John MacDonald: ACT throws National's tax plan on the bonfire

National’s tax fantasy is dead.

Now, if you’re one of the people who seem to go completely ape whenever I mention the National Party and who accuse me every time of being anti-National, calm the farm for a minute. Because what I said is a quote. I’m not saying it. It’s a quote.

It’s a quote from the headline on political commentator Matthew Hooton’s weekly column, which is published every Friday morning.

Matthew Hooton who was the PR man for Todd Muller when he was National leader for five minutes. Matthew Hooton who said this time last year that the current Labour government is the most inept government New Zealand has ever had.

So he’s not saying what he’s saying today in the NZ Herald because he’s anti-National.

The reason he’s saying National’s tax plan is dead, is because the ACT Party has looked at the Government’s books - which were opened for all the world to see last week in the Pre-Election Fiscal Update (PREFU - and has had a re-think on taxation.

And, as part of that re-think, it’s decided that now is not the time for significant tax cuts. And I agree.

ACT is saying now that it reckons the country could afford tax cuts of several hundred dollars a year. Compare that to National, which is still trotting-out the old “trust, us, everything will be fine” line. And is still telling us that a National-led government would reduce income tax by as much as several hundred dollars a month.

ACT says several hundred dollars a year. National says several hundred dollars a month.

And Matthew Hooton, in his article today, is saying that ACT’s revised approach on tax is the final nail for National’s policy because there’s no chance it could get 61 votes in Parliament.

And he is spot on. ACT wouldn’t support National’s tax plan. Neither would New Zealand First. Winston Peters has made it very clear that he doesn’t support National’s policy.

He said at a public meeting on Monday that he would even consider trying to get rid of National’s tax cuts as part of any coalition discussions.

So you can see why Christopher Luxon, pretty much every time he speaks, tells people to give both of their votes to National. Because without an outright majority in Parliament, the tax cuts are history.

But we know that National doesn’t have a hope-in-hell of getting a majority like Labour has at the moment. I think we’ve learned from the last three years that an outright majority is a disaster.

So without its coalition partners supporting its tax plan, then Matthew Hooton is spot-on when he says National’s tax policy is history.

As he says in his article, when National found itself being criticised left, right and centre for its policy, it could have done something simple like tweak the timing of it and voters would have accepted that, because of the current financial situation.

But National didn’t do that. In fact, it dug its heels in. Telling us all that it had the modelling; it had the numbers; and it would be pressing-on with the cuts if it ended up in government. Rock solid.

Or as Matthew Hooton describes it: “National then decided to double-down on its lie, smearing the professional reputation of the country’s most reputable economists, financial analysts and tax experts.”

So I think in light of National’s obvious coalition partner, ACT, coming out and saying now is not the time to be promising big tax cuts, and revising its own tax policy, National needs to do the same.

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