Q+A interview with Labour Leader, Phil Goff.

Points of interest:
Refuses to rule out introducing new taxes such as Financial Transaction Tax
High income earners would ‘have to give some of their tax cuts back’
nothing in budget to grow economy, all about cuts
Labour to create more trade training
Cannot guarantee Labour would reverse cuts to Kiwisaver in its first term
Previous Labour promises of extending paid parental leave may ‘have to be delayed’ in light of deficit
Promises Labour would return NZ to surplus ‘about the same time as National’

The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can be watched on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

Q+A, 9-10am Sundays on TV ONE. Repeats at 9.10pm Sundays, 10.10am and 2.10pm Mondays on TVNZ 7

Q+A is on Facebook, http://www.facebook.com/NZQandA#!/NZQandA and on Twitter, http://twitter.com/#!/NZQandA

PHIL GOFF interviewed by GUYON ESPINER

GUYON ESPINER
Welcome, Mr Goff. Thank you very much for your time.

PHIL GOFF – Labour Leader
Good morning, Guyon.

GUYON As we said, you’re talking to your congress soon, but you’ve been giving hints about a boost, a policy boost to research science and skills training. Can you share with our audience around NZ anything of what you’re going to say in that regard?

PHIL Yeah, I can. Look, I think one of the widest criticisms of the Budget was there was no strategy, no plan to get growth back into the economy. The Budget was about cuts, it was about borrowing, it was about selling, and it was about reliance on pretty optimistic projections. But there was nothing there to actually grow our economy, and the best way to create jobs, lift our incomes and to therefore get the revenue in that closes the gap and pays down the debt is to get growth in the economy. And there were two areas, Guyon, that I thought the Budget was lacking in—

GUYON Can we talk about the Budget a little bit later? I won’t interrupt you while you’re talking—

PHIL That’s what I’m coming to. No, no, that’s fine. I want to come on to what I’m planning to say at the conference, and it’s to address that gap. And the gap is, I think, first of all, on skills. We’ve got a huge problem with skills at the moment. The building and construction industry sees something like 90,000 skilled,
extra-skilled and semi-skilled workers being needed to rebuild Christchurch, to deal with the leaky homes, to deal with the housing shortage in Auckland, but no plan’s in place to upskill NZers

GUYON So what are you going to do?

PHIL So that will be one aspect that I’m talking about. Oh, look, undoubtedly we need a real boost to trades training and skill training. You know, 10,500 under-25-year-olds in Christchurch that are unemployed at the moment. A huge job to do in Christchurch. Not one new apprentice or trainee yet taken on nine months after the earthquake.

GUYON Can you be any more specific, then? Is it a new apprenticeship programme, or are you putting a certain amount of money into this?

PHIL It’ll be the opposite of what this government has done. They took $55 million out of skill training last year. We’ve got to put money into skill training, or it’ll cost us dear – cost us in unemployment, on the one hand, and cost us on a bottleneck and huge inflation in building costs 18 months out as we’re struggling to find the skilled workers we need.

GUYON Ok, and research and development tax credits – is that the other plan that you’re looking at?

PHIL Yeah. Look, we had a really brilliant lecture given to us by Sir Paul Callaghan, the NZer of the Year last year at conference, and what he was saying is we need a smart and innovative economy. We’ve got to be the best in the world—

GUYON Ok. I think you probably have a lot of people agreeing we’ve got to be a smart economy. Are you going to promise to return to giving tax credits to research and development. It’s about a $300 million policy. Is that what you’re looking at?

PHIL I’m looking at making an announcement that will be a definite announcement to conference in about two hours’ time. It will be a boost to the amount of money going in to research and development. How will that be paid for? I will specify precisely how that will be paid for. But I’ve got to say the other real benefit, Guyon, from that will be that if we have an upskilled workforce, if we have more research and development, that is going to lead to greater productivity. As everywhere else in the world, it’s going to lead to more jobs, more revenue.

GUYON Ok. Let’s go to the Budget now. The changes to KiwiSaver and Working For Families. Can you give me a yes or a no on this? Are you going to restore them to their full position which was before the Budget?

PHIL Well, I’m going to do what’s responsible. I’m going to have a look at the wider picture, and when we announce our spending and taxation policy, it’s got to do something about the debt. We can’t keep adding to the debt, and that means I can’t promise to put everything back that National has cut. But I can promise
this – we introduced KiwiSaver. We need a saving programme, as Standard & Poor’s pointed out, that NZers can have trust and confidence in. Labour will be putting in place such as savings scheme.

GUYON Ok. I’m already getting feedback in my ear from the producer saying people are Twittering and emailing us at the moment saying, ‘Hey, we want to know what Labour’s going to do.’ Would you restore this programme? This is what our viewers are saying. Can you give them an answer, Mr Goff?

PHIL Yeah, well, they do want to know, but you also know that I have to be responsible and say, you know, given that $16.7 billion debt, I can’t put back every cut that National has made in the first year or the first term of a Labour Government. I can say in principle what I want to do, and later in the year and towards the election campaign when we’ve done the full analysis, I can say precisely what we’ll do.

GUYON Ok, let’s put it another way. Is it as important for Labour to get back into surplus, as National is saying? I mean, would you like to commit to the same parameters – say, ‘We will get back into surplus in four years’ – or are you prepared for a softer landing? Are you prepared to let that deficit go for a bit longer?

PHIL Well, it’s not precise. It might get back into surplus six months earlier or six months later, but we have to get back into surplus.

GUYON But pretty much the same timetable as National.

PHIL Broadly, but we’ll be finding our savings in different areas, and I’ll outline at least one of those areas where we find savings when I speak to conference later this morning.

GUYON Ok, let’s look at some of the policies you’ve promised already and see whether you’re able to stick to them in this new environment. January 18, 2001 Annette King promised to increase Working For Families for parents of children aged 2. Is that still the party’s intention?

PHIL What Annette talked about was a six-year programme, and with the level of deficit, it’s going to take longer to put some of those things into place. The reality of the situation--

GUYON Longer than six years?

PHIL Uh, no, it will be over the six-year period. If we’re still in the problems that we are now in six years’ time, you won’t be worried about that policy in particular; you’ll be worried about the whole way in which the NZ economy will be going.

GUYON So that’s on hold, is it? Let’s be honest with the public. Is that on hold?

PHIL No. I’m being precisely honest with the public. I’m absolutely not doing what John Key and Bill English did before the last election. As you said in your interview with Bill English, those promises were made. They were definite, they were unqualified. Every one of them has been broken and the savings banked before the election.

GUYON And we’re taking them to account on that. With respect to your policy, though, I presume that that policy and the extension to paid parental leave past 14 weeks, I presume, from what you’re telling us here, that’s on hold.

PHIL What I’m telling you, and Annette King said it yesterday at conference, and I’ll be saying it today, is that before we make a specific pledge to spend money, we’ll be showing precisely where that money comes from. That means that we can’t implement our full programme in the way that we’d like to. We have to be responsible. We have to pay down that debt, and most of all – and the priority will be this, Guyon – we have to get the economy moving, and that’s why I’m talking about skills That’s why I’m talking about research and development to create a bigger pie to share out.

GUYON You’ve set that framework up that you have to state where the money’s going to come from until you can fully promise something. Can that apply to your tax-free threshold? Your $5000 tax-free threshold cost $1.3 billion and gives everyone, regardless of income, about $10 a week. Is that still going to go ahead, and where is that money going to come from?

PHIL Yeah, that will go ahead progressively, and when we announce the tax policy in a couple of months’ time, we will set out precisely how that will be paid for. I’ve given you some indications already, Guyon, about where that will come from—

GUYON Top tax rate?

PHIL You know, people at the top – there were people who got thousands of dollars extra in tax cuts a week. Everybody’s got to share in the pain of getting this deficit down and growing the NZ economy, and we won’t be exempting the top-income earners, just like this government hasn’t exempted low and middle-income earners.

GUYON It’s interesting – you talk about fairness, and I’ve heard you talk about this a lot, and you’ve talked about raising the top tax rate back to 38c, perhaps, on six-figure incomes. Now, when you look at the amount of people who earn over $100,000 in NZ, it’s 5% of income earners, yet they pay 31% of the tax, according to Treasury. 5% earning over $100,000 pay 31% of all the total tax in NZ. Is that not enough tax for them to pay? Is that not fair?

PHIL Well, you’ve got to look at the percentage of the overall income that they earn. Guyon, let me take you back to something you said before to Bill English. I looked at the OECD figures the other day. NZ is now 26 out of the 33 OECD countries as the least equal countries in the world. The rich have got richer in NZ, and the rest of NZ have fallen behind. We are seeing the creation of two NZers, and we have to deal with that.

GUYON Ok, you’ve got that message, and I respect that, but can I get a straight answer from you on that question, Mr Goff? Is it not fair? Are they not paying their fair share if those 5% of income earners are paying a third. You’re saying they’re not paying enough, eh?

PHIL You want a straight answer, Guyon, and I’ll give it to you right now. I’m saying that everybody has to bear a share of the burden of the problem that we have with the deficit—

GUYON Is that a fair share of the burden, is my simple question.

PHIL And I’m saying that the people that got the big windfall gains will be giving some of that money back. Yep, that’s a straight answer.

GUYON Ok, so I presume that they aren’t paying their fair share.

PHIL Well, there’s another group. This is a very important point. There’s another group that’s not paying a fair share, Guyon, and that’s the people that the Tax Working Group pointed out were dodging their taxes. You know, why have we got $200 billion worth of investments in rental properties, but no net tax return from that? Why are half of the top 100 tax income earners not paying the top tax rate? Why are people like the property developer that appeared in court earlier this month who spent $1000 a year paying his tax when he’s a multimillionaire?

GUYON Ok. There are numerous examples. We’re not going to litigate all of them. In the couples of minutes that we do have left, I want to talk about how you would broaden the tax base, because it’s a word that your finance spokesman, David Cunliffe, has used. A couple of examples here – a capital gains tax. Are you ruling out a capital gains tax?

PHIL With the size of our deficit, I’ve told my economic committee to look at the widest possible range of areas where we’ll have to trim spending, where we’ll have to raise revenue and how we can grow the economy. We’re looking at everything, but I’m not going to speculate about precisely what will be in that tax policy until I’m ready to announce it.

GUYON That’s interesting, actually, what you’ve just said. So you are looking at other additional taxes? I mean, potentially, I guess, a financial-transaction tax where you can clip the ticket on bank transactions? I mean, these are ideas that have serious credibility in Europe, etc. Are you looking at the full range of tax raising?

PHIL We’ll look at everything, but that’s not to say that we won’t rule out a lot of those options as being impracticable or not feasible in terms on implementation.

GUYON But you can’t rule out a financial-transaction tax?

PHIL Oh, look, I’m not ruling anything in or out, as you wouldn’t expect me to do till I’m ready to announce that policy. I’ve asked them to look at all the options. That’s sensible. But many of those options will be ruled out as we work through the policy.

GUYON All right. That’s where I better leave it. Good luck with your congress today. Thanks for joining us.

PHIL Thanks, Guyon. Thank you very much. Going great. Cheers.

Home Page | Politics | Previous Story | Next Story

Copyright (c) Scoop Media