Tax cuts will be the big item on the agenda for today’s tripartite talks between the leaders of National, ACT and NZ First.
POLITIK understands that though the three parties have discussed their various positions on the cuts, there is not yet a consensus on how to go forward.
National did offer New Zealand First a proposal on Friday, but Winston Peters rejected it and abruptly returned to Auckland, where he seems to have remained since, even though New Zealand First MPs were in Wellington yesterday.
Now, he would seem to be getting the last laugh by having Christopher Luxon and David Seymour travel back to Auckland to meet with him, the first time all three have been in the same room for talks since the election.
The other big issue, particularly for ACT, has been the Treaty and its proposal for a referendum on its principles.
NZ First also supports moves to limit the application of the Treaty.
POLITIK understands that National and ACT have a paper prepared by the Wellington lawyer and former ACT MP, Stephen Franks, which would do just that.
It would seem that might form the basis of an agreement among the three, which would avoid the need for a referendum, which ACT has proposed but which both National and NZ First opposed.
However, the big issue is the tax cuts.
National’s finance spokesperson, Nicola Willis, underlined that on RNZ” ‘s “First Up” yesterday morning.
“We have made a really strong commitment to personal income tax relief,” she said.
“We believe it’s a core part of the mandate we need to deliver on for New Zealanders, and the other parties at the negotiating table accept that that tax reduction is a big part of what our government needs to be about.”
But Willis was not willing to re-affirm National’s commitment to lifting a ban on foreigners buying houses over $2 million and imposing a 15 per cent tax on the purchase to part fund the tax cuts.
“There were eight different areas we were planning to get the money from,” she said.
“That was a combination of reprioritisation and savings across government as well as new revenue measures, including from foreign buyers, from gambling and from immigration.
“So taken together, that was enough to fund our plan over the full forecast period, although it was always the case that in year one we raised more money and revenue than we needed to deliver the tax plan, and we always asked for it to be seen in the context of our full fiscal plan, which has buffers and contingencies built into it.”
Willis also downplayed the significance of what she has been calling a mini-budget, which she said would be delivered before Christmas.
Obviously, time is against her.
Even if the three parties get an agreement to form a government this week and open Parliament next week, she will have only three and half weeks to produce the Half Yearly Economic and Fiscal Update (HYEFU), which is usually presented in the second week of December and which she said would form the basis of a mini-Budget.
What might be more likely is that the Budget Policy Statement, which must be presented by the Finance Minister by March 31 next year but which is usually bundled with the HYEFU, might be able to be passed off as a mini-budget.
However, Willis did stress yesterday that it was her intention to have the tax cut legislation in the House before Christmas.
That is, of course, if the three parties can get an agreement on it today.
The Treaty reform is not so time-critical. In fact, unpicking Treaty references from current legislation could be a lengthy and, possibly, a highly contentious process.
NZ First deputy leader Shane Jones was clearly referring to Franks’ advice when he was interviewed on Radio Waatea yesterday.
“There are those of us who’ve got a leg in the Maori world, and we accept there’s going to be a reset,” he said.
“We’re not going to have a situation where the Maori-language version of the Treaty is the exclusive version or indeed given some religious significance to bring some balance back, and that’s why the Waitangi Tribunal writ needs to be reviewed.
“And indeed, the assumption being shown by the courts in terms of interpreting the principles of the treaty; why don’t you want the courts to go back to the role that they historically occupied, which is to rule on the law, not make the law?”
Franks would agree with this.
In a text to POLITIK last night, he said: “To be fair to the judiciary, years ago fashionable MPs started putting vague slogans into statutes, to kick awkward political questions down the road (and into judges hands).
“So Parliament invited, even obliged judges to make law, because we all thought they don’t have the choice to say ‘Parliament really meant this to say nothin’ when confronted with a reference to non-existent principles of the Treaty, in 1975.
“They’ve got into the habit of making up rules.
“When Parliament made them do it, they need not feel awkward about what it does to certainty in the law, the consequent inability for people to be able to find out the legal consequences of their actions, in advance, from written law.”
There are other issues.
ACT will still want to see a commitment to cutting back public service numbers, and NZ First will want an assurance that there will be fast-track consenting processes for infrastructure.
POLITIK understands that once the three leaders reach a broad agreement on going forward, they will turn their minds to Ministerial portfolios.