National, Labour make claims of 'dirty political games', 'flip-flops', 'scams' as scrutiny falls on tax policy

National has accused Labour of playing "dirty political games" to distract from its "stupid" cost of living payment, but the governing party says the Opposition is in a "shambles" and can't be trusted by New Zealanders.

The political firestorm was sparked by a report on Thursday morning suggesting National had dumped its tax policy, which included adjusting tax thresholds to inflation. 

Labour's Chris Hipkins then released a statement - as an MP rather than as a minister - saying National was in "disarray", which led Chris Bishop to accuse Labour of launching its "spin machine" to take attention off issues with its cost of living payment. 

The NZ Herald report said National had benched its tax policy. The party was reported as saying it was for Budget 2022 and it was formulating a new policy ahead of next year's election. 

The party's finance spokesperson Nicola Willis confirmed to Newshub that National's promise to index tax thresholds to inflation remained and the party was committed to tax reduction. Depending on the economic conditions next year, Willis said National may decide to go further than the policy announced by leader Christopher Luxon earlier this year.

Willis later told reporters that inflation "has roared ahead" since the tax plan was announced, "so if we can deliver more tax relief, we will".

"We have been consistent. We have consistently said that we wish to deliver tax relief for New Zealanders," the National MP said.

But when asked why then would the party have a different tax policy at the election, Willis said: "If we can go further, we will go further".

"We believe the tax policy we presented in January should have been delivered in this Budget. Our policies that we campaign on, that is the minimum that we will deliver. We would like to go further."

She also confirmed National remained committed to repealing the upper 39 percent tax threshold the Labour Government introduced earlier this term.

National's Nicola Willis.
National's Nicola Willis. Photo credit: Getty Images.

Responding to a statement from Hipkins that suggested National's decision to drop their tax policy showed "internal division" in the party, Willis said Labour was trying to "distract" from issues the Government has had this week with its cost of living payment. 

The scheme, intended to pay $350 to Kiwis struggling with rising prices, has been criticised after it emerged expat New Zealanders and former temporary migrants now offshore also got the first round of the money. Labour also came under attack after a fundraising email claimed more than 2 million New Zealanders had got the payment, when it was really about 1.3 million.

Bishop also claimed Labour was attacking National to remove the spotlight from the payments.

Following Hipkins' statement, Bishop put out his own press release saying Labour "is far more interested in dirty political games than on real solutions to the cost of living crisis". 

"While Kiwis up and down the country are feeling the pain, the Labour Party has spent all morning obsessing over National and misrepresenting clear statements to try and score cheap political points."

He continued to tear into Hipkins when speaking to media on Thursday afternoon.

"If the Labour Party is going to fire up [sending] press releases to attack the National Party in a desperate attempt to distract attention away from their cost of living debacle, well, two can play at that game," the MP said.

"I'm here to defend the National Party's record and make sure that the people of New Zealand know that the Labour Party is desperately trying to distract attention away by firing up the spin machine. It's not good enough and New Zealanders shouldn't stand for it."

Bishop said it was Labour that was in "disarray" and National is "rock solid".

"When you've got French backpackers receiving money who left New Zealand five years ago, when you've got people in Perth who left New Zealand 20 years ago receiving taxpayer cash, they should front up and be accountable for that and explain how they're going to fix the stupid scheme rather than send out press releases attacking the National Party."

National's Chris Bishop.
National's Chris Bishop. Photo credit: Getty Images.

After Bishop and Willis spoke to media, it was Hipkins' turn. 

"It looks like a total shambles. I mean, who knows what their position is today? It seems to change from day to day. They've now done a flip-flop on their flip-flop."

Hipkins said he released a statement as it was important to make sure New Zealanders know "what their options are". 

"I think New Zealanders should understand and should have the right to know whether the National Party actually mean what they say."

He denied his attack was intended to distract from the cost of living payment issues. 

"I think the National Party are doing a fine job of distracting attention from their own policies by not being clear on what they are. Every day their policy seems to be changing.

"It's more evidence that New Zealanders simply can't trust them to come up with anything coherent. Look, if you can't hold a coherent position in Opposition, how on earth could you run the country?"

Labour's Chris Hipkins.
Labour's Chris Hipkins. Photo credit: Newshub.

Later, in the House, MPs fired up over an email Labour sent to members this week about the cost of living payment. The email, which also asked members to donate to the party, said the payment had gone to "more than two million New Zealanders", when IRD previously confirmed it had gone to about 1.3 million.

National's Paul Goldsmith attempted to table the email during Question Time, which Hipkins said wasn't allowed as it was free for people to see in the media. Bishop hit back, saying there were many variations of the email asking for different amounts of money.

"It's a very interesting little scam the Labour Party is running here," he said.

Hipkins didn't let that lie, replying: "The member can't accuse another party of being engaged in a scam, no matter how superior his knowledge on the topic is."

During the exchange, the trio of Bishop, Hipkins and Willis were all asked to apologise for comments they made. 

Meanwhile, Prime Minister Jacinda Ardern was trying to stay out of the fight. She told media on Thursday morning that "the policies of the Opposition are a matter for them and whether or not voters feel they are consistent and therefore trustworthy is also a question for them too."

She also tried to distance herself from Labour's email. 

"Not every piece of correspondence that comes from the Labour Party will I see. I am aware that instead of saying there are 2.1 million New Zealanders eligible, they said there are 2.1 million who will receive it. Of course, we are aspiring that everyone who is eligible receives it, but they absolutely acknowledge the mistake."

Luxon was away from Parliament on Thursday preparing for his party's annual conference over the weekend.