Here are the economic policies National says it will cull
Wednesday, 12 October 2022
ANALYSIS: National is upping the ante on its pledges to repeal Government economic policies and laws it says are limiting growth.
On Wednesday, National pledged to repeal proposed changes to agricultural emissions pricing, if the Government’s plan put forward on Tuesday went ahead.
It adds to a growing list of laws, and Government policies, that would be ditched, if National came to power.
National deputy leader Nicola Willis set the tone in a speech to KiwiSaver managers last month, saying: “Government must provide careful economic management that gets the basics right: taking care not to add unnecessary costs, reducing regulatory and policy barriers that choke growth and innovation, ensuring Government spending is disciplined and delivers results, squarely focusing the Reserve Bank on price stability, and ensuring we don’t over-tax New Zealanders.”
**READ MORE:
* Healthy Government finances provoke fresh calls for tax cuts
* Points of Order: Finger pointing, economic chaos and a culture war
* Luke Malpass: What's happened to Labour's political radar?
**
The party’s to-do list of repeals may also lengthen, if it had to form a coalition with ACT.
The next election must take place before January 13, 2024.
The list so far includes:
The ‘Jobs tax’
“If the Government does press ahead and implement the jobs-tax, we will repeal it,” Willis told the KiwiSaver managers.
The “jobs tax” is National’s name for Labour’s proposed national income insurance scheme, which would provide a new ACC-like safety net for workers who found themselves unemployed.
People who were made redundant or lost their jobs as a result of illness would receive up to 80% of their pay, capped at a maximum of about $2000 a week before tax, for up to six months while they looked for another job.
But the cost is too high, National says.
“The new jobs tax would make a typical worker (earning $60,000) $834 worse off every year. That’s $834 less for groceries, bills, and people’s own savings. It’s a cost Kiwis can’t afford,” Willis said.
The 39% top tax rate
National has pledged to remove the top 39% tax rate as part of its tax cut plan.
The top tax rate kicks in for people earning above $180,000.
This repeal would come hand-in-hand with other tax cuts.
National has pledged to repeal the Regional Fuel Tax in Auckland, and the “car tax” on truck and ute buyers.
Fair Pay Agreements
Fair pay agreements would create a new employment bargaining regime, compelling unions and employer associations to negotiate industry-wide collective employment agreements in a bid to give workers greater bargaining power.
National’s Paul Goldsmith has argued it would make businesses less internationally competitive and contribute to more pressure on prices.
Goldsmith said National was committed to repealing the bill if elected.
“This bill is an ideological overreach, deliberately going to war with employers at a time when we’re facing huge economic challenges,” he said in March.
Three Waters
National opposes and would repeal the Government’s Three Waters reforms.
The proposed reforms of New Zealand’s varied, and often inadequate, water systems have raised alarm within local councils across the country.
They have also ignited an often heated debate in which people accuse people with a different view of being racist, or being engaged in a conspiracy to undermine democracy.
National’s local government spokesman, Simon Watts, said local councils should be able to retain local ownership of water assets, and a National Government would work with them to identify problems and solutions.
Property investor mortgage deductions
National has pledged to repeal the Government’s plans to phase out investors’ ability to offset mortgage interest costs against rental income and extend the bright-line test to 10 years.
Investors have been particularly outraged by the change to interest deductibility, which could add up to $6000 a year to the cost of owning a typical rental property.
The Government’s policy was part of its attempt to make homes more affordable, calling interest deductions a “loophole” that needed closing.
Turn the clock back on Reserve Bank
There’s a political conflict raging over what the Reserve Bank Te Pūtea Matua should be doing.
In 2018, the Government extended the Reserve Bank’s mandate for focusing on “price stability” (code for keeping inflation low) by instructing it to have regard to the goal of supporting “maximum sustainable employment” when setting monetary policy.
Critics have said the dual mandate means the bank faces conflicting signals when trying to fight inflation, which has traditionally involved raising interest rates in order to dampen economic demand, which results in job losses.
Luxon has signalled he intends any government he leads to return to a single mandate of price stability.
The Reserve Bank published a report on a public consultation on its mandate on Wednesday, indicating Luxon may have the majority of the engaged public behind him.
“Many submitters commented on the weighting of our price stability and employment objectives,” the report said. “A large number of submitters favoured a stronger weight on inflation.”
National has called for an independent public inquiry into decisions made by the bank since March 2020.
ACT as a coalition partner
ACT has published a work plan for its first 100 days in government, should it win power, which realistically will only come through a coalition with National.
Its repeal list matches National’s on many points, including Three Waters, fair pay agreements, turning back the clock on the Reserve Bank, and scrapping the 39% top tax rate, and investor mortgage deductibility.
But ACT’s list would also see changes to the Residential Tenancies Act rolled back, 90-day trials reinstated for jobs, as well as reversing bans on live animal exports, and the ban on oil and gas exploration.