Labour is in full crisis mode as Finance spokesman Grant Robertson publicly admitted today that Labour's changing positions and inability to communicate a coherent tax policy has been a failure. They're now reverting to the previous tax policy of Andrew Little, which held that any proposed changes to taxation from Labour's tax working group would be campaigned on in the 2020 election.
Throughout August Labour had visibly shifted away from Andrew Little's sensible policy of waiting until a second term to implement any tax changes. It was a sensible policy by Little, who was borrowing from Key's 2008 playbook of ruling out any asset sales until a second term where they'd campaign on them in the 2011 election. Earn the trust of voters over your first term, then they'll trust you to make more significant changes in your second term.
That was until August, when Jacinda publicly rebuked her deputy Kelvin Davis and stated that Labour would be free to implement any tax changes before the 2020 election.
What followed was a comedy of errors from Jacinda as she was forced to back away from the numerous new taxes being proposed by senior members of her caucus. She first had to rule out changes to income tax, then rule out a capital gains tax on the family home, then rule out a land tax on the land under the family home, and now Grant Robertson has had to emerge and announce that Labour is reverting back to Plan A.
Politically this is an utter disaster for Labour. While Grant's announcement today is the right decision to make, Labour should never have allowed the tax circus that's been running for the past month to take place, and it demonstrates a huge lack of political nous and leadership from senior Labour figures, and some of the blame has to go on the back office who are advising them and not just their MPs.
Confronted with their meteoric rise in the polls, it seems that Labour's leadership, campaign, and policy teams all got ahead of themselves in believing Jacinda's popularity would allow them to have a much more ambitious policy programme in their first term than they had originally planned.
In doing so they opened up a chink in their new found armour that National has driven a lance through and exposed a lot of rust on the inside. As I wrote back when Jacinda first became leader, Labour's problems have always gone a lot deeper than just their leadership, and their inability to stick to a coherent position on tax policy confirms this. Eight weeks was never going to be enough time for Jacinda to fix those internal issues, but regardless of the election outcome, hopefully she does takes steps to rectify it soon.