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Economists query National tax plan

It’s one month until election day! Welcome to The Spinoff’s election live updates for Thursday, September 14. I’m Stewart Sowman-Lund.

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Economists query National tax plan

It’s one month until election day! Welcome to The Spinoff’s election live updates for Thursday, September 14. I’m Stewart Sowman-Lund.

Reach me on

Learn more about the political parties and what they stand for at

The agenda

Sep 14 2023

Today’s top stories from the election campaign (and beyond)

I’m clocking off for the day (unless news breaks, in which case we’ll be back) so let’s take a look at some of our top stories.

Bye for now!

Luxon still refusing to answer questions over foreign buyer tax

Christopher Luxon speaks at the National conference at the Michael Fowler Centre in Wellington. (Photo: Hagen Hopkins / Getty Images)

National’s Christopher Luxon faced more than a dozen questions on his party’s proposed foreign buyer tax in Christchurch today – and still refused to release any modelling.

It overshadowed the release of a new rural policy  and comes after the release of independent modelling by a trio of economists that queried the amount of revenue National’s planned tax policy would pull in.

Asked whether he was still “rock solid” on the tax plan as a result of the economists’ findings, Luxon said absolutely.

“We’ve looked at the numbers very closely, we’ve had them independently reviewed, and I’m very excited by the fact we’re going to raise foreign buyer tax… and most importantly we’re going to give it hard working Kiwis,” he said.

He was then asked whether his tax plan would be millions of dollars short every year, as the economists claimed. “I disagree,” said Luxon. “There’s a different set of assumptions, economists will have different disagreements about it but from our point of view it’s been very conservatively put together.”

It went on for some time. You can read more on Luxon on the campaign trail in this new piece from me: The two Christopher Luxons. 

How a ‘failed’ door knock earned Julie Anne Genter a new supporter


In the run up to next month’s election, we’ve asked a bunch of MPs and candidates from across the political spectrum for their favourite door knocking story – something that amused, surprised or shocked them.

Today: Green MP and candidate for Rongotai, Julie Anne Genter.

A month or two ago I was door-knocking and went down a long drive. I knocked and someone from behind the door said “Who is it?” I said “Kia ora! Julie Anne Genter, Green MP”. He said “Nah, no thanks” from behind the door. I left a leaflet and said “No worries, have a good day!”

Carried on thinking it was a failed attempt, but the a few weeks later I got this text from his neighbour:

Read more door knocking stories: Here is Labour’s Georgie Dansey and National’s Tama Potaka.

National wants to cut red tape in the primary sector

Five farms were approved for sale in July to become commercial forests (RNZ/Nate McKinnon)

National’s launched a new primary sector policy that it claims will get Wellington out of the farming sector.

It’s pledged to cut red tape by allowing water storage to be built on farmland without the need for a resource consent (though a consent would still be required to take water).

Penalties for breaking biosecurity rules would also be hiked and the most consents for commercial fruit and vegetable production would be removed.

“National’s goal is a growing primary sector that protects the environment and is subject only to smart and useful regulations, not to burdensome compliance costs that serve no purpose,” said leader Christopher Luxon, who is today in Christchurch.

“National will also cut red tape that is stopping the creation of wetlands on farms, which deliver a range of environmental benefits.”

Todd McClay, the party’s agriculture and trade spokesperson, said farmers had been frustrated by “over-bearing” regulation. “New Zealand has abundant freshwater, but we capture and store less than 10%. Current rules make it all-but impossible to build new water storage. Consents can often take years and cost millions of dollars. As a result, farmers are left with unreliable access to water, and urban areas face water restrictions in dry years.”

Luxon will speak to media shortly.

National ‘one of the least transparent oppositions that NZ has ever seen’ – Hipkins

Chrises Hipkins and Luxon (Image: Archi Banal)

Labour leader Chris Hipkins hasn’t held back when lambasting the opposition’s tax plan and the questions hanging over it, suggesting National’s proposal could tank the economy.

So far, National has refused to release the modelling used to draft up its foreign buyer tax plan and a group of economists has today suggested the party’s figures are off.

Speaking to media from Greymouth, Hipkins said the opposition’s numbers didn’t add up and it would result in potentially thousands of job losses. “It’s time for Christopher Luxon to front up, and to show some responsibility and accept some accountability and release the National Party’s internal costings because no one is saying that their numbers add up,” he said. “It’s about time he was more upfront with the New Zealand public.”

Hipkins labelled National “one of the least transparent oppositions that New Zealand has ever seen” and said that if the opposition was really confident about its plan, it would release the numbers.

“I think not only is National’s tax plan completely cooked, I think their economic credibility has gone down the toilet with it as well,” said Hipkins, suggesting the party was headed for “the same territory Liz Truss did in the UK where she basically tried to implement massive, unaffordable tax cuts and tanked the UK economy in the process”.

Asked about last night’s TVNZ poll that had Labour languishing in the 20s, Hipkins said “a good campaign” would turn that around.

How National’s tax model was replicated

Simeon Brown, Christopher Luxon and Nicola Willis (Photo: Toby Manhire)

There’s been a lot said this morning already about the trio of economists that have claimed National’s foreign buyer tax will fall well short of projections. You can read the top lines on that here.

But now that the formal embargo on the report has dropped, here is some more. For starters, the economists in question are Michael Reddell, Nick Goodall and Sam Warburton. The latter two gave an interesting interview with Nine to Noon this morning, while Reddell was on Morning Report.

In their report, the three say their “best estimate” is that National’s foreign buyer tax would raise $210 million per year, compared with National’s suggest figure of $740 million. “This leaves a significant $530 million (71%) per year gap in the
costing of the foreign buyer tax and the wider Back Pocket Boost policy,” they write. “Our higher-end estimate is revenue of $290 million per year, with a shortfall of $450 million (61%) per year.”

While National has so far refused to release its modelling, the economists said they replicate it, taking into account growth in housing prices and stock, the fact that foreign buyers disproportionately purchase houses in higher-priced areas and that Australia and Singapore buyers can already purchase homes.

“For our estimates, we assumed that foreign buyers might be prepared to overpay for houses as low as $1.75 million. That is, foreign buyers that would otherwise rather buy a $1.75 million house would be prepared to pay $2 million for it in order to secure a house in New Zealand or, instead of buying a $1.75 million house, buy a $2 million house instead,” the economists said.

“Additionally, our results include estimates of how many foreign buyers would have to ‘overpay’ for houses and to what degree in order to reach National’s estimates.”

Here is a screenshot of the proposed models provided by the economists, in which they conclude that the third is “likely the best” while the second provides estimates of the “likely maximum amount of revenue”.


The economists also cast doubt on the information provided by economic advisors Castalia, which they say “cannot be relied on to back National’s estimates” owing to the fact the agency hasn’t “demonstrated what review took place”.

The day ahead

Here’s your daily look at where the political campaigns are heading today.

  • Labour leader Chris Hipkins is continuing his tour of the South Island. He’s on the West Coast today and will start the day in Hokitika alongside Damien O’Connor. He’s visiting a “food rescue service” and will then head to a local cafe (probably for another pie). Later, he’ll head to Greymouth to visit the Pounamu Pathway and wrap the day at the Miners’ Hall and another cafe (for probably another pie).
  • Also in the south today: National’s Christopher Luxon. He’s in Christchurch again and will kick the day off with another visit to a local business. Then he’ll head to the Riverside Market and make another policy announcement later in the afternoon.
  • Green Party co-leader James Shaw kicks the day off in Auckland with an event to celebrate the completed construction of the 2.4MW Waiuku Solar Farm. Later, he’s participating in a finance debate down in Queenstown. Marama Davidson will be in Dunedin later today for a National Organisation of Women event.
  • Joining Shaw and other finance spokespeople in Queenstown today will be Act’s David Seymour.

Economists claim National’s foreign buyer tax falls millions short

(Image: Getty; additional design: Tina Tiller)

A trio of economists from across the political spectrum have claimed there is a multimillion-dollar hole in National’s proposed plan to recoup revenue from a new foreign buyer tax.

The party announced the plan as part of their tax package and estimated it would raise $740 million.

But Michael Riddell, a former Reserve Bank economist, said new modelling would suggest National’s plan would would raise closer to $210 million. And a generous interpretation would indicate it being closer to $290 million, still well short of National’s figures.

“We can only go on what they’ve described on their methodology… so you can kind of triangulate and come up with a range of estimates it’s just that none of them are close to the $730-$740 million that National is relying on,” he told RNZ. “If their numbers are as robust as they claim, it would seem perfectly easy to make them available… to explain why they were right and we were wrong.”

National has so far refused to release its modelling for that part of its tax plan.

On Twitter, another of the economists involved in the new modelling claimed that National’s methods were “pretty good” but that the party had “taken a cake recipe and all the ingredients for cake and somehow baked a salad”.

Labour’s finance spokesperson Grant Robertson has used the report as the basis for a scathing press release sent out this morning. “Christopher Luxon’s sorry excuse for a tax plan is now officially dead in the water,” he said. “National’s economic credibility is in tatters. It has pitched its dodgy plan to voters as fully funded but it’s now clear Christopher Luxon and Nicola Willis actually have no idea how their party is going to pay for its tax cuts.”

Robertson said that National should release its “secret costings” related to the plan.

The full economists’ report is expected out later this morning.

The Bulletin: Thousands of Corrections staff to strike, Act wants to see more people in prison

Corrections staff are planning to strike over pay rates and sick leave. More than 94% of members in the Corrections Association and Public Service Association unions voted to strike, issuing a two week strike notice to Corrections on Tuesday night. The unions represent more than 7,700 Corrections staff. Corrections has been chronically understaffed over the last few years, with incarcerated people in some prisons going without visits from friends and family for three yearsDouble-bunking and 22-23 hour solitary confinement stints have also been deployed to manage short-staffing. The department has spent millions on recruitment campaigns, having to pull a range of ads after the Advertising Standards Authority censured some of them for ‘problematic’ content.

The Act Party launched its law and order policy yesterday and while Seymour judged a Barbiefied Act election sign as “more than Kenough”, he doesn’t think there’s enough people in prison. Act wants to see the prison population return to 2017 levels and defended his party’s plan to spend $1b adding 500 places to the country’s prisons, saying the policy includes measures that will help rehabilitate prisoners.

Want to read The Bulletin in full? Click here to subscribe and join over 38,000 New Zealanders who start each weekday with the biggest stories in politics, business, media and culture. 

Luxon sticking by foreign buyer tax plan as economists cast doubt

Christopher Luxon at the National Party campaign launch. Photo: Fiona Goodall/Getty Images

Christopher Luxon’s continuing to stick strong behind his party’s plan to tax foreign buyers purchasing luxury properties – and is casting doubt on modelling from a group of independent economists.

As detailed in The Bulletin, and previewed by media last night, new modelling due out this morning from a pair of economists from across the political spectrum looks set to cast even more doubt on National’s plan. Newshub’s Amelia Wade said it would show that National’s plan comes up short by “hundreds of millions of dollars”. And RNZ’s Craig McCulloch today said the new modelling would show that National’s proposed revenue intake from the foreign buyer tax would fall short by 60 to 70%.

Speaking to Newstalk ZB, Luxon said the public “get” the proposed foreign buyer fee and there would always be a range of views from economists.

“The tax plan has a series of funding from reprioritising from bad spending … and we’ve built that really conservatively and we’ll also have a very conservative fiscal plan. There’s going to be a bunch of economists with lots of different things they disagree about,” said Luxon. “A lot of our economists didn’t read that we’d be in a recession, didn’t read that inflation would stick around for longer. I think we’ve got a fundamental difference of assessment.”

As for the new modelling out today, Luxon said he didn’t know who the economists were. “They’ve got their own independent view and our assumptions are very different. We’ve got robust assumptions that we are very determined and understand well,” he said.