Labour Party Leader speaks to Indian Newslink on multiple issues
Long Read
Venkat Raman
Auckland, March 23, 2024
The hard-working Indian community in general and Indian businesses in particular deserve ‘better and more support,’ Labour Party Leader and Leader of the Opposition Chris Hipkins has said.
Sympathising with retailers who have been hit hard by increasing crime against them in the form of ramraids and aggravated robbery, he said that measures must be in place to improve their safety.
Mr Hipkins was at the Indian Newslink offices on Friday, March 21, 2024 as a part of our ‘Meet the Leaders’ Series and spoke on various national and international issues affecting New Zealand.
He also said that New Zealand must take the necessary steps to build better relations with India and India’s Prime Minister Narendra Modi is also keen to see a significant improvement.
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The interview can be viewed here along with our Podcast on several platforms.
As we have reported earlier, this is a turnaround from the stance of the Jacinda Ardern government which had said that a ‘Free Trade Agreement with India is not a priority.’
“I had promised to visit India within 100 days of forming a Labour government and even now I am keen on a visit. It is essential to build a useful programme. Trade Agreements are an essential part of bilateral relations,” he said and added that Free Trade Talks are important for good economic relations between countries.
He agreed that a Comprehensive Trade Agreement with India would take time but it is essential to make progress in possible areas and mentioned direct air services as an example.
He said that at some stage, New Zealand should also take up the issue of dairy exports to India.
He would not agree with us that New Zealand has signed Free Trade Agreements with the United Kingdom and the European Union that exclude the export of dairy products- at least not without tariffs. He said that there is a provision for such exports in the pacts.
We maintained that the provision was not implementable but he differed.
Equitable Tax Reforms
Reacting to the suggestions made by former Finance Minister Grant Robertson (in his Valedictory Speech in Parliament on March 20, 2024), that New Zealand does not have a proper and balanced tax system and the recommendations of the International Monetary Fund, Mr Hipkins said that New Zealanders should have a mature and open conversation of taxation, based on social values, outside of political considerations.
“In New Zealand, we rely more heavily on PAYE (Pay As You Earn) as a proportion of the taxes compared to the rest of the world since we do not have Capital Gains Tax and other forms of taxation to supplement. Therefore, ordinary workers are paying more in taxes to the government than others. I think it is inequitable and must be discussed. We will have a different tax policy before the next election and working through it at the moment,” he said.
Mr Hipkins promised New Zealanders that they would have a clear choice of what the tax policy and structure will be and how the system will be made fairer and equitable.
He described ‘as narrow,’ the charges that Labour tends to tax ordinary workers more and destroy the entrepreneurship of employers through stringent employment and investment laws.
He said that the Labour Movement was established to ensure the well-being of hardworking people to get ahead in life. It is not that they should be working every hour that they are awake.
“The Labour Party works to ensure that workers have a better life,” he said.
Lifting Productivity
Answering our question on the status of New Zealand at the bottom end of the productivity index of the OECD, Mr Hipkins said that better wages provide the incentive for people to work better and lift the level of productivity.
But he agreed that conversations on promoting the interests of small business owners should be held and that increasingly people preferred working for small companies than in large establishments but stopped short of spelling out the measures in this connection.
Mr Hipkins agreed with a few issues that are currently being tackled by the new Coalition Government although he differs in the way in which they are being addressed.
New Zealand in Recession
Ahead of our interview, news was at hand that New Zealand had slipped back into recession with the Gross Domestic Product (GDP) falling by 0.1% in the December 2023 quarter.
According to Statistics New Zealand, this was the fourth quarter of contraction.
The International Monetary Fund, in its report released on March 20, 2024 warned the New Zealand government against borrowing more money and adding to the inflationary pressure. It called for a more balanced tax structure through tax reforms.
“New Zealand already has one of the most efficient goods and services tax systems globally. However, tax policy reforms are needed to promote investment and productivity growth, increase the progressivity of income tax, and mobilise additional revenue in response to long-term fiscal challenges. To achieve these objectives, reforms should combine comprehensive Capital Gains Tax, Land Value Tax, and changes to Corporate Income Tax,” the Report said.
In his response, Prime Minister Christopher Luxon blamed the Labour government.
“We do not undo six years of economic vandalism and mismanagement in one Budget, but what we are going to build is back a culture of financial discipline into Wellington and that is on which we have been working incredibly hard.
His government will deliver Budget 2024 on May 30 and Mr Luxon has promised tax cuts for middle and low-income New Zealanders.
“You have to wait until the Budget. We are working on balancing how we will protect frontline services, get rid of wasteful spending and grow our economy. That is what good, responsible economic managers do. Our government is having to clean up after the last one, this is the hangover of all of that,” Mr Luxon said.
Disturbing global issues
Responding to our question on the issue, Mr Hipkins said that New Zealand is not immune to the impact of world economic trends over which no government has control.
“We have seen China, our largest trading partner recovering from the recession faster than expected. We have seen a cost of living spike and the Reserve Bank of New Zealand having to lift the interest rate as a response, engineering a recession. In fact, (RBNZ Governor) Ardian Oar was aiming to engineer a recession when he increased the interest rates over a year ago,” he said.
Would Mr Hipkins have taken corrective measures to avoid the GDP getting into the negative territory if he had continued in power?
Mr Hipkins would not give a straight answer but said that the change in the GDP affects different parts of the economy differently and cited Fonterra which upgraded its dairy exporters earlier in the day and that Zespri had started exporting apples from Hawkes Bay after more than a year of interruption following the devastating effects of Cyclone Gabrielle.
“However, the Number One issue for New Zealand families, irrespective of where they live, is the rising Cost of Living. Getting inflation down would have been the priority for a Labour government because any benefit that people may get from measures such as tax cuts will quickly disappear if inflation continues at the current rate,” he said.
No threat to Leadership
The Labour Party is in the process of rejuvenation, having lost some of its stalwarts including Kelvin Davis, Andrew Little and Grant Robertson since the general election held on October 14, 2024.
“There is a good balance in the Caucus. We need a good mixture of experienced people and new people with aspirations for themselves and the country. I think we have that balance in the Labour Party Caucus now,” he said.
Mr Hipkins does not believe that his leadership is under threat but believes that the opposite is true: a unified Labour Caucus working hard to look at the changes that are required to face the people in the next general election.
“This is one of the most unified and constructive teams that I have seen in the Labour Party. There is no major ego; people want to do the right thing for the Party and the country. There is no challenge to my leadership and no one is remotely contemplating challenging the leadership,” he said.
Common Problems but differing solutions
When asked to name three issues on which he agrees with the National-led Coalition Government, Mr Hipkins named the problems in State Houses, Youth Offenders and Vaping as important issues but disagreed in the approach to solving them.
“I agree that anti-social elements occupying state houses must be dealt with firmly. I agree that eviction should be an option but not in the first instance because it can affect children, the schooling community and families. I also agree that youth offenders have become an increasing problem in our country in the past few years with ramraids and similar crimes. However, I do not think that boot camps are an answer because the young offenders will go back to their environment thereafter. This should be addressed through proper means; bombastic slogans will not work,” he said.
Mr Hipkins said that it was unforgivable that owners of dairies and superettes (mostly people of Indian origin) should suffer youth offending because it is not just their business that is destroyed but the whole family suffers. In many cases, the place of business is also their home, he said.
He also agreed with the government’s move to control vaping but said that the enforcement would be ineffective without adequate staff.
Holistic Healthcare
New Zealand needs a holistic approach to healthcare with Prevention First at its core and also look at the ways and means of improving Maori health, he said.
“We see an increasing number of people visiting the Emergency Departments of our hospitals for ailments that could have been avoided with proper preventive care. Better Health for Maori is not a discriminatory approach but an essential component of our approach,” he said.
On the Palestine crisis, Mr Hipkins said that New Zealand should take an independent stand based on its values and articulate the issues internationally.
Photographs, Video and Podcast by Daryll Garcia, Audience Engagement Expert, Indian Newslink.
