Episode description
Labour claims New Zealand's economy is holding up well compared to many others, but global pressures and new policies may threaten its re-election chances. National has been on the attack, with the cost of living crisis cutting deep, over what it says is wasteful spending and unnecessary taxation - but its own tax plans have left it open to criticism too. In today's Focus on Politics podcast, RNZ Political Editor Jane Patterson examines how Labour and National are facing turbulence - from their own policies and the global economy.
"The global environment is enormously challenging at the moment ... they are choppy waters," - Finance Minister Grant Robertson
Labour claims New Zealand's economy is holding up well compared to many others, but global pressures and new policies may threaten its re-election chances.
National has been on the attack, with the cost of living crisis cutting deep, over what it says is wasteful spending and unnecessary taxation - but its own tax plans have left it open to criticism too.
Listen to the full podcast here
Labour Finance Minister Grant Robertson cites positive economic indicators - record-low unemployment, low public debt and, though constrained, economic growth - as evidence New Zealand is in a relatively strong financial position.
He acknowledges worker shortages as a main weakness right now, constraining productivity and - as highlighted by the Reserve Bank - driving inflation. The hard-but-necessary border closure decision when Covid-19 hit contributed to this, but Robertson says trades training and loosened immigration will help ease the pressure.
National won't be easing the political pressure over Robertson's spending, however, honing its latest attacks on the proposed social insurance scheme.
The details aren't final, but the plan would see a 2.77 percent levy on pay packets - split between employees and employers - set aside to support worker who lose their job through redundancy, sickness or disability. They would receive 80 percent of their income for up to seven months, capped at $130,000 a year.
It was in part developed at the urging of the Council of Trade Unions, and Business New Zealand.
The latter's chief executive Kirk Hope says they back the principle, but members have had concerns from the start and have been active in responding to the government's discussion document.
Business NZ chief executive Kirk Hope
"We would have a preference for a tax-neutral scheme and secondly that health and disability wouldn't be included in the scheme, as that effectively doubles the cost ... business wants the government to start listening - here's an important opportunity for them," Hope says. …