It is uncommon for a major economic policy release to miss the mark on both social and economic grounds, but that is what I believe National have succeeded in doing with yesterday’s tax package.

Others have dealt well with the groups of New Zealanders who will miss out or be  worse off as a result, but I want to look at what I find an astounding aspect of how National is planning to pay for their tax package.

One of things on the campaign trail in Wellington Central where there has often been agreement among candidates is the need for an improvment in our economic productivity.  We work hard as a nation- but we have not always worked smart or been able to produce as efficiently as others.  Getting on top of productivity needs quality infrastructure, improved savings to provide for capital investment, investment in skills and training and research and development.  These are long term investments to solve a long term problem.

What we witnessed yesterday with the release of National’s economic plan was a major step away from driving the productivity agenda in favour of short term political opportunism.   The changes to Kiwisaver amount to a fundamental undermining of the scheme.  New Zealanders have been poor savers- the scheme acknowledges that by setting up generous incentives to participate.  Over night National would eliminate many of these, and put workers in the position of having to effectively pay both their own and the employer contribution.  This will undermine the scheme, and the thus far very successful attempts to make a major shift in our savings efforts.

We have also suffered from a low level of private sector research and development. The R and D Tax Credit was brought in to help stimulate that work.  While I have no doubt some accountants will devise ways to manipulate the scheme, there are far more companies who are using, and will use, the scheme as an opportunity to invest in the future of their business.  It is an extraordinary decision by National to walk away from a key plank in improving productivity, and it is going down badly.  Alongside their casual dismissal of NZ Fast Forward, there is very little in the way of vision from National for linking our scientists and our businesses.

And we have the news that National plans to wind back their plans for infrastructure investment.  Not surprising since they were based on reckless borrowing, but no evident plan as to how to ensure the infrastructure investment still takes place.

It had been said that the announcement of National’s tax package would be a key moment in the campaign.  It may well be- because it will now be obvious to many New Zealanders that the myopic focus on tax cuts is going to come at a severe cost to our future economic development.