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John MacDonald: A guarantee from a politician? Read the fine print

John MacDonald,
Publish Date
Thu, 31 Aug 2023, 12:48PM
Nicola Willis. Photo / Mark Mitchell
Nicola Willis. Photo / Mark Mitchell

John MacDonald: A guarantee from a politician? Read the fine print

John MacDonald,
Publish Date
Thu, 31 Aug 2023, 12:48PM

What’s that old line? If something sounds too good to be true, it probably is too good to be true. 

And that’s how I’m feeling about the National Party’s new tax plan, now that I’ve had a day to think about it. 

Even more so, after listening to Finance spokesperson Nicola Willis on Newstalk ZB this morning. 

I’ll come back to that. But first, in terms of how much better-off National reckons we would be if it’s running the shop after next month’s election, this is it: a family with two kids on the average income - $250 better-off per fortnight; an average-income household with no kids - $100 better-off per fortnight; someone on the minimum wage - $20 better-off; and a retired couple - $26 better-off each fortnight 

Sounds good. I’d like to believe it. But do I believe it? Well, let’s consider how National reckons it can pay for it. And this is where the likes of the Labour Party starts to get all “voodoo” on it. That’s a word Grant Robertson has been using to describe the policy. 

And there’s one part of National’s tax plan where I think Grant Robertson is bang on with the “voodoo” thing. And it’s the extra money it reckons it can get from foreigners who, under Labour, aren’t allowed to move here and buy houses. 

The ban was brought in by Labour in 2018 because it thought international buyers were sweeping-in and snapping-up homes, leaving locals out of the market. 

So National wants to change that - to fund its tax cuts - and would open the doors to foreign buyers wanting to buy places worth more than $2 million. And it would sting them with a 15 percent tax. 

It thinks that, on average, that would increase government revenue by $740 million a year. 

And how does it know that? Well, it doesn’t. It’s done some estimates. And it got a consultancy called Castalia to run the numbers and they came back and said National’s plan was “possible and plausible". 

And, on the back of that, Nicola Willis made the big statement this morning that, come hell or high water, the tax cuts are a guaranteed thing. 

Even when her costings are dependent on things like enough foreigners wanting to move here, buy a house and being prepared to pay an extra tax for the privilege. 

Nicola Willis said this morning that, even if that doesn't eventuate and the government's financial position is worse than expected, the tax cuts will still happen. She said she guaranteed it. 

But I don’t believe it for a minute. 

Because back when Christopher Luxon was running Air New Zealand, do you think he would’ve slashed the price of his airfares because he had his fingers crossed that fuel prices might go down? 

Of course not. So how does he think he can deliver all this tax relief when he doesn’t know for sure how he’s going to pay for it? 

More to the point, how-on-earth can his Finance spokesperson take it next level and guarantee that it’s going to happen? 

It is head-in-the-clouds stuff. 

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