A war of words has broken out between National and Labour over tax cut promises. The National Party's been forced to clarify its tax cut package, after questions over what it intends to take to the 2023 election.
National Party finance spokesperson Nicola Willis says her party remains remained committed to getting rid of any new taxes introduced by Labour. Photo: RNZ / Angus Dreaver
Finance spokesperson Nicola Willis says National will take a package of tax cuts to the election including threshold changes to take account of inflation, but the policy's final shape will be determined by the books at the 2023 Budget.
Labour has raised questions about whether National will in fact stick to the policy of indexing income tax thresholds, as announced by leader Christopher Luxon in March, which effectively works as a tax cut.
He announced it ahead of this year's Budget, calling for Minister of Finance Grant Robertson to "adjust the bottom three tax thresholds to account for the inflation we've seen in the last four years".
The indexation changes would have cost $1.7 billion a year, which Luxon said could be paid for out of Robertson's bumper $6b new spending allowance.
Luxon promised to reverse every tax increase imposed by this Labour government, which included scrapping the 39 percent top tax threshold for income over $180,000.
National would repeal the Regional Fuel Tax, the extension to the Bright Line Test, and the removal of interest deductibility for landlords.
Labour has seized on a news report claiming National had parked its tax policy, using it to question the opposition's credibility and trustworthiness. Senior MP Chris Hipkins issued a statement accusing the party of "being in disarray ... this has got internal division written all over it".
MP for Remutaka Chris Hipkins Photo: RNZ / Angus Dreaver
Willis said the promise was still to take a tax package to next year's election that would contain changes to income tax thresholds "to take inflation into account", because New Zealanders had been pushed into higher tax brackets, and as a result were paying a lot more tax.
"We want to adjust it, we think that's a fair thing to do," she said.
"We're also committed to putting forward a responsible tax plan that responds to the economic and fiscal conditions in front of us next year, and a cornerstone of that plan will be tax relief for New Zealanders."
The plan announced in March was "a proposal for the 2022 Budget", but the party would want to "take account the conditions of the books" ahead of next year's election, Willis said.
"The spending tracks, what the growth forecasts are, what the inflation forecasts are ... and we want to present those plans for that period.
"We are absolutely committed and remain committed to tax indexation such as Christopher Luxon outlined as a cornerstone of that plan."
However, Hipkins countered that it was "simply not believable for Willis to say it was a policy only for the 2022 Budget, given the fanfare attached to the launch and that they have been vigorously campaigning on it for months now".
"This is another sign that Luxon is out of touch and not ready - in government you can't keep changing your mind on fundamental issues and policy like this.
"Luxon has had to clarify if National would actually increase health and education funding by inflation as promised; labelled hard working New Zealand businesses soft while overseas; provided a muddled response to the Supreme Court decision on abortion; and gave the impression he was in Te Puke when in fact he was holidaying in Hawaii."
Hipkins put out his statement as the "MP for Rimutaka" (sic) and in the same spirit National MP Chris Bishop, as the "List MP based in Hutt South", had a whack back.
"Labour is far more interested in dirty political games than on real solutions to the cost-of-living crisis and cleaning up the mess they've made of the cost-of-living payment," Bishop said.
List MP based in Hutt South Chris Bishop Photo: RNZ / Angus Dreaver
"While Kiwis up and down the country are feeling the pain, the Labour Party has spent all morning obsessing over National and misrepresenting clear statements to try and score cheap political points."
Prime Minister Jacinda Ardern also chipped in, when asked by reporters about National's tax policy: "Obviously the policies of the opposition are a matter for them, and whether or not voters feel that they are consistent and therefore trustworthy".
Willis said National had been "consistently clear that [we are] the party that stands for tax reduction".
The difference between National and Labour "couldn't be starker", she told RNZ, with Labour "determined not to provide any permanent tax relief to New Zealanders, preferring a band-aid payment".
National remained committed to getting rid of any new taxes introduced by Labour, and the $180,000 top tax threshold, in a first term, Willis said.