Venu Menon
Wellington, August 29,2023
Parliament on Tuesday witnessed a protracted back-and-forth between Prime Minister Chris Hipkins and Leader of the Opposition Christopher Luxon of the National Party in what could aptly be described as a dress rehearsal for the campaign trail in the lead-up to the general election in October.
Luxon hurled choice epithets such as “reckless economic vandalism” to describe the Labour Government’s economic management over the last six years.
Luxon implied the government was slamming the brakes on its spending spree by announcing new measures to increase savings at the last minute. The government was “now making spending cuts at the eleventh hour in a very desperate attempt to make New Zealanders think that his [Hipkins’] government hasn’t been engaged in reckless economic vandalism on a scale we’ve never seen before.”
“Is he [Hipkins] now ready to admit that there’s billions of dollars of waste, and why didn’t he start reining it in over the last six years, instead of leaving it just for the last six weeks before the election?” Luxon asked.
But Hipkins pooh-poohed the query, saying all governments looked for savings every Budget cycle. Instead, he sought to turn the tables on Luxon by accusing the National Party of proposing unaffordable tax cuts and “four new taxes in order to pay for them.”
The prime minister reminded Luxon of the National government’s GST increase, “meaning New Zealanders paid more every time they went to the supermarket, more every time they paid the power bill, more every time they filled up the car – all because National promised unaffordable tax cuts, which is history repeating itself here.”
The prime minister said he was proud of the fact that “teachers have had record pay increases and our nurses have had record pay increases.” He said the government was spending “record levels on road maintenance.”
But Luxon trotted out figures to substantiate his claim of economic mismanagement by the Labour government. He said spending was up almost 80%, inflation by more than 22%, and tax by 65%. National debt had tripled, and New Zealand was the only country in the region that was in a recession.
Hipkins pointed to a recent IMF report that showed the New Zealand economy had “experienced cumulative growth of 10.2% since the second quarter of 2020,” which put the country ahead of Australia, the US, the European Union, and the UK.
Hipkins warned that National’s proposed tax cuts and the four new taxes meant to pay for them “will disproportionately benefit those on the highest incomes – millionaires, amongst others -and property owners.”
In a nod to Labour’s left-leaning legacy, Hipkins said his government was focused on “supporting working New Zealanders through the current cost-of-living challenge with targeted cost-of-living measures that will make a meaningful difference for them,” adding, “ We’re not focused on delivering tax cuts to those who need the money the least.”
Earlier, the House heard the prime minister catalogue the achievements of his government, including economic growth of 2.9% over a year, unemployment below 4% for a record 24 consecutive months, wages increasing by 7.1 % in the year to June and by 29% since the Labour government took office, and a 44% increase in the minimum wage.
“The delivery of new free-trade agreements mean almost three-quarters of our exports are now covered by a free trade agreement,” Prime Minister Hipkins noted.
Venu Menon is an Indian Newslink reporter based in Wellington
