New analysis that warns National’s tax cuts risk pushing Kiwis’ mortgage interest rates higher is further evidence that Christopher Luxon’s plans will actually leave many households worse off, Labour Finance Spokesperson Grant Robertson says.
“Many households with mortgages could be worse off as a result of National’s tax plans if they drive inflation and interest rates even higher as Goldman Sachs believes they could,” Grant Robertson said.
“This is classic National, robbing Peter to pay Paul. Offering a tax cut, but then saddling households with higher inflation and higher interest rates.
“Everyone knows their tax plan doesn’t add up and will result in deep cuts to services New Zealanders rely on. The fact it is inflationary makes it even worse.
The new analysis from Goldman Sachs reported in the Herald today follows economist Cameron Bagrie when he said: “National tax plan is inflationary.” And economists Michael Reddell, Sam Warburton and Nick Goodall have said the policy to lift the foreign buyer ban for houses over $2m will cause greater house price inflation in New Zealand below the $2m mark as well.
“These higher interest rates under National would be on top of the higher rates and water bills New Zealanders will face as a result of National rolling back Labour’s Affordable Water reforms.
“And in Auckland, Mayor Wayne Brown has pointed to a $2 billion hole in the city’s transport budget if National gets elected.
“It would be economically crazy to vote National. Their plans mean higher inflation, higher interest rates, higher council rates and water bills, higher house prices and more foreign buyers pushing Kiwis out of the market due to Christopher Luxon’s desire to sell off $5 billion of Kiwi property to overseas buyers every year. That’s not an economic plan; it’s a recipe for disaster.
“Under Labour the economy is turning a corner. Inflation is coming down, unemployment is low and we have a safe and steady plan for the economy. National’s irresponsible plan puts our recovery at risk, will mean big cuts to public services, and will put big extra costs on households,” Grant Robertson said.
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