Former prime minister Chris Hipkins is giving his first press conference as leader of the Opposition, as the Labour Party gets stuck into the new National-led Government with new claims of a “growing fiscal hole”.
“I said during the election campaign I was expecting this coalition to be a coalition of chaos, I did not expect them to prove it so quickly,” he said.
Hipkins said that the new Prime Minister Christopher Luxon needs to show some leadership, particularly towards Winston Peters, who Hipkins claims has overstepped majorly.
“He needs to talk to Winston Peters and tell him his comments are unacceptable,” Hipkins said.
Hipkins called on Luxon to “stamp it out” and “act like a prime minister”.
“I am not overly confident that Luxon has control over his government,” he said.
“It is wrong for Winton Peters to be stepping outside the cabinet manual at the very meeting where they were meant to be confirming the cabinet manual,” Hipkins said.
“We also said during the election that National’s tax plan didn’t add up, we are now seeing more evidence of that.
“New Zealanders did not vote for a windfall gain for landlords being applied retrospectively, which is effectively what they are planning to do with the announcements they have made.”
Hipkins pointed out the hundreds of millions of dollars that are putting “more pressure on the giant fiscal hole”.
On the removal of the smoke-free laws, Hipkins said it was “morally reprehensible”.
“It shows just two days into government they have already lost their moral compass,” Hipkins said.
“It is an international embarrassment as well, the first major headline that this government has attracted is their decision to increase the number of New Zealanders who smoke cigarettes.”
Hipkins is speaking at Parliament as new analysis suggests a policy that allows landlords to reduce their tax bills could cost $900 million more than National had budgeted.
National’s coalition deal with Act and NZ First saw it make billions of dollars’ worth of changes to its spending and revenue plans, including dropping the foreign buyer’s tax, forgoing an estimated $3 billion in revenue.
This left it to make up the difference by scrapping world-leading smoke-free laws to retain tax revenue from tobacco sales along with scotching its plans to increase support for low-income families in order to fund tax cuts.
Finance Minister Nicola Willis told the Herald the Government stood by commitments made in its coalition agreements.
Hipkins said the analysis found there was “even more pressure on a budget that is already billions short”.
“It’s not just shocking, but incredibly concerning that people’s health and wellbeing is worth less than a few extra dollars to National’s coalition.”
Hipkins is also likely to address the increasingly combative conduct of Deputy Prime Minister Winston Peters towards the media, including making false claims of bribery.
Hipkins told TVNZ’s Breakfast this morning that Peters was potentially breaking the law by making false claims that the media was bought off through the Public Interest Journalism Fund.
The NZ First leader claimed this week that the $55 million journalism fund was a bribe to the media sector, with specific reference to TVNZ and RNZ which are taxpayer-owned.
Hipkins told Breakfast that Luxon needed to “rein in” his deputy.
“They’re pretty outrageous allegations, actually, about the media being bought off. That’s incredibly damaging to the public integrity of New Zealand’s Fourth Estate.”
There was “potential” that Peters was breaking the law, “because his comments around TVNZ and RNZ effectively giving them public instruction on what they should be doing, almost certainly falls foul of the laws that are very clear that ministers shouldn’t interfere in the editorial decisions”, he said.
He said it was even more concerning that Luxon did not think Peters’ comments were serious enough for him to intervene, saying the PM should “be stamping down on these straight away”.
“They’re wrong, they’re baseless, they’re false and they’re actually very dangerous to the integrity of our democratic system.”
It comes as New Zealand On Air board member Andrew Shaw resigned yesterday after making social media comments critical of Peters and his attacks on media independence, calling him “malicious” and “the worst of this gang of thugs”.
Hipkins told RNZ that while he had sympathy for Shaw’s views, they were not appropriate in the context of his role on the board. NZ On Air administered the Public Interest Journalism Fund.
Applicants to the Public Interest Journalism Fund were asked, that when appropriate in producing funded content, to support NZ identity, culture and public interest requirements, including support for the principles of Te Tiriti o Waitangi.
Agreements included clauses around maintaining editorial independence. For instance in NZME’s agreements - in a clause specifically requested by the company - is an acknowledgement of the absolute editorial independence of the media entity: “We acknowledge the importance of your editorial discretion as a media entity and confirm nothing in this Agreement will limit or in any way impede or influence the ability of your news reporting functions to report and comment on news stories and current events, including those involving us, as you see fit.”
Meanwhile, analysis by Council of Trade Unions economist Craig Renney, formerly an adviser to Labour finance spokesman Grant Robertson, suggests a policy that allows landlords to reduce their tax bills will cost an extra $900m and come in closer to $3b.
The previous government abolished landlords’ ability to deduct their interest costs, increasing the amount of money on which they pay tax, and thereby increasing their overall tax bill. The changes began phasing in from 2021. National, Act and NZ First pledged to reverse this change, effectively reducing the tax bills of individuals who owned multiple residential properties.
National’s campaign promise estimated the cost of this change at $2.1b over the four-year forecast period, based on phasing out the change at the beginning of the next tax year starting on April 1.
As part of its coalition deal with Act, National agreed to accelerate the pace of this change, beginning in the current tax year.
About $600m of the increased cost comes from phasing out interest deductions more quickly, as National is obliged to do under its deal with Act. The rest comes from using updated information from the Inland Revenue Department, published in 2022, which revised upwards the income brought in by Labour’s changes - and therefore increased the cost of cutting them.
The retrospective nature of policy would also see some landlords receiving a refund for the current tax year.
The change is just one of a number of u-turns National had to make on some of its election promises to pay for the concessions.
National had campaigned to raise the Working for Families abatement threshold from $42,700 to $50,000 in 2026, supporting about 345,300 beneficiary and low-income families with the cost of raising children.
Scrapping those plans means low-income families will miss out on up to $37.90 a week that the party had promised under a policy designed to ease the “impact of the cost of living” which was “especially significant for families raising children”, according to a policy document.
Hipkins’ press conference also comes as new Police Minister Mark Mitchell continues to refuse to express confidence in Police Commissioner Andrew Coster remaining in the role. In opposition, Mitchell was a critic of Coster’s style of police leadership.
Coster met with Mitchell on Tuesday and told the Herald he had not offered his resignation, adding he was “confident” he could work well with Mitchell.
Mitchell refused to voice confidence when approached by the Herald, and again on Wednesday morning in an interview on Newstalk ZB.
The Prime Minister is ahead of other big international names.