Derek Cheng: National may not have been untruthful about its tax cuts but it might hurt them anyway

OPINION

You know those massive store-front advertisements promising up to 80 per cent off? You see them. You get excited. What a deal!

You march in and realise that the discount promised in those big, bold letters in the store-front only applies to 0.18 per cent of the clothing/climbing gear/boxes of dumplings inside.

And none of those items are in your size, or your kind of flavour.

Sure, there are other things in the store that you might like, but they’re discounted at maybe a fifth or even less of what you envisioned when those big, bold letters drew you inside in the first place.

National’s leader Christopher Luxon is right. He hasn’t technically misled anyone about the party’s tax package. “Up to $250 a fortnight” in savings under his tax package definitely encompasses all the amounts between $0 and $250.

But you’d be forgiven if you’d heard Luxon’s sales pitch and thought you’d get $250 because you had kids and earned an average wage.

There are 1.63 million households in New Zealand. Only 3000 of them would qualify for that amount.

Luxon knew this from the beginning, but it would hardly draw people into the shop if the sign out front included the caveat that the mega-discount only applied to a fraction of 1 per cent of customers.

Is this a public relations disaster?

Luxon meets you in the store after you demand to see the owner. He’s very confident in his rock-solid advertisements. He points to the words “up to” in the sign.

He’s right. You have no grievance, technically - though Labour is surely going through transcripts right now to find times where Luxon didn’t qualify the $250 tax cut with the words “up to”.

But he hasn’t exactly endeared you to be a loyal customer.

Nor does it help that National attacked the staff at the Council of Trade Unions - who pointed out how few households would get the maximum - for their former roles in the Labour Party.

This is the very definition of playing the man, not the ball. National eventually had to concede that the substance of what the CTU was saying was correct.

The question is whether all this is enough to convince you to shop elsewhere.

Labour wants to take GST off fresh and frozen fruit and vegetables. Photo / 123rf

Labour leader Chris Hipkins doesn’t have clean hands either after promising that fruit and vegetables would be 15 per cent cheaper after GST was removed.

“It is not clear whether the benefit of specific GST exceptions are passed on to consumers,” said the Government’s tax working group.

“The New Zealand tax system has no pass-through mechanism from a change in tax to a change in the price of specific goods,” said health advice to ministers in April. “GST is based on a business’ total revenue not on the revenue associated with a particular product. So removing GST off vegetables and fruits would not result in a direct decrease in price.”

Hipkins is so confident that he’s not even saying “up to” 15 per cent. He’s right, he says, because of reassurances from the supermarket chains that it would be passed on, and the oversight from the grocery commissioner.

The commissioner’s role has been criticised by National and Act as a guy with a clipboard who’s supposed to travel the country noting the different price of bananas.

Does any of this make you want to visit Hipkins’ shop? If not, where should you shop?

The danger for Hipkins is far less here than for Luxon. The tide has been receding for Labour for a while and may well have reached a point where it won’t drop much further.

The tide for National was rising at the start of the campaign, but has stagnated in the past weeks as persistent questions remain unanswered about its tax package. It has far more tide to lose.

Derek Cheng is a senior journalist who started at the Herald in 2004. He has worked several stints in the press gallery and is a former deputy political editor.