22 Aug 2023

Hipkins: National prescription fees going to 'tax cuts for millionaires'

10:22 am on 22 August 2023
Chris Hipkins and Nicola Willis.

Chris Hipkins and Nicola Willis. Photo: Angus Dreaver / Nick Monro / RNZ

Labour leader Chris Hipkins has accused National of promising to roll back fees-free prescriptions to pay for "huge tax cuts for millionaires" rather than just funding extra cancer drugs.

It comes on the back of a disastrous poll for both the prime minister and his party. Labour dropped four percentage points to 29 percent in Monday's latest 1News-Verian poll, the fourth consecutive drop since January, when they were on 38 percent.

At the last election, Labour achieved 50 percent - resulting in an outright majority in the House, the first of the MMP era.

Hipkins himself has lost support too, dropping three percentage points to 21 percent as preferred prime minister, a statistical tie with National's Christopher Luxon, steady on 20 percent.

"I think we've had a really tough couple of months, and it comes off the back of a tough couple of years, and so the voter sentiment ultimately is a bit grumpy towards the government and I can understand a lot of that," Hipkins told Morning Report on Tuesday.

"We're now getting into the campaign mode, we're going to be setting out our vision for the future, our plans for the future."

National outlined a part of its vision for the future on Monday - reintroducing the $5 prescription fee for most Kiwis to fund 13 cancer drugs identified by the Ministry of Health's Cancer Control Agency as providing significant clinical benefits, and funded in Australia but not New Zealand.

"Let's be very clear," National deputy leader Nicola Willis told First Up on Tuesday morning. "We're going to keep free prescriptions for superannuitants. We're going to keep free prescriptions for those on low incomes who use the Community Services Card. And we're going to ensure that the total amount any family pay for prescriptions in a year will be capped at $100."

The $100 cap was already in place before the government scrapped prescription fees altogether earlier this year.

"But by stopping prescriptions being free to everyone, regardless of their income, we will be able to fund 13 cancer drugs that are currently available in Australia that the New Zealand Cancer Control Agency has identified would provide significant clinical benefits - and in funding those drugs, we will save lives," Willis said.

When the government got rid of prescription fees, it said the cost over four years would be $619m. National said the cost of funding the new cancer treatments would be $280m over that same period.

"The policies that they announced yesterday … will actually result in people being charged more for their prescriptions than the National Party are going to be paying out on extra cancer drugs," Hipkins said. "They're doing that because they've got a big financial hole to fill to pay for their tax cut."

The clear lead National, with likely coalition partner ACT, have over Labour could play into Labour's hands, Hipkins insisted.

"Now that National is the frontrunner, I'm sure that there's going to be a lot more scrutiny on exactly what it is they're promising New Zealanders because their numbers simply don't add up. They're promising huge tax cuts for millionaires. They're very vague about the cuts to government spending they're going to make in order to pay for them, and they're being a little sneaky."

Labour's tax cut offer - cutting GST off fresh fruit and veges - would largely benefit those on higher incomes, most economists believed.

Hipkins did not challenge this assertion when it was put to him by Morning Report, just saying it would cost "a fraction" of National's planned tax cuts for "people on the highest incomes".

He also rejected a suggestion his party's GST policy had failed to win over voters.

"The last TV1 poll was taken several months ago, and actually quite a lot has happened since then and we've dealt with a number of very difficult issues since then. So I don't think that the last week of the polling period in question is necessarily going to be reflected in those numbers.

"We've got a lot of work to do, look, there's no question about this. We go into this campaign as the underdog. We're going to be getting out there, working hard.

The last 1News-Verian poll before Monday's was actually in mid-July, just over one month ago. It had Labour falling from 35 to 33 percent - within the margin of error, but consistent with the overall trend.

A Newshub-Reid Research poll earlier this year found a majority of voters in favour of a wealth tax, which Hipkins ruled out. He maintained that was the right call.

"It was based on the advice that we received. We looked at a wealth tax. It was very clear that a wealth tax actually contained huge economic risk for New Zealand. Wealth is ultimately very mobile. If a whole lot of the people who would have been subject to the wealth tax can remove that wealth from New Zealand, actually, our economy would have been in far worse shape.

"I looked at the evidence, I got the advice and I made the call that a wealth tax wasn't going to be the right way forward for New Zealand."

Little margin for errors

Should Labour - or its potential partner the Greens - pick up some support, National and ACT could find themselves in the position of relying on Winston Peters and New Zealand First to form a government. Peters has ruled out working with Labour, but ACT has ruled out working with Peters.

Recent polling has seen NZ First support rising steadily, now sitting within reach of the crucial 5 percent threshold for getting back into Parliament without winning an electorate. It scored 3.7 percent in the 1News-Verian poll this week.

Willis said it showed voters were "tired of the current government", but urged them to consider National instead. But just in case, National would not be ruling out working with NZ First.

"We're just waiting to see what the actual numbers are. Of course, in the most recent polling, they wouldn't be in Parliament. They haven't made that threshold, so we don't want to get ahead of things by ruling people in or out when they may not even get there."

NZ First has registered at or above the threshold in three recent polls - Guardian-Essential, Roy Morgan and Taxpayers' Union-Curia, and was within the margin of error in the latest Newshub-Reid Research and Talbot Mills polls. Its result in the 1News-Verian poll puts it just outside the margin of error at that level of support.

ACT was an easier pill to swallow for National, Willis saying the two parties share "some alignment on some big-picture things that are important - reducing the tax that working people pay, bringing more discipline to government spending, ensuring better delivery of infrastructure, higher education standards, addressing some of the workforce shortages in hospitals".

"So on the big issues, there's philosophical alignment and of course, we will disagree with each other from time to time - and under MMP, that's okay too."

She called his recent comments about wishing to blow up the Ministry for Pacific Peoples Guy Fawkes-style "unwise".

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