Category: Politics

Source: Radio New Zealand

You might imagine Parliament’s penultimate week before the summer break would involve MPs lurching tipsily between Christmas functions, ministers pinning yuletide bows onto the government’s now-closed annual agenda, and the vibe turning once again to Christmas mince pies and beach cricket.

MPs hoping for that dreamy vision will be sorely disappointed. This week in the House is packed with debating. If any MPs manage to abscond and attend a Christmas function they might well be tired enough to fall asleep in a corner, without the help of festive libations.

Last bill in, first bill out

The Government seems determined to pack in as much work as possible to complete bills already underway. To remove any remaining fest from the festive warm-up the Government began the week by introducing ten brand new bills for debate. One or two new bills is more usual in weeks when any new bills are introduced at all.

Nine bills were introduced at the usual time, before Question Time. A tenth was added at the last possible moment before it was debated under urgency. Why was the tenth bill added so late? It’s unlikely the drafters were desperately scribbling out the concluding sentences. Possibly it was because it was also the first to be debated under an urgency plan that lasts the week. Such a late addition makes it hard for the Opposition to prepare for debate.

That last minute addition was the Resource Management (Duration of Consents) Amendment Bill, which was debated through all stages under urgency – being finally approved on Wednesday morning. It extends expiring resource contents until the end of 2027 while the government’s new RMA plans kick in. That is a logical consideration, though as a blanket move it may have some unintended consequences council would prefer to have avoided.

Opposition speakers did not appear impressed with the process or the available information. Labour’s Rachel Brooking was the first to respond.

“It’s very sad that we are once again in this House on an all-stages urgency bill, with a bill that we have seen only this afternoon. There is a departmental disclosure statement that we have just picked up off the Table now… . But it is quick reading because it just says ‘no, no, no, no, no, no, no’. Has there been a regulatory impact statement? ‘NO.’ Has there been a proper analysis of how many consents this will apply to? ‘NO.’ No, no, no, no, no-that’s all we see in this report.”

The bills under urgent debate

Debating under urgency is the order of the week. The plan includes seven first readings, some of which are among those ten new bills, as well as four other bills already under consideration. Briefly here are the other bills receiving first readings:

The Emergency Management Bill (No 2) makes changes to both national agency and local body powers in regard to national and regional emergencies.

The Arms Bill repeals and replaces the Arms Act 1983. It says that it “reduces the burden on licence applicants, licence holders, and the Arms Regulator.” In fact it replaces the arms regulator, removing it from the police.

The Crimes Amendment Bill does a lot of things including changing the rules around citizens arrests and ‘property defence’. It changes offences and penalties around people trafficking and smuggling, and slavery offences. It creates new offences for assaults on first responders or corrections officers, and makes it worse to kill someone when they didn’t see it coming (the so-called ‘coward punch’). It also increases penalties for undertaking theft in an “offensive, threatening, insulting, or disorderly manner.” Polite thefts only please.

The Climate Change Response (2050 Target and Other Matters) Amendment Bill almost halves New Zealand’s biogenic methane reduction target to as little as a 14% reduction by 2050. Fear not though, it also institutes a review of the new reduction plan – for which review you have only to wait until 2040. While many of the first readings this week are only under urgency for their first readings (meaning they will be sent to a select committee for public feedback), the methane bill is going through all stages under urgency, thereby avoiding public feedback. Why it is more urgent than the other bills is not obvious. The methane target change aspect of it (which is the bulk of the bill), is not urgent so possibly this is about avoiding public and science feedback in committee.

The Public Works Amendment Bill follows on from a review into how governments can improve the efficiency and clarity of acquiring land through the Public Works Act. One change it does make is requiring consent from the Minister for Māori Affairs when governments intend to take protected Māori land for government work.

The other bills being completed this week under urgency

The Fast-track Approvals Amendment Bill consolidates the controversial fast track legislation enacted last year (itself partly under urgency). This amendment was sold by the government as helping increase competition in the supermarket sector. Controversially, public submissions were only open for ten days. The bill is slated for debate on three remaining stages. You can read more about it here.

The Animal Welfare (Regulations for Management of Pigs) Amendment Bill softens the current plan to ban farrowing crates and mating stalls on pig farms. This bill also has three debating stages remaining that the Government wants completed this week. You can read more about it here.

The Electoral Amendment Bill makes a number of electoral law changes. Notably it sets a much earlier deadline for enrolling to vote-13 days before election day. It also disqualifies all sentenced prisoners who are detained in prison from enrolling or voting (despite court findings that this, as well as the current less absolute ban, are contrary to the New Zealand Bill of Rights). You can read more about it here.

The Overseas Investment (National Interest Test and Other Matters) Amendment Bill seeks to ease restrictions on investors from outside of New Zealand and process low risk investment applications more quickly. You can read more about it here.

The Judicature (Timeliness) Amendment Bill aims to include the time it takes for cases to go through the courts by improving the resources available to judges and marginally increasing the number of high court judges. It is being sent back to the Committee of the Whole stage so the Government can undo their mistake of accidentally voting for a larger increase in the number of judges, an amendment suggested by Labour.

The week’s whole plan involves progressing 12 different bills through 32 stages of debate. That is a lot of work, and the urgency motion required to achieve it will mean the House will add extra hours from Wednesday, sitting from 9am until midnight (with meal breaks). It can continue like that until Midnight Saturday.

It’s not impossible that by the time MPs get to Christmas they will be sobbing gently under the tree. When the week will actually finish is anybody’s guess.

*RNZ’s The House, with insights into Parliament, legislation and issues, is made with funding from Parliament’s Office of the Clerk. Enjoy our articles or podcast at RNZ.

– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Finance Minister Nicola Willis is rejecting claims she’s indulging in a sideshow as she gears up for a debate against her early 90s predecessor Ruth Richardson.

The Labour Party is characterising the “public duel” as a distraction from what really matters to New Zealanders. Willis says it’s substance.

Willis threw down the gauntlet on Tuesday, [https://www.rnz.co.nz/news/political/581282/anytime-anywhere-nicola-willis-challenges-ruth-richardson-to-debate

challenging Richardson to “come out of the shadows”] ahead of an expected Taxpayers’ Union “pressure campaign” pushing for more aggressive cuts to spending and debt.

Richardson, who chairs the lobby group, initially laughed it off. But the Taxpayers’ Union later issued a media release, saying Richardson was “more than happy” to debate.

Appearing on Morning Report’s politics panel on Wednesday, Willis said discussions were underway with various media outlets about the date and location.

“When people make newspaper advertisements alleging that somehow we can literally cut billions of dollars overnight and do this job immediately upon assuming office, I don’t think that that’s very realistic,” Willis said.

“I’ve thought that through and I want to debate it.”

But Labour’s deputy Carmel Sepuloni, also on the panel, questioned whether the debate was the best use of Willis’ time: “It just sounds like flexing.”

“This is not… an area of primary concern for New Zealanders,” Sepuloni said.

“They want the government to be focusing on the things that matter: jobs, health, homes and real action on the cost of living. Not having duels with former ministers of finance.”

Willis fired back, saying she was focused on getting the books back in balance and doing “a huge tidy-up” of the public finances.

“I’m having a policy debate about issues which Labour likes to think aren’t important, but are important,” Willis said.

“If New Zealand racks up more and more debt, the people that pay for that are future generations… debt remained level last year after years of it actually doubling under Labour. So we’re doing that job.”

Richardson is most well known as the architect of the ‘Mother of All Budgets’ in 1991 which delivered deep cuts to government spending on welfare and social services.

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Source: Radio New Zealand

The Minister for Disability Issues is seeking advice on the Supreme Court’s decision that parents who care full-time for their disabled children are employees of the government and should received the same benefits and protections.

Louise Upston asked the Disability Support Sevices, a government unit that was responsible for supporting disabled people and their whānau, to consider the ruling “carefully”.

The decision was released on Tuesday, in favour of recognising both Christine Fleming and Peter Humphreys, who care full-time for their disabled son and daughter, as ministry employees.

For carers not to be recognised as employees meant they weren’t entitled to things like holiday pay and protection against unfair treatment – and during the April hearing, lawyers said the issue could potentially affect thousands of family carers.

Upston said existing care arrangements would continue while the investigation by Disability Support Services took place.

She said the government had already announced changes that would give more consideration to the needs of family, whānau and carers.

Disability advocate Jane Carrigan, said the decision had huge implications for at least 10,000 family carers.

She said the decision could not be ignored.

“These issues have really been before the courts for the last two-plus decades. But this is the first time we’ve ended up in the Supreme Court, so we’ve finally got a decision the government aren’t going to be able to ignore.”

Humphreys, who cared for his 37-year-old daughter Sian, told Morning Report, he was “really happy” with the decision and it had been a long track through the courts.

“Hopefully its come to an end this time.”

He said the case began for him when his family moved into a house and needed a bathroom modification for Sian’s health and safety.

“When I applied to get some funding to assist with that I was told no, I had to be means tested. I asked the question, what other employee is means tested to alter a bathroom for their employer?”

He said his case had been running through the courts in parallel with Fleming, so it was ideal that judges were able to hear both cases and see the different dimensions between each case.

“My wife Maria and I have been together 43 years, we have two of us doing it [caring], but often it’s one-person doing it. Often the mum is left at home looking after a person.

“You just get on with life because you’ve got no choice really.”

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Source: Radio New Zealand

Former Finance Minster Ruth Richardson has agreed to a challenge from the current finance minister to debate her.

On Tuesday morning, Nicola Willis challenged Richardson, who was Finance Minister from 1990 to 1993, to a debate.

The challenge, Willis said, was because the Taxpayers’ Union was preparing to launch a pressure campaign against her.

Richardson is chair of the organisation.

“My message for Ruth Richardson is a very clear one, come and debate me face to face. Come out of the shadows. I will argue toe for toe on the prescription that our government is following,” Willis said.

“I reject your approach and instead of lurking in the shadows with secretly funded ads in the paper, come and debate me right here in Parliament.

“I challenge any of these media outlets here to host that debate. I’m ready anytime, anywhere. I will debate her. She needs to come front up face to face.”

Richardson had earlier laughed when RNZ asked her if she would debate Willis, and made no apologies for the pressure campaign.

“I came to Parliament as a minister of finance. She is the minister of finance. She has to make the calls.”

On Tuesday afternoon, Taxpayers’ Union spokesperson Tory Relf said Richardson was more than happy to debate the government’s debt, levels of public spending, balancing the books, and growth.

“The government promised to reduce public spending. It’s now higher than when Grant Robertson left office,” Relf said.

“The government promised to tackle Labour’s 30 percent increase in bureaucrats. They’ve managed to reduce the size of the core public service by not even one percent.”

Relf said all National Party finance ministers since Robert Muldoon have had to tackle structural deficits inherited from Labour, and Willis’ challenge was no different from Richardson’s or Sir Bill English’s.

“The government promised to get the books back into surplus. Unless you count a newly invented OBEGALx measure, the government’s fiscal pathway never gets New Zealand back into surplus,” Relf said.

“The government promised ‘growth, growth, growth’. GDP per capita is lower than when Grant Robertson was in office.

“The government promised to reduce borrowing. Borrowing is still near Grant Robertson-era levels.”

The Taxpayers’ Union confirmed Richardson was ready to debate the country’s fiscal position after the release of the Half-Year Economic and Fiscal Update next Tuesday.

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Source: Radio New Zealand

Parliament has been briefly interrupted following a protest from the public gallery, calling on the government to sanction Israel.

Question Time was just beginning as the call “free Palestine” rang out from above the chamber.

“For two years this government has refused to take its obligations to the genocide convention.”

Around 10 people joined in, chanting “Christopher Luxon you can’t hide for supporting genocide”.

They also floated leaflets into the debating chamber, with demands such as expelling the Israeli Amassador and to cut all cultural and academic ties.

The protesters were removed within two minutes, while the Speaker watched quietly before acknowledging the “impromptu performance” from the “friends in the gallery.”

“A little bit of poetry, and lots of perforative art as well.

“I think we’ll now progress to questions for oral answer.”

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Source: Radio New Zealand

The government unveiled its proposed replacement bills for the Resource Management Act on Tuesday afternoon, totalling about 750 pages.

Here’s five key details:

Two new laws, in effect by 2029

Two new laws will replace the Resource Management Act.

The Planning Bill will lay out how land can be used and developed including planning for housing growth, while the Natural Environment Bill will lay out the rules for managing the use of natural resources and protecting the environment.

Each of these will have “goals” the system needs to achieve, and rules limiting what councils can regulate.

They were introduced to Parliament around the same time as the system was announced, and the government plans to have them passed by the end of 2026, and fully operational by 2029.

A transition period allowing some of the new system to kick in while extending the expiry date of current consents – mostly out to 2031 – two years after the transition period is expected to end.

The government intends to urgently pass legislation in the coming days to enable the transition.

Fewer plans, fewer consents

The new system aims to streamline and simplify consenting processes, saying this will save money and improve productivity by curbing compliance costs.

It reduces the more than 100 policy statements and plans across 78 local authorities down to 17 Regional Combined Plans, which will take two years to develop.

Many more activities will be considered permitted by default, and the number of consent categories will be reduced to four.

Zoning will be standardised, and National Standards will set out cookie-cutter approaches to consenting, planning, information gathering, and environmental limits – so all councils are working from the same basic approach.

The government expects the reforms to save $13.3 billion over 30 years, and increase Gross Domestic Product by at least 0.56 percent annually by 2050.

Several current rules from the RMA for things like farming will be scrapped and standardised.

Property rights

One of the main principles laid out in the new system is a new approach to “regulatory relief”, also known as “regulatory takings”, which basically means compensation for when people’s rights are impacted on by regulation.

In this case, local councils will be required to compensate land owners for “significant” impacts on any privately owned land.

This could take the form of cash payments, rates rebates, extra development rights, no-fee consents, land swaps, or the provision of expert advice.

That’s a higher threshold than under the current RMA system, where such compensation is limited to extreme scenarios where land is considered unable to be reasonably used.

A new planning tribunal would help decide what to do if landowners and councils disagree.

‘National instruments’

National Standards and National Policy Statements will set out the government’s priorities and direction in a regime that expands on the current approach.

Some of the existing national policy statements will be incorporated into the new system.

The government intends to set out the initial instruments out in two stages, the first in late 2026 and the second in 2027.

Iwi authorities will have input into the national instruments.

The environment will be protected through environmental limits, which set out maximum thresholds for things like pollution which cannot be breached – or if they are, councils will plan how to correct it.

Repeal, replace and reform

The overall thrust of the system somewhat resembles the reforms Labour passed shortly before the 2023 election.

The emphasis on property rights is one key difference, alongside the goals set out in national direction and the purpose statements setting out how the laws should be interpreted.

The coalition scrapped Labour’s regime as one of its first actions after coming to power in 2023, returning New Zealand to the previous Resource Management Act while writing up its own new version.

Coalition reforms to local councils – including limits on what councils can spend on and increased monitoring of council decisions, the abolition of regional councillors, and a new rates capping regime form another plank of the changes the government is pushing ahead with.

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Source: Radio New Zealand

The coalition’s replacement of the Resource Management Act (RMA) will force councils to compensate landowners for significant restrictions that impact developments.

It will be an additional challenge for councils facing rising costs and widespread changes in other areas, including restrictions on what they are able to spend funding on – and an incoming 4 percent cap on rates increases.

The reforms follow a similar model to Labour’s attempt, aiming to creating two new laws – a Natural Environment law and a Planning law.

More than 100 reporters, stakeholders commentators and officials spent two hours going over the documents ahead of the official release at 1pm, revealing the information all at once to avoid market disruption.

The planning bill would lay out what infrastructure is needed and when, with land secured for key infrastructure like roads, schools, and utilities. Regional policy statements are being scrapped and replaced with ‘Regional Combined Plans’ which include spatial planning, environmental planning, and land-use planning.

Zoning – currently up to councils, with more than 1100 different zones across the country – will also be standardised, with new “overlays” providing additional and sometimes stricter rules for specific areas where consents would normally be permitted.

The government estimates its new system will save about $13.3b over the next 30 years and increase GDP by 0.56 percent a year by 2050.

The changes, introduced to Parliament on Tuesday afternoon, would be passed in 2026, with another bill to be passed “in coming days” in “coming days” to extend current consent expiry dates.

Until the main bills take effect, new consent applications will still be able to be made. Current consents will also be largely extended to 2031, two years after the main legislation takes effect, under a bill the government expects to pass urgently in “the coming days”.

The legislation will include “descriptive, non-operative” Treaty of Waitangi clauses listing specific provisions that relate to the Crown’s Treaty obligations, and “clear requirements for iwi participation in the development of national instruments” like the national policy statements and national standards.

Councils will also work with tangata whenua to identify significant sites and apply rules and policies in line with the national standards.

RMA Reform Minister Chris Bishop said he did not think the legislation would weaken Maori rights, rather providing additional clarity.

Like Labour’s approach, consenting would be largely standardised, with many activities deemed permitted so no consent is needed and new national standards giving councils requirements to develop plans and make consenting decisions. Also resembling Labour’s approach, regional spatial plans will set out 30-year planning for infrastructure in each region.

Labour’s approach reduced the number of consenting categories to five, the coalition reduces it further to four: permitted, restricted, discretionary and prohibited.

The coalition repealed Labour’s version as one of their first orders of business, reinstating the Resource Management Act until they could bring in their own replacement.

There are key differences to Labour’s version.

One is an emphasis on regulatory takings – a concept that was also a key feature of the Regulatory Standards Bill. In this case, councils would be required to compensate landowners, including through rates remission and other measures.

Under the RMA, compensation is limited to extreme scenarios where land is considered unable to be reasonably used; the new system would lower that threshold to where impacts of regulation on all privately owned land are “significant” under a new framework.

Instead of shifting to a system focused primarily on environmental limits the coalition will have a mix between the effects-based RMA and the limits-based approach. However, fewer effects would be able to be considered as part of the consenting process. Limits would be set out in national direction documents.

The new approach would also come into effect much faster than the decade-long process Labour envisioned, with the first suite of national instruments expected in place by the end of 2026.

Planning would be largely up to a new planning tribunal which would also be tasked with resolving disputes about how councils provide compensation.

The RMA Reform Minister Chris Bishop also highlighted simplified purpose statements in the legislation which would avoid complexity and litigation.

Labour’s version also aimed to have a Climate Adaptation Bill which would intersect with its other legislation, but the work on that was not completed before the party lost power in the 2023 election.

A new national regulator may also take over enforcement, which is currently up to councils and inconsistent across the country, depending on advice to the government. This would be progressed through separate legislation if the government decides to take it up.

Where Labour’s bills totalled about 900 pages, the coalition’s version is a little shorter at about 750 pages. That total – in both cases – also does not include the respective fast-track laws, the transitional bill the government is passing, the coalition’s local government reforms, or the potential new national regulator.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Nicola Willis has challenged former National Party Finance Minister Ruth Richardson to debate the country’s books at Parliament.

The Taxpayers’ Union is poised to launch a “pressure campaign” targeting Willis in an effort to convince her to cut spending and reduce debt.

Heading into National’s caucus meeting on Tuesday morning, Willis said it was clear the campaign was being driven by Richardson, who is chair of the Taxpayers’ Union.

“My message for Ruth Richardson is a very clear one, come and debate me face to face. Come out of the shadows. I will argue toe for toe on the prescription that our government is following.

We’ve had a lot of good publicity for our campaign launching very soon, and now it is our turn to say what it is all about. The campaign is about @NicolaWillisMP becoming our best ever finance minister. No one wants her to succeed more than than Taxpayers’ Union to cut wasteful…

— New Zealand Taxpayers’ Union (@TaxpayersUnion) December 7, 2025

“I reject your approach and instead of lurking in the shadows with secretly funded ads in the paper, come and debate me right here in Parliament.

“I challenge any of these media outlets here to host that debate. I’m ready anytime, anywhere. I will debate her. She needs to come front up face to face. Put her face to he words.”

Willis said she stood by her decisions in government and wanted Richardson to “defend her legacy”, having introduced the infamous ‘Mother of all Budgets’ in 1991.

“What I want is a straight up honest debate to really analyse some of the claims that she and her associates are making, to argue about actually what the impact of some of the things that she is calling for would be on everyday New Zealanders and their families, to test what her tolerance for human misery is and to understand why it is that she is prepared to reject our government’s economic approach in ads, but won’t front up.”

Richardson laughed when RNZ asked her if she would debate Willis.

“I came to Parliament as a Minister of Finance. She is the Minister of Finance. She has to make the calls.”

She made no apologies for the pressure campaign.

“The issue of very vulnerable fiscal position and the structural fiscal deficit is bread and butter for the Taxpayers’ Union and we are seeking to hold the feet of the Minister of Finance to this fiscal fire. Her Treasury are shouting, ‘fire, fire’. We have a structural deficit. This cannot go on. It needs to be addressed.

“This is not an issue about personalities. This is an issue about policy.”

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Source: Radio New Zealand

Happy birthday, GST. You probably pay it every day – 70c or so on a bottle of milk, $150 on an airfare.

But did you know the tax, which is applied to almost everything you buy, has turned 40?

This December marks 40 years since the law changed to allow Goods and Services Tax (GST) to be introduced in New Zealand. It took effect the following October.

Alan Bullot, a GST expert at Deloitte, said there was a lot to celebrate about the tax.

“New Zealand certainly wasn’t a trailblazer, but the GST legislation we brought in in New Zealand is seen universally as almost being best practice from a tax design point of view.

“It has a broad base that has very few exceptions and it just gets on with the business of what the tax is supposed to do, which is collect some money for the government to go off and do what the government needs to.”

He said when GST was first introduced in New Zealand, about 30 or 40 countries had a similar tax.

“Now, it’s the vast majority of countries other than America that have a national GST or VAT regime.

“Governments just love GST or VATs because they can forecast its collection a lot better because it functions over the whole economy. It’s a test of what the economy is doing.

“If you think about company tax, if I make a profit Inland Revenue can say ‘you made a $100 profit in the company and 28c is coming in’. That’s great, but if I’ve made a loss for two or three years, even if I made a profit of $100 this year the government might not get anything because I’ve got to go through my loss that’s in there.

“It’s much harder for the government to forecast exactly how much money will be coming in from income tax.”

More change coming?

Over the years, the rate has lifted from 10 percent to 12.5 percent to the 15 percent we now pay.

Bullot said it had also had to keep up with technology.

GST now applied to almost all international purchases imported into New Zealand.

“If you think about 1985, you might have heard of a CD. You may have seen a CD, that would be the pinnacle of music. You would have had a Walkman, you certainly weren’t able to download endless amounts of songs from overseas, you couldn’t download any movies.

“If you wanted to order anything online you couldn’t. If you wanted to order something from overseas that would have been pretty difficult… it was just so different in terms of the way that things would operate.

“The fundamentals of GST haven’t changed, but it has had to keep adapting to the economy it operates in.”

Every so often, there are calls for GST to be taken off things like public transport or food. Bullot said that was possible, but there would be drawbacks.

“Every time you do that, you add a bit of additional complications for businesses that are having to deal with it. And more to the point, if you’re not collecting it here, where are you collecting it?”

Bullot said Australia had more exemptions than New Zealand, but had been discussing whether to increase its coverage.

Treasury recently calculated that if nothing else were to change, GST might have to increase to 32 percent to cover the cost of an ageing population.

Bullot said another option would be not to have income tax but to charge a much higher rate of GST.

“Would people accept the doubling of GST?”

He said he could not see a future where GST was not a very significant part of the tax take.

“I think that it will stay that way. I think it is unlikely for it to increase from this rate from a practical political perspective. I think it is much more a case of we just need to keep making sure that it’s fit for purpose.”

He said Inland Revenue should change the rules if GST was not working as intended over time.

“I think Inland Revenue needs to be able to use that power perhaps a little more frequently sometimes rather than us going into sort of long technical debates… Sometimes we should just say what’s best for ‘New Zealand Inc’ and let’s move on.”

He said it was notable the level of GST tax debt had also increased recently and the government would need to continue to take action on it.

“I think it really needs to be a focus, because GST isn’t working if we’re getting information on returns but no cash. GST’s job is to collect large amounts of money in a consistent manner for the government, for the government to do the government’s programmes with the least amount of economic damage to the country in terms of compliance costs, uncertainty…

“Businesses can work around odd rules as long as they can see that they’re going to be there and they’re not going to flip and change.”

Is the tax regressive?

A major criticism of GST is that it is regressive because lower-earning households tend to spend more of their money, and spend more of it on things that attract GST.

Bullot said when the tax was introduced, benefits were increased to help cover the cost. He said the tax might not be as regressive as some people worried.

“When you look at what people in the lower incomes are spending their money on, a lot of it is residential rent, which is one of the big aspects that doesn’t have GST charged on it.

“Whereas if you are going out and you’re lucky enough to be in the financial position to buy a new house, for instance, when you’re buying that new house off the developer and say that was $500,000, you’re paying them $75,000 GST on top of that.”

Financial services and rent were some of the few things exempt from GST.

Could we introduce a tax like this now?

New taxes tend to be politically difficult. Bullot said the environment was different in 1985.

“It was coming in as part of a range of things… the floating of the New Zealand dollar, deregulation, we had a wage price freeze not many years before that, we’d had carless days and the GST coming through was just another one of those things.

“There was some pushback ,but not massive amounts, and there were significant cuts in the top rate of income tax.”

Good sales pitch

Infometrics chief forecaster Gareth Kiernan said it helped that the tax replaced other complicated sales taxes, and happened alongside income tax cuts.

He said income tax was almost 75 percent of the tax take in March 1986, and that had dropped to 69 percent in June this year as the share of GST lifted to 24.4 percent.

The top income tax rate dropped from 66 percent two years later.

“The pre-MMP political environment was such that large changes could be made relatively easily, whereas political policy now is often very much about compromise between the various parties in the governing coalition.

“Interestingly, the yearbook also notes reviews in 1967 and 1982, both of which recommended greater reliance on indirect taxes, with mention also being made of the need to reform existing indirect taxes – so it wasn’t like GST was something that came completely out of the blue.

“I can’t comment on the sales job that Labour did around introducing GST in the 1980s, but it must have been reasonably good, given that the party was re-elected in 1987.

“Perhaps an analogy can be drawn with the current (longstanding) debate about capital gains tax. From an economist’s point of view, a move to tax profits on property more fully is a positive, because it means that person who has lots of money and assets would then be taxed more fully than currently, compared to the low-asset wage-earner who doesn’t have the ability to tap into these tax-free gains.

“It seems to me that the problem is in the sales pitch, which for the last six years has been ‘here’s a new tax’, rather than ‘this tax change will enable us to reduce income tax for the 80 percent of the population who aren’t property investors’.

“But even with its recent announcement, Labour was finding new ways to spend money from the additional tax, rather than just looking to make the tax system fairer.”

Economist Shamubeel Eaqub said he thought it would be possible for a government to do something similar with a tax on capital.

“It will happen with the political calculus of bankrupting our grandchildren forces us to.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

The government will release its long-awaited replacement to the Resource Management Act, which the Prime Minister has described as a “game changer” for New Zealand.

Details of exactly what the replacement will look like will be revealed on Tuesday afternoon, but the government has already signalled the RMA will be replaced by two new pieces of legislation.

Both pieces of legislation will have more of a focus on private property rights.

A Planning Act will be focused on regulating the “use, development, and enjoyment” of land, while the Natural Environment Act will be focused on the use, protection, and enhancement of the natural environment.

On Monday, Christopher Luxon said the RMA was “broken” and was the “root cause” of many of New Zealand’s economic challenges.

“Everyone knows that the RMA is broken,” he said.

“It has held us back for 30 years, and it’s turned us into a country that says no far too often. With our government’s new planning system, there will be less talking and filling in forms, and more building, and more growing.”

Luxon said officials had estimated up to 46 percent of consent and permit applications required under the existing RMA could be removed under the new planning system.

Shortly after the coalition came into government it repealed Labour’s replacement of the RMA, which had only passed into law two months before the election.

The Natural and Built Environment Act and the Spatial Planning Act were instead replaced by the old RMA until the coalition could introduce its own replacement.

Despite repealing Labour’s reforms, Luxon said the government had reached out to Labour to seek bipartisanship on its own reforms.

Labour leader Chris Hipkins said he had a few “informal conversations” with RMA Reform Minister Chris Bishop about the legislation.

“I don’t think that this merry-go-round of constant repeal and replace, repeal and replace, repeal and replace, is sustainable,” Hipkins said.

“So if we can find ways to support large parts of what the government are doing, we will do that. If there are areas where we disagree, we’ll be clear on what those areas are. But they won’t necessarily involve a whole other cycle of repeal and replace.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand