Prime Minister, Chris Hipkins speaks to the media following a GST related policy announcement concerning fruit and vegetables in supermarkets.
OPINION
Elections are a choice between carrying on, or change. With the recently launched Guardian Essential poll revealing that just 31 per cent of New Zealanders believe we are headed in the right direction, Labour cannot win by promising more of the same.
Labour’s strategy is to suggestthat its reckless borrowing and spending was for you: “In it for you,” says its slogan. And then to campaign not on its record, but its promises.
Labour says it will fund the GST reduction by getting non-residential landlords to pay more tax. It will be their tenants who pay the tax. The tenants of commercial buildings will be paying for the richest New Zealanders to eat imported grapes free of GST.
Labour says taking GST off fruit and vegetables was popular in focus groups. Tax relief is always popular. Why not take GST off bread? After all, Chris Hipkins promised to focus on ‘bread and butter’ issues. Since he became Prime Minister, the price of bread has kept rising. Like Marie Antoinette, Hipkins is asking, why don’t we eat fruit?
We cannot live by fruit alone. When I bought my first house, my priority was the mortgage. I could not afford the recommended five portions a day of fruit and vegetables. Voters who do not eat their five portions will not get all of Labour’s promised GST savings.
There is a wider problem with Labour’s strategy of campaign promises. The Pre-election Economic and Fiscal Update will reveal that Labour has spent it all. The party has come up with an innovative solution to that problem: make its promises future promises.
Last weekend, Labour promised to “lift the Working for Families abatement threshold by more than $5000 to $50,000 from 1 April 2026″. A family on $45,000 must wait three years for the abatement!
This month’s promise of a new Auckland Harbour crossing is even further into the future. Labour announced that if re-elected, then sometime this decade, construction will start on three tunnels across the harbour, costing up to $45 billion with no date given for completion.
As well, Labour is promising to spend $14b on light rail to the airport. The only thing moving on that project is the cost.
The promise of a new Auckland Harbour crossing could cost up to $45 billion. Photo / Michael Craig
New Zealand could afford to build a Harbour Bridge in the 1950s because bridges are much cheaper than tunnels. The Auckland Harbour Bridge was built in just four years for £7,516,000 (or about $400 million in today’s money).
Compare that to the City Rail Link tunnel. When approved, it was to cost $1.5b and be completed in 2020. The latest estimate is $5.49b, to be completed in November 2025.
No wonder the mayor is claiming a crossing can be done cheaper and faster.
If elections were a contest to make the biggest promises, then the Greens would always win. As US political strategist James Carville famously quipped, “it’s the economy, stupid”. Every election is a credibility contest about who can best manage the economy.
The party is now like a hapless whale being attacked by sharks. The sharks are the Greens and New Zealand First, who are ripping voters off Labour.
Chris Hipkins has only himself to blame.
Hipkins made a huge mistake when he made a captain’s call to rule out wealth taxes. Not because it was the wrong decision, but because he gave the wrong reason — politics. The best case against a wealth tax is that it raises little money. Taxpayers flee rather than waiting to be shorn. Overall tax revenue falls.
By not explaining that wealth taxes reduce government revenue, Hipkins has allowed the Greens to claim wealth taxes can pay for their promised Shangri-La.
Hipkins could have prevented New Zealand First from breaking the 5 per cent threshold by reminding us that Winston Peters was in the Cabinet when co-governance policies were adopted — except Hipkins would have to admit he was there too. Hipkins could have said Peters was in the Cabinet when compulsory Covid mandates were adopted — except he would have to admit he was the minister who oversaw the mandates.
There is a lesson here for Christopher Luxon. “Get our country back on track” must be more than a slogan; it must be the heart of his campaign. Getting into a contest of promises about transport policies last week was nuts. Transport does not appear in the polls as a major issue of concern. Luxon must make the campaign about who has the better economic credibility, where he cannot lose.
And Luxon must always remind us that if Peters can install Jacinda Ardern as PM, he can also install Chris Hipkins.
Richard Prebble is a former leader of the Act Party and a former member of the Labour Party.
