Q+A’s Guyon Espiner Interviews Labour Leader Phil Goff.

Points of interest:

- Labour likely to reinstate top tax rate of 38% on income over $00,000.

- Business tax rate likely to remain at 28% under Labour.

- Not ruling out capital gains tax, but not on the family home "up to a reasonable level".

- Minimum wage to raise in stages to $5 by the end of Labour's first term.

- No foreign ownership of more than 25% of public or privately owned utilities and key assets.

- Australia will be included in definition of foreign ownership under such controls.

- Labour will tighten up on foreigners buying farms - such sales are not in New Zealand's interest.

The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can also be seen on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

Q+A is repeated on TVNZ 7 at 9.10pm on Sunday nights and 10.10am and 2.10pm on Mondays.

PHIL GOFF interviewed by GUYON ESPINER

GUYON ESPINER I understand one of the policies you’re going to announce to the conference when you speak to them soon is that no foreigner can buy more than a 25% stake in utilities like airports and ports and other infrastructure. Will that apply to both publicly owned and privately owned utilities?

PHIL GOFF – Labour Party Leader Yeah, that’s our intention, and it’s pretty consistent with what Labour has done in the past. When the Canadian Pension Fund wanted to buy up the Auckland International Airport shares, we said no in government.

GUYON So, for example, would the energy companies come into this?

PHIL Well, the energy companies may not be regarded as monopolies because there’s the numbers of them. They do have some monopoly characteristics. But it would apply to electricity networks.

GUYON But not an electricity provider like a big energy company like Contact Energy?

PHIL No. I mean, Contact is the one that the National Party privatised. Labour’s policy, of course, is against privatising state assets, so we wouldn’t be privatising the other companies, and therefore we’d have control over them. They’d be publicly owned, as well as NZ owned.

GUYON Well, let’s take say Wellington Airport. It’s, um, 34% owned in public ownership and 66% owned by Infratil, a private company. Is there anything under your policy to stop those shares going into foreign hands?

PHIL Well, we’re gonna look at the detail of that, but, uh, at this point—

GUYON Well, it’s a pretty important detail, isn’t it?

PHIL It’s an important detail—

GUYON Well, what’s the answer?

PHIL What we’re looking at is making sure that monopoly infrastructure does not fall into the hands of foreign buyers. That’s the principle underlying our policy.

GUYON Well, is Wellington Airport monopoly infrastructure?

PHIL Well, it is because there’s only one airport commercially important to Wellington.

GUYON So how are you going to stop 66% of shares that are in a private company, Infratil, now--? How are you going to stop them going into foreign hands?

PHIL Well, I mean, if you decide that you’re not going to have NZ assets, in particular areas foreign owned, then the government has the legislative power to do that.

GUYON So, how will you do it?

PHIL Well, the same way that you do anything else – you legislate and regulate. Uh, you have controls that ensure that no more than 25% of the core monopoly infrastructure can be foreign owned.

GUYON How--?

PHIL No, I think you need to get the principle behind this—

GUYON No, I’ll move to principle after the detail, because the principle comes after the detail.

PHIL Let me just finish because otherwise we’re talking over—

GUYON I’ll give you that opportunity for the principle. I want the detail first. Tell me how you would stop those 66% of shares. How can you do it? How can you put capital control so a shareholder doesn’t sell the shares to someone who’s living in Singapore? How do you do it?

PHIL You can require that the 75% that needs to be retained in NZ is retained in NZ. The government has the authority to do that. What our goal is is to stop our key monopoly assets that produce monopoly rents from going overseas to remain under our control, used for our benefit and those dividends coming to NZ.

GUYON Is Wellington Airport a worse airport since August ’98 when it was sold into some private ownership?

PHIL No, it isn’t. But we say that, as a country, if we’re to be a sovereign country, we need to have control over our core strategic assets. The National Party acknowledged that, but stepped back from changing what Labour put in place under the last government. And that also applies, of course, to the wider area of farmland.

GUYON Ok. To move to that – When you look at New Zealand, though, it’s massively owned by Australia. 91% of our banking system, our three largest media companies are owned by Australians. I mean, the horse has bolted under Rogernomics, and you helped open the stable door.

PHIL Yeah, I mean, it’s true about the banks. What is it? $2.5 billion in dividends from the banks go out of NZ, uh, back to Australia—

GUYON And you supported these policies.

PHIL Yeah. That’s right—

GUYON You were wrong?

PHIL Yeah, I think we were wrong. Uh, I think we were wrong, and we showed that under the last Labour government where we adopted a quite different policy. We looked at the banks. They were all Australian controlled and owned, and we said we’d bring in Kiwibank, and 800,000 New Zealanders voted with their feet and put their assets into Kiwibank. Now, you know, that was a way of dealing with that problem. The fifth Labour Government was not like the fourth Labour Government. We’d moved on, and we’ll move on in the next Labour Government as well.

GUYON This policy you’re announcing today, does it apply to Australia?

PHIL Uh, it applies to any foreign ownership.

GUYON Ok. Because in August 2009, NZ and Australian prime ministers agreed that any investment from Australia in NZ would not face any screening at all unless it exceeded $477 million. Now, is your policy today consistent with CER?

PHIL Our policies will be consistent with CER. But, uh, where there are problems, uh, that opens the opportunity to renegotiate particular areas.

GUYON You would renegotiate certain--?

PHIL Well, if there is a problem there, obviously we would look at it. I know under the WTO, what the policy is that I’ll be announcing this afternoon is quite consistent with WTO rules and likewise with the Chinese Fair Trade Agreement.

GUYON Let’s say there was an investment from Australia at $470 million that didn’t need any screening. But you would veto that under this policy.

PHIL Well, we’re gonna have a look at that. I’m gonna announce the broad principles of our policy this afternoon—

GUYON Things are pretty fundamental—

PHIL No, no, that’s right, but we’re—

GUYON You spent your ministerial career criss-crossing the globe, signing up to open investment. Now you’re saying---

PHIL No, no, no. No, you’ve got it wrong, Guyon. You’ve got it wrong. Labour will continue to welcome foreign investment. We need foreign investment because we’re not saving enough to invest in our own development. But there are areas where that foreign investment does not work in New Zealand’s interests And we’re saying as a party that where it does not work in New Zealand’s interests, there will be greater control, and that will be in areas like monopoly infrastructure and farmland.

GUYON Well, tell me about farmland, then, because I understand that you’re gonna make it so difficult that virtually every application will be turned down. Is that the case?

PHIL Well, the norm at the moment under the National Government and, uh, under the previous Labour Government, uh, almost all applications were approved. The National Party hasn’t turned down one application to buy up NZ land—

GUYON And you turned down three out of 222.

PHIL That’s right, and what I’m saying is when you lose an election, you have a chance to rethink your policy. We’ve rethought our policy in this regard, and we’ll change it to work in NZ’s interests.

GUYON And does that effectively mean no foreign buyers for NZ farmland?

PHIL No. What we’d say is that in most instances, the purchase of NZ farmland by overseas interests is not of particular benefit to NZ. They don’t bring new technology. They don’t bring new skills. They don’t open up new markets. So what we would say is that most farmland will be retained in NZ ownership. And what’s the reason for that? We don’t want NZ farmland priced outside the means of Kiwis to continue to farm their land. We don’t want to be tenants in our own land, but we’re—

GUYON I’ve heard that phrase before.

PHIL Yes, from the Prime Minister. And what Labour is doing is actually putting meat on the bone and saying we’re actually gonna stop that happening. Not smoke and mirrors, as the Prime Minister has come up with.

GUYON Foreigners who buy land in NZ are treated to the same tax laws, the same employment laws, the same environment laws. What is wrong with them owning land other than they don’t look or sound like New Zealanders?

PHIL No, that’s not the point at all. The point at all is this – that we want NZ farmland continued to be owned and controlled by New Zealanders—

GUYON But what if they’re good owners?

PHIL No, no, let me finish, Guyon.

GUYON What if they’re good owners, though?

PHIL No, no, let me finish this. We want New Zealand, young New Zealand farmers not to be priced off being able to buy farmlands because overseas interests are trying to control the whole of the supply chain.

GUYON So it’s only about price?

PHIL No, no. It’s partly about price, and it’s about preventing—

GUYON You talked about a principle—

PHIL No, no. If you’re gonna keep cutting across my answers so I can’t answer, we’re not gonna get through the debate. What I’m saying is that there are a couple of reasons why we would not want overseas control over our farmland. Let me go through it, because they’re all important. One – if you get widespread control of NZ farmland by overseas interests, they end up controlling our farming cooperatives – places like Fonterra, Alliance, Silver Ferns. It is not in New Zealand’s interest to lose control over our major exports and those cooperatives.

GUYON So why did you sell 122 rugby fields a day when you were in power?

PHIL Yeah, look, I’ve answered that question. I’ve said what this next Labour Government will do will be different from what the last Labour Government has done. We’ve had the chance to think about that. We’re prepared to take the hard decision. We’re prepared to act in New Zealand’s interests.

GUYON Let’s move on and talk about tax. You are hinting quite strongly at reinstating the 38% rate at incomes about $100,000. Why?

PHIL Because under the tax cuts, 42% of all of the tax cuts went to the top 10%, and 2% of the tax cuts went to the bottom 20%.

PHIL Don’t wanna talk about National’s policy. I wanna talk about your policy.

PHIL But that’s why. You asked me why, Guyon, and I’m telling you why. Ok. Because the current tax cuts have been unfair. They’ve taken the burden off people at the top, the wealthiest New Zealanders, and the burden is on lower and middle income New Zealanders. They’re the people that have missed out.

GUYON You’re gonna shift that money to the lower--?

PHIL We’re gonna make it fairer. We’re gonna make the tax system fairer so that the burden is not overwhelmingly on the lower and middle income, uh, tax brackets, and we’re not going to allow the bulk of that money to go to a tiny percentage at the top. The next Labour Government will be governing for the majority, not the privileged.

GUYON We lose 280 doctors a year to Australia. Do you really want to give them another reason to take flight across the Tasman?

PHIL But what about the thousands of skilled tradespeople we lose each yeah, Guyon? What about the thousands of people who are going across to Australia?

GUYON Well, maybe those tax cuts gave them a chance to actually earn a decent amount of money.

PHIL And remember this—

GUYON So—

PHIL No, no, let me finish. You’ve gotta let me finish these points. Australia has a top tax rate of 45%--

GUYON Yeah, where does it cut in? $200,000.

PHIL Yeah, Ok. I’ve said that the tax rate under a Labour Government will cut in at six figures, Ok? It will not be hitting lower and it will not be hitting middle NZ.

GUYON What sort of rate are you talking about?

PHIL Oh, look, we’ll make our tax announcement in due course, and that will be closer to the Election. But I’m setting again the principle, and the principle is that it was wrong to spend billions and billions of dollars helping the most wealthy income earners in this country while lower and middle income earners will either be worse off or not better off because of the tax swindle.

GUYON The business tax rate coming down to 28%. Are you gonna leave it there?

PHIL Uh, we’ve got no policy, uh, change at this point that we’re looking at for business companies. What we’re looking at doing is developing companies.

GUYON Sure, but that opens up a 10% differential. 28% business tax rate. You’re gonna have a 38% top personal tax rate. What we saw under your tenure in Labour was a whole host of people not paying their fair share of tax because they set themselves up as companies. Aren’t you going to risk that sort of behaviour again?

PHIL No, because when they distribute the company dividends, people pay personal income tax on it.

GUYON You’re not worried about having a differential of--?

PHIL No, and nor is the present government, because they’re left the differential in place, and you know that.

GUYON Yeah, but 28 and 33 are a lot different from 28 and 38.

PHIL Yeah, yeah, but, look, there’s a number of tax changes that Labour will be making, and it is a scandal that half of the top 100 earners in this country aren’t paying at the top tax rate, and there needs to be wider issues dealt with there in terms of tax evasion and tax avoidance, and Labour will be looking at that as well. If everybody’s not paying their fair share, then some people in NZ are paying more than their fair share, and in particular that’s true of the middle income earners. Uh, they carry the burden. The higher income earners are the ones that have done really really well out of those tax cuts.

GUYON Let’s talk about the bottom end for a second and wages. You spoke to the National Distribution Union this week, and you were talking about a $15 minimum wage. It’s $12.75 at the moment. When, if you were to win in 2011, would you have a $15 minimum wage?

PHIL Oh, we’d move immediately to phase that in. It might be phased in over a couple of years. Uh, but we’d get it to $15. And why would we get it to $15? Because anybody that does a week’s work deserves to have a living wage, and you can’t pay people less than what they need to actually live off.

GUYON At the end of the first term, say, you would have $15.

PHIL Oh, yeah, I’d be confident we’d get the minimum wage up by that time, yes, and that’s the right thing to do.

GUYON Let’s talk about capital gains tax – the tax that you pay when you sell an asset like a house. Now, I know you’re not gonna put it on the family home, but is Labour still considering for second properties or for investment properties introducing a capital gains tax?

PHIL We haven’t done any work on that at this point. Uh, there would be certainly no capital gains tax on the family home, uh, up to a reasonable level. I’m listening to what a lot of people are saying. I had a business—

GUYON Would you rule it out?

PHIL No, no, let me—No, no, I haven’t totally ruled that out. We had a business person come along, Selwyn Pellett. He won’t mind his name being used. He said that he makes millions and millions of dollars out of capital gains, and he thinks that’s wrong. He’s a person in the productive business area, and he says that it’s wrong that where people who work 40 hours or 50 or 60 hours a week and are paying the top rate on their income tax, somebody can make a huge capital gain speculatively, and they’re not taxed at all.

GUYON So it sounds like you do want a capital gains tax as such.

PHIL No, no, we’ve done no work on it at this stage, but we haven’t ruled that out.

GUYON In the final few minutes that I’ve got, I wanna ask you some strategic questions about Labour. When you talk to Labour people and they talk about the prospects of winning in 2011, it’s usually not too long till Winston Peters’ name pops up. Would you make any electoral concession to make it easier for New Zealand First and Winston Peters to re-enter the New Zealand Parliament?

PHIL Well, we would not change electoral law around helping any particular party.

GUYON I’m talking about standing aside in a seat.

PHIL Oh, no. No, I don’t think that’s on. Uh, Labour hasn’t done that. National has done that to allow the discredited ACT Party to stay in Parliament. That’s not part of our philosophy.

GUYON Have you talked to Winston Peters?

PHIL Um, I’ve seen him at the odd league game that we both go to, yeah. I mean, we get on quite well on a personal basis.

GUYON Have you talked at any strategic terms about making it easier for Winston Peters to come back? Have you done anything that would allow his entry into Parliament to be made?

PHIL I think Winston Peters will be the first person to say he’s not looking for favours from any political party. If he’s gonna come back into Parliament, he’s gonna win 5% of the vote or win an electorate. And that’s way to do it. I personally feel that the system that allows Rodney Hide to have two ministers in Parliament and five members of Parliament because they can ride on his coat tails from Epsom is wrong when Rodney Hide got fewer votes than Winston Peters. That’s an area of the electoral law that I’d wanna see changed.

GUYON When we sat here last year at Rotorua at the Labour conference, you said that one of the main reasons that you were behind in the polls is cos simply people did not know you. And then we saw you come out on your motorbike, and we heard the stories about your six seasons working in the freezing works, your widowed grandmother who was the inspiration after being rescued by the first Labour Government. Do you think that people know you now?

PHIL I think they’re getting to know me better. Um, you know, I suppose the eight-second television grab is not a good way to get to know people.

GUYON Perhaps the 17 minute television—

PHIL Maybe 17 minutes on Q+A is much better, Guyon. But the other thing that we’re doing is we’re going right around the country. We’re talking in communities. We’re talking to halls. Sometimes it’s a Grey Power meeting of 250. Sometimes it’s a much smaller meeting of 30 or 40. But I am getting to meet people around the country, and I am getting a good response from them.

GUYON Do you think, though, that part of the problem is that next year it’ll be 30 years in Parliament? Um, you joined the Labour Party at 15, which would give you about 42 years in the Labour Party. That simply people do know you, and they’re not inspired by what they see?

PHIL No, look, certainly I’ve got political experience. People know that I’ve been competent as a Cabinet minister. Uh, they know what I believe in. I need to go out there, and I need to do more in terms of selling the skills that I have as a leader. I’ve shown skills of decisiveness—

GUYON What is it that you’d need to do more?

PHIL Oh, I think it’s getting around. It’s getting to meet people.

GUYON You’ve done, though, Mr Goff. You’ve done that for 30 years.

PHIL Yeah, but, look, I’ll remind you of something, Guyon, in case you’ve forgotten. I think Helen Clark was on 2% in the public opinion polls in May 1996. Uh, three years later she was prime minister, and she proved to be one of the best prime ministers this country’s ever had.

GUYON But strategically, though, last time you brought your family into it a little bit more. You showed us some of your personal life with your interest in motorbikes and some of your family story. I mean, is there more of that you need to do? Or is it simply getting Labour’s policy out?

PHIL Guyon, any time Q+A wants to follow me around and see a bit of my wider life, you’re very welcome to do it.

GUYON We may well take you up on that. (CHUCKLES) We may well take you up on that. But that’s pretty much all we’ve got time for this morning. Phil Goff, thank you very much for joining us on Q+A. We really appreciate your time.

PHIL Appreciate the opportunity. Cheers.

ENDS

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