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Contrasting visions towards economic recovery after the Covid-19 pandemic saw passionate exchanges between Paul Goldsmith of National and Grant Robertson of Labor on Q + A this morning.
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National and Labor finance spokespersons describe their plans to jump-start the New Zealand economy after Covid-19. Source: Q + A
Topics of discussion between the two finance spokespersons included taxes, expenses, house prices and retirement.
Host Jack Tame asked the couple why National and Labor’s tax policies didn’t broaden the tax base to include, for example, a capital gains tax, given the rising cost of housing despite the economic downturn. that followed the pandemic.
Robertson said the Labor Party was “prioritizing stability right now.”
“I think a big shakeup of our tax system right now is just not right in terms of providing certainty.”
He said Labor’s tax policy, which proposes to introduce a new top tax rate of 39 percent for income earned above $ 180,000, will help with the government’s balance sheet.
However, the policy is expected to hit the top two percent and raise about $ 500 million a year.
Robertson said Labor might consider other taxes “in the future,” but said the tax is only part of the government’s books. He said it should also consider job creation, debt, and the productivity and sustainability of the economy.
“We will seek a mandate for everything we want to do in the future,” he said of the additional taxes.
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After taking some observations from National, Robertson said that his numbers “squared” and that the graph was then corrected. Source: 1 NEWS
Goldsmith said the previous national government did not have to increase or introduce new taxes as it recovered from the global financial crisis in 2008.
So there was no need to introduce more taxes to recover from Covid-19, because National would focus on “growth and careful spending,” he said.
Goldsmith said a national government would have an additional $ 1.8 billion to spend each year on health and education.
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The party had based its projected debt target on older figures, a mistake that Labor’s Grant Robertson pointed out. Source: 1 NEWS
But Robertson accused National of falling into a “Bermuda tax triangle,” repeating his comments from September.
“You want to cut taxes, you want to increase spending, and you want to drastically speed up debt repayment. You can’t really do all of those things credibly,” he said of Goldsmith.
Goldsmith dismissed his comment, saying, “You can do it if you’re handy.”
Goldsmith this morning reiterated his party’s policy of cutting taxes starting in December this year for 16 months.
It could mean that a worker making $ 64,000 per year could keep an additional $ 3,226 over a 16-month period, with an estimated policy cost of $ 4.7 billion.
Meanwhile, those earning minimum wage would be left with an additional $ 8.10 a week.
Goldsmith said in September that the $ 4.7 billion would come out of the Covid-19 Response Fund.
“We have allowed another $ 4 billion for potential expenses, and then we are working on the assumption that we can use the rest to pay off the debt.”
He said he would leave around $ 9 billion to spend on the fund.
Later in September, Goldsmith defended targeting middle-income people in Q + A, despite economists saying low-income tax cuts led to more spending and economic stimulus.
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National finance spokesman Paul Goldsmith says it’s about giving money back to “people who are working hard.” Source: Q + A
“We want to put some extra money in the hands of people who are working hard,” he said at the time.
When Tame asked him today if those with lower incomes are likely to spend their tax cuts on the economy than those with higher incomes, Goldsmith said, “Yes. … But, there are many ways to stimulate the economy.”
He added: “Everyone can spend money.”
Goldsmith could not point to an economic theory to support his point that tax cuts for those with the highest incomes would generate the most economic stimulus when Tame asked for it.
But he said there was “very clear evidence” that giving people money back stimulated the economy.
Robertson said National should focus on middle income, rather than average.
He accused politics as an example of trickle-down economics, to which Goldsmith said, “There is no trickle down.”
Goldsmith said National’s proposed policy of doubling the depreciation rate on new equipment and machinery worth more than $ 150,000 was one of the party’s many policies designed to give companies the confidence to invest and hire new staff.
“There are tens of thousands of companies, large and small, that hire that additional person which gives them the opportunity to have a job and that makes the economy work.”
Under Todd Muller, National also proposed awarding companies $ 10,000 for each new employee they hire, up to a value of $ 100,000.
Tame defied Labor proposals to double sick leave, raise the minimum wage and introduce a new holiday, all of which put additional pressure on small businesses.
Robertson said Labor was following the advice of its Small Business Advisory Panel.
He also noted the Small Business Cash Flow Loan Scheme and government regulation of business fees.
Goldsmith criticized Labor proposals, saying the increases should “be based on productivity.”
“You have this kind of naive view of the world, you kind of tell companies to pay people more, and it magically happens,” he said.
Both spokespersons did not say openly that house prices should drop.
Robertson said the “sustained moderation” was appropriate when it comes to house prices and “not having the big spikes we’ve seen.”
Goldsmith said that home prices should be lower in some areas, but they did not target specific areas.
“We don’t need a capital gains tax,” he said.
Both parties propose to amend the RMA.
Robertson said of real estate investing: “There is a security in property in people like.”
In response to changes to the Residential Leasing Act this year, Goldsmith said, “This government has gone to war with landlords.”
Robertson rejected the statement and asked what was wrong with providing tenants with a warm and dry home.
Goldsmith responded, “Every little change on its own might make sense. But, if you do them all together at once … in full, it means you end up with a supply shortage and the price goes up, and that’s a real driver. of poverty.
“If you are concerned about poverty, this makes it much, much more difficult for households in New Zealand.”
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Property owners say it will now be harder to get rid of the few dumb tenants. Source: 1 NEWS
He also noted that the record waiting list for social housing and Labor fail to deliver on its KiwiBuild promises.
But Robertson said the long list is because the Labor Party really recognized those who needed housing.
Goldsmith said that the introduction of universal retirement was one of the best policies the country had introduced because it provided security for retirees and the policy was affordable over time with a strong economy.
He said National would move the retirement age from 65 to 67 within 18 years.
Robertson said retirement was affordable “if we make it a priority and don’t go around cutting taxes.”
Watch the full episode of Q + A on TVNZ OnDemand here.
