Claire Trevett: National leader Simon Bridges sticks to safe ground in tax pitch to middle NZ

National Party leader Simon Bridges. Photo / Andrew Warner

Opinion

COMMENT:

National leader Simon Bridges has a vision and his vision is tax cuts, albeit tax cuts that aren't quite tax cuts but are at least not tax increases.

The billing for his State of the Nation speech promised he was excited about the year ahead, brimming with vision.

It delivered Bridges' first major grab for middle New Zealand. That came in the form of promising from 2021 to move income tax thresholds every three years in line with the cost of living - a halt to bracket "creep". It would leave someone on the average wage about $450 a year better off in the first year, rising after that. Those on higher wages would be about $550 better off.

He pointed out those brackets had not changed since 2010 and bracket creep was "tax increases by stealth".

By 2022, someone on the average wage would be in the top tax bracket.

It was also a bid to put the ructions of last year and his low personal polling behind him and assure National supporters the party had not changed.

He sought to remind people of National's core strengths - sticking to the safe territory of talking about the economy, dismissing Labour's "woolly" talk of a wellbeing Budget.

It was also the first batch of significant policy to be dished up by Bridges. While tax policy is usually kept under wraps until closer to an election, the timing was calculated.

Bridges was effectively showing his armoury in advance of the Government's Tax Working Group reporting back.

That report is expected to include a suggested capital gains tax. There are suggestions it will be fiscally neutral, matched by income tax cuts for lower incomes.

And all of it could come a cropper if NZ First won't get on board.

Tax has long been one of the main points of difference between National and Labour and that is not set to change anytime soon.

Bridges' announcement was not simply a reheat of National's 2017 income tax policy - a "Families Package" which included tax threshold changes at the bottom end.

Bridges did not deliver on tax cuts. But he left the prospect dangling, saying in due course he would release the full tax package. Cuts would depend on how the economy was tracking.

Much of that will depend on Finance Minister Grant Robertson, who was enjoying himself in the Wairarapa by impersonating National's former Finance Minister Steven Joyce.

Robertson said Bridges had some explaining to do about how he was going to afford everything. On National's numbers, the indexation of tax brackets would meant the Government missed out on $650 million - one percent of tax revenue.

Robertson pointed out Bridges was also going to scrap regional fuel taxes and any capital gains tax moves Labour might make, and had promised no new taxes in a first term. Yet he still wanted to build all the roads and pay all the teachers more.

"I think he'll find Steven Joyce's fiscal hole in his backyard."

The substance of Bridges' speech did at least outweigh the style.

Former PM John Key was dire at presenting set-piece speeches, droning on until he sometimes seemed to even bore himself. Key was much better at off-the-cuff speeches, although they are a risk when setting out detailed policy.

So it was with Bridges, who handles the informality of public meetings and walk-abouts well but lacked the fire of conviction for a traditional "vision" State of the Nation speech.

That could be down to the audience, a business audience in Christchurch. Or it could be because he had dismissed Prime Minister Jacinda Ardern's talk as being all style and little substance, so maybe he was trying to deliver the reverse.

It will not bother him. He will be hoping middle New Zealand could only hear the cha-ching of extra cash into their piggy banks.