National finance spokeswoman Nicola Willis says she has leaked information that Labour intends to drop GST on fruit and vegetables, against the advice of some of its senior ministers.
Video / Mark Mitchell
Opinion by Claire Trevett
Claire Trevett is the New Zealand Herald’s Political Editor, based at Parliament in Wellington.
On Sunday, the election result will effectively be decided in advance for a big chunk of Labour’s caucus.
Its list ranking committee meets on Sunday to decide on the party’s list – and there will simply not be enough life boats for the current MPs, let alone new faces.
The list ranking process for any party is a fraught time. Egos are invariably wounded and careers begun or ended. Many electorate MPs who won seats from National in the 2020 election face oblivion and will need the list to survive.
For National, the list ranking process this time is not career-threatening. All its current MPs who plan to stay are pretty much guaranteed to be high enough to return – unless the party makes a conscious effort to try to ditch one.
Labour, however, got 50 per cent at the previous election, enough for 65 MPs. It is currently polling at around 33 per cent - enough for about 43 MPs.
Candidates will be given a night to digest their final ranking and decide whether to save face by withdrawing altogether to spend more time with their family instead.
For Labour, this one will be particularly fraught.
It is happening as Hipkins tries to stop signs of creaks in caucus unity and discipline from becoming cracks. The polling is wobbly and the bad news for Labour seems to keep flowing. The last week has been particularly bruising as MPs digested the news of Kiri Allan’s car crash and resignation.
The list ranking process will unleash a brigade of disgruntled MPs to wander around Parliament for another month before the campaign proper begins.
While some disgruntled MPs manage to hold it together, there are almost inevitably others who can’t and start whispering or decide that a blaze of glory is the way to go out.
It’s a counter-productive exercise given the more disunity there is, the more it will damage their chances, yet somehow it seems irresistible.
Illustration / Guy Body
In an attempt to reduce that risk, Labour is expected to keep its list ranking fairly predictable.
Cabinet ministers will by and large be ranked according to their Cabinet rankings. Others likely to get relatively secure places will be those already tagged for better things: such as the Whips’ Office team - good news for Camilla Belich who missed out selection for the safe seat of Mt Albert and for Shanan Halbert, who is MP for the swing seat of Northcote.
Now that women outnumber men, it is also apparently no longer a disadvantage to be a white bloke in the party: there are some pushing for Dan Rosewarne to get a good ranking because his military and tradie background is a rarity in Labour’s ranks now.
However, MPs who have electorates that are marginal will be expected to win them: there will be no safety net for many.
Any who have been around a while with no sign of promotion or those who are on their way down again should take the hint, as the likes of Jamie Strange and Marja Lubeck have.
Hipkins will be hoping the fear of losing will hold the caucus together: especially those MPs who won seats from National last time and face a fight to hold onto them.
Doing the latter will require Hipkins to keep morale high enough to feed campaign momentum and energy. That will only be possible if Labour’s polling stays high enough to keep it in the race.
That may require a bit of a circuit-breaker to try to focus attentions away from the woes of the last months to what lies ahead: in the form of new policies.
However, governing parties tend to leave the announcement of new policies until quite late in the process, after Parliament winds up and Hipkins moves from Prime Minister mode to Labour leader mode in earnest.
Labour is yet to confirm this is its intention, but it hasn’t done very much to hose it down either. Willis was also right when she said Labour was working on a wealth tax ahead of the Budget.
It is obvious it has at least been considered in earnest by Labour after Hipkins scotched the original plan of a tax switch: a tax-free income threshold to be paid for by a wealth tax.
If so, it is a bit of a Hail Mary tax policy.
It is a concession Labour cannot outbid National on income tax cuts. It has given up on Labour-friendly ideas such as the capital gains tax or wealth tax. But it knows it needs to take something to voters.
Taking GST off fruit and veg is easy to explain and fits on a billboard nicely. It has clearly done well in Labour’s focus groups.
It also allows Labour to point to something it is doing while continuing to take aim at National’s tax indexation policy for costing too much without a firm indication of how it will pay for it, and for delivering much more to those on higher incomes than lower incomes.
It has been Labour policy before back in 2011. It didn’t do it much good then: it was the policy former PM Sir John Key took aim at with his “show me the money” line, when he demanded then-leader Phil Goff explain how he would fund Labour’s policies.
Labour leader Chris Hipkins with an array of Auckland candidates. Photo / Alex Burton
Presumably Labour has learned from that. Hipkins and Robertson have made a lot of noise about National’s inability to specify how it would fund its tax cuts, and promised anything it did would be fully funded.
If so, the GST move is unlikely to be the only element of Labour’s tax policy – although Labour undoubtedly expected it to be the show-stopper bit.
At that point, Labour had intended to pay for it by putting in place a new top tax bracket. The 2017 government did put in a new top tax bracket, without the GST move, so it now needs a new trick.
It will also prompt months of arguing about how workable it is, businesses arguing about compliance costs and what qualifies. There is also the question of whether it would offer much benefit at all to those Labour is targeting: low and middle-income earners.
Had it given up on taxing the rich in favour making their five-course meals cheaper?
That is inconvenient for Hipkins and does little to assure people Labour’s senior figures are not divided on a key policy area.
Perhaps best of all, it will also give us the fun of watching Finance Minister Grant Robertson undergoing Houdini-esque contortions to explain why he thought carving out exemptions for GST was “a boondoggle” as recently as March, but now thinks it is just the ticket.
Claire Trevett is the NZ Herald’s political editor, based at Parliament in Wellington. She started at the NZ Herald in 2003 and joined the Press Gallery team in 2007. She is a life member of the Parliamentary Press Gallery.
