Barbara Edmonds on guiding Labour’s tax ‘journey’

It’s been a little over nine months since Barbara Edmonds first took on the Labour Party’s finance portfolio; “It’s a labour of love,” she quips of the milestone.
But anyone hoping for the birth of a bold new tax policy at the party’s annual conference in Christchurch this weekend would be wise to manage their expectations.
Edmonds’ leader Chris Hipkins has already indicated a definitive stance remains some way off, while the former tax lawyer is at pains not to tip her own hand as far as any personal preference towards a wealth tax or capital gains tax.
“We are right in a pivotal point for our party, it’s our first conference since the election … our members do really amazing things both in their personal life and for the party, so I’m going to give them the grace and respect to have that discussion without me saying what I personally believe,” Edmonds tells Newsroom.
She has been struck by opinion polls showing an increase in support for some form of CGT, as well as unexpected voices from the business sector – such as ANZ chief executive Antonia Watson – indicating their own approval of such tax reform.
But Labour has tried and failed many times to get some form of a wealth tax across the line, and it is clear something will have to change if it is to succeed at the next election.
“It doesn’t matter what we’re going to bring as the alternative to the public: if we don’t communicate it well, and we don’t bring them along on that journey as to why we’ve made that decision we’re going to, we’re going to lose.”
It isn’t the party alone that needs to drive the debate, Edmonds says. In her meetings with business groups, she has had a simple message on both tax and wider economic policy: “If you like something, say so, otherwise the silent majority doesn’t have a voice.”
Having non-political voices making the case for tax reform – or even just a meaningful debate – could help to shift the dial in a way that politicians can’t.
Ultimately, Labour will still need to devise a policy of its own, with the timeline dependent on how this conference goes but Edmonds aware of the need for a sufficiently long runway.
“Tax is technical and so you need to work through all the different unintended consequences, all the different design measures … there has to be sufficient time to develop a strong policy, but then sufficient time as well to actually inform the public and go through that communications exercise up and down the country.”
Winning over the wider public is a significant challenge, but so too is soothing the feelings of party members frustrated with Hipkins’ decision to rule out a capital gains tax and wealth tax before last year’s election; the Herald reported this week on a conference remit to effectively ban so-called ‘captain’s calls’, a measure unlikely to pass but that serves as a clear signal of discontent.
Edmonds offers a defence of the party’s policy-making and the role of the grassroots membership within it, but says a debate at the conference is welcome – as long as it’s respectful and constructive.
With inflation falling and the Reserve Bank cutting the official cash rate for the second time in a row, it’s not the easiest time to be making the case that Labour is the better steward of the economy.
But how much credit does the Government deserve? “Not much,” she replies swiftly, noting the underlying weakness of the economy and the role of monetary policy rather than the coalition’s fiscal measures.
Edmonds says the coalition’s decision to put the handbrake on a range of infrastructure projects has had a negative effect on the labour market, removing clarity on a future pipeline of work and increasing the flow of New Zealanders heading to Australia for better working conditions.
“One of the things I’m hearing [about the Government] is, ‘It’s all good to repeal, remove, replace – but what’s your plan? … We want to have confidence that you are looking past the short-termism’.”
Labour’s conference is a chance for Edmonds to give a sense of her party’s own long-term vision, and she says it is future generations who will be at the front of her mind when she speaks to delegates on Saturday.
But it is the current generation of voters who Edmonds and her caucus colleagues will have to win over, sooner rather than later, on the vexed issue of tax.