21 Feb 2024

Labour must settle on 'a clear fiscal plan' in time for next election - Edmonds

8:54 am on 21 February 2024
Barbara Edmonds at announcement of Finance role for Labour

Labour's new finance spokesperson Barbara Edmonds. Photo: RNZ / Angus Dreaver

Labour's new finance spokesperson Barbara Edmonds will weigh up tax reform, such as a wealth tax, in the coming months, as she helps the party settle on "a clear fiscal plan" in time for the next election.

Edmonds is coming to grips with her new role, as the Labour Party is set to lose one of its most influential politicians of the last 15 years with the retirement of its finance spokesperson Grant Robertson.

Announcing his retirement next month, he said he'd given his all to a career in parliament that included three years as deputy prime minister and six as finance minister.

Robertson is to be replaced by Mana MP Barbara Edmonds who moves from 11 to four in the party's lineup.

When asked on Morning Report about her view on tax reforms such as bringing in a wealth tax or a capital gains tax, she said she wanted to look at revenue being earned that wasn't taxed.

"It is something that Labour will need to take into the next election, a really clear fiscal plan, and tax is a part of it."

She added: "I think there's a case for re-examining all the different revenue bases that we need to look at, because we do have some really long-term pressures on our fiscal position."

She refused to say whether she supported Robertson's recommendations for a wealth tax taken to Cabinet around six months before last year's election.

She preferred to "draw a line in the sand" on what position she had taken at the time.

"I need to start again in my own shoes and have a look at what we need to do. But there's also a party process too and I'm going to respect our party process and go through that."

Edmonds disputed that the country's economy was in a "fragile" state as described by the prime minister and finance Minster this week.

She said "headwinds" for the economy had been identified by the Labour government and was a reason it introduced some of its policies in its last two years in power.

Her style was to be fiscally prudent.

"Surpluses are something that every Finance Minister will want to achieve, the question will be around what timeframe and the books will determine what that looks like."

Finance Minister Nicola Willis' Budget Policy Statement, due out in March, would determine where the operating allowances would be for the minister and they would also clarify the choices that needed to be made.

As far as earning the trust of New Zealanders, especially regarding debt levels, she said she did not apologise for Labour's spending during the Covid pandemic and then the response to Cyclone Gabrielle and the Auckland floods.

While some were criticising Robertson for not reducing government spending faster, she said she supported his approach.

The country's gross domestic product (GDP) is 32 percent now and was at 27 percent when Labour took power and it had run the economy during the pandemic and two major natural disasters.

"Yes I do want to be a prudent finance minister in the future, yes I want to bring us back to surplus but at the same time we have some really big challenges."

She nominated infrastructure as one of those challenges and said Labour might have to consider other ways of funding what needed to be done.

She would be focusing on expanding her networks in sectors such as business, unions and the rural sector over the coming months, she said.

Edmonds paid tribute to Robertson and agreed she had "big shoes to fill".

Wealth tax not a factor in Robertson's retirement - Hipkins

Labour leader Chris Hipkins

Photo: RNZ / Angus Dreaver

Party leader Chris Hipkins said Robertson's decision was not related to Hipkins' ruling out a wealth tax and the social insurance scheme for Labour's election policy last year.

Hipkins said it was natural for politicians to want to move on after being in the job for several years.

He said all governments had to work out the best and fairest tax system and this country had some gaps.

It was one of the few that relied only on personal income tax for revenue.

The issue needed to be looked at in the context of broader economic policy and the strategy and priorities for government spending.

"It's not just about tax, it's about all those other things too."

Hipkins said he was determined that by the next election Labour would have worked out a tax policy that was credible and deliverable.

"It's not the kind of work you do overnight."

The broad parameters would be laid out, however, the specifics would probably not be released until "close to the election" - just as National and other parties did last year.

'Thoughtful, considered and quick on his feet'

Kiri Allan

Kiri Allan Photo: RNZ / Samuel Rillstone

Former Labour MP and Minister Kiri Allan said when she joined the Labour Party at 18 Robertson was already "an institution".

"Grant as a person was somebody who just wrapped up young talent, provided a real sense of guidance and wisdom and ... throughout all our political careers, remained somebody who you could pick up the phone and say: 'hey chief, can you walk me through this?'

"He was one of those guys who really loved people."

Allan said he was a formidable performer in Parliament.

"When you see that cheeky little smile you know exactly what's coming. He's very thoughtful, considered and quick on his feet. Just knows his stuff as well.

"He was groomed under the likes of Sir Michael Cullen, one of the most exceptional people in the House."

While Robertson's departure was a sad loss for Labour, it would be a relief for the opposition, Allan said.

He accompanied her to some of the hardest hit areas of Tai Rāwhiti after Cyclone Gabrielle.

"Grant was the type of person that when he had his feet on the ground up in some of those communities that were the hardest to reach he listened deeply and it was the way I saw him construct his approach behind closed doors that gave me an insight into the depth and breadth of that person."

He "led with his heart" in trying to help those communities solve their problems, she said.

Regarding his sports portfolio, she said he played in a leading role in helping New Zealand secure three pinnacle women's events - the Cricket World Cup, the Rugby World Cup and the FIFA World Cup which were held over a period of 18 months.

"It's just an epic legacy that he seeded in so many young men and women, boys and girls that we're going to see the legacy of in years to come."

She hoped Robertson would now get the opportunity to put some of the aroha he had showed to others to himself and his whānau.

Get the RNZ app

for ad-free news and current affairs