Labour axes tax break policies

VERNON SMALL
Last updated 12:24 22/01/2014

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Labour has finally dumped two flagship tax policies of former leader Phil Goff that would have taken GST off fresh fruit and vegetables and set a tax-free band on income below $5000.

Leader David Cunliffe said the changes, signalled as likely by David Shearer when he was leader, would free up about $1.5 billion a year.

Cunliffe said his keynote speech in Auckland on Monday would outline better ways to help struggling families. He would not say if their cost would be the same.

"While these were worthwhile policies, we believe there are better ways to help struggling Kiwi families, Cunliffe said.

"Labour has a range of game-changing plans that will help New Zealanders who are being squeezed by the National Government's lopsided and unfair policies."

Cunliffe said his Monday announcement would include new policy to help create opportunities for Kiwi families.

Labour would be looking at reinvesting the money in ways more directly focused on needs, he said.

For example, new evidence showed fresh fruit and vegetables were mainly consumed by those who could afford more. A more targeted way of delivering relief would be sought.

The tax-free threshold would have delivered cuts to the top earners as well as those on lower pay, Cunliffe said.

Labour would make some tax announcements but not necessarily on Monday, he said.

He confirmed the capital gains tax policy, exempting the family home, would stay.

However, although it might be tweaked - as would the policy on raising the pension age to 67 gradually, as the party looked at maintaining social and gender equity as the age rose.

Cunliffe said Goff was on board with the two tax policies being dropped.

Other policies were also under review and the policy mix would be "different from what you have heard from us before"'.

Labour had not changed its core values, and wanted to close down the "inequality gaps" in society, Cunliffe said.

An increase in the minimum wage to $15 within his first 100 days in office had not changed, although the minimum wage would go higher in time. A living wage would be brought in over time, starting with the state sector, as it could be afforded.

Labour would bring in a Budget that would work and Labour would not write cheques it could not cash, Cunliffe said.

He reiterated Labour's policy on exploratory deep-sea oil drilling was to change the law to ensure world best practice, but it was not opposed to it in principle.

"We will change the law to ensure that we have world best-practice standards," he said.

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If new consents did not meet those standards they would not proceed, but there would be no "moratorium".

The industry had said it could meet world best practice and the current law did not reflect that, Cunliffe said.

He had looked at Norway's law and its standards and at the way it used the income in a sovereign wealth fund. It was an interesting idea, but no decisions had been made.

- Stuff

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