Election 2023: Winston Peters wants to see National’s costings before joining govt, mini-Budget before Christmas, Luxon says tax cuts ‘absolutely’ affordable without foreign buyers’ tax

New Zealand First leader Winston Peters says he wants to see National’s detailed tax costings ahead of forming any government with the party.

Current polling shows NZ First may be needed for National and Act to get over the line and form a government after the election.

National has come under fire in recent weeks for its proposed foreign buyers’ tax, which would levy a 15 per cent stamp duty on the sales of homes worth more than $2 million to non-tax residents.

But economists have criticised the policy, saying the revenue assumptions are unrealistic. National wants to get $2.9 billion from the tax over four years to fund its $14.6b tax plan. But economists warn the actual revenue could come in $2.1b short, leaving National with the choice of borrowing to fund the tax plan, or ditching part of it.

“To the best of my efforts, I can’t work out how the fiscals work, and nor can any economist,” Peters told the Herald.

Earlier, he slammed the tax plan as “voodoo economics”.

When asked whether he would like to see the economic assumptions underpinning the plan, Peters said, “that’s what we’ve all been waiting for”.

“Maybe they are going to hold it back until after the election and show me, and not show the media in the meantime,” he said.

Peters said he watched National’s finance spokeswoman Nicola Willis on Q+A last weekend, when Willis brandished a copy of the party’s tax plan to show the public the quality of what National had released, but he was unconvinced.

“I looked at it later on, and I didn’t think anybody got an answer, so maybe they’ve gone back to do some calculations and we’ll find out,” Peters said.

“There’s $500 million missing,” he said.

Winston Peters has good odds of being in government. Photo / Dan Hutchinson

He added he had no philosophical objection to the plan and that foreign investment could be positive.

Peters said he wants a mini-Budget before Christmas, something Willis had also hinted at.

“We want a mini-Budget before Christmas because the situation demands that their errors are an absolute priority now, where we deal with the absolute basics, and then try to turn the economy around,” Peters said.

“This is a debate where there are so many promises being made of financial impact and they appear to have no regard to the Prefu,” Peters said, referring to the acronym for Treasury’s most recent forecasts, the Pre-election Economic and Fiscal Update.

Peters said he would like to see tax relief this term, but he wanted this to be a $14,000 tax-free threshold, a concept the Greens and Te Pāti Māori would like to see, and which Labour looked at as part of its investigations into a wealth tax, which it ultimately dropped.

Peters was open to National’s decision to bring back the full deductability of interest costs from tax bills for landlords.

“If it is to help speculation, that will be disastrous. If it is to help accommodation costs coming down and being passed on to the tenant, then that is a matter someone could explain to me how they will do that,” he said.

But he warned the plan was “short of detail”.

Peters said he would not back lifting the age of eligibility for superannuation, a policy National and Act back.

He did not answer when asked whether he wanted the role of Treasurer again, a job created for Peters after the 1996 election, giving him the key finance role in the Government.

When asked whether he would take this role, Peters said, “if I wanted you to negotiate for me, I’d get you a new job”.

National leader Christopher Luxon was pressed on whether he could deliver his tax plan if the revenue projected from some of his tax increases fell short of expectation.

The plan promises $14.6b worth of tax cuts, paid for by $14.7b worth of spending cuts and tax increases.

Luxon said he had built-in “buffers” to the plan and said the revenue assumptions were “conservative”. He said the plan generated a surplus of $500m in its first year.

However, that surplus erodes over the four-year costing of the plan to just $100m, less than one-twentieth of the $2.1b he might be short, thanks to the foreign buyers’ tax.

He said National’s fiscal plan - essentially a draft Budget - would also contain buffers, allowing the party to deliver on its promises.

When asked whether he could deliver the tax cuts without the $700m a year from the foreign buyers’ tax, Luxon said “absolutely, absolutely”.

“As I said to you before, we have built - we are very confident in our assumptions,” Luxon said.

“The point is we have built significant amounts of buffer around our tax plan, we have built buffer into our fiscal plan as well,” Luxon said.

He did not answer when asked whether he believed Peters would allow the tax to survive coalition negotiations.

“I am very confident we will deliver low- and middle-income tax relief. People out there who are waking up this morning, slogging their guts out, going off to work, paying their taxes, getting their kids to school, taking on a second job, cannot get ahead,” he said.

Luxon then said he would actually be doing his foreign buyers’ tax.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.