In today's email we catalogue yet more twists and turns in the race to election day.
1. A tale of two polls
Confusion over the shape of the electoral landscape deepened last night after TVNZ published its latest Colmar Brunton poll.
It showed Labour on 44 percent (up one point) and National on 40 percent (up one point). That gave Labour a stable lead of four percentage points with the Greens up two percentage points to seven percent. That would mean Labour could govern with Green and not need either the Maori Party or New Zealand First.
However, the poll taken between Saturday and Wednesday contrasted with TV3's Reid Research poll taken between last Wednesday and Monday that showed National on 47.3 percent, Labour on 37.8 percent, the Greens on 4.9 percent and New Zealand First on 6.0 percent.
One poll taken in the last three days showed Labour with a four point lead, while another poll taken over three common days (Saturday, Sunday and Monday) and including three previous days showed National with a 9.5 percentage point lead.
Last night's Colmar Brunton poll showed support for Jacinda Ardern as preferred Prime Minister fell one point to 34 percent, while Bill English rose one point to 32 percent.
The noise around the two campaigns on their internal polling suggest the gap is somewhere between the two extremes and probably closer to National being ahead by a point or two. But it is so close and the support levels are so bouncy as not indicate any particular result.
The historic record also shows the polls closest to the election tend to be quite accurate for National and Labour, but tend to over-estimate the actual result for the Greens by a percentage point or two, but under-estimate the actual result for National.
It all still comes down to who New Zealand First will choose to go with and whether or not the Greens get back into Parliament, neither of which can be easily predicted.
The RNZ poll of polls, which averages the public and private polls, shows the drag race to the coronation is neck and neck.
2. Reversing a captain's call
Finally, after weeks of pressure, Jacinda Ardern abandoned her 'captain's call' of being able to introduce a capital gains tax (excluding the family home) in Labour's first term.
She sent Grant Robertson out to announce Labour would not introduce any tax changes recommended by its Tax Working Group before 2021.
Ardern has had to repeatedly fend off claims from National that Labour is planning a capital gains tax or a land tax that would tax the family home or the land under it. National has also argued that a capital gains tax could turn into an inheritance tax.
National has repeatedly pointed to Labour's policies on water royalties, an extended bright-line test for capital gains on landlords, a regional fuel levy, a tourism levy and the removal of National's tax cuts as 'Labour's seven new taxes'.
In the last five weeks, Ardern has been progressively forced to rule out an increase in the top personal income tax rate, a capital gains tax on the family home, a land tax under the family home and an inheritance tax. But she has always drawn the line at saying Labour could introduce a capital gains tax that excludes the family home within its first term after a Tax Working Group has reported back.
Finance spokesman Grant Robertson released a statement around mid-morning yesterday and held a news conference in Parliament to announce the change in stance to rule out any changes recommended by the Tax Working Group in the first term ending in 2020.
"Today Labour has released its full tax plan, bringing together a number of previous announcements and more detail on the Tax Working Group. Given the amount of misinformation being spread, it is important that we have all the information in one place. Labour will not make any changes to personal income tax, corporate tax rates or GST," Robertson said in the statement.
“What we will do is reverse National's proposed tax cuts and use the billions of dollars to make 70 per cent of families with children better off and invest more in health, education, housing and other public services. Our policy also cracks down on those who are exploiting weaknesses in the tax system by speculating in the housing market.
"Labour will end the practice of negative gearing, and extend the current bright line test that taxes the capital gain on the sale of a property other than the family home to five years," he said.
"We are establishing the Tax Working Group to explore other options to make our tax system fairer, particularly in terms of the balance between taxing income from salaries and wages and property speculation. To be absolutely clear, under Labour the family home and the land around it will never be taxed. There will also be no inheritance tax.
“We know it is important to get this right, so we will balance the need for certainty and urgency by ensuring that any potential changes will not come into effect until the 2021 tax year. This gives multiple opportunities for public input, and a general election before any new tax would come into effect."
Robertson then rammed the point home to try to shut down the vacuum that National has wriggled into with its arguments about inheritance and capital gains taxes on small businesses.
"To avoid any doubt, no one will be affected by any tax changes arising from the outcomes of the Working Group until 2021. There will be no new taxes or levies introduced in our first term of government beyond those we have already announced."
This is the first acknowledgement that Jacinda Ardern's decision to reverse Little's decision to rule out a Capital Gains Tax was a strategic mistake.
I called it Ardern's first mistake on August 14 when it became clear that Little's pledge had been abandoned.
However, her ability to cut her losses and execute a fairly shameless backflip shows a ruthlessness and Key-like ability to sniff the mood of the public and recognise when to fold and when to hold. It is a blow, however, for Grant Robertson and David Parker, who have consistently argued for a capital gains tax and who had won back influence over economic policy that had been lost under Andrew Little.
The question is whether the reversal was soon enough. 150,000 people have already voted in the first three days of voting, which is significantly faster than in previous elections, as this Electoral Commission chart shows.
3. 'Two down, five more to go'
The reaction for National and others was suitably triumphal, with calls for even more reversals.
National finance spokesman and campaign chairman Steven Joyce said Labour had postponed two new taxes (capital gains and income tax), but was still planning five more (water, petrol, ETS introduction, income tax cut reversal and tourism levy) that he said would slow the economy down.
“They’ve begun the long march back but they’ve got a long way to go. This is about the fifth version of their tax policy in the last month. They are just too vague on a whole range of policies and it shows," Joyce said.
“It’s interesting that it was a 'captain’s call' to allow for a capital gains tax, but the captain was nowhere near the back down," he said.
“We know that Labour desperately want to put a capital gains tax and an inheritance tax on farms, small businesses and the family bach. They have had it in their policy for two elections and they have only dropped it this time because they were rumbled by the public.
“The public simply can’t trust Labour on tax," Joyce said, noting also that Ardern had gotten Robertson to announce the change. She did comment later in the day on the campaign trail.
The Opportunities Party Leader Gareth Morgan said the decision was betrayal of those who had already voted.
“Scared by the latest poll results the old establishment party of the left has abandoned struggling New Zealanders by kicking any change to our broken tax system for touch until 2020,” Morgan said.
“This leaves TOP alone in having a fully costed plan for a Fair Tax system that will benefit 80 percent of all New Zealanders by giving workers a 30 percent income tax cut, and finally closing the tax loophole that lets the rich get richer, while condemning future generations to a miserable future as part of a divided treadmill economy.”
4. Permission vs forgiveness
Newsroom's Co-Editor Tim Murphy has taken a closer look at Jacinda Ardern's reversal of her captain's call.
"Its decision to seek permission and not forgiveness from voters at the 2020 election could cauterise its problem in the polls," Tim wrote yesterday for Newsroom.
"It does show a party willing to listen to feedback, albeit perilously late in the election campaign. And it takes some political gumption to front up and admit leader Jacinda Ardern's 'captain's call' to plough on with tax reforms without a mandate was wrong. Finance spokesperson Grant Robertson did that fronting, but the party has relented, nonetheless," he wrote.
"The big question is why Labour let its tax vulnerability run and run, a sitting duck for a scrambling National Party over the past fortnight. Critical days, news cycles and early votes may have been wasted. Early voting began on Monday and some of those thrown into doubt by National's attacks may have already taken ballot box fright."
5. A strange Landcorp reversal
The other big news on the campaign trail was National's announcement that it would sell some Landcorp farms to young landless farmers through lease-to-buy schemes that forced them to stay on the land for at least five years.
National's Primary Industries spokesman Nathan Guy announced National would break up and sell up to two thirds of Landcorp's farms at market rates to 100 young farmers.
“The Government owns a large number of commercial farms through Landcorp, but there is no clear public good coming from Crown ownership and little financial return to taxpayers,” Guy said in a statement.
“We think that some of these farms are better off in the hands of hard working young farming families who are committed to modern farming and environmental best practice. National will direct Landcorp to lease these farms to young farmers, and give them the opportunity to buy them at market rates when they have built up enough capital," he said.
“This is a win-win policy that will help more young Kiwis into farming, and put taxpayer money from the sales towards things they care about."
The farms would be awarded on a lease-to-buy arrangement by a panel and ballot that prioritised to young farmers who had experience running farms but did not own their own farms. They would be required to work the farm continuously for five years before being able to buy the farm, or longer if they needed more time to build up capital.
Guy said he expected around 100 young farming families to use the programme.
“Not all of Landcorp’s around 140 farms will be sold. Many are subject to Treaty claims and others have a right-of-first-refusal for iwi – and these rights will of course be respected. Some of Landcorp’s larger farms will be divided into smaller units more appropriate for first-time owners," Guy said.
“We expect it will take over a decade to complete the sale and settlement process for the farms that are included in this programme. Any revenue generated by the sales will be reinvested in public services."
The problem for National is this policy has come completely out of the blue. It has never suggested such a policy before and it has come as a shock to Landcorp, Federated Farmers, its bankers and its overseas customers, who have gotten used to Landcorp's higher value and larger scale strategy. It is a reversal of nine years of policy.
It conflicts with the corporate direction National has given to Landcorp for nine years to become a larger scale and more efficient farmer that tries to create more value through its brands and its investment in staff and technology, rather than more volume of commodity products.
Small farmers will have to focus all their resources on buying land, rather than investing in scale operations or R&D and marketing. They will eventually be forced into mergers to gain the scale needed to compete. It is a return to a 1950s model of ownership and strategy -- family-based small farming of commodities.
There are also big questions about how much land might be available. Most of its land is either subject to treaty claims or 'rights of first refusal' (RFR) clauses that mean it cannot be easily sold. Guy's claim that Landcorp owns 140 farms and that two thirds of the land could be sold is also wrong.
Just 70 percent of the land that Landcorp farms is actually owned and operated by Landcorp, with most of that subject to treaty and RFR claims. The rest is leased or operated by sharemilkers.
Green Party primary industries spokeswoman Eugenie Sage described the proposal as a backward step that risked undoing Landcorp's good work on the environment and enabling the sale of local farmers to overseas owners.
"By forming an Environment Reference Group comprising Dr Mike Joy and Dr Alison Dewes among others, reviewing how it farms and phasing out PKE, Landcorp is showing it is serious about reducing the pollution that harms our waterways and climate, not making excuses for it," Sage said.
“Landcorp can lead the shift to environmentally sustainable farming. Its farms are a public asset we should be keeping, not selling them for overseas buyers to purchase sometime in the future."
6. More questions about Jian Yang
The Jian Yang story is far from over and Newsroom continued to investigate his background and the potential reaction from our partners.
Newsroom's Foreign Affairs and Trade Editor Sam Sachdeva reports that more questions have been raised about the National list MP's connections to Chinese military intelligence, including whether the vetting process that allowed him to enter Parliament was satisfactory.
After a Newsroom investigation revealed his background, Yang told media he was not a spy, but had taught spies at a languages school run by the Peoples’ Liberation Army in China.
Bill English has defended his MP, saying the party was aware of Yang’s time at military intelligence schools and had no concerns.
However, a number of Chinese experts have suggested there are questions to answer about how Yang became a New Zealand citizen and then an MP.
Chen Yonglin, a Chinese diplomat who defected to Australia over a decade ago, said Yang would had to have been supported by the Chinese government when he moved to Canberra to study.
While studying in Canberra, Yang was president of the city’s Chinese Students and Scholars Association, which Chen said suggested he had “obtained full confidence from the Chinese embassy” as the association had ties to the Chinese government.
Chen said New Zealanders “should be worried” about Yang’s background and how he was allowed to become a citizen.
“Has the New Zealand SIS done its job in allowing such a suspicious background, this military background to become a citizen of New Zealand?
“If his background was KGB, would New Zealand allow him to [become a citizen]?”
See Sam's full story on Newsroom Pro, where it was published first this morning.
7. Rod Oram's column on the election choice
This election comes down to a simple choice on a vast array of complex issues. Rod Oram looks at National's record and the options for change in his column published first on Newsroom Pro.
He concludes more of the same won’t deliver for New Zealand, while new leaders and policies will.
8. One fun thing
The Labour tax backdown was the main topic of discussion around the political traps.
Ben Thomas: "The real victims here are Jacinda Ardern and Helen Clark, who both voted on Monday for a tax policy that turned out to be untrue."