Why power prices matter

News that the CEO of Contact Energy is now earning $1.7 million a year, or $33,000 a week, has shocked many New Zealanders and reinforces the urgent need for Labour’s NZ Power policy, Labour’s Finance spokesperson David Parker says.
“Currently power companies are allowed to charge excessive prices by pricing all electricity at the price paid for the most expensive electricity produced (often gas fired).
“Under Labour’s NZ Power consumers pay the average, rather than the highest, cost of generation. This saves hundreds of dollars a year for the average household and about 5 per cent for commercial users.
“This is only fair. Sixty per cent of NZ’s electricity comes from hydro, which is the cheapest electricity to produce in the world. It’s fuelled by the energy which comes from our public rivers. At present the public gets little benefit from this.
“I have been challenged by the business community on how I justify Labour’s policy to drop power prices.
“It’s easy.  People are cold. A couple of weeks ago I was in Wanganui. It was a cold day. I dropped into a suburban library. I was told many of the people who come in do so to get warm. They stay for hours on cold days because they cannot afford to heat their homes.

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Exports in permanent decline under National

Exports under National are in permanent decline – a result that causes long-term damage to our country’s wealth and makes Bill English’s admission that he has no new ideas all the more serious, Labour’s Finance spokesperson David Parker says.
“National promised that exports as a percentage of GDP would increase from 33 per cent to 40 per cent under its watch. The opposite is happening. Exports have declined to 29 per cent and will drop even further to 26 per cent.
“This is despite the strongest terms of trade in a generation.
“That is the real story of National’s economic management. As a nation we are going backwards. The way to increase our wealth is to export more to our trading partners. That will lead to better jobs with higher wages.
“That won’t happen under National. Bill English admitted on The Nation he has no new ideas to turn around the economy. That’s worth showing again.
Lisa Owen: Mr English, I’m going to give you one last chance, Mr English. Have you got a new idea to boost our economy?
English: We want to keep going in the direction we’re going.
“It isn’t working. Labour has a real plan to boost exports. Our Economic Upgrade will focus on investment, innovation and industry to support exporting businesses.
“We will boost investment through making KiwiSaver universal to increase our national investment pool and use our capital gains tax to ensure that money goes into productive businesses.

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Key’s credibility – death by a thousand tax cuts

John Key’s fingers-crossed promise to provide $1500 a year in tax cuts would cost two or three times as much as he claims, providing yet another blow to his fiscal credibility, says Labour’s Finance spokesperson David Parker.
“John Key is undermining the work Bill English has done on fiscal credibility. To the obvious discomfort of his Finance Minister he has introduced vague promises of tax cuts years into the future.
“The National Leader has now tried to claim his tax cut would give Kiwis $1500 more a year, while saying it would cost $500 million to $1 billion. But $1500 a year will cost $2.4 billion, around three times what John Key says it would cost.

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John Key’s tax cut turns into a facts cut

John Key is being hauled over the coals for his hypocrisy by announcing tax cuts without the facts yesterday and rightly so, says Labour’s Finance spokesperson David Parker.
“After carrying on for days and demanding more details on other parties’ policies John Key is now facing a grilling of his own. He has come up short.
“He demanded a debate on the minutiae of Labour’s capital gains tax despite that information clearly being determined by an experts’ working group.
“But when he releases a tax cut policy minus any facts he refuses to answer the questions. It’s desperate stuff and he’s done it over the head of his Finance Minister.
“National’s fiscal plan has made no allowance for spending in coalition negotiations, unlike Labour.
“Tax cuts were National’s big silver bullet to get out of the hole of Dirty Politics. It has backfired,” says David Parker.

9 September 2014                                                           MEDIA STATEMENT

Fed Farmers is just plain wrong on CGT

Federated Farmers has deliberately played politics with Labour’s capital gains tax by delaying the release of an incorrect report they have had since June to just a week before the election, says Labour’s Finance spokesperson David Parker.
“It’s clear that this is an orchestrated attack. Federated Farmers sat on their June report and released it at the same time as National’s attack on our CGT.
“Federated Farmers is just plain wrong. Yesterday I wrote to NZIER showing errors in the report. Further errors have been identified by BERL overnight. Federated Farmers should admit their errors and print a correction.
The report they rely on has two fundamental errors.
·         The report asserts that based on the Australian CGT (which has a different headline rate) the CGT revenue estimates for New Zealand are too high. This is incorrect because, in Australia individuals and small businesses are taxed on just half the capital gain. In New Zealand the whole gain (from the date of introduction) is taxed at the lower 15% rate.
·         The report mistakenly underestimates capital gains because it does not properly calculate all realised gains after the date of introduction. It wrongly focuses on the gain in the year of sale.

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Vague tax cuts before surplus don’t cut it

National cannot get away with announcing tax cuts before the books are in the black and not providing any specifics until after the election, Labour’s Finance spokesperson David Parker says.
“John Key is being completely irresponsible. Promising vague tax cuts that may, or may not, provide Kiwis with a few dollars a week in a few years’ time provides no information for New Zealand voters.
“Labour has provided the most detailed fiscals of any opposition party with a comprehensive framework that spells out in detail our revenue, spending and debt reduction plans.
“We have also done the numbers on ACT and the Conservatives tax policies which will cost the country over $10 billion a year. John Key’s budget includes no allowance for third parties. Ours does. How is he going to afford their promises?
“National went into the 2008 election promising ‘significant tax cuts for low and middle income earners’ which were scrapped on taking office.

“Two years later the ‘significant tax cuts’ became higher GST, and income tax reductions that disproportionally went to those on higher incomes.
“Six years and $60 billion of debt later, here we go again.

“With exports in decline, growth halving and wages stagnating, New Zealand needs economic policies that will support investment, innovation and industry and create better jobs with higher wages. That’s what Labour’s Economic Upgrade will do,” David Parker said.

8 September 2014                                                        MEDIA STATEMENT

Voting has started and still no tax plan or fiscal budget for voters to see

“Even though voting for the election has already begun, National still refuses to provide any details of its proposed tax cuts. And Bill English admitted this morning that he won’t provide any specifics until after the election”, Labour’s Finance spokesperson David Parker says.
“National is now dangling the prospect of vague and undefined tax cuts just weeks after Bill English said nothing substantial was affordable.

“It’s pretty obvious that tax cuts were dangled only after National was in trouble with inappropriate behaviour by Judith Collins and the Prime Minister’s Office.
“Neither has National made any provision for spending by its coalition partners.
“In contrast, Labour has. Our detailed fiscal plan has been out for months and responsibly shows our revenue, spending and debt reduction plans.  Even more importantly we’ve got a plan to move the economy from speculation to productive investment and to higher value exports supporting secure well-paid jobs.

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