Prime Minister Christopher Luxon says Labour is talking "a load of rubbish" when it claims the Government is implementing a new "gas tax" on New Zealanders.
By Craig McCulloch of RNZ
And Energy Minister Simon Watts has told media the new energy plan is not a "levy" either, despite Luxon calling it just that at the official announcement on Monday.
Labour fired back on Tuesday morning with one of National's own attack lines – "if it looks like a tax and it quacks like a tax, it's a tax".
The back-and-forth came on Tuesday morning, the day after the Government announced plans to build a new liquefied natural gas import facility, funded by a charge levied on the electricity companies.
Labour was quick to label the levy a "gas tax" which would be passed on to consumers through higher power prices.
But Luxon told reporters that was not the case.
"What a load of rubbish. It's all designed to lower power bills for New Zealanders. That's why we're doing it, and that's what it's all about.
"It's about increasing supply, so we lower the dry risk year, and therefore lower electricity prices."
Luxon refused to divulge the size of the levy while the procurement process was underway, but he said the government had received advice that the move would save households $50 per year.
"Let me be clear: without doing this, New Zealanders will pay more."
Watts told reporters the announcement was neither a tax, nor a levy because it would result in "net savings" to New Zealand households' energy bills.
"It is neither [a tax nor levy] because it is a net benefit to New Zealand households."
Labour leader Chris Hipkins said the Government simply could not make that commitment.
"Christopher Luxon is struggling to comprehend basic household economics. Probably not surprising from someone who only spends $60 a week on groceries.
"Ultimately, if the government charges every household in the country a new tax every time they receive their power bill, it's going to cost households more money."
Dictionary disarray
Hipkins said it was "farcical" for the government to claim the new levy was not a tax, especially given National had promised New Zealanders "no new taxes" before last election.
"I'll quote from Nicola Willis directly. It's a quote you might want to go back and find: 'if it looks like a tax and it quacks like a tax, it's a tax'."
Willis made that statement while in opposition in 2022 after Labour proposed changes to how KiwiSaver fees would be taxed. Labour ultimately dropped the plan after a swift public backlash.
Speaking on Tuesday morning, National's Willis said Labour was "absolutely wrong" to label the government's plan a tax, pointing to the official advice that electricity prices would fall.
"This is not us conjuring up numbers... Labour have not engaged with that analysis at all. Don't let them get away with it," she said.
"I am not going to tolerate Chris Hipkins claiming that we are taxing people when we are actively reducing their energy bills after the mess left to us by the last government."
Willis said Labour had made a "clear mistake" in banning gas exploration and had not proposed any new solutions to the energy crisis.
"Their previous plan was to invest $17 billion in Lake Onslow, which wouldn't have been available until after 2030 and would have resulted in a significant cost impost for New Zealand households."
Hipkins said Labour would reveal its energy policy later this year and was currently keeping all options on the table.
National's coalition partners also weighed in on the definitional dispute on Tuesday afternoon.
ACT leader David Seymour said the recently passed Regulatory Standards Act made clear that a levy required its benefits to go to the people who paid it.
"In the case of the levy that's been in the news today, it is a levy," Seymour said.
NZ First leader Winston Peters, however, said he believe the government's plan did meet the definition of a tax.
"We should not be wasting our time here with different sort of language trying to explain things away," Peters said.
"It's a tax. This one may of course bring a benefit at the same time."
His deputy Shane Jones initially told reporters the proposal was not a tax, but later backtracked after being informed of Peters' comments.
"It would be life-threatening to publicly disagree with my leader," Jones said.
Jones said he would take the matter of breaking up the gentailers to his party's AGM, seeking the mandate to take the issue to the election.
Greens' co-leader Chlöe Swarbrick said the Government had decided to actively increase New Zealanders' power bills.
"Whatever you want to call it, Christopher Luxon has decided that New Zealanders are going to pay for his decision to lock us into fossil fuel dependency."
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