Southern say: Leary, Woodhouse at odds philosophically

Nominally, our two main political parties are from the left and right sides of the spectrum.

However, the voters who will decide any election result cluster in the middle, hence both Labour and National tend towards being centrist, preferring being in power to being pure of principle.

People might cynically suggest that sometimes makes it hard to tell the two parties apart, but every so often a debate or an issue pops up which demonstrates Labour and National do indeed have different mindsets.

Just such a philosophical moment happened on Tuesday, when Dunedin Labour MP David Clark, on behalf of Covid-stricken Revenue Minister David Parker, introduced the snappily-titled Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill.

As the name implies, this is a hardy annual when the Government places in statute any tinkering it has in mind for the tax system in the coming financial year.

Most significantly, the Bill includes the removal of interest deductions as a business expense for residential investment properties, a hot button issue both for the mum and dad investors who own property in Dunedin’s student quarter and the people who rent off them.

As a member of the finance and expenditure select committee, Taieri Labour MP Ingrid Leary was keen to weigh in.

"Why do some people in this country own 25 houses when others can’t even afford to get a roof over their head," she asked.

"Well, that’s because those groups of investors are one of the only groups in this country who have never had to contribute anything from the profit of their investment."The inaction of doing nothing for that group is actually not only worse for first-home buyers, it makes inequality worse, so National cannot in all honesty say they’re interested in closing the inequality gap when these tax cuts that they propose and what they don’t want to support in terms of interest deductibility is about feathering the nests of their rich friends and trying to buy their way into government with promises of tax cuts."

Her observations immediately sparked a sharp rejoinder from Dunedin National list MP Michael Woodhouse.

"Well, I credit Ingrid Leary for her deeply socialist roots being so clearly on display there, because what she’s basically said that is she hates rich people, she cannot stand success and innovation and people getting ahead," he said.

"She thinks it’s something that happens by accident, and that’s the sort of theme that we’ve had permeating this debate all the way through."

This is not the first time that the different stripes of Ms Leary and Mr Woodhouse have been on full display in recent weeks.

Ms Leary, as was her Dunedin South predecessor Clare Curran, is a strong advocate for the KiwiRail Hillside workshop, an industrial landmark now being remodelled for future rail engineering work.

Former South Dunedinite Grant Robertson, equally as committed as Ms Leary to Hillside, wrote the requisite cheque in his role as finance minister.

A previous National government backed the closure of Hillside on the basis that so far as it could see it made little economic sense to build trains in Dunedin when it could be done more cheaply elsewhere.

This stoush flared up again over Christmas when Treasury and Ministry of Transport advice regarding funding the development at Hillside which ran contrary to Government policy, was made public.

From a purely dollars and cents argument, the fact that trains built overseas would cost less than trains built here would cost has some strength.

But Labour, and Ms Leary’s, argument is that there is a social benefit in the jobs the work at Hillside would create which is worth spending that extra money on.

Suffice to say, Ms Leary makes no apology for her deeply socialist roots, and the auditor in Mr Woodhouse is not going to stand for what he believes to be unreasonable expenditure.

Expect these philosophic debates to continue for some time to come.

Credit where its due

Another taxing matter on Dr Clark’s desk in recent weeks has been the Credit Contracts and Consumer Finance Act.

The legislation, which Dr Clark inherited from former Minister Kris Faafoi, was drafted with the best of intentions to stop predatory pay-day lenders from exploiting the vulnerable poor.

However, exactly what banks warned would happen during select committee hearings, did happen: people in that middle range of voters found that their every takeaway and coffee purchase was being scrutinised by their bank so that they did not fall foul of responsible lending rules.

After problem after problem was revealed, many being highlighted by some excellent reporting by the Otago Daily Times business department, Dr Clark temporised by saying he would have another look at the matter.

That look obviously warned that here be dragons because early on Friday morning Dr Clark announced "practical amendments would be made to the Act.

That included clarifying lenders do not need to look deeply into borrowers’ daily living expenses, and giving further guidance to what "sufficient detail means when assessing if a borrower can afford the cost of credit.

These are sensible changes, and not before time, but the problem was largely of the Government’s own making.

By not recognising the potential pitfalls of the legislation as written, it laid itself open to what has been an effective attack from National and Act New Zealand, which have scored points by accusing it of requiring excessive nit-picking into people’s personal lives.

And in a week in which an opinion poll placed National in first place in the preferred party stakes for the first time in two years, Labour will need to avoid giving the opposition any more free hits.

Promise kept

Readers may recall that last year Prime Minister Jacinda Ardern had been scheduled to read a story to the children of Bathgate Park School during a visit to Dunedin, a trip called off due to the city being fogged in.

Ms Ardern wrote an apology letter to the children and promised that she would be back one day.

Politicians get a bad rap for breaking promises, but this was one which Ms Ardern kept, spending part of her Thursday morning running through a Lynley Dodd classic for her enraptured audience.

mike.houlahan@odt.co.nz