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Peter Wilson: Goff Gets Off To A Good Start

Peter Wilson
Peter Wilson
Phil Goff
Phil Goff

For the many, not the few. Labour's new slogan has potential and it would be a good idea to keep it going.

It gives party leader Phil Goff a wide range of opportunities, and he needs to take anything on offer during a crucial second year in opposition.

And opportunities will come his way, because the Government is going to be more vulnerable than it was in 2009 when it was dealing with a recession and Labour couldn't be seen to be trying to score points while the economy was in strife.

This year is going to be about change, which always carries elements of political risk, and Labour will be able to exploit any discontent.

Hence the slogan, and the mission it has chosen is to fight anything that even looks like favouring a minority.

If that happens, it will be translated into National "looking after its rich mates" at the expense of the low paid.

Goff's first chance to have a go will be the Government's tax changes, expected to be outlined by Prime Minister John Key in his scene-setting speech to Parliament when it opens on February 9.

Although finance Minister Bill English said last year there wouldn't be any "big bang" changes to the system, this is going to be a big deal. It's going to affect just about everyone and it's meant to set the economy on a new course leading to increased productivity.

Key and English will be choosing from the set of intriguing recommendations delivered by the working group that examined the tax system and declared it to be broken.

Among the options in front of the Government are raising GST, cutting the top tax rate and introducing a land tax.

Lowering the top rate looks like almost a certainty because of Australian moves in that direction. That seems to fit well with Labour's watchdog role of looking out for everyone, but it isn't that simple.

Although the top rate applies to high income earners, there's also the fact that the top 10 percent (the few) pay nearly half of all tax revenue the Government collects. The other 90 percent (the many) don't have a problem with that but more and more of them are getting caught by the top bracket as their income increases.

Raising GST would be in line with the Government's desire to tax the spenders, not the earners, which might help reduce the country's huge private debt problem and increase savings.

But it would also clobber low paid people because they would feel a GST increase much more than those who are better off. The top 10 percent of earners wouldn't notice much difference in their lives, the bottom 10 percent most certainly would.

These issues mean the Government is going to have to carefully balance whatever it does, and given its aversion to doing anything that would damage its remarkable popularity, it won't want to upset large numbers of voters.

But it is going to have to do more than fiddle around the edges of the system and the results will have far-reaching effects which Labour can use to question the Government's entire economic management.

As for Goff and his party, the first caucus of the year re-elected its leadership team of Goff and deputy Annette King unopposed, giving them a strong endorsement and setting them up for a trouble-free year in terms of challenges. National may try to whip up rumours of caucus discontent, but all the signs are that Labour MPs want to get on with the job in Parliament without any self-inflicted wounds.

Labour's senior members have given no indication of wanting to oust Goff, and if there are any who really want the job it wouldn't make any sense to make a move now anyway.

Goff's second year in charge is going to be a stronger test than the first because he will go head to head with ministers on domestic policy, as opposed to dealing with the tactics that were needed to combat the global recession during the first year.

He will need to lift Labour's poll ratings by the end of this year so the party can go into an election year looking like it might have a chance, even though National seems assured of at least a second term.

And although the gap between the main parties is still significantly bigger than it was on election night, Labour didn't actually lose much ground during 2009. It won 33.9 percent of the party vote in the election, and it is still polling close to that mark. Voters certainly haven't been deserting in droves and National's gains have come mainly at the expense of the small parties.

It does have a problem with Key. The prime minister's personal popularity is phenomenal, and Labour seems to have a problem figuring out why. National isn't entirely sure either, although it can easily explain it by simply saying he's a great leader.

If this support for Key doesn't start to diminish, and if Goff's standing in the eyes of voters doesn't improve, any fall in National's ratings will continue to be offset by the huge opinion poll gap between those two.

Goff has had a good start to the year. An impressive state of the nation speech included a new policy to cap the pay of senior public servants at the level of the prime minister's salary. That has some holes in it and it's been pointed out that he's comparing apples with pears, but it was a clever and simple idea. If he can keep the pressure on the Government and force it to defend itself, Goff could end up having a better year than Key.

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