The debate between the current Finance Minister and Finance Spokespersons from the top four polling parties to help you make an informed and purposeful decision when it comes time to vote. The debate will be moderated by Saturday Mornings on Newstalk ZB host, Jack Tame.
Act Party leader David Seymour wants to make 15,000 public servants redundant “as fast as possible” and claims some in Wellington are in favour because it would get rid of “that guy in the next cubicle”.
Seymour made the comment to uproarious laughter at the ASB Great debate in Queenstown, which saw him pitting the credentials of his economic plan against those of Labour’s Grant Robertson, National’s Nicola Willis, and the Green Party’s James Shaw.
The loudest cheers at the beginning, giving a flavour of the audience, were for Willis and Seymour, while one of the loudest boos was for the Greens’ wealth tax proposal.
Front and centre was National’s proposed tax package, Labour’s economic record through the pandemic and natural disasters, Act’s plans to cut billions of dollars in funding to the public service, and the Greens’ wealth tax to fund, among other things, a universal basic income.
After the debate, Willis said that many job cuts was not National’s policy, but she couldn’t say how many public service job cuts was acceptable in the 6.5 per cent cuts to certain departments that National wants.
Instead she said it was up to the chief executives of those departments to find those savings, which could include job cuts.
Willis faced continued scrutiny over whether National’s tax package adds up, but National continues to go up in the polls, prompting Shaw to tell the 400-strong audience that people just seemed to just want tax cuts and didn’t care about the fine print.
She also said she didn’t know how rolling back interest deductibility and the bright line test changes would affect house prices.
And she doubted the party’s proposed tax on foreign purchases of homes worth over $2m would materially push up house prices - even in Queenstown where the average price was $1.7m.
The biggest factor in house prices was housing supply, she said, a point which all debaters agreed with.
After the debate, Robertson said: “What I know for sure is that changing those two policies (interest deductibility and the bright line test) will push first home buyers out of the market.”
Robertson said he believed people cared about whether National’s tax package added up.
“Of course people want a tax cut but nothing’s free in this world and you have to be able to explain how you will pay for it.”
Earlier Robertson kicked off the debate saying Labour had “actually done okay” with its economic track record through the pandemic, inflation, and extreme weather of the last years.
He rattled off statistics about unemployment and the level of public debt, which provoked some scoffing from the audience.
He defended Labour’s spending above and beyond anticipated amounts by saying it was necessary to respond to events like the pandemic, which most political parties supported.
“Now is the time to bring spending back down to normal levels ... that’s the direction we’re now on.”
Willis said “okay wasn’t good enough”, and New Zealand was in its third year of a cost-of-living crisis, as interest rates push mortgages into unaffordable territory.
She said government debt has ballooned to $74 billion, projected to exceed $100b.
Labour's finance spokesman Grant Robertson. Photo / Michael Craig
Seymour said the country needed “more than a slight change in direction”
He said there had been a massive increase in government spending yet hospitals and schools and public safety were all going backwards.
He wants to make 15,000 public servants redundant “as fast as possible”, turning the number of public servants from 62,000 full-time equivalents to 47,000, the same number in 2017.
He said you’d expect Wellingtonians to be against such a cut but some public servants tell him “we hope you fire that guy in the next cubicle”.
Robertson said events such as the FIFA Women’s World Cup would be gone under Seymour.
“The winter games would stay,” came a retort from the audience.
When Robertson continued, Seymour asked whether the audience was going to shoot the next one down.
National deputy leader Nicola Willis. Photo / Alex Burton
Robertson said taking GST off fruit and vegetables, which he was previously opposed to, was only one part of Labour’s plan to help with the cost of living.
The debate follows a report this morning that said the National Party’s new tax proposal on foreign buyers was unlikely to raise the revenue it expects to use to fund tax cuts.
The report - by economist Sam Warburton, former Reserve Bank head of financial markets Michael Reddell and Corelogic head of research Nick Goodall - modelled three different scenarios that had revenue estimates well below the more than $700 million in revenue National says it will raise from the policy each year.
The different scenarios would leave a hole between $453.7m and $526.8m a year - up to $2.1b over the four-year period.
National has released some of the basic assumptions behind its numbers and a summary from economics consultancy Castalia, but has refused to release the modelling behind its numbers.
Willis said you’ll get six economists in a room and get seven different opinions.
She said real estate agents have told her there is “huge demand” for luxury homes in New Zealand.
Robertson: “Release the costings.”
Willis said National looked at where houses were sold before the foreign buyer ban, where they were sold, and then projected 1600 to 1700 homes at an average cost of $2.9m.
ACT Party leader David Seymour in Henderson to announce the party's Law & Order policy
New Zealand Herald photograph by Jason Oxenham 13 September 2023
Seymour was widely applauded when he said he was astonished he was in a debate where National was arguing for a new tax and Labour was against it.
Tame asked Robertson about telling the Reserve Bank to keep inflation low while supporting maximum sustainable employment, which he said seemed like telling someone to eat ice cream constantly and lose weight.
“Bad person to ask that,” Robertson quipped before saying many other countries’ central banks did the same thing.
The ASB Finance Debate in Queenstown with l-r: David Seymour, leader of Act, Labour's Grant Robertson, Jack Tame, National's Nicola Willis, and the Green's James Shaw. Photo / Derek Cheng
Economists have also slammed Labour’s key policy to take GST off fruit and vegetables. Robertson said it was only one a number of policies to address the cost of living.
Robertson said R+D support, infrastructure spending, investing in skills and apprenticeships, sector support including renewable energy would all turn the productivity dial.
Willis said private funding, such as the NZ Super Fund, needed to be used for infrastructure. Robertson said the NZ Super Fund was already involved in infrastructure at the moment.
Seymour said it wasn’t about government, but private start-ups. There were too many walls for foreign investment, and the regulatory environment had to support new ideas like agricultural genetic technology.
“Talented people have to leave this country to do experiments outside the lab because we are so far behind.”
Shaw said Act wanted to get rid of the Zero Carbon Act and take the country back 30 years.
They all agreed that the zoning around the accommodation supplement needed to be looked at.
Green Party co-leader James Shaw. Photo / Te Ao Māori News
This week the Government opened its books in the Pre-election Economic and Fiscal Update, or Prefu, which showed no forecast recession, a return to surplus in 2027, economic growth at an average of 2.6 per cent in the next four years and wages growing at 4.8 per cent a year - faster than inflation.
It showed there was enough money to keep the lights on, but undertaking ambitious spending commitments or responding to another crisis would require serious trade-offs.
Willis said it showed a Government addicted to spending that had left the cupboards bare, while Robertson claimed it showed responsible economic management.
The Crown’s tax revenue for the year to June was $2.9b lower than forecast in May, leading to a Government deficit of $10b - $3b more than anticipated.
Treasury noted how the Government has spent more than anticipated in recent years. If the Government spends $1b more in Budget 2024 than planned, there would not be a return to surplus over the 10-year projected period.
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.
