labour, National has been tallying up all new proposed taxes of all opposition parties and this number is rather dynamic and depending on what they count, when, and how, presumably by their agentic AI called Super Simeon Sol. The goal is to persuade the voters that Labour and a Labour-led government is all tax & spend.
In the same exercise, National added up all promises of Labour and fabricated figures to show eye-watering deep fiscal holes that would require huge increases in taxes or huge increases in government borrowing and likely a combination of the two evils.
National’s tactic is to turn this election into a tax election. And it seems to be working because the media are talking about it non-stop, tax, tax, tax. Tax is the only thing that matters, apparently, it’s existential and not just for The Taxpayers’ Union (TPU) that is the topic of Nicky Hager’s latest work Dirty Work: The Taxpayers’ Union and New Zealand’s Hard Right.
Except that this domineering narrative doesn’t at all reflect the most important issues on the minds of New Zealanders. According to surveys such as the Ipsos Issues Monitor, the most important issue by far is inflation/cost-of-living, followed by healthcare/hospitals, the economy, and unemployment; taxation rates as the 12th most important issue but apparently, this has increased in recent times and is now the highest since the election in 2023. Whether the latter is cause or result of National’s narrative tactic is an important question.
Similar findings have been reported by Vote Compass. Younger as well as older participants rated the cost-of-living as their number one issue, even for those aged at 70 or over; tax doesn’t get a mention at all.
Accordingly, this election is a cost-of-living election, which is no different from the general election in 2023 (cf. word cloud from the New Zealand Election Survey for the 2023 election in Lprent’s recent Post). Labour has been releasing quite a few policies that aim directly at this number one issue with firm nods to improving healthcare and creating jobs, among other genuinely important issues. These are supported by many press releases that go back to long before they launched their first policy for this election. Together they form the pieces of what could be a compelling narrative about addressing the current cost-of-living crisis with urgency and to tackle sky-high unemployment numbers with immediate job creation. None of these on their own will solve all issues at once, nor will their combined synergistic effect achieve this. But they do provide clear place-markers for a roadmap that will improve things for many, albeit slowly for some and faster for others, who are in dire need of such positive changes. Labour’s policies also point to a greater responsibility & duty-of-care and role for the state, which is the opposite of the coalition’s ideological track.
I think Labour has been mixing and stirring the right ingredients and the Greens and Te Pāti Māori (TPM) can add much-needed conscience and support. If they can re-direct the narrative away from tax and fiscal holes to cost-of-living crisis and jobs, I think they’ll resonate better with the electorate and stand a good chance at breaking the apparent polling deadlock. It is not too late yet!
The promise of no new taxes will be like Luxon's promise last time to lower the cost of living, he will break it.
If he gets back into government he will raise GST to 20% and claim that because it's an existing tax, rather than a new one, he is not breaking his word.
As far as I know no news outlet has directly challenged him on GST and other National MPs seem unwilling to discuss it either.
I wonder why? Don't want to see worms trying to slither off the hook?
Luxon was asked about it in the leaders' debate and he said no increase in GST.
That promise means nothing of course (as with pay equity and much else). But it is on the record.