Saturday, May 20, 2023

Peter Wilson: Week In Politics - The Budget chasm between Labour and National

The core differences between Labour and National that have been shown up by the Budget will flow through to the election.

Budget 2023 has highlighted the stark differences between the main parties and given voters a clear picture of what they'll be basing their decisions on in October.

There's a chasm between them: Labour is spending money helping people, National blames it for a Budget blow-out and says it would cut taxes.

Finance Minister Grant Robertson's Budget was solid Labour, looking out for people, helping young families with childcare costs, making prescription medicine free, subsidising public transport for children and young people.

There was significant spending on the public service, infrastructure projects, more state houses, and the previously announced cyclone recovery fund.

"It is retail politics, pure and simple," said Stuff's political editor Luke Malpass.

"This Budget is designed to appeal directly to real voters and put the onus back on National in particular - and less so on ACT - to commit to keeping the new stuff that people will get.

"Free prescriptions, for example ... National's Nicola Willis has already promised National will repeal it."

Malpass said the Budget was all about getting Labour match-ready and having a base from which to launch its election campaign.

"It has its party congress next weekend and despite the House having another three months to sit, the campaign will now begin in earnest."

Malpass said the Budget was designed to make Willis and National's leader, Christopher Luxon, uncomfortable.

"'What will they cut?' will be the constant question from Labour from now until the election ...

"National will now have to calibrate what it does to respond to this and whether it just keeps talking tax cuts and spending blow-outs."

The Herald's Audrey Young said Budgets were more about narratives and less about numbers, especially in an election year.

"And the narrative around this year's Budget will certainly not diminish the chances of Chris Hipkins and Grant Robertson getting a third term," she said.

"It is a sound platform on which Hipkins will be able to launch an optimistic plan in an election campaign."

In Parliament, Luxon spoke after Robertson had delivered the Budget.

He avoided criticising any specific initiatives, probably because that would have upset those who will gain from them, and went for the big picture.

Luxon labelled it "the blow-out Budget" and followed that with familiar rhetoric.

The government's appalling economic mismanagement had created the situation the country now found itself in and Labour was "addicted to spending" - he said that eight times.

"It's just spend more and expect Kiwis to pay for it, that's what it is," he said.

"That's what we've come to expect but I'm not surprised ... it's just the same old Labour government."

Luxon again pledged to cut taxes, saying it was the best way to help people get ahead, and delivered another warning about Labour's tax intentions: "If you've got a farm, watch out; if you've got a KiwiSaver account, watch out; if you're doing the right thing trying to build up a nest egg for the future, watch out because they're coming for you."

Hipkins followed Luxon. "The biggest blow-out we've seen today is the release of hot air from the leader of the opposition ... we heard nothing today about what a National government would stand for."

The government's most trenchant critic was, as usual, ACT leader David Seymour.

"Incontinence is where you just have no control of things squirting out and when it comes to government spending that describes Grant Robertson unfortunately. He is fiscally incontinent," Seymour said.

"This is a reckless, irresponsible blow-out Budget with $7.5 billion worth of deficit spending next year that will put all of this government's attempts to help with the cost of living in the shade."

The downside of the Budget is that the spend-up won't do anything to help get inflation down.

Robertson denied it would add to inflation but National didn't buy that and Luxon highlighted the plight of homeowners who would be paying higher mortgages for longer.

The Herald's business editor at large, Liam Dann, said Labour had decided it didn't have to slash and burn, and as a political strategy that made sense.

"Labour could have delivered the mother of all austerity Budgets and they'd still have struggled to get inflation under control before the election," he said.

"So why not take the softer path, offer young families a break, slow the pace of debt reduction and live the deficit life a bit longer?"

Dann said it was a classic Labour Budget. "If you think this country needs a short, sharp dose of austerity to get things back on track, these aren't your guys and they're not pretending to be."

Now Labour has given voters a strong signal of what to expect, National is going to have to explain precisely how it is going to cut costs, cut taxes and deliver better services - which it has also promised - at the same time.

And Labour isn't going to stand still after the Budget. It will have its own manifesto, there's more ammunition in its locker.

After doing nothing about taxes except raising it for wealthy trust holders, Labour doesn't seem likely to counter National by announcing its own post-election tax cuts.

Going on the way it has set the stage in the Budget, it's more likely to maintain revenue levels and use it for helping families.

Questioned closely on RNZ's Nine to Noon programme on Friday, Robertson said unfunded tax cuts would cause "big problems".

Not much else happens during Budget week because the opposition knows it won't get much media space, but here's the best of it:

A Newshub-Reid Research poll showed Labour just ahead of National, but the gap was so small as not to matter - Labour 35.9, National 35.3.

That would give National/ACT 59 seats, not enough to govern and with no potential coalition partner in sight since National has ruled out working with the Māori Party.

Labour would have needed the Greens and the Māori Party to hold 61 seats and form a government.

This very close poll result followed a trend which has shown neither of the main parties able to break away from the other and gain a significant advantage.

The next set of post-Budget polls will be the ones to watch.

Most of the interest in the latest poll was around Luxon's dismal rating as preferred prime minister and his party's inability to lift its support after the government's recent woes.

Luxon was down 2.4 points to 16.4 per cent while Hipkins gained 3.8 points to reach 23.4 per cent.

Reacting to the poll, Luxon said the party had made tremendous progress under his leadership and denied he had a "likeability" problem, RNZ reported.

"It's hard being the leader of the opposition," he said.

"It's hard to get cut through at times, but I'm working incredibly hard to get up and down the country, to listen to New Zealanders, understand what their concerns are (and) develop pragmatic, practical policy."

The Herald's Thomas Coughlan said National should be doing better after the sacking of Stuart Nash, the defection of Meka Whaitiri and the resignation of the Greens' Elizabeth Kerekere.

"While National has convinced much of the electorate that it might be a good idea to at least consider ditching Labour, the electorate clearly isn't yet convinced by what National is offering," he said.

"Part of the problem is that more than a year into the job, Luxon hasn't established what motivates him in the way that someone like Jacinda Ardern drove home with a passion for addressing things like child poverty."

Coughlan said that after speaking to MPs he found there was no appetite to change the leader - "there is simply too great a transaction cost ... changing the leadership now, they argue, would simply feed into the chaos narrative National built for itself in recent years and which Luxon, to his credit, has put a stop to."

Luxon's only offering this week was to announce a National-led government would send every taxpayer an annual "tax receipt" showing how much they had paid along with a breakdown of what the government was spending its revenue on.

Hipkins scorned the idea, saying taxpayers could easily find out how much they had paid and every Budget showed in detail where the money was going.

He said it would be a costly exercise sending out millions of "spin doctory-type letters".

That could be right. Luxon's letters might look something like the ones Hipkins sent to over-65s this week explaining all the good things the government had done for pensioners since it came to office.

Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire. This article was first published HERE


Anonymous said...

i can't understand why opposition fails to call the bluff about the doling out of funds.
- free PT for kids. it is already free on weekends, when parents are likely to take them on PT. during weekdays, i can't recall seeing kids on buses or trains in multiple years that i used them. who really benefits from this?
- half price PT upto 25. it is already half-price for schooled teens. rest are most likely to be tertiary students who get a discount. what's the real benefit?
- 130$/wk for 2-yr old in ece. but this needs a parent to spend the rest anyway, which is not a minor amount. all this does is increase demand for ece, thus feeding the private sector, akin to hoe landlords increase the price when housing benefits are increased.
- 5$ prescription waiver. it is already free in chemist warehouse. unichem waives it off for CSC holders. this simply reimburses chemist warehouse for their marketing campaign. who really benefits?

i'm sure there should be more such virtue-signalling nonsense!

Anonymous said...

To be accurate:
"Labour helping people" should read "Labour buying votes"... while destroying the economy and transforming it into a bankrupt Marxist state.

Phil said...

National should have avoided fighting over the small stuff this week. The bigger picture includes things like NZ's appalling trade deficit as a % of GDP as previously mentioned by this website.

Richard C said...

It's not really the small stuff at all Phil. As pointed out in an earlier comment (and Lindsay Mitchell's blog), who benefits - Chemist Warehouse (Australian Corporate). So we have a continuation of dealing to the small end of town i.e. traditional Labour voters (blue collars out in the 'burbs) who cannot afford a new EV (so who do you think are the buyers of those vehicles who have benefitted on direct taxpayer millions and indirectly by not paying road user charges through buying petrol and diesel?) And of course the budget related sleight of hand pushing up petrol tax for the poor sods trying to get to work in their clunkers. It's just the way National communicated. Showing again they're out of touch with reality.

Anonymous said...

Luxon appears to be either so confident he's sleep walking to an election win or he and his advisors have completely misread the public and are running a softly, softly approach to gaining power.
ACT are not much better, for example I saw ACT billboards today for ACT all about "less tax" yet ACTS own polling shows ordinary Kiwis are much more concerned about health, education, crime and the economy / cost of living. It's the wrong message re tax cuts, while we would all like to pay less tax, many are happy to leave the rates as are and instead fix those other major problems. facing our country. Both ACT and National need to "read" the electorate more, get harder and more attacking. 3 more years of Labour and God forbid Greens and Maori will consign us to a 3rd rate Pacific island outpost, poor, broke and racially divided