Neil Sands
Labour will reject minor parties’ demands for sweeping new tax measures, Chris Hipkins says, insisting a capital gains tax will be the only new levy introduced if he becomes prime minister.
Hipkins also ruled out lifting current rates of income tax and company tax if Labour wins power, saying the only revenue changes he expected to see are the regular inflation readjustments to fees and levies that every government implements as part of the budget process.
But a capital gains tax would be a bottom line for Labour in any coalition negotiations, he said.
The Labour leader told a function organised by The Law Association in Auckland on Thursday that he wanted to be upfront with voters about his intentions, saying public trust in politicians had been eroded by promises that were never followed through.
In a bid to restore faith in the system, Hipkins unveiled a suite of policies including making political lobbyists more accountable, strengthening the Official Information Act (OIA), and limiting the use of urgency to ram legislation through Parliament.
“[Without action] cynicism can take hold, and all of that leads to people asking the question, ‘if nothing’s going to change, why would we bother?’” he said.
“Telling people to have more faith in democracy isn’t the answer to that. We’ve got to give them a reason to believe that their vote’s actually going to make a difference.”
If Labour is in a position to form government after the November 7 election, Hipkins will be confronted with a revenue wish-list from potential coalition partners, with the Greens’ eyeing an inheritance tax and both the Greens and Te Pati Māori pushing for a wealth tax.
The issue has become a major attack line for National, which says a Labour-led coalition could bring in nine new taxes, including Labour’s 28% capital gains tax.
Hipkins dismissed any suggestion he would allow minor parties to set his tax agenda.
“They can put them forward, but they can’t demand. They can’t force us to vote for them… If we’ve said that we won’t support them, we won’t support them.
“That’s it, end of story… That’s the bottom line in terms of what we will support. Absolutely.”
Taxpayer-funded pay equity
Hipkins said Labour would release its campaign costings next week, showing its policy platform has been fully accounted for.
A major expense for an incoming Labour government would be meeting its pledge to reverse the current government’s pay equity reforms, which is expected to cost at least $12 billion.
“The bulk of that is going to end up having to be paid by the public, by the government,” Hipkins said.
He “categorically” ruled out Greens co-leader Chloe Swarbrick becoming Finance Minister on his watch, saying Labour’s Barbara Edmonds would fill that role.
One policy initiative Hipkins does share with the Greens is the need to rein in political lobbyists through a mandatory code of conduct and register.
“If someone’s being paid to change the minds of the government, the public has the right to know about that,” he said, citing the behind-the-scenes manoeuvring that led to legislation quashing a major climate change court case.
“Access to government shouldn’t depend on being able to afford somebody with the right connections,” he said, also pledging to prevent ministers from leaving Parliament, then immediately signing up as lobbyists in the private sector.
Hipkins said urgency, which has reached record levels under the current government, would be limited to “emergencies, fixing urgent errors in the law, budgetary measures, and implementing the 100-day plan, where the policies in it have been clearly signposted before a general election.”
He said the OIA would be rewritten to include meaningful penalties for breaches, and a Labour government would ditch electoral reforms that set a 13-day deadline for voters to register before an election, which he said disenfranchise tens of thousands of people.
Bipartisan cooperation, but no ‘grand coalition’
Whatever the election result, Hipkins said he was prepared to work with National on major long-term issues that would benefit from a bipartisan approach, such as infrastructure investment.
“I’m absolutely open to the idea that Labour and National, as the potential lead parties of government, should try and achieve a greater degree of consensus on what needs to be built and where,” he said.
“That shouldn’t change every time there’s a change of government.”
Hipkins said during the current government’s term, Labour had adopted a bipartisan stance on a social media ban for under 16s, modern slavery legislation and the free trade agreement with India.
But he said the collaboration with National would not extend to a so-called “grand coalition” bringing the centre-left and centre-right parties into one administration.
“We wouldn’t, unless it was an absolute emergency… If you cede the centre ground, then you actually allow room for more polarisation and more extremes to grow,” he said.
“We’ve seen that in other countries where there has been a grand coalition in the centre. You lose the centre ground because there doesn’t continue to be a vigorous fight for the centre.
“You need that vigorous fight for the centre in a robust democracy. Labour and National’s fight for the centre ground is actually really, really important. If you take that away, the outer flanks will grow.”
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