Written By: - Date published: 4:36 pm, September 25th, 2017 - 178 comments
Categories: accountability, capital gains, Economy, election 2017, grant robertson, gst, jacinda ardern, labour, national, Politics, tax, winston peters - Tags: lakoff
Labour didn’t deserve to win on Saturday because, firstly, because it failed to bring a fully-fleshed tax policy to voters, and, secondly, it never attempted to win the ideological battle over tax.
Missteps over the Capital Gains tax apart, Jacinda Ardern ran an energetic and near flawless campaign and yet Labour still lost heavily.
It is as certain as death, that tax will be front and centre of the next election and voters will be easily scaremongered again, if Labour fails to address tax.
How a major party can spend nine years in opposition and still not have detailed its tax policy, bewilders me. It raises serious questions about the competence of Finance Spokesman Grant Robertson and other senior members of the leadership team.
To not finalise its position on tax, left gaping openings for National attacks – that it was both dithering and that unlimited tax options might be introduced by the Tax Working Group.
National was easily able to scare various sectors of the electorate by raising the prospect of a capital gains tax, inheritance tax, land tax, gift duties, or new higher income tax brackets.
Each of these taxes is perfectly worthy of consideration. But, assuming NZ First supports National to form a government, if Labour wants to stop an action-replay of this election, it must set up its own tax working group early next year and have its position nailed down by the end of 2018. (You can place your bet now that any government dependent on Winston Peter is not going to last until 2020).
Most importantly, whatever, the tax working group decides, Labour must put a categoric cap on how much tax, as a percentage of GDP, it intends to raise, to pre-empt tax-and-spend attacks.
If the working group recommends a CGT, as it most likely will and should, then Labour must give assurance it will maintain the cap irrespective of how much the CGT raises. So if CGT pulls in $500m of revenue by 2025, then income taxes, or the rate of GST, will be commensurately reduced.
Using the commitment not to go beyond the set ratio will allow Labour to allay attacks that it will tax anything that moves.
Far more important, however, is the need for Labour to win the ideological debate – that taxes help to build societies. This debate has to be tackled front-on and from the day parliament reconvenes. It cannot be left to an election campaign, where there are inevitable distractions.
Until Labour wins hearts and minds that taxes are the mechanism for creating a fairer, caring and better working society, it will always be on the back foot.
According to cognitive linguist George Lakoff of the University of California, the Right has succeeded in capturing the international debate on tax. The framing meme that lower taxes are good for voters has been backed by powerful, shorthand metaphors that make it difficult to counter.
Terms such as “tax relief”, used by the Right since the 1980s, conjure an unconscious message of tax as an affliction. Thus those proposing to cut taxes are portrayed as heroic, while those advocating holding, or raising tax, are portrayed as villains.
Similarly, the widely used term ‘nanny state’, succinctly and negatively frames any initiative to improve society’s wellbeing, such as debate on food and sugar use.
Lakoff says the language and framing capture explains why so many voters have been so willing to vote against their own interests.
Messaging on taxes by the Right has been highly effective in winning long stints in power which have been used to smash unions into submission, resulting in lower real wages and lower living standards for many.
Ironically, once workers’ pay is near subsistence levels, they then become more susceptible to the message of tax “relief”, often voting for parties proposing less progressive tax regimes such as lower income tax, but higher GST. That results in spending cuts that undercut the very support programmes in health, education and security that they need to live adequately.
Lakoff argues the Left must find similar effective framing and language for its argument that taxes are what people pay to build our community – that they allow us to live in a civilised, democratic, society which uses progressive taxes to try to equalise opportunity.
He also says the Left needs to frame tax as a moral issue – that people should willingly pay their fair share and that the ability of people to avoid paying tax on such things as capital gains is repugnant. Why should disgraced former MP Todd Barclay make hundreds of thousands of dollars of profit on the sale of his Arrowtown house and not pay a cent of tax, while regular workers who can’t afford a house never, have such opportunities?
Progressives around the world, including US senator Bernie Sanders and Labour’s Jeremy Corbyn in the UK have all shown there is appetite for parties that promise to use taxes to restore social services that have been slashed by the Right.
These movements have fallen short partly because of the failure to win voters over in the ideological discussion that lowering taxes is bad for society and for most voters.
To succeed at the next election, Labour must begin work today to frame this debate.
The frame should include Labour’s moral vision of empathy, responsibility, protection, fairness, equality and empowerment. The narrative should emphasise that New Zealand, thanks mainly to previous Labour governments, has a history of looking after people, and Labour will build on that.
Every communication from Labour, whether on health, education, welfare or whatever, should add to the narrative about the need for taxes to support government initiatives. As well, there has to be a narrative about how tax cuts result in the removal of services and protections that have been created to ensure all citizens have the opportunity to fully participate in society and are cared for properly.
Such framing takes time, determination and cohesion. That’s the hard part. The relatively easy part is nutting out a detailed, comprehensive tax policy to present to voters. Failure to do that though, will certainly see result in another disappointment at the next election.
(Simon Louisson formerly worked for The Wall Street Journal, NZPA, Reuters, The Jerusalem Post and was briefly a political and media adviser to the Green Party)