Labour leader Chris Hipkins yesterday took the gloves off and laid into National and its leader Christopher Luxon.
For many in Labour – and particularly for some at the top of the caucus and the party — it would not have been a moment too soon.
POLITIK is aware that among some leading Labour figures, there has been frustration that Hipkins has lacked “mongrel” in his campaign, particularly in the TVOne leaders’ debate last week.
And so yesterday, he attacked National’s record when it was last in government, set out what its 6.5 per cent government cuts would mean in practice, and most devastatingly went to the issue of whether National leader Christopher Luxon could be trusted.
Meanwhile, National spent the weekend bombarding the media with press statements making claims about Labour’s promises.
But it is National’s refusal to publish the working details of its tax cuts and how they would be funded that is now fuelling Hipkins’ argument that Luxon can’t be trusted.
“Christopher Luxon has a budget hole and a credibility gap to go with it,” he said.
“Now I know, as Prime Minister, that you’ve got to be honest with Kiwis. That’s what Kiwis expect from their leaders.
“If Christopher Luxon is not willing to tell you the truth when in opposition, why should New Zealanders believe that he’d be willing to tell the truth in government?”
Hipkins took aim at the six point five per cent cuts National will demand from the public service.
Finance spokesperson Nicola Willis has already said that the Department of Conservation will be one agency singled out for cuts.
Hipkins said it was impossible to achieve that without cutting front-line conservation efforts.
“Even if National got rid of every piece of the talk that deals with policy, every person that deals with communication and stopped all of their advertising and public communications, they would still need to cut $40 million more just from DOC to make their cuts add up,” he said.
National’s finance spokesperson, Nicola Willis, confirmed on TVOne’s “Q+A” yesterday that those were the kind of jobs National would be axing.
“In terms of DOC, we will be asking them to find savings in the backroom departmental functions,” she said.
Pressed further, she said that would be the policy advisers, the communications advisers, the PR advisors.
Ironically, DOC’s communications and PR functions are headed by Sia Ason, the Deputy Director-General of Public Affairs, a former Chief Press Secretary to the former National Prime Minister, Sir John Key.
Hipkins also pointed out how National’s cuts might impact the Inland Revenue Department.
“We could take maybe a department that’s maybe the least popular with some members of the public, the Inland Revenue.
“Even if you cut their policy and advice function four times over, you still wouldn’t be able to deliver the sort of cuts that National is proposing to deliver.
“So, it seems now that as well as giving tax cuts, National wants to cut things like investigations and audits into tax avoidance.”
Central to National’s election campaign is its tax proposal for tax cuts for middle New Zealand.
Labour, possibly recognising their electoral popularity, has not challenged the cuts head-on but rather has focussed on National’s difficulties explaining how they would be funded.
National claims it can get an average of $740 million a year over the next four years by imposing a 15 per cent tax on houses over $2 million sold to foreign buyers.
The proposal has hit any number of obstacles.
It has become clear that under New Zealand’s double tax agreements with over 40 countries, the tax could be imposed only on those people who spend less than 183 days a year in the country.
Economists Michael Reddell and Sam Warburton and CoreLogic’s head of research, Nick Goodall, have written a critique of the proposal, saying that the key sticking point is to estimate how many foreign buyers might, all things being equal, pay less than $2 million for a house but who, because of the $2 million limit, might now be prepared to pay above it simply to gain access to property ownership in New Zealand.
“Spending $2 million on a house instead of $1.75 million would see a foreign buyer paying $550,000 more ($250,000 to get to $2 million, plus $300,000 in tax) for a house they would otherwise have wanted to pay $1.75 million for,” they said.
“The overall price they pay, including tax, would be $2.3 million – about 30% more than their original intended spend and clearly not an insignificant amount of money.”
They, therefore, conclude that National has overestimated the number of sales that might incur the 15 per cent tax and that, therefore, the party’s estimates of $740 million a year are out by over $400 million a year.
However, yesterday on “Q+A”, Willis appeared to qualify her confidence that National could meet its targets.
“I am confident that we have put this together in a way that means we will not need to borrow for tax cuts, and we will not need to make reductions in any front-line services,” she said.
Jack Tame (host): Would you give the same assurance if you don’t get the revenue you have projected?
Willis: “No. And can I tell you why? Because the revenue that we get depends on the economic growth conditions and, therefore, how much tax people are paying across a range of things. And it depends on the economic conditions that we are in. But I will be delivering tax reductions.”
And as if to confirm that National may end up borrowing for its tax cuts, Willis would not guarantee to return to surplus before 2027, the same year that Labour is projecting a surplus but is doing so without any tax cuts.
“I’m not making that commitment today,” she said.
“What I’m telling you, we will hit surplus earlier than Labour would because we will stick to our spending discipline.”
There was little doubt that yesterday, Labour went on the attack. That was obvious in Robertson’s confrontation with Willis on “Q+A”; it was obvious with a rousing speech by Megan Woods to around 150 party faithful in Wellington and yesterday, and it was most apparent in Hipkins’ keynote speech to that rally.
Nevertheless, he rejected suggestions he was getting a bit of “mongrel” into his campaign.
“I’ve been very clear since the beginning of the campaign that we are going to be highlighting the contrasts between what’s on offer and are a continuation of our government and what a change would mean for New Zealanders,” he said.
But the change in tone comes from the realisation within Labour that they are now on the back foot, that the polls are against them.
There was one ray of hope, though.
The chair of the Maori seats campaign, Willie Jackson, told POLITIK the party was ahead in two of the three electorates that the Maori Party has been picked to win.
Cushla Tangaere-Manuel, Labour’s candidate for Ikaroa Rawhiti, is six points ahead in a Whakaata Māori-Curia Research poll.
And Jackson said the Labour candidate for Te Tai Hauauru, Soraya Peke-Mason, was also ahead of Maori Party co-leader Debbie Ngarewa-Packer.
“That again shows the work that we’re doing at ground level,” he said.
“I’ve been working with her. It’s tough because she’s up against a party leader.”
Yet despite the contests in the seats, Jackson is also keeping in touch with his old mate, Maori Party President John Tamihere.
That relationship could be critical if Labour get to form a government.
“It’s important to keep a close relationship with the Maori Party,” he said.
“So I’m catching up with JT (John Tamihere) tomorrow.”
Jackson has organised phone banks and big door-knocking campaigns – neither of which are easy in the sprawling Maori electorates —- but getting the vote out is going to be now key for Labour.
And as seems to be becoming his habit, Hipkins ended his speech yesterday with a plea to party supporters to keep up their work to get the vote out.
“I will be dedicating every last minute before Election Day to keep New Zealand moving forward,” he said.
“But I need your help to do that as well.
“We know that there are more of us than there are of them.
“So this campaign is about reaching those people and getting them out to vote.
“It means knocking on doors.
“It means conversations with friends and families or getting out in your community with a few of our pledge cards in tow.
“We need people to know that only Labour has their back and how important it is at this election that they get out and they vote for us to continue the progress that we’ve been making.”
Meanwhile, he is going to start punching.