23 May 2016

Come clean over tax cut plans, Labour tells govt

12:36 pm on 23 May 2016

The Labour Party will reveal a tax package before next year's election, to show how a Labour government would boost funding for health, education and housing.

Grant Robertson said a Labour government would re-establish the Tax Working Group.

Grant Robertson said a Labour government would re-establish the Tax Working Group. Photo: RNZ / Jane Patterson

Its finance spokesperson Grant Robertson delivered a pre-budget speech in Wellington this morning, in which he identified priority spending areas.

Mr Robertson questioned the government's position on tax cuts, and said any significant programme would be unaffordable.

"The on-again, off again relationship between the government and tax cuts has been a little like the aftermath of The Bachelor.

"Bill English broke up with them in his pre-Budget speech on a Thursday, and by Monday morning John Key got back together with them, only to announce later that day that his relationship status with tax cuts had changed to 'it's complicated.'

"He was keeping his options open - tax cuts now, tax cuts later or no tax cuts."

Mr Robertson challenged the government to be clear about whether or not it intended to campaign on tax cuts next year.

"If you really believe they are the right thing to do for New Zealand, cost them properly and put them into Budget 2017, rather than dangling them about in an election campaign as a promise from Neverland."

Mr Robertson said a Labour government would re-establish the Tax Working Group, with a broad mandate to explore policies including capital gains tax and a land tax, but that would not be part of Labour's 2017 election platform.

The best way to tax multi-national corporations would also be considered by the Working Group and Mr Robertson said he would open to looking at different measures including a diverted profits tax.

Afterwards, he told reporters Labour was keeping its options open for next year's campaign, including raising income tax thresholds.

"Look I do recognise the issue of bracket creep, that happens when you have tax rates that stay in place for a long time when incomes do grow, not as fast as we would like, but they do grow, so we will take a look at that."

But Mr Robertson said a significant tax cut programme was unaffordable.

"We have huge pressures in health, education and housing that we need to spend that money on."

Mr Robertson said the government should be rolling out a comprehensive housing package, to boost the number of affordable and social houses, and increase health funding by at least $600 million.

He said Labour would be "implementing initiatives to shut down the speculators and land bankers that are pushing housing out of the reach of many Kiwis", but would not give any further details.