Labour has been frightened into saying it won’t implement any recommendations of its tax working group until after the 2020 election.
But a Labour led government would still add the water, regional fuel and visitor taxes; reverse the income tax cuts that every party but Labour voted for; and bring farming into the ETS.
And if they don’t introduce new taxes their Budget will have a bigger hole.
A Taxpayers’ Union media release points out:
The Taxpayers’ Union says Labour can’t have it all ways, pointing out that Labour’s manifesto is costed at $23 billion over the next Parliamentary term, second only to New Zealand First.
“Labour have done the right thing in committing to put any capital gains or land tax to the vote,” says Jordan Williams, the group’s Executive Director. “But without new revenue, and having promised new spending of $13,287 per New Zealand household, Labour need to explain what spending they’ll cut in order for Grant Robertson to keep to the Party’s debt targets.”
“Two plus two doesn’t equal five. Labour can’t credibly promise to hike spending, keep to their debt limits, but also say they won’t hike taxes. It just doesn’t add up.” . .
The only way to spend more without taking more in tax is to increase debt.
Labour’s fiscal plan shows it would reduce debt more slowly than National would.
The plan also had a hole, unless you believe a Labour-led government would run zero Budgets.
Ruling out a Land and Capital Gains Tax in the next term is the right thing to do but it will make the hole in Labour’s budget bigger.