Election Live, September 18: Labour says National’s tax plan ‘reckless’; NZ First lets rip at Labour ‘abandoning regions’

Welcome to The Spinoff’s Election Live for September 18, bringing you the latest on election 2020 and other NZ news. The essential campaign dates are here. For all you need to know about the cannabis referendum click here. For the assisted dying referendum click here. Explore the parties’ pledges at Policy. I’m on stewart@thespinoff.co.nz

4.00pm: NZ First lets rip at Labour ‘abandoning regions’

The Labour announcement this morning that it wants the Provincial Growth Fund to morph into a $200m Regional Strategic Partnership Fund has been decried by NZ First leader Winston Peters as “a straight cop-out”.

“Provincial voters have had confirmed for them today that the Labour Party is abandoning them to their fate,” he said. The pledge entailed “a gross mutation of what has been a flagship success during New Zealand First’s term in government”, added Peters. “That is a sad commentary on Labour’s priorities when they are by themselves.”

Peters pounced on the opportunity to reassert his party as an advocate for the regions. “Provincial success is in New Zealand First’s DNA. Today it was confirmed that it is not in Labour’s,” he charged.

3.45pm: National tax plan ‘reckless’ Labour warns while campaigning in Wairarapa

Political editor Justin Giovannetti reports from the campaign trail:

With the National Party announcing its tax programme in Wellington today, Labour’s Jacinda Ardern swung through the Wairarapa during a tour without big crowds but frequently interrupted by selfie stops.

National’s promise of $4.7 billion in temporary tax cuts became a target of Ardern as she appeared at Featherston’s Fell locomotive museum.

The opposition tax proposal, which would lower everyone’s tax bills over the next 16 months, is a threat to the country’s Covid-19 response, according to Ardern. “My view is that now is simply not the time. What they have announced today is unaffordable and is raiding from a fund that has to be available to make sure that we as a nation can keep responding to the challenge of Covid,” said Ardern.

Labour is planning to instead increase taxes on the top 2% of wage earners. The party’s finance spokesperson, Grant Robertson, said National would need to use money from the country’s $14 billion Covid-19 fund to pay for the tax cuts.“I think it’s irresponsible as well. What this means is that the money that is needed to fund our schools and hospitals is compromised. It simply doesn’t add up,” he said.

“It feels a bit to me that this has been done on the fly. This is not the action of a responsible government.”

Robertson kept notes about the National plan on his right hand. The word “irresponsible” written in blue pen, jotted down during a short drive from nearby Greytown.

He also said it was “reckless”. Labour’s goal for today was to announce the end of the provincial growth fund if it’s re-elected. The fund is the brainchild of Winston Peters’ time as deputy prime minister and a centrepiece of New Zealand First’s current identity as the party of the regions.

Instead of the $3 billion PGF, which has often been dismissed as porkbarrel spending by the governing coalition, Labour would set up a $200 million fund that would be distributed to regional development agencies (see 2pm update).

“If the PGF has taught us how important that investment into our regional economies is, we’ll continue that, but we’ll continue differently,” said Ardern.

While Labour’s main strength is in the country’s larger cities, Wairarapa is one of the rural electorates the party would like to capture next month. Local list MP Kieran McAnulty, wearing a suit and gumboots, drove Ardern between events earlier in the day in his red ute.

What the vehicle lacks in refinement it makes up for in its Labour red paint job and everyman proletarian appeal. McAnulty left his gumboots outside the museum and stood beside the Labour leader in his socks as she spoke.

2.45pm: Generation Zero launches climate policy checklist

Climate organisation Generation Zero has launched a new policy checklist to help voters critically assess party policy through a “climate lens”.

The tool, which can be found here, is described as a way to help prospective voters better understand the climate impacts of what parties have promised, and whether or not these promises will help to build a thriving, equitable, and low-emissions Aotearoa.

2.00pm: Labour breaks with NZ First over PGF

Labour’s unveiled its regional development policy, which would see an end to New Zealand First’s provincial growth fund (PGF).

Instead, a $200 million “regional strategic partnership fund” would be rolled out, to accelerate the development of local plans by regional economic development agencies. Any PGF funding that has been allocated to sectors but is not yet tagged to a specific project will be reviewed with a view to redistributing it to the regional plans.

“The PGF has delivered significant support into our regions, but the fund was only ever resourced for three years,” Jacinda Ardern said.

“We now want to take the lessons from this support and work to develop a new approach to regional development. We want this to be driven by regions from the ground up.”

Ardern said her party’s new fund would be “more targeted” than the PGF. However, with just $200 million of backing compared to the PGF’s $3 billion, it might not impress all backers of New Zealand First’s scheme.

1.00pm: No new Covid-19 cases in community or at border

It’s the fourth day in a row with no new cases of Covid-19 in the community, the Ministry of Health has revealed. There are also no new cases linked to the border.

Today marks the first day since early August that there have been no new cases whatsoever.

There remain 54 people linked to the community cluster in the Auckland quarantine facility, which includes 22 people who have tested positive for Covid-19 and their household contacts.

Four people are in hospital with Covid-19, with one person in the ICU at Middlemore Hospital – a change from yesterday when no people were in intensive care.

Since August 12, contact tracing team has identified 3,912 close contacts of cases, of which 3,908 have been contacted and are self-isolating.

With no new cases to report and 7 additional recovered cases, the total number of active cases has dropped to 70. Of those, 33 are imported cases in managed isolation facilities, and 37 are community cases.

The total number of confirmed cases of Covid-19 remains at 1,458. There were 7,360 Covid-19 tests processed yesterday, bringing the total number of tests completed to date to 897,077.

12.45pm: Can we go four days with no new community Covid cases?

We’ve had three consecutive days with no new community cases of Covid-19. Today, the Ministry of Health will be dispatching a handy press release to reveal whether there are any new cases to report.

Yesterday, seven cases – all linked to the border – were detected in managed isolation.

While there were no new community cases, questions remain around an Auckland school closed for Covid cleaning and a healthcare worker who attended a gym and visited some shops before later testing positive.

I’ll have all the details for you here at 1pm.

11.40am: Labour acknowledges surging support for Act

The Labour Party has taken a leaf out of National’s book and criticised the party for its affiliation with Act.

It hasn’t been unusual throughout this election campaign to see Judith Collins hit out at Labour for being unable to rule in or out Green Party policy. Today, in a scathing press release, the roles were reversed, with Grant Robertson claiming National is “beholden to the Act Party” and would be forced to implement “severe cuts” if elected next month.

“On current polling, if National are to have any hope of forming a Government, Act will have to play a big role,” Robertson said in his capacity as Labour finance spokesperson.

“Act’s radical austerity plan puts popular programmes like KiwiSaver, Superannuation, the Winter Energy Payment and Working for Families at risk, right at a time when people need certainty and continuity.”

A recent, leaked, UMR poll claimed Act would become the third largest party in parliament after the next election, with 6%.

“Judith Collins can’t actually rule out Act’s policies because her and National’s position is so weak,” Robertson added.

10.10am: National promises (temporary) tax cuts

Updated

National has returned to its old ways, promising 16-month tax cuts as part of its economic policy, announced this morning.

It’s a u-turn from Judith Collins’ August announcement that her party wouldn’t cut taxes, with Collins saying she changed her mind following the recent level three lockdown in Auckland.

The plan would be achieved through a change to the existing tax thresholds. The lowest threshold would be raised from $14,000 to $20,000, the middle threshold from $48,000 to $64,000 and the top threshold from $70,000 to $90,000. The cost of this temporary tax relief would be $4.7 billion.

“To keep our economy ticking, New Zealanders need money to spend. National will deliver temporary tax relief that puts more than $3000 – or nearly $50 a week – into the back pockets of average earners over the next 16 months,” Collins said.

National’s Mark Mitchell yesterday told media the party would be presenting “something big and different” in its economic policy – a comment I incorrectly interpreted would mean no tax cuts.

Despite Labour ruling out further tax increases except for the top 2% of earners, National’s finance spokesperson Paul Goldsmith continued to repeat his line that Labour is going to try tax its way out of recession. The policy is targeted at “middle New Zealand”, Goldsmith said.

As well as tax relief, National has promised to double the depreciation rate for businesses that invest in new plant, equipment and machinery over the next 12 months, at a cost of $430 million.

No cuts would be made to health, education or social development, Collins said.

National’s previous promise to get government debt down to 30% of GDP by 2030 has been walked back, with Collins now aiming for 35% of GDP by 2034. The original target was no longer “practical or feasible”, owing to the current financial situation.

National’s plan ‘desperate and reckless’ – Grant Robertson

Labour’s finance spokesperson has slammed National’s plan for the economy as “unaffordable”, saying it will lead to harsh cuts to public services that are needed during Covid-19.

“New Zealanders need a stable and prudent path to Covid economic recovery but Judith Collins and Paul Goldsmith are putting the economic future of this country at risk with a series of ill-thought out and desperate policies,” Grant Robertson said.

“Once again the new National Party leadership prove they have left behind the considered and moderate approach that John Key and Bill English took to the economy.”

The Greens were also unimpressed. Co-leader James Shaw said National’s alternative budget would put health, education and nature at risk.

“National is planning for a decade of children learning in run-down, overcrowded classrooms, longer wait times for essential medical treatments, and less protection for nature,” Shaw claimed.

10.00am: Fonterra posts profit, resumes dividend payout

Fonterra has posted a $659 million net profit for the year ending July, the company’s announced. It follows a $605 million loss last year, driven by over $800 million in writedowns.

Chief executive Miles Hurrell said the company increased its profit after tax by more than $1 billion, putting them in a position to pay out dividends again.

Fonterra did not pay a dividend in 2019, or in the first half of its latest financial year.

On the campaign trail

Here’s where our political leaders are today:

  • Labour Party leader Jacinda Ardern is in the Wairarapa for a policy announcement this afternoon. Our political editor Justion Giovannetti is on the road with the PM today.
  • National Party leader Judith Collins is in Wellington today, announcing her party’s economic policy alongside Paul Goldsmith.
  • New Zealand First leader Winston Peters is in popping into Hamilton, Cambridge and Waihi today on his mammoth bus tour.
  • Act Party leader David Seymour is doing his best to avoid Winston Peters, heading deep into the South Island with stops in Blenheim and Rangiora today on his election bus/van tour.
  • Greens co-leader Marama Davidson is doing media today in Auckland while James Shaw is in Blenheim and Nelson.

8.10am: ‘The recession is finished’ – Grant Robertson

The finance minister has boldly declared the recession is over, a day after record low GDP figures officially confirmed the country had entered recession.

Grant Robertson repeated his government’s oft-said lines on Newstalk ZB, about how going hard and early remained the right approach, and that this represented a one-in-100-year shock to the economy.

“We will rebound fast,” Robertson said. “We are coming back strongly from this.”

Yesterday’s GDP figures showed a decline of 12%, the worst on record. Robertson said he expected next quarter’s figures to show growth and significant bounce back, although there was uncertainty how big the bounce back would be.

“It will certainly be a very solid bounce back because we’ve seen some very high levels of activity,” he said.

7.50am: Ex-Dilworth students speak out following abuse arrests

Two former Dilworth students have spoken out, after seven men with links to the Auckland boarding school were arrested for historical sexual offending.

I haven’t covered this story during the live updates this week, but this morning’s RNZ report felt like the right time to report on the latest developments.

The two ex-students were at the school during the 1970s, where they tried to raise the alarm about the offending going on at the school.

One of the men said two of his friends were assaulted and he and another boy decided to tell a senior staff member what had happened, who subsequently passed them onto the headmaster.

“The headmaster got very angry and accused us of being disgusting liars and despicable boys and gave us six of the best on the spot for bringing the school into disrepute, and impugning the characters of some of the teachers and leaders,” he told RNZ.

That wasn’t where they stopped, with the pair reaching out to Truth newspaper.

“[The journalist] asked us what school and we got scared and hung the phone up,” he said.

“The next day the journalist rang every boys’ school in Auckland, so the headmaster figured out it was us and we got suspended for a week,” he said.

Another former student told RNZ that sexual abuse was part of the school’s culture.

Read the full report, and previous reporting on the subject, here

7.40am: Top stories from The Bulletin

It almost doesn’t make sense to call this news, but the country has officially tipped over into recession. The reason it’s entirely unsurprising is because it has now been forecast for months – yesterday was just the day in which Stats NZ confirmed that it had in fact now happened. So, what does it mean?

The Spinoff’s live updates (scroll to 10.45am) has the context: The surveyed June quarter started when the country was still in level four lockdown, and included the subsequent weeks of easing out of that. As the NZ Herald (paywalled) reports, a rebound is expected to take place in the September quarter. Their journalist Jamie Grey had a lovely line to describe the effect – “activity bounced back like a coiled spring when restrictions lifted.”

The fall itself was the worst quarter for GDP in New Zealand’s history. And yet, as Politik reports, it wasn’t as bad as it could have been, which will be something of a relief for the government. There are some international comparisons of note in that article – everyone is down, many countries are down more, many including Australia are down less. Robertson has also pointed out that GDP isn’t necessarily an important measurement of how the pandemic has been handled – deaths and unemployment staying fairly low matters immensely too.

The recovery period could end up being a really positive one for the country as well, writes Kiwibank chief economist Jarrod Kerr. It gives the chance to rebalance the economy in favour of better climate change outcomes, and resources are likely to be reallocated to more productive firms in the new environment. That’s not necessarily a bad thing – if you’re operating in a capitalist system, there needs to be periods of renewal. Kerr does also note that there will need to be a huge role for the state in policy and workforce redirection to make that happen, and it’s fair to say that there will be many more people out there needing a job than this time a year ago.

Read more and subscribe to The Bulletin here

7.30am: Yesterday’s headlines

New Zealand had its third day in a row with zero new cases of Covid-19 in the community. However, there were seven new cases in managed isolation.

All staff and students at Auckland’s Chapel Downs Primary School are being urged to get tested after a student there was found to have Covid-19.

A man in managed isolation in Rotorua escaped on Wednesday and was reportedly missing for about half an hour.

New Zealand is officially in recession with the country’s GDP shrinking by a record 12.2% in the June quarter.

The treasury revelaed it printed the wrong pre-election update which was given to reporters and economists on Wednesday.

Read yesterday’s updates in full here.



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