Latest / Best of Business / Barbara Edmonds: Labour finance spokesperson on the party outlining their new fiscal plan

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Barbara Edmonds: Labour finance spokesperson on the party outlining their new fiscal plan · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk zed B.
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  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Labour wants us to prove it can be trusted with
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  Speaker 2: the government's box. They're promising a return to surplus by
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  Speaker 2: I think it's twenty nine thirty lower debt without but
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  Speaker 2: without the spending restraint that National says is necessary. So
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  Speaker 2: they've got to unveiled a new set of fiscal rules
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  Speaker 2: today with the promise of balancing the box, bringing down debt,
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  Speaker 2: restoring the Well Being Report, and perhaps most interestingly, restoring
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  Speaker 2: the Reserve Bank duel mandate. But with both major parties
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  Speaker 2: promising fiscal responsibility, what's actually a different different and why
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  Speaker 2: should any of us care anyway? Look, she was only
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  Speaker 2: with us a couple of weeks ago, so obviously a
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  Speaker 2: huge fan of the show. Labour's finance spokesperson Barbara ed
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  Speaker 2: Edmonds is with me now.
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  Speaker 3: Barbara, Hi, Hi, Good afternoon, Tim, And you're definitely a
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  Speaker 3: fan of the show, particularly going to speak to Janet afterwards.
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  Speaker 3: Jennet zachar I went to law school with Janet. She
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  Speaker 3: is absolutely a gem and she was to law school
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  Speaker 3: even after doing accounting and it was a partner in
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  Speaker 3: a firm. She's amazing.
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  Speaker 2: Well, oh, thank you. I'll pass on your best wishes
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  Speaker 2: to when I see her and in a couple of hours. Hey, look,
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  Speaker 2: I'm just going to come at this from a punter's
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  Speaker 2: point of view, and I hear because National and Labor
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  Speaker 2: both talk about that you're the fiscally responsible ones and
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  Speaker 2: you want to bring a surplus and you want debt down.
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  Speaker 2: Why should I get excited about this? What's different about
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  Speaker 2: what you've announced today.
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  Speaker 3: Well, actually one of the exciting things that you didn't
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  Speaker 3: mention in that little introductory was establishing a Parliamentary Budget Office.
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  Speaker 3: So this Parliamentary Budget Office, which will be an officer
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  Speaker 3: of Parliament. Their job is to improve fiscal transparency through
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  Speaker 3: independent analysis of the government books as well as election commitments.
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  Speaker 3: So other countries in the world, such as the US, Australia,
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  Speaker 3: the UK, they have these Parliamentary Budget officers, so that
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  Speaker 3: especially around election time, it becomes a content of policy
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  Speaker 3: ideas rather than who's got the biggest black hole, because
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  Speaker 3: actually most punters don't actually know which side whatever side,
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  Speaker 3: which hole whatever. But the main thing is this is
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  Speaker 3: an independent unit that is set up to basically provide
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  Speaker 3: to sort of nullify that.
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  Speaker 2: Is that different? I can't remember who was talking about
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  Speaker 2: the you know, let's get everyone's election promises costed. Is
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  Speaker 2: this a little different because it's around a scrutiny of
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  Speaker 2: budget statements and promises and all that sort of stuff
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  Speaker 2: when the government's.
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  Speaker 3: In power as well. Yeah, as well. So they do
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  Speaker 3: a budget, they'll do a commentary the day after budget.
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  Speaker 3: For example, the Australian PBO, they do a snapshot of
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  Speaker 3: the budget, which is really easy for New Zealand or
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  Speaker 3: for Australians to understand what's happened in budget. But the
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  Speaker 3: other thing is parties still have to do their own
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  Speaker 3: you know, we'll need to do some form of costings
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  Speaker 3: or instructions that will be provided to the Parliamentary Budget
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  Speaker 3: Office and they'll just provide a comment. Whether they're saying, well,
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  Speaker 3: this is this is our rough estimate of what it's
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  Speaker 3: going to be. It just removes that you know, it's uncosted,
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  Speaker 3: it's costed, or your modeling is worse than my modeling,
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  Speaker 3: and it just means that you can take that out
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  Speaker 3: of the argument and people can be like, well, actually,
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  Speaker 3: do I like having a twenty dollars fare cap on transport.
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  Speaker 2: Yes or no? Yeah? Okay. Now the other thing is
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  Speaker 2: so I'm sorry to do the comparisons. It's inevitable. That's
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  Speaker 2: what mention's about National once government spinning down towards thirty
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  Speaker 2: percent of GDP, you're talking, I think you're talking roughly
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  Speaker 2: thirty three percent. Is what's the difference. Is it that
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  Speaker 2: you believe in bigger government the National does, or is
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  Speaker 2: there another take on that.
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  Speaker 3: No, we believe that our healthcare system needs the investments
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  Speaker 3: in order to build the hospitals that you have that
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  Speaker 3: you need, and in order to ensure that primary care
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  Speaker 3: as well supported. So that is that is a key difference.
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  Speaker 3: It's so ours is around thirty three percent of GDP
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  Speaker 3: once once the capital gains Tax is fully implemented, and
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  Speaker 3: that's the difference. We have a new revenue stream coming in,
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  Speaker 3: but we've said for the capital gains tax that will
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  Speaker 3: all be ring fenced for health. So that's why there's
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  Speaker 3: a key difference between the spending amounts between US and
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  Speaker 3: the National Party.
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  Speaker 2: Because I think the words it might have been in
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  Speaker 2: your press release was that we don't need the restraint
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  Speaker 2: that National is advocating for. Just cynically speaking. Doesn't that
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  Speaker 2: play into the argument they're going to throw back and say, look,
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  Speaker 2: this is the party that spends, we're not. We're the
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  Speaker 2: ones who are responsible. How do you counter that or
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  Speaker 2: is that essentially sort of the argument we're going to
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  Speaker 2: hear from now till election day.
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  Speaker 3: Oh mate, they're going to throw everything at us. Then.
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  Speaker 3: You know, they're also saying that we have eight different
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  Speaker 3: new taxes as well, and we've said quite clearly we
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  Speaker 3: just got the one, which is the capital gains tax.
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  Speaker 3: You know, so they're going to throw everything at us
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  Speaker 3: in relation to this. But the key thing is is
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  Speaker 3: we've been transparent by publishing the strategy.
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  Speaker 1: Now, it's not.
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  Speaker 3: Unusual, say during a budget process, that's the Minister of
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  Speaker 3: Finance in December, the year before budget sort of provides
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  Speaker 3: the strategy that they're going to use for their budget
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  Speaker 3: and so that's similar to us. We will have the
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  Speaker 3: fiscal plan after the books are opened in late September
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  Speaker 3: to show what the choices are that we're going to
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  Speaker 3: make and then before kee Wes go to the ballot box.
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  Speaker 2: So the thirty three percent, can you explain that, what's
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  Speaker 2: what does that mean to the average vote of the
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  Speaker 2: thirty three percent versus nationals thirty Yeah.
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  Speaker 3: So basically it just depends on how So thirty three
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  Speaker 3: percent of GDP so obviously the amount that you know
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  Speaker 3: that we produced of goods and services. So for them,
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  Speaker 3: that's the really good question to ask because we're asking, Okay,
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  Speaker 3: if you want to keep it down around thirty what
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  Speaker 3: are you going to cut to pay for it? How
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  Speaker 3: are you going to pay for the new bn Z
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  Speaker 3: bank that Winston wants you to buy, and then David
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  Speaker 3: Seymour's new cancer hospital. How are you going to pay
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  Speaker 3: for these things? So it's the same argument. They can
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  Speaker 3: flip it back on us, but ultimately that's where we
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  Speaker 3: think the spending level, given that we want to put
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  Speaker 3: more money into healthcare because we're getting a CGT, that's
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  Speaker 3: where we've indicated as a percentage of GDP.
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  Speaker 2: Now you mentioned the CGT, have you had any advice
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  Speaker 2: on the shifting assumptions on what a might realize? Because
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  Speaker 2: I mean, where you host a property are here and
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  Speaker 2: it seems as it's as dead as a doornail. The
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  Speaker 2: market's not doing anything. How are your assumptions sitting in
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  Speaker 2: terms of what when you first came up with this idea.
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  Speaker 3: Yeah, great question. And so the modeling that we have
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  Speaker 3: used to model how much we're going to get from
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  Speaker 3: a capital gains tax is the same model that was
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  Speaker 3: designed by ID and Treasury when the Tax Working Group
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  Speaker 3: was looking at it in twenty nineteen. So we've taken
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  Speaker 3: that model. We've put in our assumptions. Our assumptions that
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  Speaker 3: over the long term is that you'll have on average
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  Speaker 3: three percent growth. So some years you'll have higher, some
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  Speaker 3: years you'll have lower. Some periods it maybe two years
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  Speaker 3: where it's higher or two years where it's lower as
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  Speaker 3: you've seen with the market rights, particularly post COVID hikes,
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  Speaker 3: and then obviously down in the troughs. So three percent
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  Speaker 3: on average over long term growth, long term growth, and
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  Speaker 3: that's the modeling we've used. Again. Another really good reason
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  Speaker 3: why if you have a Parliamentary Budget Office they can
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  Speaker 3: can provide comment on.
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  Speaker 2: That is it dependent on two and over in terms
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  Speaker 2: of how many people are buying and selling homes.
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  Speaker 3: Well, it depends on as well as if it's their
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  Speaker 3: first or second home. So remember nine out of ten
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  Speaker 3: New Zealanders aren't caught by this because it's their main home. Yeah,
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  Speaker 3: so it does take into account land sales or second third,
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  Speaker 3: fourth whatever non exempt homes, so it does take that
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  Speaker 3: into account as part of the assumptions as well, and
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  Speaker 3: that was very much the model that we used off
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  Speaker 3: Treasury and ID.
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  Speaker 2: One criticism, I don't want to heart back too much
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  Speaker 2: of the Last Lave government. One that keeps popping up
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  Speaker 2: in my job as a talkback host. Is it the
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  Speaker 2: last Lave government, you know, spent well beyond what it
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  Speaker 2: needed to do once the emergency had passed. Are there
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  Speaker 2: lessons that when they look at you as a new
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  Speaker 2: finance minister, are there lessons that you have learned from
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  Speaker 2: that to assuage those fears?
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  Speaker 3: The COVID recovery a COVID inquiry provided some really good
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  Speaker 3: recommendations as a result of that. Like one of the
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  Speaker 3: things they said is rather than looking at big spending
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  Speaker 3: of you infrastructure items, to maintain the assets you currently have.
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  Speaker 3: So you know, that's obviously a different sort of spending.
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  Speaker 3: You know, if it's a brand new road that cost
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  Speaker 3: a lot, but actually if you just maintain some of
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  Speaker 3: the give some money to schools to maintain them a
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  Speaker 3: bit better. So there was a really good recommendation that
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  Speaker 3: came out of that inquiry and something that I definitely
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  Speaker 3: think about that we can improve as we come back in.
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  Speaker 3: But men also remember back when we were doing the
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  Speaker 3: COVID money, we had national MPs saying we should be
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  Speaker 3: giving more. So there were no costless decisions during COVID
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  Speaker 3: and it's just you know, the intention for us was
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  Speaker 3: to try and keep people connected to their employer and
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  Speaker 3: to help the country recover once we got out of lockdown.
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  Speaker 2: Do you think there'd be a can you think of examples?
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  Speaker 2: Whereas finance minister you would have to or at least
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  Speaker 2: be prepared to tell your own ministers they've got a
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  Speaker 2: great idea and it's going to cost some money. It's like, no,
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  Speaker 2: we'd like to do that, but we're not going to
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  Speaker 2: do that. We can't afford it.
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  Speaker 3: Oh mate, I've been in plenty of those meetings already.
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  Speaker 2: Yeah, what's an example, give me no names, Come on, no, no, I'm.
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  Speaker 3: Going to I'm not going to shut down Billie Jackson.
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  Speaker 3: It is a constant joke with Willie Jackson. You know,
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  Speaker 3: he was very passionate when he was a minister, you know,
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  Speaker 3: debating with the Minister of Finance around you know, spending
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  Speaker 3: for initiatives the headline. But I'm very used to saying no.
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  Speaker 3: I've got eight kids. I know how to say no
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  Speaker 3: to them, and I know how to make sure that
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  Speaker 3: they stay in line as well. So you know, we're
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  Speaker 3: doing okay. Four of them at university, so we're doing okay,
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  Speaker 3: We're halfway to here.
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  Speaker 2: I'll see if the news can turn that into something.
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  Speaker 2: Barbara Edwins compares her colleagues with her children.
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  Speaker 3: Afly. My children walk amplient. Probably.
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  Speaker 2: Oh, that's definitely going to make the clip. Hey, now, God,
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  Speaker 2: speaking of kids, I don't mean this that way. It's
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  Speaker 2: just one that I wanted to say. Coalition partners. So
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  Speaker 2: you know, we hear a lot of this. There's discussions
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  Speaker 2: around ruling out who you will and won't work with.
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  Speaker 2: And I did hear a comment somebody said, I wish
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  Speaker 2: people wuld just start ruling out policies rather than parties.
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  Speaker 2: But anyway, just as a sort of context for that,
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  Speaker 2: one of you, obviously your plans on spending surplus debt,
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  Speaker 2: all that relies, as you say in the CGT and
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  Speaker 2: the assumptions you've made. But how what would you say
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  Speaker 2: to voters who are worried that well, hang on, if
• 10:19
  Speaker 2: you're in bed with the Greens they want a wealth
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  Speaker 2: tax and all these other things. How confident can people
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  Speaker 2: be that Barbara Edmonds will be in control of it?
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  Speaker 3: Because I'm the tax expert. I'm actually a tax lawyer.
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  Speaker 3: I know what cannon can't work, and that's why we've
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  Speaker 3: gone with the simple targeted capital gains tax. So that's
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  Speaker 3: the number of it. It's that if you want to
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  Speaker 3: talk about tax, I'm the right person to talk about it.
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  Speaker 3: Given up practice tax for over ten years.
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  Speaker 2: I guess. But that's that's well, that's a position of authority.
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  Speaker 2: But of course authority comes from also people having votes
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  Speaker 2: and being needed for coalition. How yeah, have you got
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  Speaker 2: anything to add to that? How confident can voters be
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  Speaker 2: that your fiscal ideas will survive coalition negotiations? Is it
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  Speaker 2: just that I know more than Chloe and the other lot?
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  Speaker 3: So that's what nolutely. They absolutely have to And what
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  Speaker 3: most people don't know is that as parties go into
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  Speaker 3: coalition agreements, they do have additional resources from the government
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  Speaker 3: to help cost things during the So for example, the Department,
• 11:17
  Speaker 3: Prime Minister and Cabinet, the Treasury, they're available to help
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  Speaker 3: during those coalition agreements. But what we've been really clear
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  Speaker 3: in is that we the only tax that we're taking
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  Speaker 3: into the next government that we form and that we
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  Speaker 3: lead will be a targeted simple capital gains tax.
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  Speaker 2: Okay, lucky. Last, probably not the most exciting question, but
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  Speaker 2: one for financial boffins, the dual mandate return. Are the
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  Speaker 2: dual mandates that's reducing inflation and getting employment up? How
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  Speaker 2: do how do we balance about? Aren't they in conflict
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  Speaker 2: with each other?
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  Speaker 3: So it's not a radical idea that lots of countries
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  Speaker 3: in the world have a dual mandate. Again, the Australia,
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  Speaker 3: the US, they already have a dual mandate. And the
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  Speaker 3: main thing is that monetary policy will consider both the
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  Speaker 3: price stability so inflation, as well as maximum sustainable employment.
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  Speaker 3: And they may not have to, you know, use it
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  Speaker 3: in the sense that you know, it's always at a
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  Speaker 3: point where we know that there's low unemployments and that
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  Speaker 3: inflation may just be out of the band. But in
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  Speaker 3: economic times like this, where they don't have many tools,
• 12:22
  Speaker 3: where unemployment is high and they know inflation is going up,
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  Speaker 3: the only real choice they have to do is to
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  Speaker 3: lift the ocr So this gives them that additional tool,
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  Speaker 3: and it's not unusual in other countries. I did.
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  Speaker 2: For there's one more question, the well being reporting. Yeah,
• 12:37
  Speaker 2: the well being reporting to the Public Finance Act. So
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  Speaker 2: it's ensuring decisions taking to account the impact on the
• 12:43
  Speaker 2: lives and livelihoods of New Zealanders. Cynically, I could argue
• 12:48
  Speaker 2: that it means you're not going to take the tough
• 12:50
  Speaker 2: I mean tough decisions impact lives. And for instance, if
• 12:53
  Speaker 2: you are going to change the size of the public service,
• 12:56
  Speaker 2: would you be pulling back from that because people are
• 12:58
  Speaker 2: going to lose their jobs. How can you be relied
• 13:00
  Speaker 2: upon to make tough decisions where it really matters.
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  Speaker 3: Well, you can't make a difference if you're not measuring
• 13:07
  Speaker 3: what actually matters. So for example, you could have growth
• 13:10
  Speaker 3: in your economy, but like what we have at the moment,
• 13:13
  Speaker 3: you know, some people say there's two hundred percent increase
• 13:16
  Speaker 3: in homelessness. We've got people who are having to withdraw
• 13:18
  Speaker 3: from their retirement savings for every day costs. They're having to,
• 13:22
  Speaker 3: you know, make the choice between and food and fuel.
• 13:25
  Speaker 3: So there's obviously you have to take into account the
• 13:29
  Speaker 3: economic indicators, but also how is this actually making a difference,
• 13:33
  Speaker 3: and we're just saying we want to measure that because
• 13:35
  Speaker 3: actually that's what we're going to be. Howd to you
• 13:37
  Speaker 3: know when it comes to the next election time.
• 13:39
  Speaker 2: I mean, it's just quantifying that stuff, isn't it, Because
• 13:42
  Speaker 2: it's I mean, surely all governments everyone's trying to act
• 13:45
  Speaker 2: for the well being of New Zealanders in general, aren't they.
• 13:47
  Speaker 2: I mean it seems so it seems wishy washy.
• 13:50
  Speaker 3: If you don't have to, if you don't have to
• 13:51
  Speaker 3: measure it, then then you're not being how to count
• 13:53
  Speaker 3: to it, you know. So if they're not measuring it,
• 13:56
  Speaker 3: I thought you were going to ask me a question like, well,
• 13:58
  Speaker 3: should have Adam Pompey should have played last night?
• 14:00
  Speaker 2: Or Ali l Actually, because we are finishing, did you
• 14:05
  Speaker 2: watch the game?
• 14:06
  Speaker 3: I watched the All Blacks, the Black Firm and the Wise.
• 14:09
  Speaker 3: Oh it was we're a big sports family. This is
• 14:13
  Speaker 3: I'm wearing my Warriors jacket right now.
• 14:16
  Speaker 2: It was an amazing weekend. But I mean I give
• 14:18
  Speaker 2: the weekend to the All Blacks just because of the spectacle.
• 14:22
  Speaker 2: I mean, it was phenomenal, wasn't it.
• 14:24
  Speaker 3: It was phenomenal, especially in that second half after those
• 14:27
  Speaker 3: forty minutes and then you saw that Berg scrum. It
• 14:29
  Speaker 3: was just like you guys, you follows have got to
• 14:31
  Speaker 3: win this, and they did. It was the just flipped
• 14:33
  Speaker 3: from there, just flipped from there. It was Yeah, it
• 14:35
  Speaker 3: was brilliant.
• 14:36
  Speaker 2: It was magic. Hey Barbara, Hey, hey, thanks so much
• 14:39
  Speaker 2: for your take on the on the sport as well.
• 14:41
  Speaker 2: When next time we do beverage on Sport, we'll get
• 14:43
  Speaker 2: you back on. Thanks.
• 14:44
  Speaker 3: Definitely, I'm the sporting mom.
• 14:46
  Speaker 2: Okay, good, thanks very much. That is Barbara Edmunds, the
• 14:49
  Speaker 2: Labour's finance spokesperson on their economic policy announcement.
• 14:53
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