Labour must front on $860m fiscal cost of income insurance

Papers released to National under the OIA show that Labour’s proposed income insurance scheme will not only hit Kiwi households and businesses in the back pocket, it will also hit the Government’s books with a bill of more than $800 million, National’s Finance spokesperson Nicola Willis says.

“Chris Hipkins has repeatedly refused to say whether Labour’s income insurance scheme would be implemented after the election, with Grant Robertson pointing to the need for economic conditions to improve.

"Well, with Grant Robertson declaring economic ‘victory’ this week - despite the Reserve Bank forecasting a recession, inflation remaining out of control and the current account deficit the largest in the developed world - the income insurance scheme is surely on, and with it a giant hole in Kiwis’ wallets and the Government’s budget.

“Funding income insurance would require a jobs tax making a Kiwi earning $60,000 more than $800 worse off every year. That’s $800 less for groceries, rent, the mortgage or kids’ swimming lessons. It’s a cost Kiwis can’t afford.

“Employers will also be hit with a new 1.39 per cent tax, meaning they’ll have less cash available for pay rises and may be forced to hike prices to pay for it.

“But the jobs tax also comes with a massive hit on the Government’s own books. As an employer of hundreds of thousands of Kiwis, the Government would be on the hook for $860 million over four years.

“Labour treats taxpayers like a bottomless ATM. Much like the $51 million on a cancelled bike bridge, $20 million on the cancelled TVNZ/RNZ merger, $30 billion for Auckland Light Rail, and $3 million to have gangs deliver drug rehab, this is just wasteful spending that we cannot afford.

“Labour’s economic mismanagement has seen government debt blow out from $5 billion in 2019 to more than $100 billion – and this would only make things worse.

“National will quash the jobs tax and deliver much deserved tax relief – up to $250 a fortnight for an average income family with young kids.

“After six years of reckless economic mismanagement, National will rebuild the economy and let Kiwis keep more of what they earn. We’ll rein in Labour’s addiction to expensive contractors and consultants and run the ruler over Wellington to ensure every dollar is treated carefully.

“New Zealand can’t afford another three years of Labour – let alone three years of Labour, the Greens and Te Pāti Māori with their plans for a wealth tax, jobs tax, trust tax, and more fuel tax.

“Only National will restore discipline to government spending and rebuild the economy so that Kiwis can get ahead.”