Labour and National agree on two big ideas — but argue over the details

Labour will back the Government's plan to cap council rate rises at 4% a year, at least for now. The party's justice spokesperson Barbara Edmonds told RNZ's Morning Report that Labour has long supported rates capping in principle but wants concerns ironed out at the select committee stage.

Edmonds appeared alongside Finance Minister Nicola Willis on the weekly Wednesday political panel on 25 August, where the two MPs found common ground on two policy areas but clashed over detail and process on both.

Local Government Minister Simon Watts confirmed the rates cap legislation on Tuesday. The Government has decided to cap annual council rate increases at 4% (NZ Herald). Willis said double-digit rates rises in some council areas were out of control and that a capping framework would make rates increases predictable and require financial discipline from councils (RNZ).

Labour's position is more nuanced. Edmonds said the party agrees with capping in principle but believes councils also need other ways to raise money, such as bed taxes or accommodation levies. Labour MP Andrew Little said capping rates increases at 4% will mean councils struggle to fund the services people expect. The NZ Herald made a similar point, noting that a rates cap shifts costs onto ratepayers and puts services at risk (NZ Herald).

Before a new law is passed, a bill goes through several readings in Parliament. The first reading is the initial vote — if MPs agree, the bill goes to a select committee. That is a small group of MPs from different parties who look at the bill closely, hear from the public, and suggest changes. Labour's support through first reading means the rates cap bill can go to that committee, where MPs will look at the 4% cap, the revenue alternatives Labour wants, and what it means for individual councils before the bill comes back to Parliament.

The second area of agreement, a social media ban for under-16s, produced sharper disagreement over process. Edmonds said Labour "absolutely agree" that social media could be harmful to children and wanted the first reading done before the election. But Willis said it is unlikely the bill will get a first reading in the current term of Parliament, with only 11 sitting days remaining (RNZ).

The argument is about how fast Labour moved. Willis said Labour spokespeople "dragged their feet" when Education Minister Erica Stanford contacted them weeks earlier. Edmonds said the minister had restricted access to the bill, that Labour sent a list of questions the Friday before, and made a decision to support it after the minister replied on Monday night. The bill was introduced on Monday, with Labour's decision coming the next day.

Coalition politics add another layer. NZ First has criticised National for promoting the social media ban as a Government bill rather than a member's bill — a bill brought by an individual MP rather than the Government. NZ First leader Winston Peters and ACT leader David Seymour both oppose it (NZ Herald). That means National needs Labour's votes to pass the bill, since its own partners are likely to vote against.

With 11 sitting days left before the election, the window for either bill to move past a first reading is narrow. The rates cap bill has a clearer path to select committee with Labour's support secured. The social media ban faces the tighter squeeze: Willis has effectively conceded the first reading is unlikely this term, even though Labour is willing to vote for it.

The broader context here is that both bills deal with areas where both parties want to be seen acting — rates capping and protecting children online — but they disagree on what the laws should actually do. Rates capping is popular with voters, but whether councils can keep building roads, pipes and other core infrastructure under a 4% cap is where the real fight will happen at select committee and possibly on the campaign trail. The social media ban is hard for anyone to oppose, which is exactly why the argument over process matters. If the bill does not pass before the election, both parties will need to explain to voters why something they both support did not get anywhere, and each will blame the other.

For Labour, supporting both bills through first reading costs little politically and lets the party look constructive without giving up on the details. For National, the rates cap is something solid it can point to. The social media ban, without a first reading, risks becoming a promise that was never kept.