14 Aug 2023

Labour stands by publicly released GST policy costings

3:35 pm on 14 August 2023
National Party deputy leader Nicola Willis and National Party Christopher Luxon after the Budget 2023 announcement.

Photo: RNZ / Samuel Rillstone

Labour says costings errors targeted by National were only included in documents released to reporters, and had been fixed in its tax policy announcement on Sunday.

National's finance spokesperson Nicola Willis says the party needs to explain why media were not alerted to the error, and where it came from.

"Those were the numbers that were televised ... and I'd like to know was the Finance Minister upfront in making this correction as soon as he saw the error. Because if what he did was a quiet fix-up without letting anyone know then that's a bit shabby and it certainly doesn't build trust or confidence."

"They've been very shady about this."

Labour leader Chris Hipkins announced the tax policy in the Hutt Valley on Sunday, promising a boost to Working for Families alongside eliminating GST on unprocessed fruit and vegetables.

In a statement on Monday, Willis targeted what she said was a $250 million "amateur error" in Labour's costings on the policy.

"Labour has failed to account for the fiscal impact of removing GST in the 2023/24 fiscal year, and has only partially accounted for the cost of the policy in the 2024/25 fiscal year," she said.

"This is an amateurish mistake from a party who are trying to convince New Zealanders they can be trusted with the books."

A Labour government spokesperson soon clarified the error was only contained in early documents released to reporters ahead of the announcement under a publishing embargo. The documents available on Labour's website do appear to be the correct ones.

"The materials that were publicly released at the time of the announcement were all correct," the spokesperson said. "The correct cost of the GST policy has always been accounted for in our fiscals and was discussed in the media conference yesterday."

"References to 'holes' or 'uncosted' by the opposition are false, it was a version error that was quickly realised and corrected yesterday."

However, media outlets never received the corrected documents and were not alerted to the error, largely relying on the incorrect figures in reporting. The spokesperson apologised for failing to notify reporters.

Willis had already targeted the GST-free policy, claiming late last month that Labour would campaign on it.

While they dismissed these claims as "hypothetical", Hipkins and his ministers tellingly had stopped short of rejecting the claims outright.

Speaking to media at Parliament on Monday, Willis said the policy was a "desperate" one.

"This is a desperate policy from a team who know that it won't result in the savings they're promising. The Finance Minister, the Revenue Minister, they've all poo-pooed this policy in the past."

She said the error signalled Labour was not confident it would be able to enact its policy by the promised date.

"If you look at the language Chris Hipkins used in the policy yesterday, he said the government would aim to have this up and running by 1 April 2024 which at the time struck me as a little vague," she said. "What the [incorrect] costings were based on was the policy starting in October, rather than in April."

She said National would take "really significant steps" to eliminate any mistakes from its own tax policies, including conducting an external peer review of each one.

"If I send you numbers under embargo and they're wrong and I work that out, you'll be the first to know."

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