October 10, 2014 12:00pm by David Farrar

Little puts policies on the table

Little signalled a major shift in direction if he won the leadership, including the likely ditching of unpopular policies such as raising the pension age.

At a press conference today, the former union boss also signalled a rethink of a capital gains tax, power reforms and free doctor visits for over-65s.

Little said the policies were raised constantly on the campaign trail as either scary or unaffordable.

Most Kiwis were pragmatic enough to realise when some policies seemed “too good to be true”, he said.

His approach could pitch him against finance spokesman and acting leader David Parker, who advocated strongly for Labour’s policy mix.

Little is right to say their policies were part of their failure. Kudos to him for being the only candidate willing to say so.

Parker is the architect of three of those policies, and it will be fascinating to see what he now does.

In terms of the four policies, here’s my views on them.

Power reforms – this one is near barking mad. If any one policy scared the entire business community off Labour, this was it. A de facto nationalisation of the industry, with the state setting the price for all generation. Even the guy whose work they claim it is based on, came out and said it was crackers (in more polite terms). This policy must go for them to be credible.
Super age to 67. Personally I think this is one of their better policies. But Little is right that there was a backlash from union members about it. Blue collar workers saw it as Labour wanting them to work two years more than previously. However it is fiscally the entirely correct thing to do. The motivation for the policy was to embarrass Key over his silly pledge not to raise it, but they’ve tried that twice now and failed. Also Labour can’t govern without Winston, and Winston will never agree to it, so why take the flak for it?
Capital Gains Tax. Apart from being riddled with exemptions, the problem with their CGT policy is that it was one of several new taxes, and NZers saw it as Labour just wanting to tax families and businesses more. I shouldn’t give Labour free advice, but what they should do is copy the Greens with their carbon tax, and say yes we will have a CGT, but we will reduce income and company tax to compensate. This way it is about a fairer tax system, not about taking more money off families and businesses. That would neutralise the issue. However it would mean Labour not having all the extra money for spending.
Free doctors visits for over 65s. I don’t think that was a particularly unpopular policy for Labour – just a cynical one that didn’t work.

As I said I think it is a good thing to have a leadership candidate campaign on specific policy changes, as it gives members a chance to vote on them.

Little’s performance in New Plymouth may be an issue however. Not only has did his electorate vote in 2014 drop 12% from what it was in 2011 (and is 28% lower than Duynhoven in 2008), but Labour’s party vote in New Plymouth dropped 9% in 2014 and is 28% lower than in 2008. In absolute terms 2,954 fewer people in New Plymouth voted Labour in 2014 than 2008 and 4,646 fewer people voted Little than Duynhoven.