Tax cuts. Good, because the individual knows better? Or bad, because it means less available for central government services for all?

By Alex Tarrant

Tax cuts. Good, because we individuals know more than government about to best spend our money? Or bad, because they essentially mean less government revenue able to be put towards pooled services such as health and education?

The difference between the respective stances of National and Labour on the issue was stark over the past week. This will be a regular discussion as the 23 September general election approaches. See all published policies here.

Exhibit one was Prime Minister Bill English’s speech to the National Party annual conference on Sunday: “National wants to do more to put more money in people’s pockets and reduce the pressure on those families most in need. We believe that taxpayers make better use of their own money than politicians.”

He was backed up by his Finance Minister Steven Joyce in Parliament, as MPs debated the Bill set to bring Budget 2017 initiatives into law. The Budget debate was best described as the typical ‘we-know-more-than-you’ clash between Left and Right.

Joyce extolled the benefits that would stem from the Budget’s $2bn family incomes package made up of tax threshold adjustments, Working for Families adjustments and Accommodation Supplement increases.

“…delivering for low and middle-income families very big increases in their incomes,” Joyce said. “This package is very significant. It delivers 1.34 million New Zealand families an average of $26 a week.”

He said business groups had been telling him they wanted to see the current government continue on passed 23 September “so we can deliver more growth, more jobs, and also more income so that the government can actually deliver more public services, more infrastructure and more for family incomes.”

As for Labour’s opposition to the package: “They haven’t heard the public on this one yet and there’s still time to change their minds.”

‘An election bribe from National’

Labour’s Grant Robertson sought to show how the party had indeed heard from the public. (He first had to apologise for earlier calling Nick Smith a liar and refusing to withdraw the comment in order to be allowed to speak.) When he got going, the differences started to show through.

Joyce had the opportunity to deliver a Budget “that would finally do what for nine years his government had failed to do. Finally invest properly in health, and in housing and in education, and in lifting children out of poverty,” Robertson said.

“What did that Minister do? He squandered that opportunity. He squandered that opportunity because he saw the dangled carrot of tax cuts. And the campaign manager for the National Party, who happens to be the Minister of Finance, couldn’t resist it. He had to grab hold of that tax cut.”

Labour did not think the priority for New Zealand today “was to give a Cabinet Minister like Steven Joyce, or a member of Parliament like me, a thousand bucks a year.”

Robertson then turned his attention to embattled health Minister Jonathan Coleman. “Everywhere I go around New Zealand, when they say to me, ‘but why are our health services being cut, why are we paying more money to go to the doctor?’ I say, ‘that’s because Jonathan Coleman, the Minister of Health, wants a tax cut of a thousand bucks for him.”

Robertson referenced one Cantabrian parent approaching him this week detailing how their daughter had been diagnosed with a mental illness, but wasn’t able to get treatment for four months. “So…Jonathan Coleman says, ‘thousand dollar tax cut for me,’ but that young woman in Christchurch, she doesn’t get to have a second appointment.”

“How’s that right?” Robertson asked. “How’s that morally right? How’s that fiscally right? Come on Minister. Because Jonathan Coleman and the rest of that National government have their priorities completely wrong in this Budget.”

Time for an anecdote. “I was on an aeroplane recently next to someone – a plumber from Dunedin. And he said to me, about the tax cuts, that he didn’t want them,” Robertson began.

“Because he’d thought about it. That, if he added up the $26 a week that everyone in his street would get, added all of that up, that would be one more nurse for the hospital; one more community police officer for his community. And he said, ‘that’s what I want. That’s what I want in my community’.

“That’s what New Zealanders do want,” the Labour finance spokesman continued. “This government is all about the sugar hits and not about the solutions, when it comes to this Budget.

“By all means, put in front of the public a tax cut. People say, ‘that’s great, I’m interested in that – I like the idea of that’. But New Zealanders think about that and they care about their neighbours and their families and their communities, and they want to see the investment that has been so sadly lacking from this government,” Robertson said.

“You’re not delivering for all New Zealanders when Statistics New Zealand tells us there’s 41,000 people who are homeless. You are not delivering for all New Zealanders when we have the lowest home ownership rate in 60 years. You’re not delivering for all New Zealanders when rental prices in Wellington go up by 10 and 15 and then 20% a year. They’re not delivering for all New Zealanders when we have an education system where early childhood centres are $40,000 worse off a year than they were when National came into office.”

“We have a National government that has run out of steam. Because this Budget is back to the 90s playbook. Back to the tax cuts to get yourself an election win. It’s irresponsible, it completely fails the tests that New Zealanders set for their government to make sure that every person in our country gets the basics.”