Behind the fact-check - details from the first leaders' debate

Academics at Auckland University’s Public Policy Institute (PPI) analysed the First Leaders’ Debate, which ran on TVNZ on Tuesday night, to check the claims made by the two leaders. The summary of their findings on the statements made by Labour leader Chris Hipkins and National leader Christopher Luxon is here and the details are below.

During the debate, between the National and Labour leaders, the focus of the economic segment revolved primarily around their proposed tax relief plans. National's proposal targeted low and middle-income families, promising savings of up to $250 fortnightly for an average household with young children, or up to $100 for child-free households with average incomes (National, 2023). However, the cost of this plan (estimated $15 billion over four years) was a significant concern, given the government's budget deficit projection of $11.4 billion for the year ending June 30, 2024, which was larger than the earlier estimate of $7.6 billion (Reuters, 2023).

So, the key question, which is raised by Hipkins, was the source of funding for this tax relief plan. National claimed it would be self-funded through savings generated from government spending on back-office functions, consultants, and a climate dividend (Te Ao News, 2023). They also aimed to raise new sources of revenue, primarily by selling high-value homes (over $2 million) to foreign buyers at a 15% tax rate, with a projected total of $740 million (Te Ao News, 2023). However, there were doubts about the feasibility of this revenue projection, as it was suggested that it might only raise $210 million annually (RNZ, 2023).

National's plan also involved taxing online gambling by New Zealanders, which was expected to generate an average of $179 million per year (RNZ, 2023), potentially helping regulate the growing gambling problem in the country. Nevertheless, the practical implementation of this plan was acknowledged as challenging (Newsroom, 2023). Hipkins raised concerns about the ambiguity in National's tax plan, suggesting that it would necessitate cutting approximately $6 billion worth of public services, including free early childhood education, prescription co-payments, and discounted public transport for young New Zealanders, to fund their tax cuts (1News, 2023).

In contrast, the Labour Party's economic focus centred on their 10-point cost-of-living plan, which involved GST relief on fruits and vegetables. This was estimated to cost $2 billion over four years and provide an average of $4.25 per week for consumers based on an average spending of $32.5 (RNZ, 2023). Labour pledged to ensure this relief directly reached customers by establishing a Grocery Commissioner to monitor supermarket behaviours and promote competition (Labour, 2023). However, the claim that supermarkets were making over a billion dollars a week in excess profit was disputed (RNZ, 2023), and National's leader, Luxon, argued that this relief would not significantly benefit customers, which was mostly accurate based on available evidence (NZHerald, 2023).

Moreover, overseas studies suggested that GST cuts or increases did not necessarily translate to comparable savings for consumers (NZHerald, 2023; 1News, 2023). There were concerns that the proposed GST relief would benefit high-income earners more than low-income individuals (Work Taxing Group, 2018), and altering a well-designed GST system that had been in place since 1986 (NZ History, 2021) was considered risky by some (NZHerald, 2023). Additionally, increasing petrol prices could lead to higher transportation costs and, in turn, contribute to increased food prices, potentially offsetting some of the savings from GST relief. All in all, economists expressed scepticism about the feasibility and effectiveness of the GST-free food plan proposed idea (1News, 2023). However, if implemented in conjunction with monitoring by the Grocery Commissioner, it would be more than the 2 or 3 cents claimed by Luxon.

In the health policy space, there was a mix of claims, with varying degrees of accuracy. Luxon’s claim that the 20 extra mobile dental clinics promised by Labour had not been delivered was mostly accurate. 5 have been ordered so far (Newsroom, 2023), but none are yet in service. Luxon’s numbers on Gumboot Friday counselling sessions were also correct. Hipkins was correct in asserting that medical staff have increased significantly over the last few years, but they are still not competitive with Australia (NZ Herald, 2023).

Hipkins’ claim that smoking rates are at an all-time low is entirely true, and they are continuing to decline - down from 16.4% in 2011/2012 to 8% in 2020/2021 (Ministry of Health, 2022). In contrast, Luxon’s claim that every single health outcome has gone backwards under Labour is untrue. Most of the main health outcomes have remained the same or improved - general mortality, cancer, infant mortality, maternal health. The number of hospital procedures had decreased (Te Whatu Ora).

Luxon claimed that we are experiencing two ram raids a day. "Ram Raids" are not defined as an offence in legislation and so do not have an offence code to be searched in police databases. The police have two kinds of data available: text mined data where they search the 'free text' fields of reports, and individually reviewed data. If we look at 2022 data which seems to be where National is getting its "a ram raid every ten hours" from, it is relying on the text mined data which shows 899 over the year, but the individually reviewed data for the same year is only 519. National claim that Labour gave false numbers in Parliament and that the actual figure is 70% worse than they thought, but this discrepancy is just the difference between these two data collation methods. Luxon did correctly identify a significant increase in retail crime.

Information from NZ Police confirms Hipkins' claim that Operation Cobalt has resulted in more than 50,000 charges laid against gang members and associates (NZ Police, 2023). Luxon correctly identified the funding given to drug rehabilitation - $2.75 million. The funding amount is correct as $2.75m over three years was approved for the Kahukura initiative from the Proceeds of Crime Fund. The Kahukura initiative is designed to "address the harm from methamphetamine amongst a group of Mongrel Mob chapters", however the funding was not awarded directly to them, it was applied for by, and sent to an organisation called H2R (Hard to Reach). The relationship between H2R and the Mongrel Mob is, however, convoluted as it is led by a member of the Mongrel Mob.

Regarding bootcamps, the reoffending rate is at least 80% and may be as high as 88% (NZ Herald). As Hipkins correctly claimed, the reoffending rate from the Circuit Breaker programme is only 25% (Scoop). Luxon’s question about why they hadn’t been rolled out was incorrect. They have been rolled out and the programme is being extended (Scoop, 2022).

Hipkins’ claim that foreign buyers will drive up house prices is accurate. There is plenty of evidence from NZ, Canada and Australia to support this (Do Foreign Buyers Affect House Prices?). Luxon’s claim regarding numbers of foreign buyers before the ban was fairly accurate. Statistics NZ figures show that foreign buyers made up between 3% and 20% of house sales (Stats NZ). However, Luxon’s claim that selling 1600-1700 homes to foreign buyers at the price of $3 million average with a tax of 15% would produce $740 million per year is hard to substantiate. This could add up to $750 million on average, but there has been discussion about this not being possible: "Economists analysing National's foreign buyers tax have found it would likely raise $210 million a year - falling well short of the $740m a year National expects to rake in." (RNZ, 2023).

In terms of new housing supply, Hipkins’ figures of 13,000 new in social housing and 40,000 new in private housing seem less so. According to the June 2018 Ministry of Social Development Housing Quarterly Report (the earliest archived online), there were 67,228 public houses, and the Ministry of Housing and Urban Development reports 79,463 at June 2023. This is a difference of 12,235, so is close. Private housing statistics are hard to get and it is unsure what this number is based on. Stats NZ data on new building consents between October 2017 to June 2023 come to 237,455 if you add all the data points, and other estimates on private dwellings also equate to an additional 213,100 between 2017 and 2023, neither of which are close to the 40,000 figure.

On a final but very important note, Luxon’s claim that the National Party invented ‘by Māori, for Māori’ is completely false. This phrase has been used in Matauranga Māori for decades, and comes from the work of significant Māori rangatira such as Mason Durie (Māori Studies).