I did a post last night called the poverty trap laying out the bleak situation many people are finding themselves in.
Job losses, rising prices, shrinking incomes. Not a great future for Kiwis, let alone our kids.
Despite the government spin, the economy isn’t in good shape. Look at our government debt and how it has ballooned. And how it will balloon left unchecked.
We need a plan to turn things round. A bold plan to stop our valuable assets being flogged off overseas, to give hard-working Kiwis a break, pay off the country’s ballooning debt and grow our economy. Here’s what we’ve said so far.
People need wages they can live on. A minimum wage that allows people to keep up with the cost of living.
Labour promises a $15 hour minimum wage.
We need to increase our savings and investments in a productive economy. We need to rebuild our economy on the back of exports. Not by selling our assets.
Labour will not sell state assets. You’ll have to wait for policy announcements on the other matters.
We need a fairer tax system where everyone pays their share
The first $5000 of your income, will be tax free.
GST will come off fresh fruit and veges.
Labour will introduce a capital gains tax. It’s predicted the tax will raise $26 billion over 15 years that can be used to pay off
debt, cut taxes for most New Zealanders, save our assets and prepare for the mounting cost of our aging population.
Labour will also put the top tax rate back up to 39 cents for income earned over $150,000.
That’s likely to affect around 2% of the country’s top earners.
A CGT is already in use in nearly all developed countries, including Australia, the United Kingdom and United States.
And Labour will use major government contracts to back New Zealand firms instead of exporting jobs offshore as National is doing.
Cost and quality will continue to be paramount considerations under Labour. But the new procurement policy will in future require companies like KiwiRail anf Govt depts and agencies to consider wider economic benefits rather than just taking a narrow accounting approach. As with CGT, most other countries have strong policies to back local industries and local jobs.
This is for starters. There’s more coming.
Funny how in the election 08 campaign English was railing against Cullen for suggesting borrowing might be needed to weather the recession. From your graph above it confirms what I always thought, secretly the NATS adored Cullen because he was more like one of them in his fiscal control and economic governance.
Clare why oh why do you insist on these own goals like this, government debt is not something you have the moral high ground on. Just before the last election treasury announced forecasts of a decade of deficits. Your party wants to add $18 billion of debt through its current promises.
How much is the “backing new zealand firms” policy going to cost the government? Where are the forecasts for this?
Labour has great policies!
!!!!!!!
Labour’s gunna kick butt!
Pumpkin, you beat me to it. National can at least partially blame a global financial meltdown for their performance in this selective timeline. How much larger will those forecasts be in 2013-2015 once Labour’s full manifesto is released? How much more new spending is there left to announce, Claire? And how will it be paid for?
Irresponsible and reckless spending like this is exactly why your party should not be allowed anywhere near the treasury benches. It seems that the entire western world collapsing under debt right now, and Labour seems hell bent on adding NZ to that pyre.
At least it appears NZ ain’t interested. 29% in the polls means that this will likely be the last we will hear of this madness.
Come on Baron – Cullen was a miser with the surpluses and saved our collective hydes!
!
We didn’t grow enough spud, from 05 onwards the nz productive sector didn’t grow at all, the only parts of the economy that grew were the public sector and property. Exports were flat. Instead of investing in things that made us grow the last government put money into middle class welfare. They needed to win the ’05 election, but interest free student loans and working for families for middle income people doesn’t grow the economy. If the last government had used its time better and tried to do more to lift more people out of welfare and raised the expectations and hopes of the poor in NZ, instead of ignoring them, then we might have done better.
Labour left NZ with no net Government debt and have a plan which will reduce it.
May even get my electorate vote back.
National is up to 17 billion and counting. Not even for recessionary stimulus, but for election bribes to their voters. Just like National Governments in the past.
A Neo-Liberal Government should never be allowed anywhere near economic control ever again, after their past failures.
A increasing number is seeing the sense in Labour and Greens policies.
The total criminal ineptitude of NACT is becoming more obvious by the day.
Busy day for our toryboys: one hand on our family silver, the other gesticulating “look at my big poll!”, one side of the mouth grizzling “it’s all Helen’s fault” with the other screaming “don’t panic!” as their ideology crashes and burns behind their back. Talk about one-handed keyboardists…
Personally, i think if we could move to an ethical business model in New Zealand we would be a lot better off! I don’t blame business as much as our system for creating a climate where companies big and small see us as milk cows and not people. All previous governments have allowed and encouraged this kind of behaviour! If we were charged fair prices for goods and services we would have more to spend and spread around and be healthier in the process. Stop fleecing us!
Is Labour aware that other countries like the US have exemptions on capital disposal after inheritance, capital gains included?
It’s not an inheritance tax dude!
Labour’s tax is nice like that! 
Dan you are misinformed, the US has both a capital gains tax AND death duties for large fortunes.
Some of these policies are very poorly thought out.
For example Labour’s past abolition of youth rates and the proposed increase in minimum wages will have an opposite effect to your good intentions.
Look at Jamaica – the minimum wage was increased from $9 an hour to $12.50 an hour and youth unemployment rates skyrocketed. Now their youth unemployment stands at more than double the national average in the island.
Crime and violence has also shot up and is directly correlated to youth unemployment there.
Just 4 days ago Jacinda Ardern identified that 27.6% of 15-19 year olds are without a job in NZ. Your proposed increase in minimum rates will completely price them out of the job market.
Do you really want us to become the Jamaican youth market of the South Pacific?
Ghost – they also have exemptions of up to $5m.
@Chastain –
http://www.youtube.com/watch?v=9ChADh1zt5I
Oh and Labour’s minimum wage rise did not result in higher youth unemployment!
!!!!
Clare how can you say you’re worried about debt when your plan will increase it by $18 billion without factoring in any of your spending promises?
Thats a new billboard Clare!
I thought it was about time labour used a sledgehammer on national over the debt situation.
So all those people who squealed “show us your policy” as their answer to criticism of National’s complete lack of a plan for 2.5 years didnt really mean it, they just liked the excuse of not having to back up their support of the no plan government with facts.
“John Key
Can the Prime Minister confirm that the Government is currently borrowing $32.5 billion, and that over the next 3 years it intends to increase the level of this debt, despite the worldwide credit crunch; and does she consider this to be mind-bogglingly stupid?”
I would have preferred to see CGT universal with other measures to help first home buyers, but I accept that some concessions have to be made to keep CGT politically viable.
Exemptions are just a bonanza for accountants and lawyers.
It is past time all sources of incomes were treated equally.
Bill English once said that borrowing to save was “nonsense”
Key: ‘we’re sort of comfortable with a notional debt-to-GDP of around about 25 percent, so that’s gross debt’ (always a man with firm positions)
English: 25% gross debt ‘has never been one of our policies.’
English: ‘we aren’t that worried about whether the Crown needs to borrow a bit of money [for] tax cuts’
English: ‘borrowing for tax cuts is wrong’
English: ‘National will release a comprehensive fiscal policy later’
Deleted. Rewrite without the abusive terms if you want it printed. Warning. Clare
Unemployment is also high among groups other than Youth. I think men, Maori, and the 55+ should all be paid less than the minimum wage thereby encouraging Employers to employ them. Clearly, they are all ‘priced out of the employment market’ too. Do I need to write *sarcasm* here?
Nope, that’s actually irrational and the mindset that has brought about Anthropogenic Climate Change, Peak Oil and general resource depletion. Continuing down such a path will continue to make us worse off. Dedicate NZs resources to keeping NZers healthy in a sustainable way is what we need to do. Trade needs to be minimised.
Clare- classic case of meaningless graph. How about reposting it as a percentage of GDP. That is more meaningful. It would also show that despite who is in power, the process is working well. When times are good, debt reduces. When times are bad, debt goes up.
Debt to GDP i expected to peak under 30%. With all the debt crises going on overseas, that is a good result for NZ under the circumstance. Some credit to Labour (though they should have done way, way better given the tail wind of the fantastic commodity boom trough 2005-2008), and some credit to National who have managed to keep debt levels under control and below the critical (to ratings agencies) level of 30% despite the ChCh earthquake which as far as I know is the largest natural disaster ever (in terms of percentage of GDP) to hit a developed country. Somewhere around 8% of NZ GDP versus Japans’ at around 2%.
BTW, nothing I disagree with terribly on your policies, but have you actually costed these? If you actually had costed these you’d perhaps be a bit more circumspect about pointing the finger over debt……….
Arandar, to avoid attacks you probably do
None of these symptomatic remedies deal with the fundamental causes of this problem (or BTW even mention it!!). Global market economics is a theory that has been promulgated for thirty plus years by one sector of the business community (the money from money financial sector) and they alone have benefited from it. The societies of the world however have paid a grave price for this sectors theoretical folly.
The other half of the business community (most of us), the creative sector (manufacturing/retail) which produces NZ’s actual commodity based goods and exports as well as employing by far the biggest section of every community has quite literally been taken to the cleaners (slowly raped).
On top of that, now the global financial community thinks it can forge ahead completely on its own without an effective “marketplace” at all which for the life of me, I find completely bizarre. We have a basic and massive a fundamental systematic problem and no-one’s even talking about it!
All the symptomatic remedies in the world can do anything when the problem is as deep seated as this one is. Unless you can get the whole country back to work which none of the above policies can achieve, then NZ will be in exactly the same place next year and the year after.
Why are political parties so unable to think and react decisively, all dither talk and nothing decisive at all. The problem is very obvious but only when the “asset base” of “asset rich” is seriously eroded, will they begin the process of thinking their way out of what is a basic problem. WAKE UP YOU LOT, THIS IS A HUGE BUSHFIRE and gently relieving yourselves on it is going to do nothing at all!
NZzzzzzzzzzzz! Shhh, you’ll wake someone up!
Schocking crap really.
@Arandar LOL
@Draco and Tracey – Hi
!
I would have preferred to see CGT universal with other measures, such as rent to buy State housing, to help first home buyers, but I accept that some concessions have to be made to keep CGT politically viable.
Exemptions are just a bonanza for accountants and lawyers.
It is past time all sources of incomes were treated equally.
Why would an employer hire a 16 yr old for $15.00 an hour when they can hire an adult for the same rate?
I started my working life on youth rates. I can remember being paid a miserly $4.20 an hour. I think that paying youth rates allows for young people to get their foot in the door.
I think that Labour needs to be seen as a fiscally responsible party rather than a party that will overspend.
There is a commonly held view amongst many working New Zealanders that Labour are a lolly scramble party that are soft on beneficiaries.
I don’t want to see benficiaries put through privation, especially the children of beneficiaries, but I would like to see some policy on how to incentivise working.
National’s policy on reducing the amount of money spent on employing state sector workers was popular with me. Compare the amount the average state employee gets in Wellington with that of a primary school teacher – it’s a big difference.
“Labour are a lolly scramble party that are soft on beneficiaries.” Labour treat bennies exactly as they should be treated – like human beings.
“but I would like to see some policy on how to incentivise working.” – Um, most unemployed want to work but there are no jobs. The benefit is very low and most people do want to have moola
We can help young people get their foot in the door by reducing unemployment, youth rates are unfair – same work same pay!
!
If you incentivise welfare dependency and have no policy around generating new jobs then you will only get more welfare dependency.
Could someone clarify… Where does it state that the increase will be for youth?
No one is incentivising welfare dependency.
Labour does have a plan to grow the economy and create jobs. Unemployment was low under Labour.
Maybe Clare / Tracey we should ask for Policy that is affordable and works. It is so easy to tear holes in every single one of those policies – which being charitable the best thing that can be said is that they are policies you promise from the security of opposition when you know you are going to lose an election.
So easy to disect each policy
1. $15 per hour – will price those on the lowest rungs out of work
2. GST off fruit and Veg – saves maybe 13 cents per person per day – and complicates a good policy
3. Tax “rich Pricks” over $150,000. This will be avoided by many in that category through legal means. Not much revenue in that
4. CGT – will lead to shortage of rental accommodation, will raise little money, will be complicated, and another “envy tax”
I could go on but please answer this. When the electorate votes national back in in 26 Nov will you accept the people have rejected the Labour policy platform and then go about re-constructing your policy base more in line with the thinking of the people rather than ill-thought opportunistic anti-rich prick policy –
The problem for Labour is that you keep talking about a “fair tax structure” but already the small minority are paying the vast majority of the tax take. Even Clever Trevor a few weeks ago on Twitter admitted the middle classes are paying too much tax already -
@Monty so you’re admitting that Trevor is Clever? I’ve always thought so!
!
Spud
@Monty so you’re admitting that Trevor is Clever? I’ve always thought so!
http://www.stuff.co.nz/national/blogs/what-s-he-said/5408520/Cringe-making-politics
Paul, you link to what is satire and almost cartoon-like. Nothing to cringe at, unless you hate the shallow, entertainment-style, populist politics that John Key practises.
And there is plenty to cringe at, with for example Key’s attempts at humour to get onto an American comedian’s show. FFS, he should be acting like the Prime Minister of New Zealand, not touting himself as a comedic clown.
I think the CGT policy from Labour is fundamentally flawed by not including the family home for two reasons.
First, this is where much of the ‘wealth’ created from the last property bubble is locked up untaxed. When another property bubble happens then again the opportunity to tax this ‘new wealth’ will be missed.
Second, it discriminates against those who can’t afford their own home. Why shouldn’t CGT apply to the residential home, when those who are renting will end up subsidising the capital gains of their landlords?
Monty, I think your arguments are very flawed.
Firstly, the CGT didn’t cause the problems you describe in countries where CGT already exist. Any savings off fruit and vegies is a great thing and worthwhile. all those who say hold pay at under $15 an hour should be made to try it. Those on over $150 grand are often in middle management and will declare their income (yes, those with “blind trusts” like our PM may not pay his share granted. If National get back in I don’t see it as an endorsement of National but that some people are blissfully ignorant and are voting for a personality.
Clare, I agree with the Labour party policies you have stated above.
This is for starters. There’s more coming.
Looking forward to it.
And the brown-noser of the year award goes to Sean!
Another myopic fanboy – just what this blog needs.
@pebbles… Yes perhaps NZer’s are voting for a personality in John Key. One day, those in the Labour party will realise the reason why NZer’s are so turned off by Labour at the moment, is the personalities within Labour, the old guard epitomised by the likes of Toxic Trev. Unfortunately his toxic brand of politics seems to be permeating the some of the newer members of the Labour Caucus. Perhaps after the coming election, this maybe realised by the Labour Party and a much needed clean out and refreshing of the parliamentry wing removing the perception (real or otherwise) of the party being run by “the gaggle of gays and self serving unionists”.
Maybe, just maybe then Labour will become a credible opposition and have a chance of taking the treasury benches once again.
It’s great to have so many here to tell us what “New Zealanders” think about everything.
Hi Spud
“they are policies you promise from the security of opposition when you know you are going to lose an election. ” that explains the flipflopping of this government
So people who have an opposing view to your own tracey are not New Zealanders?
Interesting interpretation of a basic statement jeff.
I can handle disagreement was just pointing out that you don’t actually know what most NZers think, you think you do. You might be right but you might be wrong. I know my opinions are, well opinions, I don’t pretend they’re factual.
here are some facts
Key: ‘we’re sort of comfortable with a notional debt-to-GDP of around about 25 percent, so that’s gross debt’
English: 25% gross debt ‘has never been one of our policies.’
English: ‘we aren’t that worried about whether the Crown needs to borrow a bit of money [for] tax cuts’
English: ‘borrowing for tax cuts is wrong’
English: ‘National will release a comprehensive fiscal policy later’
Here is another importantt fact, every poll has Labour heading for a dismal defeat. It does not matter what Policies they put out, it does not matter what Key et al say, the voting public dont like the Labour Party in its present form. The longer it takes them to realise it, the longer they will remain an inept party floundering in opposition
@jeff – it does matter what policies Labour put out, people want to know!
And let’s not say all is lost before the campaign has even begun! 
So, in essence your purpose is to point out all the reasons labour wont’ be in government as justification for National’s poor performance, flip flops, (some of which is referred to above).
I don’t share your view of politics that the party that’s “in’ gets a clear run, unfettered by pesky things like accountability. Something tells me that no matter how labour did in polls including 1999, if you thought they did something they oughtn’t you would have spoken up instead of saying “hang on everyone, the polls say they’re good, that’s enough for me”
Having a Minister of Finance during hard times stating he both believes in borrowing for tax cuts and doesn’t believe in borrowing for tax cuts and then presides over tax cuts is worthy of a closer look.
I am not justifying Nationals alleged poor performance at all. What I am saying is purely and simply with the people Labour has in place, they will not get to power regardless of what policies they have. Have different faces giving the message and the policies and they may stand a chance in 2014