No shocks in Labour tax tweak

HAMISH RUTHERFORD
Last updated 05:00 26/06/2014

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OPINION: It is hard to imagine any Labour Opposition going into an election without proposing a tax hike for high earners.

But adding 3 cents in the dollar for any earnings over and above $150,000 a year is hardly the "true red" government that David Cunliffe promised when he campaigned to be leader.

As well as a desperate attempt to turn the focus on to its policies, yesterday's alternative Budget has Cunliffe and bean counter David Parker trying to seek the moral high ground in the economic debate, dominated for so long by National.

After May's Budget, National was accused of copying Labour's play book when it announced an expansion of paid parental leave and free visits to the doctor for under-13s.

Labour has effectively retaliated by laying out a commitment on how much it would spend if it won two terms in government from September, showing a far less progressive tax policy than it planned in 2011.

The plan caught the Government slightly on the hop.

Finance Minister Bill English initially attacked the plan by saying it was the same old Labour "tax and spend".

Questioned on the statement, and Labour's relatively minor increase in either tax or spend, English changed tack, saying that Labour was now proposing to run the country on what it recently said was unsustainable.

"I don't believe a Labour Party can live on that spending."

Eventually English settled on the fact that it didn't matter what he thought, or even what Labour thought.

The future of the plan depended on Labour's probable coalition partners - the Greens, Internet-Mana and NZ First - and their spending plans.

The fact that Labour can only hope to be the large part in a broad coalition is well known, and relevant.

The party's tax plan might seem unappealing to high rollers, but will hardly have them fretting.

But its promise to pay off debt sooner and to start putting money into the New Zealand super fund faster than National might appeal to the overwhelming majority of Kiwis who never expect to be hit by the $150,000 threshold.

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- The Dominion Post

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