Joining Newsroom today is List MP and Labour Party President u/SoSaturnistic.

Comment: Labour saved New Zealand's economy

written by u/SoSaturnistic

The other day the final budget-related bill made it through Parliament, guaranteeing a consistent and reliable increase in various payments which comprise our vital safety net for all people. With the passage of this bill, the present coalition has fulfilled its fiscal obligations and delivered a much-needed shot in the arm to the economy. And as the senior party of the coalition, Labour has delivered on all of our key fiscal commitments in our manifesto.

One of the key commitments we ran with in the last election was adhering to common-sense principles of debt reduction. After all, loading up on debt during good economic times reduces the ability for future generations to act if those good times end later on as more resources are dedicated towards servicing debt rather than on economic rejuvenation. It is in this light that Labour pledged to keep an operating surplus in place so long as New Zealand stayed out of a recession or other economic emergency.

One of the issues with the draft budget paper, however, was that the Minister of Finance was unaware of the revenue effects of localising the land value tax. This change may have brought about substantial tax relief but it would cost the Crown over $16 billion each year. Without urgent action, the Crown would have assumed over $52 billion in new debt over the next fiscal cycle, with seemingly no end to the debt in sight.

Luckily, Labour delivered that solution. Due to proposals put forth by Labour, the deficit was patched up and the commitment to run a sustainable operating balance was upheld. Labour talent drafted an urgent proposal, and key talks driven by u/Youmaton were instrumental in seeing it passed. In doing so, Youma can claim to have not only saved the lives of two New Zealanders in North Korea, but also the nation's economy. Meanwhile, both the Prime Minister and the Leader of the Opposition ended up voting in favour of saddling future generations with an eye-watering level of debt over the next decade; it's a good thing that they lost the vote that day.

The budget paper also proposed a $100 per tonne carbon tax rate to take effect immediately. While global climate change experts agree that by the end of the decade such a price may be reasonable, at the current time this would be damaging to many people, both in terms of the sudden rise in costs for things like electricity and fuel and from the hit to certain sectors like manufacturing and industry. Some time ago the threatened closure of Tiwai Point's aluminium smelter was an issue of great concern after all. Then, the problem was cheap imports but last week the greatest threat would have come from the Government itself.

The worst issue to arise from this, of course, is that the carbon tax would not be applied to imports; for dirty industrial processes companies can avoid the steep costs of the tax by offshoring production to places where there is no such price on carbon. Without a way to price in the costs of foreign production, many of the carbon emissions caused by the consumption of products in our country can be offshored to other places and undermine the efficacy of a measure designed to reduce emissions, something that this country must aim for to protect our planet.

It is for these reasons, short term costs, regressivity, and the lack of efficacy, that Labour was able to pass its own amendment to the taxation bill and limit the increase to a more sustainable amount. In doing so we protected people's jobs and kept the cost of living down, while living up to our manifesto commitment to take on climate change with the carbon tax being an important part of that strategy.

In recent days there have been a number of changes in the politics of this country. We will have a new opposition leader in the National Party leader, u/Winston_Wilhelmus_4, and a new candidate vying for the position of Prime Minister from the Greens, u/CheerfullyPutrid. Neither have served in Parliament, and both parties will have elements who rejected common-sense policies on economic development, public finance, or climate change--in the National Party it will be the remnants of the Liberals and in the Greens it will be those MPs who voted down the now-passed amendments. In such a context of unease and inexperience on the big issues facing our country and the world, it's clear that more statespersons like u/Youmaton are needed at the top. The country will have a choice in the upcoming election to retain such leadership well after 11 July.