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Labour announces tax policies

Written By: - Date published: 12:55 pm, September 9th, 2020 - 98 comments
Categories: Economy, election 2020, greens, labour, national, tax - Tags:

Labour has today announced new tax policies.

The Greens were first out of the blocks in announcing policies a couple of months ago are proposing a reasonably radical shake up of the tax system.  From their policy release:

Here’s what our Fair Tax Plan includes:

  • We’ll tax wealth fairly by introducing a new tax on individuals’ net wealth over $1 million. This means those who have their own wealth worth more than $1 million – not including mortgages and other debt – would be asked to pay a small annual contribution to fund stronger social support for all New Zealanders. This would only apply to the wealthiest 6% of New Zealanders.

  • We’ll update progressive income tax so those earning much more income contribute a little more to help fund better social support for everyone. We’ll introduce new income tax brackets of 37% for income over $100,000 and 42% for income over $150,000. We expect this to generate approximately $1.3 billion a year, which will fund improvements for public health, education, income support, and environmental protection.

  • We’ll close tax loopholes & minimise tax avoidance by taxing big digital giants such as Facebook and Amazon.”

The Green Party’s estimate is that the wealth tax will raise $7.9 billion in its first year and the tax changes $1.3 billion a year.  No one whose individual net wealth is less than $1 million will have to pay it.  The collected money will go largely into income equalisation.

The Labour Party proposal is more modest, a new tax band for income over $180,000 of 39c in the dollar.  It mimics what was proposed in 1999 when the new band started at $60,000 .  Like the Green policy it also proposes changes so that foreign multinationals pay more tax.  The change is anticipated to earn $550 million a year.

I have not seen National’s response yet but I anticipate it will be negative, which is a bit rich from a party that yesterday pledged up to $500 million to do up the Hawkes Bay Hospital and whose party has proposed $31 billion in new transport projects over the next 20 years by borrowing the money.

And there is no sign of a fiscal plan from National.  Claims that they need to wait for the PREFU are tosh.  National has never looked more disorganised.

The releases will invoke considerable debate.  What is better for Aotearoa?  The Green’s radical shake up or Labour’s more incremental proposed changes?

98 comments on “Labour announces tax policies ”

  1. UncookedSelachimorpha 1

    I'm deeply disappointed by Labour here. Their commitment to not tax real wealth (remember, many very wealthy people declare no income at all in the top tax bracket) is a commitment to entrenching child poverty, inequality, underfunded health and so on.

    Taxing capital is the only way to make things remotely fair and to improve society in relation to tax.

    I am guessing Labour has wealthy donors they do not wish to offend? I'll be voting Green, who have a much better tax policy.

  2. Reality 2

    Very impressed with how Labour (Jacinda and various ministers) have been on the election trail. Seems very well organised and targeted to cover all bases. Innovative and reasonable policies and Jacinda's smile and charm to cheer the people she meets. She is very sure-footed after her three years as PM. Keep it up for a few more weeks! Hope she has some time to relax here and there.

    • Draco T Bastard 2.1

      Innovative and reasonable policies

      Innovative?

      They're a copy of last centuries polices and have all the same problems of entrenching poverty

  3. Robert Guyton 3

    Idiot/savant at No Right Turn is NOT impressed, to say the least!
    In fact, he’s fuming!

    • Robert Guyton 3.1

      His message?

      Vote Green.

    • opium 3.2

      But that is not exactly unusual

    • UncookedSelachimorpha 3.3

      I don't disagree with anything Idiot Savant is saying really

      No land tax. No wealth tax. Nothing (in fact worse than nothing, because they are explicitly ruling out anything else, while proposing tax levels lower than those proposed by Don Brash).

      The poor will continue to pay taxes on every dollar we earn, just as we always have. But most of the rich won't be expected to contribute anything extra, and they certainly won't be expected to pay anything on their untaxed wealth, land, or capital gains. And its telling that backbench MPs, some of the highest earners in the country, won't pay a cent more under Labour's policy.

  4. SPC 4

    They could have raised a $B a year – to pay interest on the rising debt.

    Simply by having 35 cents over $120,000 along with the 39 cents over $180,000.

    Or is that the Labour-Green colition compromsie?

  5. Gosman 5

    ACT has an alternative budget out there that you forgot to mention.

    https://www.act.org.nz/budget2020

    • Andre 5.1

      ACT are such an irrelevant joke that I doubt the lack of mention was due to forgetting.

      • Gosman 5.1.1

        More support than any other party except National and Labour at the moment.

        • McFlock 5.1.1.1

          Well, no, that's not actually what today's poll means. But clutch at that tendril if it makes you happy.

          After all, trading a few seats from the nats to act isn't going to dramatically change how rabidly right wing the opposition is.

          • Gosman 5.1.1.1.1

            Actually that is exactly what the private UMR poll shows. ACT is more popular than The Greens and NZ First (which are unlikely to get back in to Parliament unless their fortunes change)

            • McFlock 5.1.1.1.1.1

              Hate to burst your bubble, but nope.

              First of all, it is not describing "at the moment", it is a blurry snapshot of a recent polling period.

              Secondly, like all probabilistic data points it is not a description of what actually is, it is an approximation.

              Thirdly, taken in the context of other recent polls, it seems to be an outlier in regards to one or two general trends. Not a "rogue poll" as people love to say, but at the lower bound of the range of estimates. This could be a reflection of a change in the trend, or it could be statistical noise, or it could be part of a systemic undetected bias in the sampling and analysis.

    • Draco T Bastard 5.2

      Its an ACT budget which means that its not worth mentioning as its all BS.

  6. Andre 6

    Feeble little baby steps like Labour's are quite the waste of a good crisis.

    Unfortunately, a feeble little baby step in a good direction is still a lot better than a big step in an appallingly ill-conceived direction like the Greens' wealth tax. So, reluctantly, my vote probably will go to Labour.

    Now if either of them had the courage to go for a capital gains tax, which really is the better way to tax wealth, then I'd enthusiastically support them.

    • SPC 6.1

      How could the Greens propose a CGT when the PM has ruled it out while she leads the Labour Party?

      • Andre 6.1.1

        There's plenty of stuff Greens fight for even when there's no chance of them happening. So if you're going to put up proposals that ain't gonna happen, they may as well still be ones that make sense and would work well if implemented, rather than really dumb ones.

    • Drowsy M. Kram 6.2

      Comparing the CGT recommended in the final (Feb. 2019) report of the (Cullen-led) Tax Working Group (but not adopted by Government), to the Green party's proposed Wealth Tax, which tax would raise the most revenue? [factoring in the inevitable tax avoidance and evasion that comes so naturally to some wealthy individuals]

      I read somewhere that CGT revenue would be relatively modest for the first few years and then start to build.

      "A comprehensive wealth tax. NZ is presently the only OECD country without a meaningful wealth tax. Most wealth is gained through property value gains, and inheritance, neither of which is fully taxed. Change is needed to fully bring people into the tax system who are currently largely outside it. While most of us in NZ pay tax on every dollar we earn, in contrast those with billions of dollars of wealth pay proportionately very little tax. In virtually any other developed country, they would pay tax on their capital gains, their inheritances or their wealth – ideas Tax Justice Aotearoa discusses here. There are two aspects to the idea of a comprehensive wealth tax: a net wealth tax to be paid annually; and a charge on wealth transfers occurring by inheritance or gift. A net wealth tax would involve an annual levy above a set threshold of assets, minus debt. This would be achieved through a small annual tax on large fortunes. For instance, a tax of 2% on wealth above a $2 million threshold would generate something like $6-8 billion a year. For details on a possible wealth transfer charge, see here."
      https://blogs.otago.ac.nz/pubhealthexpert/2020/09/07/tax-policy-as-a-key-health-determinant-reform-for-the-covid-19-reset/

      "A low level annual net wealth tax of, say, 1 per cent with a high personal level of exemption at $10 million ($20m for a couple whose assets are held equally) could significantly assist. It would produce a much quicker yield than a capital gains tax and would have an impact on a very small segment of the population.
      The tax would apply to all New Zealand citizens and permanent residents with net assets over this amount. Overseas assets would be included. The family home, given the exemption level and the desirability of simplicity, would also be included. This should discourage undue expenditure on "mansions".
      "
      https://www.stuff.co.nz/national/politics/opinion/122540840/why-the-wealthy-need-to-step-up-now

      "Currently the lucky few are amassing wealth and do not have to pay taxes on those assets, meanwhile everyone else is finding it harder to pay rising rents and bills, or put food on the table.
      Having already ruled out the Capital Gains Tax, locking out any taxes on assets, property, or wealth locks in poverty and structural inequality.
      "
      https://www.scoop.co.nz/stories/PA2009/S00071/tax-should-close-the-inequality-gap-between-people-who-own-and-people-who-earn-greens.htm

      • Andre 6.2.1

        I'm not particularly concerned with the minutiae of how much each exact proposal raises nor the timing of when the revenue starts coming in. Those are easily tuned by adjusting rates and thresholds.

        I'm much more interested in how the different proposals affect people's lives and investment decisions, and how they mesh with other countries tax systems. This is because I have paid and will continue to pay both capital gains taxes (because I am also liable for US taxes) and Cullen's Foreign Investment Fund tax on retirement savings in the US, which is effectively structured as a wealth tax.

        Bluntly, the FIF tax is a pain to deal with every single fucking year, I resent it bitterly because it is unrelated to anything the government has done to create wealth, and it's just a money grab unrelated to whether I have the cashflow to pay it. Whereas a capital gains tax is fairly sharing a slice of the profit made with the government* that helped make it possible, at the time when the profit is actually realised into cash-in-hand.

        • Drowsy M. Kram 6.2.1.1

          I’d be unaffected by (and so personally would be comfortable with) a tax on wealth above $1,000,000 (or whatever) per person, but regarding it as "a pain to deal with every single fucking year", and a "money grab" to be resented (bitterly) is a valid PoV.

        • Andre 6.2.1.2

          Whoops, forgot to explain that *.

          As it happens, my biggest ever capital gains tax bill was paid to the US, after the sale of a property here in NZ. Paying the money didn't bother me because it was just part of the cashflow of the moment, but it irritated the fuck out of me that the US got a big chunk of money it had done nothing to create, that really should have gone to the NZ government that did all the stuff that enabled that profit.

    • greywarshark 6.3

      One of your good lines Andre.

      Feeble little baby steps like Labour's are quite the waste of a good crisis.

      I hope that Labour is more successful with the public than Peter Jackson's Meet the Feebles. To even be as innovative they have to make some mighty big changes. How about encouraging people on the benefit to go for it when they can earn without weekly benefit drops – as we all know the benefit is not adequate, they aren't going to be living the life of riley. When they report in at the end of a month how well they have done, give them some praise and ask how long they can keep it up.

      Remember they will be paying 15% GST on most of the net after taking off the basic income tax. Don't pull the benefit rug from under people's feet in the miserly, unsupportive way you do now. They could go onto a basic UBI level at that point, and then see how they shape up at the end of each quarter. Encouragement, encouragement NOT Exterminate, Exterminate.

      But of course we only exist to carpet the ground under the feet of business at the higher level and the corporates. But as DTB is excited about –

      Backing more than one million Kiwis by eliminating secondary tax and automating tax refunds through IR’s Business Transformation programme.

      (One large transformation for low income earners, one small step by Labour towards rational and fair taxation.)

      Our proposed new rate applies to individual income. For example, a household with $240,000 of income through two people who both earn $120,000 will see no changes to their income tax – as both individuals are below the new top rate threshold of $180,000.

      Our policy to close tax loopholes builds upon the major changes we’ve already made to target multinational corporations and prevent them from using loopholes to avoid New Zealand’s tax, and shift profits offshore.

      We’re committed to continuing our work to hold these multinationals accountable and to make New Zealand a fairer place to do business for local Kiwi companies. Ultimately, this work is grounded in our belief that local New Zealand companies deserve a level-playing field when doing business.

      https://www.labour.org.nz/tax

    • Draco T Bastard 6.4

      Now if either of them had the courage to go for a capital gains tax, which really is the better way to tax wealth

      Can't say I agree with you. Many nations have a CGT and it doesn't really seem to be working as well as some suggest it should.

    • Ad 6.5

      Jesus Andre figure yourself out.

      The Greens are too hard. Labour are too soft. National and Act are incohate.

      Yet no-one but no-one is going back to a CGT next term or any term that Ardern is PM.

      The current Minister of Finance – and probably the next one – is trying to keep the entire economy from dying. They are choosing transformation through public expenditure in the time honoured tradition. The very last thing they need to do is suck lots of money out of our pockets with a really large tax change. as you propose.

      Goldilocks was right.

      • Draco T Bastard 6.5.1

        is trying to keep the entire economy from dying.

        No they're not – they're trying to keep the rich, rich and that's about all.

        • Ad 6.5.1.1

          Most people are currently employed because of the actions the Minister of Finance has taken. And likely to remain so, because of actions this Minister of Finance has taken.

          • Draco T Bastard 6.5.1.1.1

            As I said before, there's no point in propping up a business that is going to fail due to the new paradigm brought about by the pandemic which is what's happening here.

      • Andre 6.5.2

        I don't think the Greens are too hard. I think they're badly wrong about which tree to bark up.

        In terms of progressivity, New Zealand's tax system is very low. Compared to the US, where the first USD12,000 is untaxed (apart from Social Security and Medicare/Medicaid taxes), our tax rates are very high on low incomes and very low on high incomes, and we don't tax income from capital at all.

        Taxes paid on company dividends here are credited against personal income tax, and we have neither capital gains nor wealth (except FIF) nor estate tax. Whereas in the US there's capital gains taxes on everything, income from companies is taxed twice (once at company level, then again at individual level on dividends).

        At the top end, US tax rates at the federal level are around 40%, above around a half mill in income, then there will be state income taxes on top of that. In some states like California or New York, a top salary earner might be paying total taxes around 50%.

        Our GST is quite high and on everything (except overseas holidays for the rich), which is very regressive. Sales taxes in the US vary but are generally around half the GST rate, and often don't apply to basics.

        It would be a really good thing to improve the progressivity of our tax system. Another tax bracket around 45% to 50% kicking in at around $350k annual income would be good. As would adding capital gains taxes and estate taxes. None of which would take any steam out of economic recovery now, they would start having effects further down the track after things have recovered.

        • Ad 6.5.2.1

          Agree that increasing progressivity would be a great thing for most people.

          Also that GST is regressive.

        • Wayne 6.5.2.2

          Your analysis of the US tax system is way off. There are so many exemptions and deductions that virtually no-one pays the top rate.

          It tis much better to look at the total size of the government as a percentage of GDP, then look at the tax system that achieves that outcome. That way you get a much better understanding of how the tax system is designed.

          So for instance the size of govt in the US (federal and state) is a little over 25%. You can see the effect of the deductions compared to the nominal rates. And in the US, military spending takes about 20% of all government spending.

          In NZ the size of govt is in the low 30's. The tax system mirrors that quite well. The nominal rates are much better guide since there are few deductions.

          And as I have noted previously Europe is typically in the low 40's as a percentage of GDP, with tax systems to match. I guess a lot of commenters would like NZ tax and social systems to ire Scandinavia, but that is not our history. We value individualism to a much greater extent.

          I reckon I was pretty close in my prediction, at least in terms of net effect. I was predicting 36% cutting in at $120,000. Labour has gone for 39% cutting in at $180,000. The same result would come from either, though my approach would probably have generated more revenue since it would have have caught the top 10% of whole time earners, instead of less then 5%. The 2% figure that Robertson uses relates to all taxpayers; children, retirees, part time workers, whereas the 5% relates to full time employees.

          I guess you could say Labour was politically smarter than my approach since the high threshold leaves most of Labours new voters (the 200,000 who voted National from 2008 to 2017) largely unaffected. Bowalley Road has a good item on this.

          • Andre 6.5.2.2.1

            You're right that very few people (but not zero) in the US pay tax at the top marginal rates. Partly because the upper thresholds are so high, so very few earners are potentially affected. Partly because top earners are often able to structure their income in ways that reduce their tax rates – but a key difference is many of those structures still pay some tax in the US but are completely untaxed in New Zealand. Such as capital gains. Or estates and gifts.

            You point to the US having a low tax collection as a portion of GDP compared to New Zealand. Partly that's because New Zealand taxes low earners (where numerically the majority of taxpayers actually are) at relatively high rates, while the US income taxes are much more progressive and taxes earners at low rates. There's also a good chance that an analysis excludes the Social Security and Medicare/Medicaid taxes in the US, which are actually highly regressive. Partly it's because of the very broad application and high rate of GST here, which is very regressive, whereas the US has no equivalent tax at the federal and sales taxes are set at a local level.

            For those that for some reason prefer to get info from video: here's a piece looking at how different taxes add up for different income levels in the US.

  7. AB 7

    That chewing sound is Labour eating National's lunch. It's such a small step that National's coming outrage over it will seem weird and comical. And it also signals that the 'scary' Greens won't get their way.

  8. Herodotus 8

    I note that supporters of Labour are so STRONG in their support for such a token effort that the diversion is look at National has to be used. Sums it up.

    What about coy tax, Trusts or that other revenue option that our PM promised not to touch? The rich will not have to work very hard to keep their income tax free

    This IMO is far more of a sell out than The Green School, and look at what that stirred up.

  9. Cricklewood 9

    It also signals that Labour isn't really very interested in transformative change.

    The tax system needs an overhaul to help get us through the Covid recession/depression Jacinda has the political capital and the ability to communicate the how and why.

    I'll bet you'll see alot of declared incomes at $179999 once this is done.

    • Ad 9.1

      It's a signal that in an extraordinary economic crisis, the Labour Party has the good sense not to load massive new tax costs on great swathes of the voting and taxpaying population.

      • UncookedSelachimorpha 9.1.1

        ".. the Labour Party has the good sense not to load massive new tax costs on great swathes .."

        That is misleading. Given how massively unequal wealth distribution is in NZ – any new tax that effectively targets wealth, will be a net benefit to vast swathes….

        • Ad 9.1.1.1

          The government will get about an extra $2 billion to redistribute in a term.

          Not a bad result.

    • Draco T Bastard 9.2

      I'll bet you'll see alot of declared incomes at $179999 once this is done.

      More likely we'll see them stay under the $70,000 bracket. Why would people who get to choose their income choose to increase it if it results in them paying more tax but doesn't actually increase their income?

  10. Reality 10

    The more punitive taxes that some would like, would see large number of voters in the middle (Labour and National) not vote for Labour. This way it could capture some Nats also who admire our PM. Better to have a Labour government than a National one. Do what is possible, not what is only a dream in some people's minds.

  11. Barfly 11

    Heh ….

    "as part of our coalition negotiations we have been obliged to accept a wealth tax as demanded by the Greens – all be it at a lower level than originally proposed"

    Here's hoping

    • Alan 11.1

      good luck with that, it isn't going to happen, labour recognise political suicide when they see it

      • Pat 11.1.1

        and if the Greens attracted 15-20% of the vote?

        • Ad 11.1.1.1

          No need to worry about that Pat.

          Worry more that they actually get 5%.

        • Alan 11.1.1.2

          that seems very ambitious given the current sate of the polls Pat

          • Robert Guyton 11.1.1.2.1

            We'll fly in.

          • Pat 11.1.1.2.2

            Agreed its highly unlikely, though not impossible but the point is that should that occur the bulk of that increase would move from Labour and then the possibility of a wealth tax would increase considerably as there would be no pathway to the treasury benches for Labour without the Greens….short of a grand coalition.

      • Wayne 11.1.2

        The major party in a coalition always gets their way on tax. I know that from direct experience.

        And so it should be, the major party, by and large, has the confidence of the voters. The small parties do not parties with 5% or so). They get their way on other things, but not on something as central to the government as tax.

        So Labour will not implement any part of the Green wealth tax. Should it be a Labour/Green government, the tax policy will be entirely designed by Labour (apart from a rebate on electric cars, and perhaps a charge on other cars).

        Of course if the Greens got 15% and Labour less than 40%, then it might be a different sort of negotiation.

  12. Cricklewood 12

    The taxes dont need to be punitive, the best tax systems are also broad based.

    Realistically if we dont address our tax system home affordability continues to worsen, inequality continues to rise, more families fall below the poverty line.

    What's the point of Labour if they dont address this stuff?

    • Draco T Bastard 12.1

      the best tax systems are also broad based.

      GST is broad based and is highly regressive. This has been true throughout history of broad based taxes so we can confidently say that broad based taxes are the worst taxes available.

      The rich like them though as it means that they pay very little tax and the majority of people, who can't dodge paying taxes, pay the most amount of tax.

  13. Kay 13

    I'm sure my judgement is clouded from being 'poor' all my life, but what has gone so wrong that the prospect of losing a few $$ a week that you won't even notice has gone; that it's so absolutely critical you keep every cent of that capital gains even though you've got more than enough to pay the power bill and already own at least one freehold house; that you should be handing over the government even one cent is theft (yet you're perfectly happy to avail of their services) – that just the fear this might possibly affect you is enough to change your vote??

    • weka 13.1

      I actually thought for a moment (2017 I guess) that the left might support ending poverty.

      Here's what Labour said today "A new top tax rate of 39% for income earned above $180,000 will be used to help control debt and protect vital services like health and education"

      There's no real commitment to people who are poor. Your description is hitting the nail on the head.

    • Foreign waka 13.2

      Considering that businesses citing mega profits thanks to the taxpayer. Most of them are the workers of whom many are now being sacked up and down the country.

      Now the owners get a little slap with a wet rag on the wrist of being so naughty to earn more money than any average person will be able to contemplate ever seeing in their lifetime.

      I vote outragedly this time because I am sick and tired of those lies and chicken sh… reactions. Its the Opportunities Party if they are on the time and everywhere I go I will mention them.

  14. Ad 14

    Taxing net wealth over $1,000,000 will incentivise property owners to rack up the mortgages on new property purchases: keep your gearing high and win.

    Taxing income over $150,000 isn't going to hurt too many people – that's a nice small target and won't lose too many votes.

    Taxing Facebook and Amazon: best of luck with that. We need them a lot more than they need us.

    Good on Robertson for taking the hit and keeping Ardern clean during the campaign.

    Hope he keeps the pressure on the RBNZ to keep buying up that debt.

    • Andre 14.1

      A wealth tax will disincentive risky ventures and ventures that may take a while to start generating profit. Because of the cashflow drain of the wealth tax that is still being sucked out before any profit starts coming in. So it will push money more towards sure things that start paying cash back immediately. Property, utility companies etc.

      • Ad 14.1.1

        Exactly. Deeply conservative investments.

        Conservative in the good sense that it's money into local assets, and conservative in the bad sense that it's not going to break fresh businesses or new inventions or whatnot.

  15. Enough is Enough 15

    That is a pathetic from Labour. As I have said many times before, now is the time for transformational policy. Labour will never have more political capital than it does right now. It will never again have opportunity that is presented to it in 2020 when National is is in such disarray.

    Why do they insist on continuing the failed policies of 35 years??

    A tax on high income earners that raises sweet fuck all is window shopping at best.

    I am feeling so deflated because if they won't act now, when will they?

    • Draco T Bastard 15.1

      Why do they insist on continuing the failed policies of 35 years?

      Its what they know and they don't seem to be able to envision anything else.

      if they won't act now, when will they?

      They won't.

      If you want to truly transform the nation – vote Green

  16. xanthe 16

    what a lot of comments.. did i mis the one that identifies the real problem… BANKS…PRIVATE GENERATION OF DEBT … INTEREST

    labpurr the groans not one peep out of either about dealing with the real ongoing source of the problem.

    and I am the only one here saying this ? (please tell me i am not!)

    • PaddyOT 16.1

      Well instead of recovery through an incremental "solidarity tax" on more wealthy earners to address equality in debt paydown, you could take the "blue pill", put more bureaucracy in place to redirect green and progressive funds and make another National bank.

      https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12363500

      • xanthe 16.1.1

        or we could (gasp) collect all interest payments to the general tax fund . thus putting those monies where they belong in the public fund.

      • Draco T Bastard 16.1.2

        National is promising to create a single Crown-owned bank to streamline financing for infrastructure projects and allow for more private sector investment if elected into government.

        And there we have it – how National plan to have the rich be able to bludge more off of the rest of us.

        Really, if we have a state bank funding infrastructure then it simply doesn't need private sector investment.

    • Draco T Bastard 16.2

      It's been said multiple times but I haven't mention of it over the last couple of days.

  17. Stuart Munro 17

    Well it demonstrates the essential laziness of neoliberal government – Labour means to do nothing to remedy the long horror they have imposed on New Zealand.

    It calls into question the very institution of parliament in its present form, that a major party with every prospect of an unassailable majority would so cravenly refuse to address the economic problems that their slave-like adherence to Douglas's fatuous nonsense has visited on our country.

    Shame on you, Labour nithings.

    • greywarshark 17.1

      Remember Michael Cullen's gleeful comment: 'We won, you lost, eat that." He says he never said that to National. But he's a politician – did he say it to someone, or did he say something that meant the same? Who trusts anyone these days!

      In this article from 2009 he talks about his political life and gives some clues why we can't nudge Labour to the lower table 'below the salt', which refers to a medieval custom that will probably fit our time soon. https://www.stuff.co.nz/sunday-star-times/features/2329749/Regrets-I-ve-had-a-few-Michael-Cullen-reflects

      There is reference to the good things he has done but the media are stuck on a rude comment overheard.: …The politician finds it depressing that "everyone made a federal case" out of his blurt. He's the father of Kiwisaver, the Cullen superannuation fund, of Working for Families and a return to egalitarianism in the age of excess,,,

      I don't think much of the term 'return to egalitarianism'! There was a gesture towards it that's all.

      Politics in any case is unfair and random, a war where quips, gaffes and idiot trivia can count for as much as major official victories. Take, for instance, the role of light-bulbs in the fall of the Labour-led government last year.

      "That one actually caught us by surprise," he says. The government's ban on the old, eco-unfriendly incandescent light-bulbs "infuriated people and I think people felt we were bossing them around too much anyway and this was just another straw if you like. The fact that Europe and America and Australia had either done it already or decided to do it seemed to be completely irrelevant."

      The mention of other continents having done this already implying that we should automatically copy them, explains a lot about the mis-matched policies that we have had dumped on us. It is 'Oh they do it overseas' instead of looking to see if it is appropriate here. (The same with GST going up to 15% – they had it in Switzerland. They have a lot of solid wealth in Switzerland and though cows and goat products are a big part of their lives, they have a diversified economy of a developed country, while we lag in this.)

      The concern about the ban on incandescent lights was about cost of purchasing bulbs going up at least 400%. If a poor person needed two light bulbs they could get them for about $2, the new eco bulbs would have been $8-10 for two. Saying they were cheaper was spreading the cost over the supposed long life. But poor people must be more practical, if they haven't the money now then they can't buy the bulb.

      It's not rocket science, but Labour politicians don't live on working people's wages, or think like their hard-up predecessors would have done in Savage's time; now they are comfortable pussies. What an ignorant attitude from Labour about the financial stress continually laid on poor people so they could advance the economy for the wealthy who had surplus to invest that can supply unearned income.

      Then Cullen talks about how everybody expected tax cuts, and National were promising much which would mean slashing government spending. He refers to education cuts and picks out what seemed extravagance – the twilight golf.

      National had attacked him for being Scrooge but their tax cuts were affordable only if they were prepared to slash government spending. "Well then, tell me where the main areas are [to cut]? So far it's only trivia that's been identified as areas to make savings." The National-led government cut 70 staff from the Tertiary Education Commission. "The chances are this will lead to another blowout in low-quality education spending [such as the notorious "twilight golf" courses], which will cost far more than the bureaucrats. The control was put in for a very real reason."

      Again I think this shows how little he understands the needs of the low income strugglers. The twilight golf was part of a school curriculum – an attempt to get those who couldn't settle into education to be served by more open, less controlled education setting where the youngsters agreed to attend certain classes which they chose out of interest. To give a sport component, the golf driving range at night gave them individual tuition as part of a group session, so providing interaction and training without requiring a team effort. I think this related to the Four Avenues School in Christchurch.

      About Four Avenues – https://christchurchcitylibraries.com/collections/theses/c81050990.pdf?origin=publication_detail

  18. Ad 18

    A successful tax increase policy in the middle of an election that doesn't even make the TV1 news that night should be counted as a win for Labour.

    So far not a mention.

  19. Sabine 19

    @ Ad Nr. 18
    maybe its because those that would be paying this 'tax' know full well they won't be paying this tax, so essentially a nothing burger?

    I mean, if they don't pay the current taxes (and according to some of our very rich – they don't, and according to some articles if they pay taxes then only on the first 70%) why would they say something about this 'tax increase' that they equally won't pay.

    You were not thinking that Grant Robertson and crew will actually pay any tax out of solidarity with the unwashed working poor and other unfortunate. Lol.

  20. barry 20

    The problem is that in NZ we want a scandinavian style public service with a US style tax system on third world wages.

    I am afraid that tinkering is going to have to stop some time, and some real change happen or the next pandemic will find an even worse health system with a Collins-Brownlea government. and if that doesn't frighten you then nothing will.

    • RedBaronCV 20.1

      Well said – this is just tinkering and the next RW government will push this ever rightwards. At the very least the trust rate should equal the top tax rate and the imputation credit regime should be adjusted with look thr' taxes for closed companies and other backstop measures to stop wealth being piled up in non personal tax entities.

      Plus a super tax rate for the highest incomes.

  21. ScottGN 21

    At Ad 18.

    You betcha! The precision focus by Labour so far on what needs to be achieved this election cycle is really good.

  22. Incognito 22

    With the pandemic likely to increase inequality one wonders what Labour will do to address the unfairness that seems to be baked into our system and society. Maybe they will increase the minimum wage to $20 an hour? That kind of ‘pay rise’ will be the envy of the Kiwi bourgeoisie, undoubtedly; 4 hours of work will buy you an extra coffee, before tax.

    • Sabine 22.1

      if you can get a job in the first place. The can increase the min wage to a hundered bucks, but who will hire?

  23. Descendant Of Smith 23

    Insipid from Labour.

    Often when tax rates were lowered it was argued that trust and company rates also had to be dropped to prevent the exact rorts of moving income from one form to another. Surely the same principle applies when increasing taxes as well.

    All three should be lifted.

    I'm still not a big fan of a wealth tax – seems much easier to bring back the stamp duty that John Key's government removed and extend that beyond house sales to things like art over a certain value.

    I'd also look to a 1% turnover tax and reduce personal taxation and PAYE split between worker and employer e.g. incentivise employing people by reducing PAYE costs. With a turnover tax then you spread the tax burden more by ensuring every business pays tax including overseas corporates. Also make it payable to the government at the point of sale – saving the millions in unpaid write-off that we see with both PAYE and GST.

    A higher turnover tax could remove completely personal taxation.

    As far as benefit rates Labour you still suck. The inability to do what is right at a point when they have the public support to do so e.g. immeadiately after WEAG is bewildering.

    Still can't upset the rich.

  24. millsy 24

    National, ACT and the usual suspects are carrying on like the government wants to usher in Holodomor v 2.0. The timidity is understandable given the circumstances.

  25. adam 25

    Fighting over scraps again.

    Have any of you read the new testament and read how many times it mentions the poor?

    Are you that delusional about how bad the poverty is in this country?

    We have layers of underclass people who do not vote, because they can't. It's just not somthing they have the wherewithal to do. It's gone. Kaput!

    And this is all that is on offer.

    No thanks, as always,

    nothing to see here – jog on.

    [Not sure what was with the user name part between brackets so I deleted it]

  26. observer 26

    I'm not surprised by the income tax policy, or particularly disappointed. It's what I expected.

    Largely overlooked has been a much bigger issue: an explicit promise not to introduce any new taxes, at all. So that's not only a CGT, which Jacinda had already ruled out, but any kind of measure where the motivation is not revenue gathering, but public good.

    e.g. There are good reasons for a sugar tax or similar moves on unhealthy nutrition. That's not a tax grab, it's evidence-based health policy, to save lives (and indirectly, a lot of health costs). If a tax is ruled out, then we're left with "education" (which we already have, and is largely ineffective) and legislation (i.e. banning).

    It's generally better policy to permit and tax, than to ban (for adults, at least). Labour have removed one of the important tools in the box.

    • Barfly 26.1

      sure not a tax but a

      'health levy"on sugar

    • Sabine 26.2

      why a tax on 'sugar' under the guise of 'health' were a law to regulate sugar content in beverages would be a smarter and btw, cheaper way to go about. Or is it because the only ones paying that 'sugar' tax would be the ones that buy the two liter for a 1buck drinks cause its cheaper then water or any other less sugary drink?

      I get the need for money, after all trinkets and bauble hunters need their contstruction money n shit, but this is stupid.

      Lets bash the poor a bit more with a sugar tax cause the rich who don't drink these drink approve of punishing the ones that can't afford a bottle of water. – And tap water in some parts of NZ is disgusting to be charitable.

  27. Michael 27

    Unimaginative, unimpressive, uninspiring.

    • Sabine 27.1

      and un – collectable as the accountants of those in that income group will make sure that dear Grant will never ever have to pay that 'new' tax.

  28. KJT 28

    Of course they could do what National does. Announce "no new taxes" and proceed to introduce a myriad of new charges, tax paperboys and raise GST. Or denounce debt while borrowing billions to pay for tax cuts for millionaires.

    Or Labour could have backed up the rhetoric, about ending Neo-liberalism, with following the tax working groups recommendations.

    Empty words don't feed and house people.

    "If not now, when?"

    I suppose it has dispelled any illusions that the “Politics of kindness” are going to last any longer than the Covid epidemic. Though the two tier welfare signalled that.

  29. Sabine 29

    what happened to Bill who coined the 'two tier' welfare state when the new 'covid – unemployment' was made public?

  30. solkta 30

    One word for Labour tax policy – Pathetic!

    • Muttonbird 30.1

      Yep. Timid is the word I'd use.

      The thing I hate about it is the targeting of the wrong sort of income. An asset tax doesn’t seem right either. It is the gains which should be taxed like any other income.

      They ruled that out though…

      I guess with an asset tax the increase in value (gains) does attract more tax which is something.

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