National's election campaign begins

with a shot across Labour's bows

National Party leader Christopher Luxon read out what amounts to the first draft of an election manifesto in Auckland today (Sunday).

His party had earlier been criticised for lacking policy, other than copy-and-paste statements about cutting taxes and law and order. (Boot camps for young offenders are such an old idea!)

The headline policy announcement in Sunday’s speech, however, was carefully designed to put the Labour Party off balance. It raided social-democratic territory (early childhood education) and said that National’s proposed childcare tax rebates would be paid for by reprioritising spending that (Luxon claims) is wasted by the Labour government on consultants.

That landed two carefully aimed punches. Carmel Sepuloni, Labour’s Minister for Social Development, hit back by calling National’s policy a “rushed response” to what the government is already doing in childcare. I get the sense that Labour wasn’t expecting National to attack on that front, as Sepuloni’s response looked rushed.

National’s ECE tax rebate is potentially attractive to people on low and middle incomes as it’s payable directly to parents via the Inland Revenue Dept.

The money would appear in mum and dad’s bank account. And it’s related to how much parents pay in fees (and hence to how many hours of childcare they book) and not to how much they earn. It doesn’t favour those on lower incomes; it favours those who work longer hours.

The abatement threshold is quite high: the maximum weekly rebate would gradually reduce for families earning over $140,000.

Rather than subsidise the providers, this policy gives money to working parents, making it easier to afford childcare fees. (If the parents don’t have a joint account, or if there’s a custody dispute, I’m not sure how they’d decide who gets the rebate.)

A tax rebate would help towards National’s general aim of addressing the cost of living, but by targeting families this time, not individuals.

From here on, we can anticipate that the National Party will drip-feed new policy announcements to try to grab headlines as the election year drags on.

They could trip up, however, over their big promise to “deliver resilient infrastructure for the future”. Great idea, if we take them seriously, but how will they pay for that without raising taxes? (See my last week’s newsletter.)

National has promised to repeal Labour’s Three Waters legislation (which restructures and refinances water services). But National haven’t been very convincing on alternative sources of finance, other than to return to something close to the status quo, in which case local government and ratepayers bear the brunt.

Luxon may get a waterboarding during election debates if he doesn’t have practical answers for the country’s infrastructure woes.