Prime Minister Chris Hipkins has burned several more schemes on his policy bonfire and splashed more cash in a welfare boost as his popularity continues to increase in the latest poll.
However, Hipkins’ second big policy reprioritisation, particularly in the transport sector, has ruffled the feathers of their political ally the Green Party, which claims it will only make the country’s future climate targets harder to achieve.
Several policies have either been cut, refocused or delayed to help free up the capital for the Government’s aim to reduce the cost of living, and Hipkins isn’t ruling out more former priorities being torched.
Hipkins told Newstalk ZB’s Mike Hosking today that he was not trying to buy the election.
“It is not at all what I have said.”
As a Government, cost of living and recovering from the recent floods and cyclone was the top priority.
Inflation had risen globally and New Zealand was not immune to this, Hipkins said.
“I am not accepting Government spending is the primary driver of inflation.”
However he conceded tax cuts and other decisions by the Government could have an impact on it.
Hipkins said he did not want people on low income and superannuation “to go backwards” with the cost of living increase.
“Government had to do something to bring inflation down. Interest rates will start to have an effect now.”
A recent forecast from most bank economists showed inflation starting to come down from next year, Hipkins said.
“Inflation is starting to trend down internationally.”
Asked about retail crime, Hipkins said there needed to be more work to be done to combat it.
He said the area of retail crime which had seen an increase was for shoplifting of amounts valued at under $500.
“There has been a much higher level of reporting since 2017.”
The fact that those businesses had reported more crime, gives police more tools to tackle it.
“There was good progress made last year to tackle more serious retail offending such as aggravated robbery and ram raids.
“We saw a spike last year. We made good progress, ram raiders were identified as repeat offenders, and we got them out of circulation. About 500 of those young people have been prosecuted.”
Hipkins said Cabinet would receive more information on Three Waters in the next few weeks.
Yesterday Hipkins tossed the $568 million clean car upgrade scheme that allowed people to scrap old cars to gain a grant for a more environmentally friendly vehicle, staggered the rollout of Auckland light rail, narrowed the speed reduction programme, stopped the social leasing car scheme and refocused public transport goals in Auckland, Hamilton, Tauranga, Wellington and Christchurch.
Hipkins said today that the removal of a couple of policies the Government had previously been investigating - including the old vehicle scrappage scheme and the social leasing scheme - was due to the fact that they would have made a very small contribution to our overall emissions budgets.
There were other things the Government was doing that were proving to be more successful and had the potential to reduce theemissions by a much greater amount.
”This is about looking across the work programme and saying: ‘Okay, what’s actually going to deliver the sort of change that we need? What’s actually going to help New Zealanders with the cost of living?’ And making sure that we’re investing in and focusing in those things,” he told TVNZ.
Asked if investing in those now old policies had been a waste of time, Hipkins said looking at the vehicle scrappage scheme and the social leasing scheme, the advice that he had received that both were going to prove to be “quite difficult” to implement in the time frame concerned.
Between both of them, they were looking at something like 7000 tonnes of emissions reduction period.
Contrasting that with the clean car upgrade scheme and the industrial carbonisation programmes, they are talking about millions of tonnes of carbon reduced within a similar time period for a lesser cost, Hipkins said.
Yesterday’s bonfire came as the latest 1 News-Kantar poll on Monday led to Hipkins rising four percentage points to 27 per cent as the preferred PM, while National’s Christopher Luxon dropped five points to 17 per cent - his lowest since taking on the role at the end of 2021.
Labour dropped two points to 36 per cent while National fell three points to 34 per cent. The Greens and Act were both on 11 per cent, however, only the Left could form a government on those numbers - provided they were supported by Te Pāti Māori.
Speaking to reporters at his post-Cabinet press conference, Hipkins defended his policy shift, saying the initiatives weren’t sizeable or highly efficient contributors to the Government’s efforts to reduce emissions and that more policies would be announced in due course that would help New Zealand meet its climate targets.
Greens co-leader and Climate Change Minister James Shaw says he would have argued against cutting back on climate actions that would assist low-income families.
“The Clean Car Upgrade would have provided households with more low-emissions choices about how to get around,” he said.
“This doesn’t sit well on top of the previous extension to the fossil fuel subsidies, which we know benefits the highest earners most.”
He believed climate action was a “bread and butter issue” for many, especially those impacted by Cyclone Gabrielle.
“Every time we kick climate action into the future, we make it harder for ourselves to meet those targets.”
The National Party’s deputy leader, Nicola Willis, says it is well past time that the Government inflation-adjusted tax threshold and reduce the tax that working people pay.
Speaking to Newstalk ZB’s Kate Hawkesby this morning, Willis said the Government had sworn black and blue that they could not afford to do that.
”Well, actually, turns out there’s a lot of fat in the system, they’ve found a lot of money down the back of the couch - so it’s time to get its priorities straight and reduce the tax that New Zealanders pay.”
On benefit top-ups and getting rid of what Hawkesby called “the hated policies”, Willis said they actually agreed with those changes.
”What they’re doing is correcting their own mistake. They change the way that superannuation and other benefits were calculated.
“Instead of those being tagged to inflation - as they have been in the past - they tagged them to average wages. Of course, the problem is over these past few years under Labour, average wages aren’t keeping up with prices - aren’t keeping up with inflation.”
Willis said they were pleased to see superannuants getting the payments they deserve. But what was needed as a country was a plan to get inflation under control - something that had yet to be seen from the Government, Willis said.
”What we need to see is reductions in wasteful spending elsewhere, so that we can prioritise money to the places where it counts.”
National leader Christopher Luxon yesterday cited rising food prices and high inflation in his criticism of the Government’s reprioritisation, while restating his call for inflation-adjusted tax thresholds.
“My message to Chris Hipkins is, stop spending and cut taxes,” he said.
“[Yesterday’s] moves are no more than a rounding error - pocket change in Labour’s grand scheme to spend, spend, spend with nothing to show for it except Kiwis struggling to feed their families with food prices spiralling.”
Act leader David Seymour also doubted the value of the Government’s policy shift.
“New Zealanders need real change, [Chris] Hipkins U-turning on a tiny handful of policies isn’t fooling anyone.”
Outside of transport, Cabinet also agreed to delay advice on alcohol pricing, sponsorship and advertising reform to April next year, chose not to introduce legislation to lower the voting age to 16 for general elections, deferred work on the container return scheme and pushed back public consultation on a new test to determine the difference between a contractor and an employee.
This tranche of reprioritisation, along with Hipkins’ first round of cuts, would give the Government more than $1 billion to be redirected to measures to reduce the cost of living.
Auckland’s light rail survived the cut but would be staged. The first stage was expected to be confirmed by the middle of the year.
“Staging the rollout will align it with other critical transport investments, particularly the second Waitematā Harbour Crossing,” Hipkins said.
Speed limit changes, which had been intended to apply to 20-30 per cent of state highways in the next five years, would now be focused on the most dangerous 1 per cent of roads and where local communities supported the change.
Neither the Prime Minister nor Waka Kotahi could provide the Herald with a list of what roads would be chosen, the latter saying its state highway speed management plan would be reviewed in light of today’s announcement.
Alongside the policy reprioritisation, Hipkins announced the annual adjustment of benefits, superannuation and other financial support in a $2b package that would see the incomes of about 1.4 million New Zealanders stay in line with inflation.
The annual adjustments included an extra $311m to be spent over the next four years that allowed main benefits to be increased in line with inflation - 7.22 per cent - rather than the average wage rise as previously planned, which was costed at about $1.7b.
Labour wants the Govt to denounce the US attack as a breach of international law.