Just eight days before the election, Labour has moved to neutralise National’s claims about its tax plans by pledging not to introduce any changes in its first term that are recommended by its Tax Working Group. National promises to carve Landcorp up into tiny pieces for young farmers to win in balloted lease-to-buy schemes. Meanwhile, Labour maintains its four percentage point lead in the latest Colmar Brunton poll. Bernard Hickey reports from the campaign trail.
Polling booths have been open since Monday and more than 150,000 people have voted.
A tale of two polls
Confusion over the shape of the electoral landscape deepened on Thursday night after TVNZ published its latest Colmar Brunton poll.
It showed Labour on 44 percent (up one point) and National on 40 percent (up one point). That gave Labour a stable lead of four percentage points with the Greens up two percentage points to seven percent. That would mean Labour could govern with Green and not need either the Māori Party or New Zealand First.
However, the poll taken between Saturday and Wednesday contrasted with TV3’s Reid Research poll taken between last Wednesday and Monday that showed National on 47.3 percent, Labour on 37.8 percent, the Greens on 4.9 percent and New Zealand First on 6 percent.
One poll taken in the last three days showed Labour with a four-point lead, while another poll taken over three common days (Saturday, Sunday and Monday) and including three previous days showed National with a 9.5 percentage point lead.
Go figure.
The Colmar Brunton poll showing support for Jacinda Ardern as preferred Prime Minister fell one point to 34 percent, while Bill English rose one point to 32 percent.
Reversing a ‘captain’s call’
Finally, after weeks of pressure, Jacinda Ardern abandoned her ‘captain’s call’ of being able to introduce a capital gains tax (excluding the family home) in Labour’s first term. She sent Grant Robertson out to announce Labour would not introduce any tax changes recommended by its Tax Working Group before 2021.
Labour Leader Jacinda Ardern has had to repeatedly fend off claims from National that Labour is planning a capital gains tax or a land tax that would tax the family home or the land under it. National has also argued that a capital gains tax could turn into an inheritance tax.
National has repeatedly pointed to Labour’s policies on water royalties, an extended bright-line test for capital gains on landlords, a regional fuel levy, a tourism levy and the removal of National’s tax cuts as ‘Labour’s seven new taxes’.
In the last five weeks, Ardern has been progressively forced to rule out an increase in the top personal income tax rate, a capital gains tax on the family home, a land tax under the family home and an inheritance tax. But she has always drawn the line at saying Labour could introduce a capital gains tax that excludes the family home within its first term after a Tax Working Group has reported back.
Finance spokesman Grant Robertson released a statement this morning and held a news conference to announce the change in stance to rule out any changes recommended by the Tax Working Group in the first term ending in 2020.
“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,” Robertson said in the statement.
“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,” he said.
“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.”
‘Two down, five to go’
National finance spokesman and campaign chairman Steven Joyce said Labour had postponed two new taxes (capital gains and income tax), but was still planning five more (water, petrol, ETS introduction, income tax cut reversal and tourism levy) that he said would slow the economy down.
“They’ve begun the long march back but they’ve got a long way to go. This is about the fifth version of their tax policy in the last month. They are just too vague on a whole range of policies and it shows,” Joyce said.
“It’s interesting that it was a ‘captain’s call’ to allow for a capital gains tax, but the captain was nowhere near the back down,” he said.
“We know that Labour desperately want to put a capital gains tax and an inheritance tax on farms, small businesses and the family bach. They have had it in their policy for two elections and they have only dropped it this time because they were rumbled by the public.
“The public simply can’t trust Labour on tax,” Joyce said.
The Opportunities Party Leader Gareth Morgan said the decision was betrayal of those who had already voted.
“Scared by the latest poll results the old establishment party of the left has abandoned struggling New Zealanders by kicking any change to our broken tax system for touch until 2020,” Morgan said.
“This leaves TOP alone in having a fully costed plan for a Fair Tax system that will benefit 80 percent of all New Zealanders by giving workers a 30 percent income tax cut, and finally closing the tax loophole that lets the rich get richer, while condemning future generations to a miserable future as part of a divided treadmill economy.”
National would sell Landcorp farms
Meanwhile, elsewhere on the campaign trail, National’s Primary Industries spokesman Nathan Guy announced National would break up and sell some Landcorp farms through five-to-10-year lease-to-own deals at market rates to 100 young farmers.
“The Government owns a large number of commercial farms through Landcorp, but there is no clear public good coming from Crown ownership and little financial return to taxpayers,” Guy said in a statement.
“We think that some of these farms are better off in the hands of hard working young farming families who are committed to modern farming and environmental best practice. National will direct Landcorp to lease these farms to young farmers, and give them the opportunity to buy them at market rates when they have built up enough capital,” he said.
“This is a win-win policy that will help more young Kiwis into farming, and put taxpayer money from the sales towards things they care about.”
The farms would be awarded on a lease-to-buy arrangement by a panel and ballot that prioritised to young farmers who had experience running farms but did not own their own farms. They would be required to work the farm continuously for five years before being able to buy the farm, or longer if they needed more time to build up capital.
Guy said he expected around 100 young farming families to use the programme.
“Not all of Landcorp’s around 140 farms will be sold. Many are subject to Treaty claims and others have a right-of-first-refusal for Iwi – and these rights will of course be respected. Some of Landcorp’s larger farms will be divided into smaller units more appropriate for first-time owners,” Guy said.
“We expect it will take over a decade to complete the sale and settlement process for the farms that are included in this programme. Any revenue generated by the sales will be reinvested in public services.”
Green Party primary industries spokeswoman Eugenie Sage described the proposal as a backward step that risked undoing Landcorp’s good work on the environment and enabling the sale of local farmers to overseas owners.
“By forming an Environment Reference Group comprising Dr Mike Joy and Dr Alison Dewes among others, reviewing how it farms and phasing out PKE, Landcorp is showing it is serious about reducing the pollution that harms our waterways and climate, not making excuses for it,” Sage said.
“Landcorp can lead the shift to environmentally sustainable farming. Its farms are a public asset we should be keeping, not selling them for overseas buyers to purchase sometime in the future.”
Funds for Buller hospital
Elsewhere, Jacinda Ardern visited the West Coast to announce a Labour Government would provide $20 million of capital to redevelop the Buller hospital. It would also fund upgrades to the Ghost and the West Coast Wilderness trail at a cost of over $1.4 million.
(Updated 2 pm)
