In this week's episode of VOTE2023, we talk to Labour’s Finance Minister Grant Robertson about the cost of living, tax, climate change adaptation, and student-focused issues
This series is made by politics students and aims to inform viewers about their potential representatives this election. Answers have been condensed for brevity. Click here to watch the full interview.
The New Zealand Productivity Commission says workers in NZ work longer hours for less reward than workers in most other OECD countries. How do we reform our economy to work smarter and not harder? We know that hundreds of thousands of Kiwis are moving to Australia and the UK. How do we keep them in New Zealand and pay them enough for the work they’re doing?
In order to see wages lift, we have to be more productive. If there was one answer to this question someone would have clicked their fingers and done it years ago because it’s such a long-running problem – so I’ll just give you three or four. One of those is the level of skills within New Zealand, particularly from vocational education and that’s one of the reasons why we’ve put so much effort into that. We need to list our overall skill level. One of the kind of unsung things when you compare us to other countries who are more productive, is our investment in research, science and innovation. And again, we’ve lifted that significantly through things like the [research and development] tax credit and about half a billion dollars in this Budget for the new multi-institution hubs that are going to bring public and private science together – so that investment in R&D is absolutely critical. And another area, where again we’re demonstrably way behind other countries, is our infrastructure. That’s because of a failure to invest over decades in New Zealand. So we really upped our game in that and we’ve got about $77 billion coming in over the next five years to improve the quality of the infrastructure we publicly provide. It’s not that sexy because there isn’t just one thing. If I add one more in, it’s making the investments alongside businesses in the jobs that will create higher wages and are also lower emissions as well ... We’re good at agriculture – we should keep doing it – but we should find ways of adding value, reducing emissions, and investing in these new economy industries.
You currently hold the role of Minister for Cyclone Recovery. We know that the climate and degradation of our planet is one of the biggest issues facing NZ and globally. Do you think we are acting as quickly as we need to in terms of the pace of change and adaptation?
On emissions reduction, we’ve made some really good progress in the last three years. We’ve got those emission reduction plans in place, we’ve been supporting them through the dedicated climate emergency response fund [going to be taken away by National]. That’s the fund that’s helping us reduce our emissions through industrial heat, transport fleet, cleaner car discount. We’re making good progress; absolutely get the desire to move quicker. We have a plan; it’s very clear about the reductions we’ve got to make and that’s why you’ll keep seeing us moving in that direction.
On the second part of your questions around adaption, I think what the recent cyclone events have shown us is actually that New Zealand is not prepared the way we need to be. These intense and regular climate-induced weather events are going to happen every year in New Zealand now. One of the things when we had the cyclone this time round, was that I was quite frustrated that our responses were quite ad-hoc; we were just trying to make sure we got stuff to our communities. So we’ve been working through our national adaptation plan; we’ve got a piece of legislation that [Climate Minister] James Shaw has been working on which is ready to go through Parliament. In this Budget, I created something called the National Resilience Plan – specifically to get ahead of where our adaptation challenges are ... There’s a big conversation coming up for the next government, around what the long-term plan is.
Why has nothing been done to address tax inequality during Labour’s tenure during the past six years?
I’d argue that’s not quite right. We’ve taken actions like lifting the top income tax rate and most recently putting the trustee rate up to the top rate of 39 cents as well. That is going to drive down inequality in particular because a lot of people have used trusts to shelter some of their income. In terms of the first three years we were in government, we were in coalition and we simply weren’t in a position to be able to make those changes. In the second term of government [Minister of Revenue] David Parker led the work on [tax reform] and that work will be testing for future governments to work out how to make the tax system work better. The decision we made for this election is that we’re living in some of the most volatile and uncertain economic times of my lifetime, and upending the tax system at the moment is not the answer for New Zealanders, we need stability.
How do we fix the housing crisis?
The way we get out of this is we build more houses, and from the Government’s end, we built more state houses, public houses since any government since the 1950s. Had the previous National government built at the same rate we’re building them now, much of the state house waiting list would disappear ... we’ve also facilitated building more affordable housing and creating new ways of people buying homes with first home grants and also the progressive home ownership scheme ... one of my big fears about a change of government is that the National Party will go back to their mantra of the 1990s and their last government, of just saying the market’s going to sort this out.
What is your response to criticism of Labour’s GST-free fruit and vegetable policy by economists who say it will benefit wealthier households and involves a large administrative cost?
We’ve got the supermarket duopoly in New Zealand and we are working to see better competition in that sector but at the moment, one half of that is an Australian outfit, [Woolworths]. They already do this [policy] in Australia, so there’s no great administrative burden on them to do this and I’m absolutely certain that Foodstuffs will be able to cope with it as well. In terms of the value of the policy, you do need to see it in the context of our broader 10-point cost-of-living plan. One of the things that gets raised with me the most is the cost of food and this is a contribution – it’s a small one, I get that – but a contribution we can make to reducing the cost of food.
You previously expressed support for a wealth tax which has since been abandoned by Chris Hipkins – does this sit right with you?
We made a decision that we weren’t going to go ahead with the wealth tax because at the moment in the economy that we’re in, it’s not the right policy for the volatile and uncertain times we’re in. There are also issues with it – not many people have implemented it and there are a lot of potential fishhooks in a policy like that, so no I’m backing the balanced policy that we’ve got.
Why should a tertiary student vote for Labour?
We’ve got the record of being the people who brought in first year fees free. Labour took interest off student loans and we’ve increased [the amount of] money you get through a student allowance, but the one thing that stands out for me this election is the half price public transport that we’ve brought in for under-25s – that’s at risk under a change of government.
