Bill English scoffs at Jacinda Ardern's tax and trade policies

Bill English. Photo / Michael Craig

Prime Minister Bill English has accused Labour of acting irresponsibly in saying it wanted to renegotiate the free trade agreement between New Zealand and South Korea - despite having voted for it at the time.

And he has scoffed at Jacinda Ardern's most recent ring-fencing statement on Labour's tax working group, which was to take inheritance tax off the table.

English said every region in New Zealand had benefited from the Korea free agreement which took five years to negotiate and was signed in March 2015.

Labour was now effectively tearing it up.

"New Zealand will lose credibility going back to the South Korean Government and saying 'you know that agreement we spent five years negotiating,' we now want to reopen it,'" English told reporters.

Labour leader Jacinda Ardern said today she wanted to renegotiate the deal to allow the New Zealand Government to stop offshore foreigners from buying homes in New Zealand

Korea had maintained that right for themselves and Australia which has an existing ban on such sales, kept that right.

"We don't anticipate it will be a major problem because it already exists on the Korean side of the ledger.

"We think it should be extended to New Zealand."

She did not believe it would put the deal at risk and she thought South Korea would be "very understanding."

She has already said Labour would try to renegotiate the TPP-11 trade deal and would withdraw if it was not able to get in a provision allowing a ban on offshore foreigners from buying houses in New Zealand.

National, which negotiated the deal, did not seek specific provision for that but got a provision for stamp duty to be applied to any class of investment, which could have the same effect.

However in an interview in the Australian Financial Review Ardern has been equivocal on whether failure to renegotiate the TPP would be a deal-breaker.

"If I were to reveal that to you, I think I would lose my ability to negotiate on this one. So I'm going to reserve my position on that one," she told the AFR.

The United States under President Donald Trump has withdrawn from the TPP leaving just 11 countries. It has also raised the prospect of renegotiating its bilateral FTA with Korea.

Leaders of TPP countries are due to meet in Vietnam in November to discuss a recommendation to proceed with TPP-11, which would give New Zealand four new FTAs - with Japan, Vietnam, Canada and Mexico. It has FTAs already with the other six.

Korea is not a TPP country but has signalled its interest in joining the TPP.

English said Labour's policies promoted "big uncertainties" including on tax.

He and Finance Minister Steven Joyce continued to raise questions about whether a capital gains tax would apply to the family home of deceased parents, despite Ardern ruling out an inheritance tax.

"If the exemption is just for a family home, then wont it just encourage parents to invest more in a house rather than on productive assets so they can pass on a tax free capital gain," Joyce said.