Differing views among senior ministers on tax policy amount to collegial disagreement, the PM tells The Spinoff. 

In the lead-up to Labour revealing its campaign tax manifesto – likely this weekend – Chris Hipkins has laughed off any suggestion that divergences in opinion with senior ministers on the policy amount to division in the ranks.

In a “captain’s call” revealed by Hipkins while in Europe attending a Nato summit, the prime minister squashed the budget proposal for a “tax switch” – designed by finance minister Grant Robertson and revenue minister David Parker – which would have seen a new 1.5% tax on net individual wealth over $5 million pay for an income tax-free threshold of $10,000. Though it “might be something that I would have liked to have had to happen”, said Robertson, “it’s not happening. I’m a team player.” Parker declared himself “disappointed” and subsequently quit the revenue portfolio. 

Two weeks ago, Labour’s tax plans made headlines again when Nicola Willis, finance spokesperson for the National Party, told media she had seen her rivals’ policy and its headline feature was a GST exemption for fresh fruit and vegetables. That claim, which Hipkins noticeably did not attempt to refute, left Robertson attempting a Houdini act in parliament: yes, he had previously called such a policy a “boondoggle”, but plenty of successful things had been called boondoggles in the past, such as the Hubble telescope, the Sydney Opera House, and the moon landings. 

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Despite cabinet disagreement spilling on to the surface, that didn’t point to any fracture, Hipkins said. “No, none at all,” he said, when asked if there were tensions in the relationship with Robertson. “We get on exceptionally well. And, of course, we don’t agree on everything … The idea that any kind of disagreement somehow means dissent or disunity, it’s just rubbish.” 

Hipkins bemoaned New Zealand politics becoming increasingly intolerant of different views within a parliamentary party. “I love UK politics, and [there] it’s not unusual for members of the same party to be having quite heated debates in the chamber of parliament. Whereas in New Zealand, there’s this idea that, you know, we only have six views to be represented in the house and those are the six views of the six different parties. I think we’re doing democracy a bit of a disservice in that regard.”

On the wealth tax, Hipkins said he had been open to the possibility of its introduction. “When I took over the leadership that work was under way,” he said. “I did want to see where that led. I did want to see the pros and cons of what a wealth tax would look like. And so that work continued for a period of time. And then ultimately, I looked at that evidence. I did discuss it with my colleagues, with Grant, with David, with cabinet and caucus colleagues, and made the call at that time that I didn’t think a wealth tax should proceed.” 

That decision, he said, “was based on information based on evidence based on advice. It wasn’t just something that I came up with out of thin air. [That] should be incumbent on all political leaders, before you rule something in or out, you actually consider the facts and you consider the evidence and you consider the advice.”

Given that the removal of GST from fruit and vegetables is popular in polling but opposed by most tax experts and was dismissed by successive tax working groups as an inefficient way to support lower-income earners – as a boondoggle, really – could he undertake that the forthcoming tax policy would adhere to facts, evidence, and advice? “Absolutely,” said Hipkins. “But, having said that, public opinion also matters. Ultimately, you have to bring the public with you in any reform programme, whether it’s a reform programme on tax or a reform programme on climate change or education or health, you have to bring the public with you.”

As to timing, Hipkins said: “I know everybody’s waiting. But we’re just putting the final touches on it now. We will be announcing it within the next week or two.”