What was Labour thinking?

Luke Malpass writes:

Just as it looked like Labour might be getting out of its own way and hewing back to creating some sort of economic story, it tabled a bill in Parliament that would have literally jacked up the tax on almost every KiwiSaver account.

That plan was swiftly abandoned less than 24 hours later.

Labour do polling every week night, so one can only assume the results were dire on Tuesday night!

The accompanying Regulatory Impact Statement even provided some helpful figures and examples about what this would cost – some $225 million a year in extra tax, or $103 billion to 2070. Both the Regulatory Impact Statement and common sense say the same thing – at the end it was a tax on retirement savings, paid for by KiwiSaver members through higher fees.

Remember that this got signed off by Cabinet. They were told there would be over $100 billion taken from KiwiSaver accounts through this tax change, and they said “Great, let’s do it”

Labour promised no new taxes, and there it was, in black and white. Not only that but it was a proposal to increase the costs of one of Labour’s legacy projects – the Michael Cullen-created KiwiSaver.

Dr Cullen would not have been impressed.

For National this is the closest thing to a political free lunch there is. Both Luxon and finance spokesperson Nicola Willis will try to hang this around Labour’s collective neck until the next election. “Can they really be trusted?” will be the refrain.

They tried and failed with a CGT. They have tried and failed with a KiwiSaver Tax.

What will they try next?