Labour won’t regain power until it wins the tax debate

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:

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)

178 comments on “Labour won’t regain power until it wins the tax debate ”

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  1. mikesh 1
    25 September 2017 at 5:11 pm

    ¨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.¨

    I agree, and if we see a need to widen the tax base so as to include taxes on capital or wealth, then the ¨family home¨ should not be excluded. What should matter is how much tax one is paying, not what one levies it on.

    • Nic the NZer 1.1
      26 September 2017 at 8:18 am

      What we discussed the other day implies the government does not need to collect more taxes to support more spending. The left really needs to organise a proper public information based campaign to remove the ideological hurdles which are thrown up whenever additional spending programs are proposed.

      Articles like this, which falsely imply the Labour party must figure out how to collect more tax, are a hinderance which promote false and ideologically driven positions on government spending to the public.

      • popexplosion 1.1.1
        26 September 2017 at 11:03 am

        +

      • mikesh 1.1.2
        26 September 2017 at 7:00 pm

        [Articles like this, which falsely imply the Labour party must figure out how to collect more tax, are a hinderance which promote false and ideologically driven positions on government spending to the public.]

        I don´t think taxation is just about collecting more money. The purpose of engineering a tax shift from productive activity to capital and/or wealth would be to reconfigure the economy; in particular to discourage capital being poured into housing. Fairness is also a legitimate concern which might be addressed through tax measures – capital gains taxes and taxes on imputed rent have both been advocated as measures which could increase equity.

    • Labour_Voter 1.2
      26 September 2017 at 11:50 am

      Taxing the family home is death wish. Labour will never win if it includes that in the tax package.

      • KJT 1.2.1
        29 September 2017 at 10:36 pm

        What about Key’s ten million profit on his “family home”?

        I don’t think taxing that would be unpopular, at all.

  2. Gabby 2
    25 September 2017 at 5:26 pm

    So, showing people who are hovering on the verge of poverty that you’re not going to shove them blithely over would be a good idea.

  3. SpaceMonkey 3
    25 September 2017 at 5:56 pm

    Not sure it’s about tax so much as the last thirty years having tangibly benefited only a very few. For rest now it’s either living an illusionary high, or struggling, or just miserable.

    Labour needs to be clearer about rejecting the neo-liberal experiment.

  5. Bob 5
    25 September 2017 at 6:29 pm

    This whole Tax debate is silly, CGT should be dropped as it takes so long to start collecting such tax.

    The fact that all those west Auckland voters who gave their party vote to National, yet voting a strong Labour Electorate vote, says they are misinformed of said GCT.No tax can be retrospective, it will only affect the people buying homes after the Law is passed.
    Labour did not clarify this to voters, & National succeeded in planting the seed of Doubt. Even tho it were Lies ! Say it often enough & the people believe it.
    A Trumpism if ever there was on.

    Let Winnie go with the Nats & watch the implosion of both parties,
    I say let the Nats try & clean up their own mess & deal with winston at the same time.
    This will be interesting.
    NZ ers are not stupid, well 54% are not, the other 45.6% are simply ill informed and greedy.

    • David C 5.1
      25 September 2017 at 6:39 pm

      Bob.
      Are you deluded or just misinformed?
      In a CGT all property will need to be valued as of the date of introduction (of the tax) and then CGT accrues after that.

      I really hoped for a fully worked CGT to be introduced. I would level the playing field wrt housing speculation.

      • Bob 5.1.1
        25 September 2017 at 11:22 pm

        I realize all property will have to be valued, but existing home owners will not be affected, unless they buy another house after the law is passed.
        It’s already causing headaches and lost elections because of this misinformation, so I believe it needs to be dropped.

  6. One Two 6
    25 September 2017 at 6:38 pm

    No mention of the money/debt/national/govt debt being the pre-requisite discussion

    Talking tax without talking money/debt is asinine!

  7. Stuart Munro 7
    25 September 2017 at 6:41 pm

    CGT is long overdue. NZ needs to stop kidding themselves that our economists are rockstars – we’re not climbing OECD tables in anything positive. No need to reinvent the wheel or pretend we are cleverer than the rest of the world – CGT. We can even study multiple working variations to tune it to work better here. If Douglas had been an economist rather than a crook it would’ve come in with his first free market reforms.

    • mikesh 7.1
      25 September 2017 at 9:04 pm

      ¨CGT is long overdue. ¨

      Long may it stay that way.

      • Stuart Munro 7.1.1
        25 September 2017 at 9:16 pm

        No – it’s time NZ caught up with the rest of the world.

        Our economic pretenders are the biggest charlatans since Freud, they don’t have a fucking clue what they’re doing, and they’ve three quarters wrecked the country. Time – long past time – they began to pay their share. And also time that investment was channeled productively instead of into rent-seeking or capital gain tax dodges.

        • mikesh 7.1.1.1
          25 September 2017 at 9:57 pm

          ¨No – it’s time NZ caught up with the rest of the world.¨

          The British and Australian experience seems to indicate that it doesn´t work. This seems to be at odds with the ¨conventional wisdom¨, so I suppose we should introduce it here to see for ourselves that it doesn¨t work.

          • KJT 7.1.1.1.1
            25 September 2017 at 10:14 pm

            In what way?
            It broadens the tax base so there is less reliance on income tax.
            People in Australia and UK invest in things other than farming capital gains.
            Who knows how much their house price bubbles would have risen without CGT.

            Not working?

            The only ones who are against CGT, are rorting us by adding to our interest rates, capital gains farming, without compensating the rest of us for the increased costs and taxes we have to pay.

            Time the free ride was stopped.

            • mikesh 7.1.1.1.1.1
              26 September 2017 at 12:30 pm

              There are better ways of broadening the tax base. The trouble with CGT is that, once introduced, other options will be more difficult to introduce. People will say we don’t want them if we have a CGT in place.

          • Stuart Munro 7.1.1.1.2
            25 September 2017 at 10:15 pm

            Who say’s it doesn’t work – we’ve had steeper inequality growth than them because we don’t have one. But it was never pretended that a CGT was a magic bullet – it’s just one of a suite of measures to implement when housing becomes a significant problem. Restricting migration and speculation, together with more building and a CGT should slowly deal with the problem – if we can keep the fuckwits out of power for long enough.

            • mikesh 7.1.1.1.2.1
              26 September 2017 at 10:40 pm

              Steeper inequality growth doesn’t show that CGTs work. It probably indicates a lack of productivity gains, or weaker unions.

              • Stuart Munro …
                27 September 2017 at 10:19 am

                You’re in denial.

                Plenty of other countries have also had their unions suppressed by neo-liberalism – our inequality is worse (and our productivity is worse) because our anomalous tax regime locks in advantages for non-productive investment categories – speculation and rent-seeking.

                Easily fixed – the problem is the corrupted class don’t want to.

                • KJT …
                  27 September 2017 at 1:06 pm

                  Pity they don’t read Adam Smith.
                  “Tax landowners, rentiers and traders”. Not workers and entrepreneurs.

                  The right wing, of course, have only ever read the one paragraph of Smith.

                  • mikesh …
                    27 September 2017 at 1:52 pm

                    I agree with Adam Smith. Rentiers should pay tax on their rental profits. All three should pay a land tax. A good case can be made for taxing those who have not made a rental profit, on the rental profit that we consider they should have made, in the manner suggested by Gareth Morgan.

                • mikesh …
                  27 September 2017 at 1:41 pm

                  [ You’re in denial. ]

                  I´m afraid it is you who is in denial. For my part I have never denied that rising house prices might have something to do with rising inequality. However you don´t seem willing to take on board the evidence, from the British and Australian experience, that CGTs don´t prevent rises in house prices.

                  Unfortunately the inequality red herring caused me to take my eye off the ball, which I guess was my own silly fault.

                  • Stuart Munro …
                    27 September 2017 at 1:56 pm

                    We have heard that fiction many times.

                    It has never been contended that a CGT will solve house price rises entirely. It is a soft regulatory measure that will go some way to dampening them however. There is also a measure of justice in assuring that profit derived from capital is not infinitely privileged above profit derived from labour.

                    You have failed to justify your objections to a CGT, and the conclusion is that they are founded on prejudice – vagrant opinion loitering without the means of support.

                    • mikesh …
                      27 September 2017 at 5:49 pm

                      [ There is also a measure of justice in assuring that profit derived from capital is not infinitely privileged above profit derived from labour. ]

                      The profit derived from capital is taxed in the present tax system. By that I mean that we tax rental income. I assume you are a non accountant because you don´t seem able to distinguish between capital and income. The two are different things. Capital gain is not income, it is a form of capital; and we don´t tax capital because capital is something we employ to earn income.

                      The taxing of a man´s means of earning income seems pretty diabolical. We tax income but we leave capital intact to earn more income, on which further tax can be paid.

                      I hope that clarifies this matter for once and for all.

                    • Stuart Munro …
                      27 September 2017 at 5:55 pm

                      Don’t be silly Mikesh

                      The distinction you are drawing is theoretical – housing in NZ has been corrupted into a speculative enterprise because the accountants presumption simply isn’t true.

                      The capital gain from housing is no longer a small adventitious item as like or not to be consumed by depreciation – it is the raison d’etre for buying housing as an investment.

                      And you know that perfectly well.

                    • mikesh …
                      27 September 2017 at 7:02 pm

                      [ The distinction you are drawing is theoretical – housing in NZ has been corrupted into a speculative enterprise because the accountants presumption simply isn’t true. ]

                      The distinction is based in fact. If one invests one´s capital in an asset which increases in value then the increase is a capital gain and represents an increase in one´s capital. This should be obvious from the fact that if one wished to reinvest the proceeds from the sale of an asset one would have less capital to invest if one has had to pay a capital gains tax.

                      [ The capital gain from housing is no longer a small adventitious item as like or not to be consumed by depreciation – it is the raison d’etre for buying housing as an investment. ]

                      The raison d´etre for investing in housing is to earn taxable income from rent. If the raison d´etre is flick it off for a profit then that profit is taxable under IRD rules – this is true even if the transaction does not come within the ambit of the brightline test.

                      I think there is both good and bad in the housing market. I think there are ¨honest¨ landlords whose sole purpose is to provide a rental service and to make a profit from it.

                    • Stuart Munro …
                      27 September 2017 at 7:44 pm

                      It doesn’t matter how many times you repeat it Mikesh – it is palpably untrue to suggest that rental income drives housing investment decisions in NZ.

                      And that’s a problem. Hiding your head in the sand and pretending otherwise does nothing to resolve it. It’s not a matter of ‘good’ or ‘bad’ landlords – we have had housing hyperinflation – and that hyperinflation has been caused by governmental collusion in the property market.

                      This has extremely serious and negative social and economic consequences and muttering mimsy nonsense about distinctions between capital gains and other forms of income simply doesn’t cut it.

                      The capital gain dwarfs all other income.

                      It is vital that this rort is addressed – and a CGT is the best and simplest way to do so. You have not produced anything that could be mistaken for a credible alternative so clearly your expertise is considerably less than you claim.

                    • mikesh …
                      27 September 2017 at 11:36 pm

                      [ It doesn’t matter how many times you repeat it Mikesh – it is palpably untrue to suggest that rental income drives housing investment decisions in NZ. ]

                      I´m pretty sure there are many many ¨honest¨ landlords in the rental market. If you think otherwise then I suggest you provide some proof. But even if it were untrue, the principle that the purpose of investment is to make rental income would still stand. It would just mean that everyone in the rental market was abusing the system; and it is that problem that we should be addressing rather than bringing in inferior tax measures.

                      [ And that’s a problem. Hiding your head in the sand and pretending otherwise does nothing to resolve it. ]

                      Hiding your head in the sand and refusing to recognise how a rental market ought to operate does nothing to solve the problem. Any decisions we make, regarding tax, should be made on the basis of how a housing market ought to operate, otherwise we are just pissing into the wind.

                      [ This has extremely serious and negative social and economic consequences and muttering mimsy nonsense about distinctions between capital gains and other forms of income simply doesn’t cut it. ]

                      Advocating a capital gains tax doesn´t cut it either. The evidence from Australia and Britain suggests it would achieve next to nothing. And, because of the householders exemption, it´s not even equitable

                      [ The capital gain dwarfs all other income. ]

                      That´s interesting. I really didn´t know that. But what is your argument exactly.

                      [ It is vital that this rort is addressed – and a CGT is the best and simplest way to do so. You have not produced anything that could be mistaken for a credible alternative so clearly your expertise is considerably less than you claim. ]

                      Calling something a ¨rort¨ does´t make it one. And a CGT is not the simplest way of addressing the problem. I have given credible alternatives; a CCT or a land tax. The latter I believe would actually be the simplest – land is not the sort of thing one can hide – and it could be collected simply by adding it to rates demands, with local authorities forwarding the proceeds to the government.

                    • mikesh …
                      28 September 2017 at 9:49 am

                      Something has occurred to me since my last comment, and which I hadn´t thought of before. It is that if Morgan´s CCT were introduced, a property owner, whether landlord or private, would, in effect,be paying a capital gains tax as he goes along, since the tax would be based on the total value of the owner´s equity, which would include accumulated capital gains. This means that a CCT, in addition to addressing the problem of the inequity of not taxing imputed rent, would also address the concerns of you CGT enthusiasts.

                    • KJT …
                      29 September 2017 at 10:33 pm

                      Capital gains, is the income landowners are earning from their initial capital. That is the whole point.
                      There are now more people farming for capital gains, than are farming cows.

                      Both in excess, are detrimental to the economy and the environment.

                      You have absolutely no evidence that Capital gains tax hasn’t prevented even faster house price rises in other countries. Aa that would require a. parallel experiment in identical countries.

                      There is evidence that the lack of capital gains tax in NZ has distorted the economy from productive to speculative investment.

                    • mikesh …
                      30 September 2017 at 12:43 pm

                      [ Capital gains, is the income landowners are earning from their initial capital. That is the whole point.
                      There are now more people farming for capital gains, than are farming cows. ]

                      As I have pointed out many times previously capital; gain is not income but an increase in the value of an asset.
                      the other ways of taxing farmers who appear to be farming for capital gains – I would suggest either a land tax, or a tax on imputed rents – and in any case a capital gains tax would also ¨punish¨ farmers who are not doing that, since it is not possible to be selective in who one is going to tax.

                      [ You have absolutely no evidence that Capital gains tax hasn’t prevented even faster house price rises in other countries. Aa that would require a. parallel experiment in identical countries. ]

                      There is no evidence that it has. As you say, it would require parallel experiments in identical countries to prove anything at all.

                      [ There is evidence that the lack of capital gains tax in NZ has distorted the economy from productive to speculative investment. ]

                      What evidence???

  8. Mickey Boyle 8
    25 September 2017 at 7:21 pm

    Theres nothing stopping people from paying a substantial amount more tax than is currently taken off them, go make a donation to the government via the IRD, I dont want to be paying more taxes and i’m certainly not alone. I believe I have this attitude due to the huge amount of waste that has and is currently being spent on my behalf from the government. If I actually thought a tax increase might make a shred of difference to outcomes for the country as a whole I may be for it but alas I cant see the day where that will occur.

    • DoublePlusGood 8.1
      25 September 2017 at 7:46 pm

      Sorry, where is this waste of which you speak? Most parts of the government are running on vastly less than what they need to run their responsibilities properly, and are therefore forced to do a lot of fiscal gymnastics to try and stay afloat.

      • GregJ 8.1.1
        25 September 2017 at 7:57 pm

        You fundamentally misunderstand the concept that taxation is a large-scale collective action that is different from an individual act. Even if Gareth Morgan were to pay more taxes than he currently does it would have negligible effect on Government finances.

        “An individual who decides to pay more taxes than necessary does not have a small effect on government finances and decision making; he has no effect at all…”

        The quote is from a “The Economist” article that covered the argument fairly succinctly in this piece – So why don’t you just pay extra taxes? Hm?

        It also eliminates the “free rider” – the society as a whole pays tax for the benefit of the whole society. Your argument about waste is a red herring. That is a question of governance and financial control not tax. A better debate would be on progressive taxation and whether those who have more should be paying more.

      • BevanJS 8.1.2
        26 September 2017 at 7:11 am

        I’d suggest a fair chunk of particularly MBIE and also MPI as a start.

    • mikesh 8.2
      25 September 2017 at 10:01 pm

      ¨Theres nothing stopping people from paying a substantial amount more tax than is currently taken off them, go make a donation to the government via the IRD,¨

      I like your sense of humour.

    • KJT 8.3
      25 September 2017 at 10:18 pm

      You would rather free load off those of us who do pay tax.

      Funny how right wingers are fine with socialism, so long as it is our money, and work, paying to them.

      Right wingers seem to always have their hands out for “other peoples money”.

      • cleangreen 8.3.1
        26 September 2017 at 8:02 am

        Perfectly correct JKT,

        Just look at what our road freight industry have done to our roads now that they used powerful lobby’s to get government to increase the size and weight of trucks and then encourage more use of them!!!!!

        We now find our hillsides falling down from repeated road based vibrations causing hillsides to ‘fracture’ and now the roads are sinking under the weight and number of trucks on our roads now.

        Latest obsene plan to further sqander our public taxayer purse today is the bill of a estimated $10 billion for “a massive viaduct through the Manawatu Gorge.”
        Rail must now be used for ‘land transport’ of freight & passenger services through the Manawatu Gorge, to reconnect the western traffic to the eastern side.

        http://www.radionz.co.nz/news/national/340220/huge-viaduct-one-of-13-proposals-for-manawatu-gorge

        Finally this latest NZTA road plan for a possible (estimated) $10 Billion dollar “huge viaduct through the Manawatu Gorge” must then become a ‘toll road’ as it is expressly needed urgently only for the freight/road industry and expressly not needed for the occasional private car user.

        We must now realise to pay for all massive road upgrades/repairs especially in any locations such as road gorge configurations such as repeated slips occurring in the Manawatu, Waioeka, Otira, and other venerable road systems.

        Locations that are forced to use only a gorge then dictates that we must make ‘commercial users’ of our roads a “user pays” policy now as the local ratepayers and NZ taxpayer cannot sustain the increasing tax burden on them exclusively.

      • mikesh 8.3.2
        26 September 2017 at 7:11 pm

        [You would rather free load off those of us who do pay tax.]

        Property owners pay tax. Rental income is taxable just like wages, business profits, etc.

        • Stuart Munro 8.3.2.1
          27 September 2017 at 10:22 am

          Rental income enjoys undeserved tax minimization opportunities.

          • mikesh 8.3.2.1.1
            27 September 2017 at 2:17 pm

            [ Rental income enjoys undeserved tax minimization opportunities. ]

            It´s not that rental income provides tax minimisation opportunities, it is just that some landlords are taking on, probably, uneconomic properties and justifying this to themselves through the expectation of capital gain. This, I agree is unfair, but the way to address this problem would be to apply Gareth Morgan´s CCT rather than to introduce a CGT. After all there is no reason a decent rental profit should preclude a later capital gain, so these landlords can´t be said to be gaming the system to avoid tax now in order to obtain a tax free capital gain later.

            Some thought should also be given to the problem of interest. Where landlords are not making a profit it is probably because they are over leveraged, so that the interest they have to pay is gobbling up all their profits. A good case can be made that interest should not be tax deductible anyway, and if it wasn´t landlords in this position would find themselves having to pay a lot of tax despite a lack of profits.

            • Stuart Munro 8.3.2.1.1.1
              27 September 2017 at 2:29 pm

              Morgan’s CCT is wishful thinking – you can’t implement it piecemeal, and he’ll never get a majority. So it’s a distractor – an idea like the FTT, but less progressive. We have a CGT now – all that remains is to expand it until it makes leveraging and other speculative strategies unattractive. That won’t on its own resolve the housing crisis – but it will soften inflationary tendencies.

              • mikesh …
                27 September 2017 at 2:50 pm

                Now that Morgan has put CCT ¨on the political table¨ I don´t think it will go away, even if TOP eventually disappears from the the political scene.
                It is likely Jacinda´s tax working group will now take a serious look at it.

                Incidently, the brightline test is not a CGT. What it means is that the IRD says that where an asset is acquired for the purpose of resale any profit from it´s sale is taxable. The difficulty lies in proving that an asset was purchased for that purpose. Under the brightline test an asset is DEEMED to have been acquired for the purpose of resale if it is sold within two years.

                • Stuart Munro …
                  27 September 2017 at 3:13 pm

                  Yes – I’m aware of that – the fact is that property purchases have increasingly been driven by a desire to profit over recent years, enough that the old presumption that a purchase is not to obtain a profit by resale has been overturned – in the real world if not in tax law. This principle underwrites The Block among other things.

                  Labour’s intention of pushing the bright line out to five years will catch a lot of the remaining speculative activity – but owners and traders of multiple properties will still enjoy an undeserved tax exemption, especially if they trade at six years.

                  Until property is a tax neutral or negative activity it will continue to distort and dominate the NZ investment market, and burgeoning inequality will continue to worsen, while productivity lags.

                  There is no reason to suppose Morgan’s CCT will not die on ‘the table’ as Social Credit policies did, and an FTT seems likely to. The CGT is a much less intrusive reform – though the argument that there should in fact be no family home exemption is sound.

                  • mikesh …
                    27 September 2017 at 6:20 pm

                    The difficulty with the brightline test is that they will catch a lot of home owners who sell for valid reasons eg the breadwinner is transferred to another town by his employer, or they need to cater for a larger family, or they simply want to trade up to something swankier. And even if private householders are exempted Labours extension to five years seems a kneejerk reaction to the problem of rising house prices – in effect, a claytons CGT.

                    [ There is no reason to suppose Morgan’s CCT will not die on ‘the table’ as Social Credit policies did, and an FTT seems likely to. The CGT is a much less intrusive reform – though the argument that there should in fact be no family home exemption is sound. ]

                    If the CCT can´t be introduced I would advocate introducing a land tax (with no exemptions apart from fallow maori land), since it not only has a higher profile than a CCT, but it is more equitable than a CGT. I believe that the Crown´s interest in land does not cease when that land passes into private hands.

                    Incidently, Social Credit ideas have not died. The UBI concept is just another name for Social Credit´s national dividend. There is also a fair amount of informed opinion which holds that commercial banks should not be creating money out of nothing. The Social Credit party still exists, though only just.

                    • Stuart Munro …
                      27 September 2017 at 6:34 pm

                      The Social Credit idea is effectively dead.

                      You must’ve read Hickey – the last nine years have added over half a $trillion to house values, chiefly by inflation.

                      The capital cost of that is going to steeply reduce local home ownership and massively increase negative social phenomena like poverty, crime, homelessness and suicide.

                      It takes a long time to turn a housing market around without Draconian excesses – we don’t have the forty odd years that social credit was left loitering. We don’t have four.

                    • mikesh …
                      27 September 2017 at 7:59 pm

                      Your first paragraph excepted (and it does´t have much relevance to the debate in any case), I can´t say I disagree with any of that. I have read some of Hickey´s stuff and the comments you quote sound like stuff he would have said, though I don´t recall any of it.

                      I don´t think there is much we can do to bring about anything other than a gradual reduction in house prices. CGTs, CCTs and land taxes are largely attempts to introduce greater equity into the market and though they may have some effect in reducing prices, I don´t think that effect will be great. Building more houses will obviously help, but building enough will take time. The only thing that would bring about a sudden reduction would be a devastating economic collapse, but in that case we would be into a completely new ball game.

                    • Stuart Munro …
                      29 September 2017 at 9:18 am

                      Yes, we know you think nothing can be done.

                      You are wrong however – we can implement a CGT. In the absence of such a measure to disincentivise housing inflation other measures will never catch up.

                      It’s the ‘nothing can be done’ which is your key premise, because it is your earnest wish that nothing be done.

                    • mikesh …
                      29 September 2017 at 9:42 am

                      I didn´t say ¨nothing¨ could be done. I said that the best we could do, using tax measures, was bring about gradual change. Significant change can probably only come from increasing the stock of houses, but this of course takes time. The trouble with tax measures is that they would have to be pretty draconian to bring about changes to the extent we desire.

        • KJT 8.3.2.2
          27 September 2017 at 10:23 am

          After you have claimed all the deductions. Right?

          We all know that capital gains is simply profit that is foregone, to avoid tax.

          I could have earned more money in the last ten years, tax free, by simply renting my Auckland house at a loss, then selling it, than i made by working.

          A loophole which is destroying the New Zealand economy, with all the people doing just that.

          Unfortunately, so many are now doing it ,that the first Government which stops the rort, that costs those of us left who do pay taxes on income, will be a one term Government.

          I remember once on a blog publishing the IRD numbers for average tax paid by farm owners. $1500. Someone said why did you pick a bad year. So i picked a good year. $1800.
          Obvious that most farms are farming tax free capital gains, not cows. To the detriment of those who want to farm as an ongoing, income earning, business. Farm prices are now so high, because of capital gains farming, that the traditional routes into farm ownership for youngsters are closed. And farming as a business can scarcely pay the interst on the land prices.

          • mikesh 8.3.2.2.1
            27 September 2017 at 3:01 pm

            [We all know that capital gains is simply profit that is foregone, to avoid tax.]

            What utter drivel. It´s not profit at all. It is actually an increase in the value of an asset, particularly of an asset such as land.

            [ I could have earned more money in the last ten years, tax free, by simply renting my Auckland house at a loss, then selling it, than i made by working.]

            Under current tax law if you purchased the house for the purpose of resale you would be liable to pay tax on any ¨profit¨ you happened to make.

            • KJT 8.3.2.2.1.1
              28 September 2017 at 4:53 pm

              Semantic bullshit. you make money on it. It is income/PROFIT. An increase in money/wealth you have, and should be taxed at the same rate as any other income.

              Under current law. You only have to say the land/house was not for the purpose of resale and IRD have to take your word. I sold to move for work. By the way.

              • mikesh …
                29 September 2017 at 9:09 am

                [ Semantic bullshit. you make money on it. It is income/PROFIT. An increase in money/wealth you have, and should be taxed at the same rate as any other income. ]

                Capital gain is an increase in the value of an asset, and if it exists it does so independently of whether or not you ever sell that asset. Usually it will be reflected in increased rentals or enhanced benefits from the asset. Income/Profit is what you get from producing something, or providing some service, usually in return for monetary remuneration.

                When an asset is sold, and a capital gain realised, the gain is not underpinned by profit in the above sense – the seller hasn´t produced anything, or provided a service – so the only source of the gain can be the buyer´s loss. There is no income or profit where there is no net benefit to the community and the only thing that has changed is an exchange of assets ie where cash has been exchanged for property.

                [ Under current law. You only have to say the land/house was not for the purpose of resale and IRD have to take your word. ]

                Making false representation to the IRD in order to avoid paying tax is fraud, and the fact that you can get away with it doesn´t change that.

                • KJT …
                  29 September 2017 at 9:24 am

                  And. we know it happens all the time.

                  And where is an exchange of some asset for money any different in effect than exchanging my asset, skills and knowledge, for money.

                  You can wriggle all you like, but there is no justification, and considerable expense to the community for one to attract tax and the other, not.

                  • mikesh …
                    29 September 2017 at 10:05 am

                    [ And. we know it happens all the time. ]

                    Possibly. Though the brightline test helps avoid this, and one´s activities can usually provide evidence of intent.

                    [ And where is an exchange of some asset for money any different in effect than exchanging my asset, skills and knowledge, for money. ]

                    No. You get paid for the work you do. If you have special skills and knowledge you would probably be paid more. A doctor, no matter how well qualified, will receive no income at all if he sits on his bum all day and does nothing.

                    [ You can wriggle all you like, but there is no justification, and considerable expense to the community for one to attract tax and the other, not. ]

                    I don´t think you understand the meaning of the word ¨expense¨.
                    I suggest you look it up in the dictionary.

                    • KJT …
                      29 September 2017 at 10:22 pm

                      So. I earn money, working hard, with an extremely high level of skill, by the way, and pay tax on it.

                      You get more money sitting on your butt, simply because you own a house in Auckland, and don’t pay tax.

                      Not only that, but the excessive immigration, high interest rates and extra infrastructure spending, caused by your decision to speculate in housing, is a many billion dollar cost on the rest of us.

                      Just one example is the interest cost to a NZ business is around 12% while overseas competitors are paying 3. With the reserve bank raising rates to try and put a brake on housing inflation.

                      Either you are being deliberately obtuse. Or you are blind to the effects.

                    • mikesh …
                      30 September 2017 at 1:08 pm

                      [ So. I earn money, working hard, with an extremely high level of skill, by the way, and pay tax on it.

                      You get more money sitting on your butt, simply because you own a house in Auckland, and don’t pay tax. ]

                      Are you now suggesting that ¨family homes¨ should also be taxed? If so I would agree that, if we were deluded enough to introduce a capital gains tax, it should apply to all properties, including ¨family homes¨. If, on the other hand, you are talking about the rental income I might receive from a rental property, I agree that I should pay tax on that, and that the tax should be at a level appropriate to the income received.

                      [ Not only that, but the excessive immigration, high interest rates and extra infrastructure spending, caused by your decision to speculate in housing, is a many billion dollar cost on the rest of us.

                      Just one example is the interest cost to a NZ business is around 12% while overseas competitors are paying 3. With the reserve bank raising rates to try and put a brake on housing inflation.

                      Either you are being deliberately obtuse. Or you are blind to the effects. ]

                      Most of this I would probably agree with, but it´s not really relevant to the discussion since it does nothing to indicate that a capital gains tax would be more appropriate than other taxes that might be employed, or other measures that might be taken.

    • popexplosion 8.4
      26 September 2017 at 11:06 am

      lol. private taxes. costs of interest are past onto consumer prices, we are all paying more to pay for Auckland housing, a govt legislated private tax on the whole nation.

      • KJT 8.4.1
        27 September 2017 at 1:12 pm

        Yes. The price of rising interest rates and the overpriced currency, (a brake on NZ exporters), extra infrastructure, increased population and decreased wages, from the shenanigans to keep Auckland house prices up, falls on the rest of us.

        While those who benefit, escape tax on their gains.

        Now they are complaining, because we want to withdraw their subsidy.

  9. Gristle 9
    25 September 2017 at 7:39 pm

    David is correct in that CGT is a transaction based tax that is collected at every sale.

    For this reason property taxes are quicker to generate revenue and are likely to be levied annually.

    Given that property values are already being struck and that ownership and occupancy information is readily available the issues about levying will be low. No doubt it would follow the same sort of processing and enforcement path as rates.

    See the Netherlands for a working example.

    • mikesh 9.1
      25 September 2017 at 9:12 pm

      I agree. The government would be better served by receiving a steady stream of income, year after year, from, say, a land tax, than from an occasional burst of income from a capital gains tax.

      Incidently, where can I find this ¨Netherlands¨? Somewhere in Europe, isn´t it?

      • RedLogix 9.1.1
        25 September 2017 at 9:42 pm

        Which is why Morgan’s CCT or Asset tax is a far smarter and ultimately much fairer mechanism. And much less likely to introduce distortions.

        By contrast a CGT would almost certainly have to exempt the ‘family home’ and this massive loophole would just get gamed all to hell and back.

        • Stuart Munro 9.1.1.1
          25 September 2017 at 9:55 pm

          Easily fixed – cap the value of the family home definition.

          • RedLogix 9.1.1.1.1
            25 September 2017 at 10:18 pm

            What precisely do you mean by that? I’m always leery of tax thresholds of all sorts; they tend to become a form of distortion themselves over time; so I’d be curious to know how you think it works in this instance.

            In general the best strategy with tax is lots of small taxes, levied often and difficult (or better still pointless) to avoid. A CCT inherently meets that requirement; a CGT needs design fiddles.

            I’m not totally against CGT’s; it’s just that overseas experience with them suggests they rarely achieve the investment re-balancing goals that are claimed for them.

            • Stuart Munro 9.1.1.1.1.1
              25 September 2017 at 10:43 pm

              You misunderstand – the object of a CGT, like the object of a Gift Tax, is not primarily to raise revenue. The CGT is to counterbalance inflationary tendencies in the housing market. The Gift Tax is to make evasion by transfers more difficult, not to raise revenue.

              Given a CGT shy population, a higher threshold might be chosen – say $2 million. Properties in excess of this value would be ineligible for the family home exemption. Over time this would concentrate housing values just below the bar. But it would also catch a lot of speculative trade in the high end of the market. The bulk of the market however would not be affected.

              The threshold would also provide a handy litmus for voters. ” <$2 million? Won't affect me."

              • mikesh …
                26 September 2017 at 10:56 pm

                “The bulk of the market would not be affected”

                This of course would be a disadvantage if it was the market that you were trying to regulate.

                • Stuart Munro …
                  26 September 2017 at 11:11 pm

                  By no means – it is folly to regulate an activity which is universal – it lacks public support. Better to regulate the outliers.

                  The extremes of sociopathy are natural targets for regulation – raising taxes on the bloke down the road who does a bit of overtime is neither here nor there, but coming down like a tonne of bricks on the incontinent greed of assholes like Theo Spierings has a healthy deterrent effect in addition to providing a modest bump in state finances.

                  A strict regulation regime for housing could solve the affordability problem overnight – capping prices at $100k + $50k per bedroom. But the weeping and wailing of property speculators and their victims would in that instance become so loud as to overstretch noise abatement enforcement.

                  I offer you a market based solution and you choose tyrannical statism – who’d’ve thunk it!

                  • mikesh …
                    27 September 2017 at 10:01 am

                    ¨By no means – it is folly to regulate an activity which is universal – it lacks public support. Better to regulate the outliers.¨

                    A tax on proerty, such as a land tax, could be applied to everybody. It would still ¨regulate the outliers¨ inasmuch as they would be paying more than the ¨inliers´.

                    • Stuart Munro …
                      27 September 2017 at 10:26 am

                      The truth is that you are at pains to sabotage meaningful tax reform. You can only achieve this by lumping the non-problematic majority in with the problematic speculators and slumlords. If we separate them out there is no difficulty in finding broad based support for reform.

                      No need to punish everyone for the greed of a few.

                    • KJT …
                      27 September 2017 at 1:16 pm

                      Progressive CGT is possible. EG. 0% up to a 500k. 15% up to a million.
                      30% over that.

                      As is replacing some income tax with Morgans version.. Levied along with rates.

                    • mikesh …
                      27 September 2017 at 2:31 pm

                      [ The truth is that you are at pains to sabotage meaningful tax reform.]

                      I´m not. I like tax. Tax is what provides us with all sorts of good things like schools, hospitals, etc. The point is, though, that a tax, such as a land tax, should be applied to everyone who qualifies for it by owning land, in much the same way that PAYE applies to everyone who earns a wage or salary. This is true even if speculators and capital gains are not present.

          • KJT 9.1.1.1.2
            25 September 2017 at 10:19 pm

            What he said.

            • cleangreen 9.1.1.1.2.1
              26 September 2017 at 8:14 am

              A tax, is a tax, is a tax!!!

              Is that clear to all who advocate a ‘across the board tax for all’.

              Wasn’t that National party policy whistle, to scare people off Labour about imminent increase in taxes?????

              You can bet the rich will welcome the ‘general tax all policy’ we see being advanced here right now.

              labour lost a lot with the tax debate, and now you want them to commit to a tax now?

              how is rthat going to fare when 2020 comes around?

              Another one term Government = Labour!!!

              Put it away and tax the rich please. They have spounged to long off us all.

              • KJT …
                26 September 2017 at 9:42 pm

                What is being advocated here is increased taxes on the wealthy, and decreased taxes on workers, especially low waged ones, along with help for the poorest.
                NOT. A general overall increase in taxation. That is National and the medias framing.

                Water taxes on farmers are simply asking for them to pay for the public services of water supply and disposal in the same way urban businesses have for decades. It is not up to us to subsidise your, untaxed, capital gains.

                National will always go for the more taxes frame. Not mentioning the things that will cost us more, to pay for tax cuts.

                “Free’ university education, a functioning health system, fixing housing and reversing the damage of the last 30 years will cost.

                Higher taxes on those who use the most public resources, the wealthy, are essential for a functional country.

                Successful countries all have a State share of GDP greater than ours.

                Higher taxes are inevitable, but it doesn’t have to be solely paid by PAYE
                payers. The great tax bait and switch from wealth to the rest of us, of the last 30 years, can be reversed.

  10. Craig H 10
    25 September 2017 at 7:44 pm

    Labour had detailed tax policies in 2011 and 2014 including fully-costed and detailed CGT. Nobody should be bewildered by Labour’s inability to come up with a tax policy, because we came up with tax policies, twice, and we got slaughtered over it because no amount of messaging changed the simple attack lines of National or got any traction with voters. People believe, completely wrongly, but believe nonetheless, that CGT means government will tax all profits 100%, even the family home. No amount of explanation deals with totally irrational fears like that and ultimately that’s the issue for Labour- you can’t explain away an issue that people have reasoned themselves into.

    Much better to not have one and find something simple like the bright line test, possibly while reviewing all policies with the resources of government, and pick something easier to sell. Or just dump that, and go with the bright line test alone.

    If we want to win elections, we should reframe the debate to National increases taxes and creates new taxes, and will do it again, because who can trust them not to? Then smash them on it from now on, and all campaign when it comes up.

    Meanwhile, tell Joe Worker on Struggle Street that we will be cutting taxes somewhere and increasing it on the rich, by adding a fifth bracket of 40c/$1 over $150K. Dump ESCT and increase KS employer contributions. Above all, avoid any signs of increasing taxes below the rich.

    • McFlock 10.1
      25 September 2017 at 8:29 pm

      I think your first paragraph hit the nail on the head.

      No matter what labgrn do (because it applies to both), National will follow their proven tactical template: lie big about the policy;
      if there is detail, criticise invented minutae as if it’s earth-shattering;
      if there are loopholes, exaggerate them and invent more;
      if there is a broad approach, claim invented details are being concealed.

      So any action by LabGrn is covered with an automatic spin response.

      But also, calling it a “tax debate” shows a policy bias that misunderstands the objective of National’s response template: it’s not a debate about taxes.

      National consistently turn what looks like a bureaucratic policy argument into a wider portrayal that attacks labgrn integrity and competence and deliberately alienates people from policy analyses. It becomes the situation where the confident-looking bullshitter looks more competent than the serious person trying to deny and correct the bullshit.

      For me, that’s the real weakness labgrn have facing the bullshitters: it’s not what the policies are, it’s that however they are presented they will be lied about, misrepresented, and lost in the fog of bullshit.

      • Macro 10.1.1
        25 September 2017 at 9:59 pm

        For me, that’s the real weakness labgrn have facing the bullshitters: it’s not what the policies are, it’s that however they are presented they will be lied about, misrepresented, and lost in the fog of bullshit.

        QFT

        Until we get a 4th Estate actually worthy of the name we shall have the right wing doing nothing, continuing with BAU, and fucking the planet up big time.

        • Craig H 10.1.1.1
          26 September 2017 at 1:02 am

          The 4th Estate did well on those issues in this election IMO – they called out the lies very quickly, and Paddy Gower in particular was great in really denouncing it. However, people still believed it, so I personally propose we come up with something similar and hammer them with it.

          • McFlock 10.1.1.1.1
            26 September 2017 at 11:17 am

            That just makes politics about lies vs lies, though – which is exactly the ground national want to fight on.

            Alienate even more voters.

            • Craig H 10.1.1.1.1.1
              27 September 2017 at 12:58 am

              I don’t mean actually lie, I mean find something to hammer them on (legitimately) and hammer them. Hammer them on a previous history of introducing taxes without telling the electorate first, or on increasing GST after saying they wouldn’t, or something like that. Don’t lie, just pick their perceived strength and hammer at it.

              • McFlock …
                27 September 2017 at 1:30 pm

                But it doesn’t occur in a vacuum: the referee is biased, and the nail has a mind of its own.

                Labour tried a bit of that this time, but the media always shied away from the message. And if you campaign too negatively it can count badly against you.

                And if one concentrates too much on one issue, it’s easily deflected into “you have no policy of your own” territory.

                There’s no workable tactic here. Success against tories relies in a large part on them fucking up – like eating their coalition partners.

        • mikesh 10.1.1.2
          26 September 2017 at 11:07 pm

          It’s not just the bullshitters or the MSM, though of course contribute to the problem. It’s also the squattocracy, home owners residing in overpriced houses who don’t want anything to interfere with property values or the opportunity to accumulate even more capital gain.

    • Ad 10.2
      25 September 2017 at 8:54 pm

      There are subtler ways of bringing in a CGT, already in place and working fine.

      National in particular bringing in the 2-year “bright line test” put a tax on the realized profits on the capital gain of the only asset 90% of kiwis will ever own: their home.

      If Labour had promised to introduce the 5-year “bright line test” and done absolutely nothing else, they would have got away with the entire tax debate and achieved the twin results of shifting asset classes nationally and cooling the housing market.

      • Craig H 10.2.1
        26 September 2017 at 1:14 am

        Exactly. I remember the tax working group policy because it arose out of a regional conference and wasn’t actually about CGT at all, but even just sticking with Andrew Little’s call to not implement anything out of it until after another election would have been enough.

    • mikesh 10.3
      25 September 2017 at 10:15 pm

      ¨People believe, completely wrongly, but believe nonetheless, that CGT means government will tax all profits 100%, even the family home. No amount of explanation deals with totally irrational fears like that and ultimately that’s the issue for Labour- you can’t explain away an issue that people have reasoned themselves into.¨

      Perhaps you could tell the people that National were planning to tax wages 100% and, if the people didn´t believe you, ask them why they believe Labour would tax capital gains 100%.

      • Craig H 10.3.1
        26 September 2017 at 12:59 am

        Anyone I met who thought that, I turned them back by explaining that a) that wasn’t Labour policy and b) that’s not how a CGT actually works, but I can’t exactly explain that individually to thousands of people. By explanation in my original comment, I meant explanatory material e.g. a website, not personal explanation. Basically, if the Nats are just going to make it up, we may as well hammer the bejesus out of them instead of coming up with super detailed policy, because they’re just going to lie about it anyway.

  11. Zack Brando 11
    25 September 2017 at 7:51 pm

    Disagree, Labour, Greens and Peters have the seats and they’re only going to increase once the specials come in. If there is an outpouring of love/support from the grass-roots public towards Peters to back a red-black-green Government, the Left will be in.

    Peters has negotiated many MMP deals and that skill set should be considered an advantage given Labour’s time out of government. The oldies want a change of government too and have voted in Winston as their insurance policy to represent their interests as the ‘times are a changing’.

    I think Winston is cool, it’s a shame he has to suffer so much elder abuse in parliament. He reminds me of the ‘Howard Lyman’ character from The Good Wife – their is an episode addressing ageism head-on, featuring a story line that brought sensitivity training to the fictional Lockhart, Agos and Lee law firm. Worth a watch: The Good Wife s07e05

  12. DoublePlusGood 12
    25 September 2017 at 7:51 pm

    Basically, Labour should say it will ditch GST and replace it with significant income and wealth taxes aimed at stopping accumulation of wealth in the hands of the top 10%.

    Sold well, ditching GST should be an instant election winner. Just have to market National’s GST rise as punishing hard working New Zealanders. Say we need a more common sense tax policy. Attack the tax dodging bludging rich by painting them as costing hard working New Zealanders by making ordinary kiwis pay more money. Common Sense. Hard Working New Zealanders. Fiscal Responsibility. Strong tax leadership.
    And all the rest of that empty vacuous crap that voters low, but unlike National, backed by sound policy that helps New Zealanders.

    • KJT 12.1
      25 September 2017 at 8:23 pm

      80% support ditching GST and having CGT, a higher top tax rate, inheritance taxes on wealth and wealth taxes instead. Reversing the give to the very rich, of the last 30 years.
      The status quo when we had one of the highest standards of living in the world.

      Successful economy’s, including ours in the past, have a Government share of the economy over 45%. Higher taxes, on those who take the most from our society, are essential.

      • RedLogix 12.1.1
        25 September 2017 at 10:28 pm

        And that’s a critical point most New Zealanders have no idea about; that our Govt share of the economy once you have accounted for retirement income is one of the very lowest in the developed world. We have an appallingly mean and underfunded public sector; yet the Nats only plan is to plunge us further down the table … below Mexico last time I looked.

        (Nothing against the Mexicans … just one tough dammed country to live in for most people.)

    • NewsFlash 12.2
      25 September 2017 at 11:18 pm

      +1 DoublePlusGood

      GST is a regressive tax that increases inequality, what you’re suggesting is bang on.

      I don’t think there would be a problem selling the idea as NZ just happens to have the WORST version of GST any where, NZ is the only country in the world that GST applies to 98% of all goods and services, Aus has a 10%GST, but only on 50% of goods and services, ie food, health are excluded, some Scandinavian countries have some high GST rates 50/60% but only apply to small number of goods and services.

      The other good idea for TAX reform is the introduction of a TAX threshold, currently in Australia the threshold is set at $18200, no tax is paid by anyone up to this amount, and then progressive, it means people on lower incomes get most benefit.

      • mikesh 12.2.1
        26 September 2017 at 8:41 am

        ¨GST is a regressive tax that increases inequality, what you’re suggesting is bang on.¨

        I don´t know that its regressiveness is a problem, providing it´s counterbalanced by a sufficiently progressive income tax.

      • Craig H 12.2.2
        27 September 2017 at 1:03 am

        GST is painful to implement when it has different rates and exemptions. Legitimately easier to use much more progressive income taxes or a tax-free threshold, than to play around with GST.

        • KJT 12.2.2.1
          27 September 2017 at 1:28 pm

          GST would be better gone.

          It was a stealthy way of taxing lower income to cut taxes to higher incomes.

          But it has to be replaced by something, to accord with it’s original stated purpose.
          To damp down consumption, especially of imported goods, after tariffs were removed.

          • Draco T Bastard 12.2.2.1.1
            27 September 2017 at 2:33 pm

            It was a stealthy way of taxing lower income to cut taxes to higher incomes.

            QFT

            To damp down consumption, especially of imported goods, after tariffs were removed.

            Interestingly enough, tariffs. In fact, tariffs are far closer to free-trade than FTAs as they don’t take a country’s choices away from them.

            Also, need to set the exchange rate in relation to our actual trade rather than letting the currency speculators set it.

    • Draco T Bastard 12.3
      27 September 2017 at 2:28 pm

      Attack the tax dodging bludging rich by painting them as costing hard working New Zealanders by making ordinary kiwis pay more money.

      They are costing hard-working NZers – billions per year – and everyone should know that.

  13. Pat 13
    25 September 2017 at 8:08 pm

    think Mr Hickey has pretty well nailed it….

    http://www.radionz.co.nz/national/programmes/thepanel/audio/201859882/panel-says

    no one is going to sign a blank cheque (those that know what one is)

  14. Keith 14
    25 September 2017 at 8:11 pm

    In case you missed it Labour had many if not all economists backing their economic plans and guess what, Stephen Joyce made up the 11 billion dollar hole, yep, he just made shit up and just like that, enough dumb arse voters believed it even though Nationals record on honesty is awful.

    Thanks for playing, game over!

    They can get all their tax plans signed off by the best economic minds in the world but what about when National lie again and New Zealand’s thick voters fall for? What then, how do you counter the lying?

    But I do agree, present an overwhelming case on why we need more tax because Christ knows, our public services are running on empty.

    • Ross 14.1
      25 September 2017 at 8:24 pm

      And of course National got away with misleading voters through their advertising. Labour ought to be looking at a few scare tactics – above board of course – of their own in 2020 whether they’re in govt or not. Nice guys come last 🙂

      http://www.medialawjournal.co.nz/?p=682

      • KJT 14.1.1
        26 September 2017 at 9:48 pm

        Lying during an election campaign should result in instant disqualification from parliament, if not a criminal prosecution.

        11 billion dollar lies, about 20 years.

  15. Ad 15
    25 September 2017 at 8:16 pm

    +100

    Ardern herself had overruled her own Deputy Leader Kelvn Davis and made a “captain’s call” to potentially implement a capital gains test in the first term. She embarrassed herself and humiliated her Deputy Leader.

    Then it went south.

    Robertson then had to effectively admit defeat and come in with less than two weeks to go, scoop the whole lot up, and dump it into the next term.

    So Ardern, Davis, and Roberston were damaged.

    Then on the water tax and emissions tax the farmers of Morrinsville aided and abetted by a Fonterra subsidiary took her carefully-spun country-girl image and ruined it on live tv. Ardern herself set that one up with the previously-planted origin story.

    The above simply piled onto Joyce’s narrative about “there’s a fiscal hole”, and the whole of Labour’s carefully framed audited set of accounts justifying their massive promises went up in a bonfire of manufactured authenticity.

    And with that of course went the 6% of the vote that they needed to wipe out National.

    Tax is earned; the right to tax citizens’ incomes is formed through the mandate of the ballot box. It is the origin of the distributive state upon which the Labour movement stands.

    Ardern showed that she did not understand that basic political premise. Ardern and Robertston are jointly to blame for the loss of the 6% that they needed to win.

    Ardern and Robertson’s handling of tax policy is the one thing that tells me that they could sit this term out (just like 1996) until they have a strong story to tell and Ardern has some actual leadership experience under her belt.

    • Ross 15.1
      25 September 2017 at 8:31 pm

      A good analysis…in an FPP world. Pity we’re operating under MMP. National have won nothing.

      You might have missed the German elections over the weekend. Angela Merkel looks set to be the German Chancellor for another 4 years. Her party secured a mere 32.5% of the vote.

      • Ad 15.1.1
        25 September 2017 at 8:46 pm

        Neither National nor Labour have won anything, nor did I claim that.

        You need lessons on how to squarely critique your own party without feeling like your world is collapsing.

        I have a post on the German elections coming out tomorrow.

  16. Shona 16
    25 September 2017 at 8:22 pm

    +100 @doubleplusgood. Dump GST bring in FTT and tax money finally. All those currency traders traders will be squealing up a storm like weaner pigs taken off the teat. Pollution taxes need to be trialed if we get the desired coalition this time. Long overdue as is a UBI

  17. Terry 17
    25 September 2017 at 8:42 pm

    We need to change the conversation about tax. Wage & Salary earners are taxed before our pay ends up in our bank accounts, our Kiwisaver contributions are taxed, if I have some spare cash & I open a term deposit, the interest earned is taxed & deducted by the bank. I get a second job & I get taxed, at a higher rate.

    However as a “Property Investor” I buy a house on a interest only loan, claim the interest payments as a taxable deduction, make a “loss” claim another taxable deduction. Sell the property for a profit and don’t get taxed. In fact I probably don’t pay any tax at all.

    The conversation needs to be about the people who don’t pay tax or are able to avoid it.

    • Ad 17.1
      25 September 2017 at 8:51 pm

      If National forms a government I doubt that even a conversation about deductibility and loss-making claims will be possible. English and the Reserve Bank will simply continue to cool the housing market, first-home buyers get better and better breaks, and that will be enough for that kind of government.

      At base, so long as the state has enough tax to keep generously delivering the goods to taxpayers, a National-led government doesn’t need to start any tax conversation at all other than continuing to tinker around the income thresholds as they have been.

      • Carolyn_nth 17.1.1
        25 September 2017 at 8:58 pm

        How is the state of our health and state education systems, life for those on low incomes, beneficiaries living on not enough, unaffordable housing, selling state houses, etc – delivering for tax payers – ie the workers, savers, GST payers, who don’t get income from housing inflation at no tax….?

        • Ad 17.1.1.1
          25 September 2017 at 9:21 pm

          Your question makes no grammatical sense whatsoever.

          But the simple answer shining through your syntactical fog is: poorly.

      • mikesh 17.1.2
        25 September 2017 at 9:43 pm

        ¨At base, so long as the state has enough tax to keep generously delivering the goods to taxpayers, a National-led government doesn’t need to start any tax conversation at all other than continuing to tinker around the income thresholds as they have been.¨

        It´s not about whether the government has enough money to deliver the goods: the government can print money if it has to. We just need taxation to control the money supply. The pertinent debate concerns the question of whether the burden is being equitably shared.

        • Ad 17.1.2.1
          25 September 2017 at 10:05 pm

          Can you point to a government that successfully just printed money?

          Taxation is not there to “control the money supply”. Money is traded around the world every day. Taxation is justified every year by the government in their budgets line by line, precisely to deliver the things that society needs through the state.

          • KJT 17.1.2.1.1
            25 September 2017 at 10:25 pm

            Labour for the original State housing. USA for the “new deal”. Germany issuing the mark, after WW2. Many others, but everyone knows how to google.

          • mikesh 17.1.2.1.2
            25 September 2017 at 10:34 pm

            ¨Can you point to a government that successfully just printed money?¨

            The American Colonial government, prior to independence. The fact that that they were able to do this successfully caused the British to take umbrage, and was one of the factors that brought about the war of independence.

            In the 1930s the Savage government borrowed from the Reserve Bank (the equivalent of printing money) in order to finance the construction of state houses.

            I´m sure there are many other instances.

            ¨Taxation is not there to “control the money supply”.¨

            Governments either create or borrow the money needed to pay their way, and then use taxation to recover the money so spent; but, in doing so, they look at the GDP equation (GDP= C+I+G-T+X-M) to decide how much to recover.

            It´s probably better to create the the money they spend rather than borrow because then they don´t have to pay interest or build up public debt.

          • mikesh 17.1.2.1.3
            25 September 2017 at 10:47 pm

            ¨Taxation is justified every year by the government in their budgets line by line, precisely to deliver the things that society needs through the state.¨

            Budgets detail how much governments intend to spend under the various headings: health, education, etc. They also detail how much tax they expect to collect from each tax base. Budgets don´t always balance, so they will usually indicate how they will finance any deficits.

          • Nic the NZer 17.1.2.1.4
            26 September 2017 at 10:10 am

            “Can you point to a government that successfully just printed money?”

            Actually given the context of what your saying the correct answer is probably every single one at all times. If your maintaining an official cash rate then the act of borrowing and spending is functionally equivalent to the act of spending and then borrowing. If (using NZ terms) the government or RBNZ chooses not to borrow back the government spending then extra reserves will accumulate in the interbank market. The banks lend surplus (to their immediate payment requirements) reserves to each other. The result will likely be the 90day bills rate diverging from and falling below the OCR.

            E.g There would only be a difference were the RBNZ to allow that to occur.

          • Draco T Bastard 17.1.2.1.5
            27 September 2017 at 2:48 pm

            Taxation is not there to “control the money supply”.

            It’s one reason and probably the most important. Interest rates don’t work to well as the housing bubble shows.

            Money is traded around the world every day.

            But should it be?

            Taxation is justified every year by the government in their budgets line by line, precisely to deliver the things that society needs through the state.

            That doesn’t mean that that is the right way to do it. In fact, it seems to be the wrong way.

            Far better to see money as a cycle. It starts at the government and returns to the government. That government spending is what gets the economy moving to deliver, from the countries own resources, what the nation wants.

            And once you do make the money flow a cycle then taxation is control of the money supply. And interest rates can be, and should be, zero.

    • Blackcap 17.2
      25 September 2017 at 9:21 pm

      Its a misnomer that you get taxed at a higher rate if you have a second job. Yes initially you do pay the secondary tax rate. However the total tax you owe is just the tax that you should have payed on your total combined gross wage/salary. If secondary tax causes you to pay more than you should have paid you can claim this money back as a refund.

      • KJT 17.2.1
        26 September 2017 at 9:51 pm

        Who puts in a tax return.

        Only tax dodgers, and those who have to by law.

        Following that. Employers can claim back expenses against tax, but employees cannot. Even though a great many employers, require employees to supply their own equipment, these days.

        • Craig H 17.2.1.1
          27 September 2017 at 8:29 pm

          Places like Woohoo have made a living doing it for salary and wage earners – with the various tax credits available, there can be quite large refunds available. Granted, people can choose the DIY option for free, but most avoid it in case they get it wrong and have to pay a bill.

      • Anonymous 17.2.2
        26 September 2017 at 10:10 pm

        That you can get some back doesn’t change the fact you /are/ taxed at a higher rate. There’s no option to pay both PAYEs at main rate, even if you can show you shouldn’t be paying the extra. You’re still out of pocket for at least a year, and now unlike with just one job you need to keep immaculate records & chase up IRD.

        • Craig H 17.2.2.1
          27 September 2017 at 8:27 pm

          Each tax rate has a corresponding secondary code, so people overpay because they select the incorrect tax code, rather than an inherent higher tax rate.

          Also, if individual circumstances require a more specific rate, people can apply to IRD for a special tax code.

          • Anonymous 17.2.2.1.1
            27 September 2017 at 10:05 pm

            Hmm, when did they bring that in? Used to be main, secondary, and some specialist codes & that was it. Secondary was higher regardless.

            • Craig H 17.2.2.1.1.1
              29 September 2017 at 12:55 am

              October 2010 which set, in order, the Secondary codes as SB, S, SH, ST, each mirroring the tax brackets rates (10.5%, 17.5%, 30%, 33% respectively).

              Before that, the higher S codes matched the relevant tax brackets, but the standard S code was 21c, whereas the bottom rate was 19.5c. Not a huge difference, and presumably set to allow some leeway for people whose second job would put them slightly over the $38,000 threshold.

    • Strategos 17.3
      26 September 2017 at 9:02 am

      Yep, +1

    • mikesh 17.4
      26 September 2017 at 12:46 pm

      Interest is problematic. There is an argument which suggests it should not be deductible and, if that were the case, highly leveraged landlords would be declaring large profits, and would have to pay an awful lot of tax.

  18. Incognito 18
    25 September 2017 at 9:04 pm

    Thank you for an intelligent and well-articulated post.

    Is there any reason why tax shouldn’t be framed as part of a social contract, which each of us is morally and legally obliged to honour?

    As an analogy, when you stay in a hotel – let’s call it Hotel California – you pay an agreed price and although you can complain about certain things or service you don’t quibble with the receptionist or management on how they spend the money and run the business. A cheaper hotel is not necessarily a better deal for you or for other guests …

    • Ad 18.1
      25 September 2017 at 9:22 pm

      Go ahead and expand the analogy out to New Zealand society.

      • Incognito 18.1.1
        25 September 2017 at 10:46 pm

        Simple enough.

        Hotel=NZ Government

        Guests=electorate

        Finding & comparing hotel deals=election campaign

        Hotel reservation=election promises & bribes

        Choosing Hotel =election

        Room rates=taxes

        Length of stay=3 years +/- a few days unless the hotel needs to be evacuated because of emergency

        Need more expansion?

  19. swordfish 19
    25 September 2017 at 9:53 pm

    2014 New Zealand Election Study

    Q NZ needs a Capital Gains Tax excluding the family home

    Agree 34%
    (Strongly 13% Somewhat 21% = 34%)

    Disagree 35%
    (Strongly 22% Somewhat 13% = 35%)

    Neither 10%

    Don’t know 20%

    So voters pretty evenly divided in 2014 – but those who Agree with CGT more likely to be mildly supportive while those who Disagree more likely to feel strongly

    Also = a pretty substantial Unsure + Neutral element (30%)

    • Ad 19.1
      25 September 2017 at 10:07 pm

      Were those people voters, or merely people responding to a questionnaire?

      • swordfish 19.1.1
        25 September 2017 at 11:13 pm

        Yeah fair point

        From NZES

        The 2014 NZES attracted 2835 respondents, sampled from the electoral rolls, containing just over 91 percent of those estimated to be eligible to vote. Half (1419) also participated in the 2011 NZES

        NZES respondents
        83% voted = 2014 Election
        15% didn’t
        2% Unsure

  20. Michael 20
    25 September 2017 at 10:48 pm

    I agree. After nine years in opposition, Labour has neither the intellectual rigour nor the moral courage necessary to develop and defend a socially just tax system to the people. As a result, National continues to set the agenda and will keep doing so until Labour decides what it stands for.

  21. Draco T Bastard 21
    25 September 2017 at 11:10 pm

    How a major party can spend nine years in opposition and still not have detailed its tax policy, bewilders me.

    They haven’t spent nine years thinking that they needed to change the tax system. That’s new, seems to have come about in the last few months.

    You seem to be assuming that parties are monolithic and never changing which isn’t even true of National.

  22. happynz 22
    26 September 2017 at 1:27 am

    When I cast my vote taxes were not paramount in my voting preference. I reckon taxes are the cost of being part of a society. I may or may not be happy about the amount that is deducted, but I budget accordingly and then just get on with it.

    What I do look at is how well the government is managing infrastructure, if the citizens and residents are afforded the opportunities and help needed for living a dignified life, provide free quality education, secure the health and general welfare, and if they promote and follow through with being good stewards of the land. Those are my primary concerns.

  23. left_forward 23
    26 September 2017 at 7:35 am

    Intersting article excluding the utter nonsense of the opening sentence. This was a significant gain to the left battling against a well-resourced, msm neo-liberal campaign.
    The three main opposition (anti neo-liberal) parties now have the majority – this is not failure!

  24. bwaghorn 24
    26 September 2017 at 8:27 am

    you want to up the tax take while lowering income tax , simple , get rid of cash .

    ever noticed when you are in the corner dairy that if you hand over cash the till more often than not gets opened with out the amount being keyed in .
    then there is the mountain of under the table work done .

    stop living in dark ages cash must die .

    • Carolyn_nth 24.1
      26 September 2017 at 9:07 am

      There is an upside to cash – I use it as much as I can. No commercial or state surveillance of my activities – and I’m not a tax evader or avoider.

      • bwaghorn 24.1.1
        26 September 2017 at 11:27 am

        mate they can’t keep up with watching the badarses mfs like the headhunters , why in the hell would they waste resources looking at little old you !

        • Carolyn_nth 24.1.1.1
          26 September 2017 at 11:31 am

          Maybe not little me per se, but there’s a long record of state surveillance of left wing activists.

          Plus, I object to the surveillance of commercial enterprises – and worry about how it can get out of control.

    • greywarshark 24.2
      26 September 2017 at 11:33 am

      b waghorn
      You are wise to go on writing and reading here. In a little while you might realise for yourself why cash should not die. Cards just present a barrier to freedom of choice and privacy in what you do with your cash. The imminent danger of being under constant surveillance for everything you do, and being judged by the paranoid employees of a paranoid dictator government is here, and some like you say
      ‘Resistance is useless’.

    • mikesh 24.3
      27 September 2017 at 3:21 pm

      If cash was abolished we would probably find a substitute: petrol vouchers perhaps, or postage stamps.

  25. savenz 25
    26 September 2017 at 9:52 am

    One look at what happens when you talk about raising taxes. The Greens! A moron at this point should be able to work out, more taxes campaign is the kiss of death in a relatively wealthy society.

    Sorry no matter how right or wrong taxation is, any talk of raising taxes totally puts that party out of the running to win. Without winning you can’t get your other policies in and the country gets progressively worse off by right wing policy who do win.

    It annoys me how Labour can’t actually get it, either. Just don’t screw up each election by campaigning on a capital gains tax. Seriously I hate National, but it’s getting irritating how Labour (and Greens) keep flogging a dead horse to voters about more taxes!

    The Greens are full of rich people who want to save the environment. Is their vote worth less than a beneficiary? If those that can’t be arsed voting don’t care enough to vote then you have got to work with that. The ‘youth’ vote, does not vote. Get over it and stop losing more and more voters over to the Natz who do vote. The left are constantly going on about issues that are not important to regular voters and don’t speak to regular voters experiences.

    Play the long fucking game for gods sake, you can’t help beneficiaries if you blow your chance each election. Learn from your mistakes!

    Labour has become encapsulated by special interest groups that actually don’t reflect what people want to vote for. People want change, that much is extremely clear, but voters don’t necessarily whole heartedly agree of any of the solutions being proposed by the opposition parties.

    It is easy to demand more taxes if you don’t have to pay them and they go to you. But less easy to sell to those giving more taxes.

    Likewise WOF of rentals. Great if you have $10,000 to upgrade houses, less great if you don’t have the money and even if you did, some P head might just destroy your house.

    If you have a look at the quality of housing in 2017 compared to 1950 it is significantly better. I used to flat in places that had one outdoor toilet, one horrendous bathroom and a kitchen that is unrecognisable to those under 40 years today.

    People over 40 can’t necessarily relate to this idea that younger people have to have so many mod cons provided to them – and clearly younger people are not that into the policy either judging by the voting patterns. I’m sure there are still horrendous houses out there, but there has been improvement. With improvement comes increased rents. The idea of more improvement in rentals with less rents was not ringing a bell with voters.

    I’m a huge fan of state houses. In particular not housing estates but state (not social) housing in rich, poor and middle class areas. With school zoning that means that we don’t have divided societies and rich and poor ghetto’s developing, like this high rise of poverty idea.

    Labour and Greens need to look at the bigger picture. Do they want National to win and actually sell off state houses, make people homeless by importing in 73,000 new people per year because they have become obsessed by a ‘warm dry house’ discourse that applies to voters that fail to vote and older voters having to provide it to some exacting standard that is deemed by a group of middle class intellectuals and buraucrats?

    There are PLENTY of ways to be more efficient to save money on government spending other than more taxes, for example. Health care, prevention, massive savings on IT, get rid of all the troughers that have ballooned away from health care under Bill English. http://werewolf.co.nz/2017/08/bill-english-the-forgotten-history/

    The Auckland council wastes 1 billion on failed IT and their overpriced CEO structure just wants more rates. Government agencies are increasingly off on a tangent and completely unaccountable to those that provide money.

    The left catch cry of more taxes is failing to resonate for those proving the taxes but being left with less and less services for the taxes and more and more troughs diverting the money. Asking for more money is not solving the fundamental problems voters are seeing.

    If Labour started on that discourse of wasteful government spending under National, rather than a group of experts wanting more taxes, then they would have won the election outright and not be relying on Winston.

    • Sparky 25.1
      26 September 2017 at 10:11 am

      A voice of common sense and reason. Seems to be less and less of us these days. Well said.

    • Anonymous 25.2
      26 September 2017 at 10:26 pm

      Who was talking about raising taxes? Labour wanted a tax working group, to look at the structure of tax. Too many people think the democratic process begins and ends at the ballot box, that ticking a box based on sound bites is the way to go. If people /really/ wanted a voice on taxes they’d’ve voted Labour, and the whole country could’ve had a massive discussion, select committees, etc etc. But no, instead of direct input people only want democracy as far as the vagueness’s of putting a tick in a ballot box. The mind boggles.

    • Hydrangea 25.3
      27 September 2017 at 8:08 am

      This has to be one of the best posts I have ever read at TS. Well thought through and spot on. Congrats Savenz.

    • Pat 25.4
      27 September 2017 at 8:21 am

      a lot to agree with there but would suggest that there is room for both your view AND increased taxation

      https://www.oecd.org/tax/revenue-statistics-new-zealand.pdf

  26. Sparky 26
    26 September 2017 at 10:07 am

    A vicious 15% GST on pretty much everything, substantial taxes paid on wages that are not keeping track of inflation, hefty council fees for home owners on over priced houses.Central and local government awash with public money.

    NO WE DON’T NEED MORE TAXES!!! WHAT WE NEED ARE COMPETENT COMMITTED PEOPLE WHO KNOW HOW TO MANAGE THE ENORMOUS SUMS OF MONEY ALREADY IN THE SYSTEM!!!! THAT’S THE PROBLEM THAT NEEDS A SOLUTION.

    • savenz 26.1
      26 September 2017 at 11:01 am

      I hope people from Labour and Greens read this, because Sparky is probably representing the ‘working class’ voice that they keep harping on about wanting to attract, but actually don’t because they have too many middle class intellectuals, ‘experts’ and bureaucrats working out the policies that don’t actually reflect the working class experience anymore. And increasingly people are not even working class anymore. They are poor, middle class or wealthy.

      Labour and Green policy marketing has increasingly reflected a privileged experience of white middle class education but their images and speeches don’t reflect that. There is a disconnect as is, with those that are middle class and wealthy that they need to get on board to get the majority votes.

      Luckily Bill was a robot and all the Natz could come up with, was Delivering for New Zealanders. Hardly inspiring. The election was very close.

      I have never seen Maori, someone homeless, or anyone else worrying about whether his/her letterbox is obscured by greenery which was one of the things in the ‘voluntary’ WOF. It’s the sort of thing the worried well, worry about. (and then fail to vote Labour).

      Labour and Greens are MUCH better than that. Seriously. The world has a lot of problems, don’t turn voters off, by marketing the smaller issues or issues that effect a small segment of society.

      The voters for change deserve a deal with Labour/NZ First and Greens. It is their election to lose because it is not a fair fight anymore. Natz have amassed huge power and have no morals. The results in Auckland directly represent their policy on immigration and it will not stop.

      We have Dutch Fonterra chief earning over 8 million, while NZ farmers are going bankrupt and more and more farm land sold off. Why allow a discourse against the farmers to continue – half the lifestyle blocks on social media were wondering if they would have to pay capital gains – who knew??? And why go there. Why gift so many votes to National?

      • Ian 26.1.1
        26 September 2017 at 6:04 pm

        Sparky talks a lot of sense and labour need to listen. As a dairy farmer who does a bit of irrigation they also need to stop targeting sectors in society that they perceive are making too much money. The water tax was a tax based on envy and targetted a very small group,of whom most are very hard working and it has backfired because most kiwis are fair minded and could see the stupidity of it.
        Sparky is also right about the enormous amount of money allready paid in tax that needs to be better managed.
        So would it be OK if Fonterra had a maori chief earning $8 million ?Theo has done a bloody good job over the last few years and added considerable value to Fonterra.

        • KJT 26.1.1.1
          29 September 2017 at 10:55 pm

          Water tax is simply user pays.

          Just like city businesses have been paying rates for water supply and waste disposal forever.

          By the way. If I pollute the water in my job, I will get hauled off to jail. And the company I work for can be fined in the millions.

          It is not hating on farmers. Just an expectation that farming pays their own business costs like the rest of us. And, if there are good export policy reasons to subsidise farming, which we do, Farmers should be bloody grateful for it.
          Other export and local industries have been killed, to help farmers out with “free trade agreements and the like. Industries that could have earned a great deal more than dairy, . One reason why we now have a 1.2 billion trade deficit.

          So. excuse me, if I get rather annoyed at all the bleating for special treatment.

    • red-blooded 26.2
      26 September 2017 at 11:07 am

      So Sparky, if that’s the problem, how do you suggest we solve it?

      On the whole, competent, committed people find it bloody hard to work in a system in which they can’t deliver a reasonable level of service because they are not resourced adequately to do so. Our public services have been starved away under the austerity regime of this government, and we’re feeling its effects. My DHB has been replaced by a commissioner. Apparently, they weren’t “competent” or “committed” enough. Except – shock! horror! – she’s made no difference to their mountains of debt and services have gone backwards under her regime. People are waiting months and months for surgery, often having it scheduled and cancelled multiple times, even when they are at the top of the list and facing significant danger to their lives and long term well-being. Routine services seem to have been put on hold. For many years I have had regular appointments with a specialist to manage a long-term health condition – I should be seen every 6 months. It’s now been a year and a half since my last appointment.

      As for the original argument about Labour’s tax policy – I think it’s pretty bloody easy to sit on one side and criticise. Labour has to provide a mechanism for funding increased public services and as a party with a commitment to social justice, it also has a duty to try and make our tax system fairer. We’ve tried really detailed tax plans – what was the outcome? Attacks and scaremongering – voters assuming they’ll be “hit’ somehow and not able to see the bigger picture. This time, we said we’d consult with an expert panel to develop a fairer approach. Jacinda muddied the waters by saying that she’d bring forward the actioning of any recommendations, but I certainly understand why she’d do this and she made a pretty strong case, especially in relation to the property market. The tax working group wasn’t a radical idea – as pointed out many times, it’s exactly what the Nats did when they first came to power. The differences? They didn’t tell anyone about it beforehand and they angled things towards being less fair – impacting more on the poor through increased GST. Anyway, we all know the result – lies, attacks and scaremongering; voters assuming they’d be hit somehow and not able to see the bigger picture.

      I don’t necessarily have an answer for this, but I don’t think the “they didn’t do the work” argument holds true.

      • savenz 26.2.1
        26 September 2017 at 11:45 am

        Maybe instead of asking for an unidentified amount of higher taxes to pay for Health, Labour could be quoting what has occurred under Bill English in health,

        “The number of bureaucrats more than doubled between 1993 and the end of 1997, even as health workers lost jobs, reaching a ratio of one manager or administrator for every five medical staff by March 1998.59”

        “Labour will remedy wasteful spending of managers and administrators under National, and put more Doctors and nurses back in the Hospitals”.

        Likewise with teaching.

        “Labour will remedy the National standards which are a National failure (30% of school children are now failing maths and handwriting by year 8), and instead allow the teachers less time on mindless testing and more time teaching the kids”.

        “Under National Standards when kids are found to be failing, there is no money or resources provided to the schools to bring the kids up to standard. It is a complete and utter waste of time, marooning kids and teachers into a nightmare system of identifying failure and then not providing extra teachers to help the kids catch up”

        “Money under Labour will not be diverted to business for expensive Charter schools it will be used to give a world class education to ALL our children. If a business wants to have a charter school they can apply for it the old fashioned way with State-integrated schools and actually be accountable to the educational standards they bring. Not a way for private individuals and groups to steal public money from kids educations like under National”.

        Labour and Greens waste time with more taxes talk and instead they need to talk about how they can make a better society with the taxes how they are. Otherwise the debate always becomes about taxes, NOT about the essential services quality.

        • red-blooded 26.2.1.1
          26 September 2017 at 5:48 pm

          Labour said all these things, and said them forcefully!

          • savenz 26.2.1.1.1
            26 September 2017 at 8:54 pm

            @ red-blooded, Nope, nothing about getting rid of National’s wasteful spending (they are building the most expensive road in the world for God’s sake), nothing about Charters schools and National standards (in fact Granny ran fake fakes campaign praising National’s National standards), nothing about improving services like health, nothing about reducing bureaucracy in health care to save money.

            I think Labour did an ok campaign, but it’s not ACTION or inspiring – it’s bureaucratic sounding aka Not, we WILL clean up the rivers BUT Hold a Clean Waters Summit. Not improve Mental health BUT Set up a Ministerial Inquiry in order to fix our mental health crisis – , Introduce legislation to set a child poverty reduction target NOT action to reduce child poverty…. Too many inquiries and then firm action on the holy grail of NZ, property, …

            I’m pointing this out, because I want people to vote Labour and whoever Labour is using to work out election policy, is not actually creating a majority of voters voting for them. Their policy is firm in some areas that will turn off voters and wishy washy in others.

            National are creating a Kafka like control freakery government services that don’t function anymore and are literally destroying our country and Labour in spite of what they might believe are not being clear in pointing it out.

            Labour’s charter from their first 100 days on their web site.

            Make the first year of tertiary education or training fees free from January 1, 2018.
            Increase student allowances and living cost loans by $50 a week from January 1, 2018.
            Pass the Healthy Homes Guarantee Bill, requiring all rentals to be warm and dry
            Ban overseas speculators from buying existing houses
            Issue an instruction to Housing New Zealand to stop the state house sell-off
            Begin work to establish the Affordable Housing Authority and begin the KiwiBuild programme
            Legislate to pass the Families Package, including the Winter Fuel Payment, Best Start and increases to Paid Parental Leave, to take effect from 1 July 2018
            Set up a Ministerial Inquiry in order to fix our mental health crisis
            Introduce legislation to make medicinal cannabis available for people with terminal illnesses or in chronic pain
            Resume contributions to the New Zealand Superannuation Fund to help safeguard the provision of universal superannuation at age 65
            Introduce legislation to set a child poverty reduction target and to change the Public Finance Act so the Budget reports progress on reducing child poverty
            Increase the minimum wage to $16.50 an hour, to take effect from 1 April 2018, and introduce legislation to improve fairness in the workplace.
            Establish the Tax Working Group
            Establish the Pike River Recovery Agency and assign a responsible Minister
            Set up an inquiry into the abuse of children in state care
            Hold a Clean Waters Summit on cleaning up our rivers and lakes
            Set the zero carbon emissions goal and begin setting up the independent Climate Commission

            • red-blooded 26.2.1.1.1.1
              27 September 2017 at 3:41 pm

              What you’re ignoring is that policy and policy statements are wider than the First 100 Days’ focus.

              • savenz …
                27 September 2017 at 5:51 pm

                If Labour wants to start winning it needs to have much better policy able to be digested in a modern society (aka media soundbite, debate and long read) and appeal to a wider group of people who it represents.

                Otherwise all the great work that the Labour MP’s do and other people supporting them are disappointed. They don’t understand why people are not voting for them more. I’m just trying to help them understand a wider group they have to appeal to, and that their marketing advisers obsession on appealing to small segments of society while ignoring the larger segments.

                No mention of TPP and no mention of immigration from Labour in their 100 day plan which were key policy differences from National.

                There was also no mention of TPP in the final days either from the Greens. The five reasons to vote for them were Clean up our rivers, Save the whales, Improve public transport, Help end child poverty, Real action on climate change. While I support all those things they were not presented in an authentic way and seemed like a mishmash of bad advertisements. No plea about what makes Greens different from the other parties in particular their strong stance on TPP (think of the amount of people who marched for this issue), nothing on assets sales and selling off the country etc, nothing on sustainability and zero urgency. It could have come from any charity asking for money.

                There is also a small element of whipping boy to some sectors from Labour and Greens such as farming and landlords. The policy makers should be the targets not the little guy. Even then, it starts getting negative press. Why not unite and think of positive things. If there were no landlords there would be no houses and if there was no farms there would be no food.

                Also they should have had Labour middle NZ and Greens further left. Instead both parties messaging seemed to flip flop with similar messages competing against each other and then leaving out the most important differences.

                Both seemed to have the warm dry house as a key policy overall – again a message affecting 35% of society, clean rivers, child poverty, mental health (not sure how many that effects) and tertiary students. Many of those probably fall into the under 35 voters which mostly don’t vote.

                Middle NZ may have been represented somewhere but it was not the main messaging in the last weeks of the election. People vote for the party who they believe will improve their lives the most. So it’s important to relate in a mainstream way, not just talk endlessly about someone else’s issues.

                I’m on both Greens and Labour mail outs and I mostly got asking for donations in the final weeks – and asking to vote. Not an impassioned reason why I should vote for them, and if I did none of the reasons related to me.

                Greens were the most appalling in their final campaign to their email members. In one mail out I kid you not, there was Chloe’s recipe for smashed avocados on the 15/9 and Holt’s hot hatch. If you really want to undermine the seriousness of an election – you could write a paper on what the Green’s were sending out prior to the election. Nothing about the important issues – mostly about how many Green MP’s they could get into parliament with how many votes.

                I don’t blame James Shaw who did a fantastic job saving the Greens – but clearly don’t let the 22 yo’s loose on social media and have someone running your campaign who is not a committed Greenie experimenting with god know what, (drugs??) – anyway clearly has ZERO idea what most serious Green voters want from the Green Party. Please can they get Lucy Lawless, Russel Norman or someone actually committed to Green issues next time if they want some input before they press, send.

                When you experiment, bear in mind you can actually repel people from voting for you, if you get it wrong and clearly that’s what happened to them. And that’s a massive shame. Likewise with Labour not knocking it out of the park when they are finally on the right track.

  27. Dean Reynolods 27
    26 September 2017 at 10:41 am

    Fantastic article – spot on! Labour must do this, starting now!

  28. DH 28
    26 September 2017 at 1:50 pm

    I’ve had a ponder on this article for a day and have to say I disagree with it. To my mind Labour need to win the spending debate, not the tax one.

    Like most people I view it through my own lens which is that of a person who lives within their means and tries to budget wisely. I don’t have the luxury of putting my income up just because I want to spend more, and nor do many other NZers. I look for a Govt who will display due respect for other people’s money and I’m afraid Labour failed that test with nearly every campaign they’ve run. They rarely get my vote.

    The tragedy is that Labour don’t really need to do much on that front. Mostly they just need to stop promising more spending on their election campaigns. Capex is generally ok, we all understand that, but operating expenditure should be left until after they’re in Govt.

    • Michael 28.1
      26 September 2017 at 5:48 pm

      You fail to understand the difference between a sovereign government and an individual household. Because governments have far greater powers, individuals agree to them exercising those powers, ideally for the common good. The Right want you to think small, and fret about “balancing the books”, because you won’t look at the big picture of the Right getting richer while you get poorer and your environment turns to shit (literally). It helps, too, if you are encouraged to hate someone else (usually people of a different skin colour to your own) for your steadily declining standard of living. National (and ACT) are brilliant at this (they have the best propagandists and dirty tricks performers money can buy), although it beats me why “Labour” doesn’t even try to defeat this wicked spin (FWICS, Labour just peddles a milder version of it instead). That’s why we’ve got a fourth term neoliberal government.

      • Craig H 28.1.1
        27 September 2017 at 1:18 am

        Arguably this will be a 12th term neoliberal government, regardless of who actually forms it…

        That aside, you’re right, but actually getting that across to people is tough, as per DH’s post. That’s also why Labour can’t afford to be seen as too soft on beneficiaries, for example – rightly or wrongly, public perception of beneficiaries is awful following decades of bashing them as lazy good-for-nothings, so it just looks like Labour will waste people’s taxes.

  29. Adrian Thornton 29
    27 September 2017 at 3:59 pm

    +1 Excellent post Simon, thanks.
    You are quite correct that Labour has done a woeful job of unpacking the issue of tax to the citizens of NZ.
    However that they have, is sadly unsurprising from a centrist third way labour party moronically chasing the middle voting block who have obviously abandoned them long ago.

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  • Pharmac Director, Climate Change Commissioner, Health NZ Directors – The latest to quit this m...

    Summary:As New Zealand loses at least 12 leaders in the public service space of health, climate, and pharmaceuticals, this month alone, directly in response to the Government’s policies and budget choices, what lies ahead may be darker than it appears. Tui examines some of those departures and draws a long ...
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  • The Kākā’s Pick 'n' Mix for Friday, July 19

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  • Weekly Roundup 19-July-2024

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  • Tobacco First

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  • Trump’s Adopted Son.

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  • The Kākā’s Journal of Record for Friday, July 19

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    1 week ago

  • Joint statement from the Prime Ministers of Canada, Australia and New Zealand

    Australia, Canada and New Zealand today issued the following statement on the need for an urgent ceasefire in Gaza and the risk of expanded conflict between Hizballah and Israel. The situation in Gaza is catastrophic. The human suffering is unacceptable. It cannot continue.  We remain unequivocal in our condemnation of ...
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  • AG reminds institutions of legal obligations

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  • More young people learning about digital safety

    Minister of Internal Affairs Brooke van Velden says the Government’s online safety website for children and young people has reached one million page views.  “It is great to see so many young people and their families accessing the site Keep It Real Online to learn how to stay safe online, and manage ...
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  • Speech to the Conference for General Practice 2024

    Tēnā tātou katoa,  Ngā mihi te rangi, ngā mihi te whenua, ngā mihi ki a koutou, kia ora mai koutou. Thank you for the opportunity to be here and the invitation to speak at this 50th anniversary conference. I acknowledge all those who have gone before us and paved the ...
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  • Employers and payroll providers ready for tax changes

    New Zealand’s payroll providers have successfully prepared to ensure 3.5 million individuals will, from Wednesday next week, be able to keep more of what they earn each pay, says Finance Minister Nicola Willis and Revenue Minister Simon Watts.  “The Government's tax policy changes are legally effective from Wednesday. Delivering this tax ...
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  • Experimental vineyard futureproofs wine industry

    An experimental vineyard which will help futureproof the wine sector has been opened in Blenheim by Associate Regional Development Minister Mark Patterson. The covered vineyard, based at the New Zealand Wine Centre – Te Pokapū Wāina o Aotearoa, enables controlled environmental conditions. “The research that will be produced at the Experimental ...
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  • Funding confirmed for regions affected by North Island Weather Events

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  • Indonesian Foreign Minister to visit

    Indonesia’s Foreign Minister, Retno Marsudi, will visit New Zealand next week, Foreign Minister Winston Peters has announced.   “Indonesia is important to New Zealand’s security and economic interests and is our closest South East Asian neighbour,” says Mr Peters, who is currently in Laos to engage with South East Asian partners. ...
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  • Strengthening partnership with Ngāti Maniapoto

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  • Transport Minister thanks outgoing CAA Chair

    Transport Minister Simeon Brown has thanked outgoing Chair of the Civil Aviation Authority, Janice Fredric, for her service to the board.“I have received Ms Fredric’s resignation from the role of Chair of the Civil Aviation Authority,” Mr Brown says.“On behalf of the Government, I want to thank Ms Fredric for ...
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  • Test for Customary Marine Title being restored

    The Government is proposing legislation to overturn a Court of Appeal decision and amend the Marine and Coastal Area Act in order to restore Parliament’s test for Customary Marine Title, Treaty Negotiations Minister Paul Goldsmith says.  “Section 58 required an applicant group to prove they have exclusively used and occupied ...
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  • Opposition united in bad faith over ECE sector review

    Regulation Minister David Seymour says that opposition parties have united in bad faith, opposing what they claim are ‘dangerous changes’ to the Early Childhood Education sector, despite no changes even being proposed yet.  “Issues with affordability and availability of early childhood education, and the complexity of its regulation, has led ...
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  • Kiwis having their say on first regulatory review

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  • Government upgrading Lower North Island commuter rail

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  • Government moves to ensure flood protection for Wairoa

    Local Government Minister Simeon Brown has announced his intention to appoint a Crown Manager to both Hawke’s Bay Regional and Wairoa District Councils to speed up the delivery of flood protection work in Wairoa."Recent severe weather events in Wairoa this year, combined with damage from Cyclone Gabrielle in 2023 have ...
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  • PM speech to Parliament – Royal Commission of Inquiry’s Report into Abuse in Care

    Mr Speaker, this is a day that many New Zealanders who were abused in State care never thought would come. It’s the day that this Parliament accepts, with deep sorrow and regret, the Report of the Royal Commission of Inquiry into Abuse in Care.  At the heart of this report are the ...
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  • Government acknowledges courageous abuse survivors

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    3 days ago
  • Half a million people use tax calculator

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  • Paid Parental Leave improvements pass first reading

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  • Rebuilding the economy through better regulation

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    3 days ago
  • ‘Open banking’ and ‘open electricity’ on the way

    New legislation paves the way for greater competition in sectors such as banking and electricity, Commerce and Consumer Affairs Minister Andrew Bayly says. “Competitive markets boost productivity, create employment opportunities and lift living standards. To support competition, we need good quality regulation but, unfortunately, a recent OECD report ranked New ...
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    3 days ago
  • Charity lotteries to be permitted to operate online

    Minister of Internal Affairs Brooke van Velden says lotteries for charitable purposes, such as those run by the Heart Foundation, Coastguard NZ, and local hospices, will soon be allowed to operate online permanently. “Under current laws, these fundraising lotteries are only allowed to operate online until October 2024, after which ...
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  • Accelerating Northland Expressway

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    4 days ago
  • Sir Don to travel to Viet Nam as special envoy

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    4 days ago
  • Grant Illingworth KC appointed as transitional Commissioner to Royal Commission

    Minister of Internal Affairs Brooke van Velden says newly appointed Commissioner, Grant Illingworth KC, will help deliver the report for the first phase of the Royal Commission of Inquiry into COVID-19 Lessons, due on 28 November 2024.  “I am pleased to announce that Mr Illingworth will commence his appointment as ...
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  • NZ to advance relationships with ASEAN partners

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    4 days ago
  • Backing mental health services on the West Coast

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    4 days ago
  • NZ support for sustainable Pacific fisheries

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  • Students’ needs at centre of new charter school adjustments

    Associate Education Minister David Seymour says proposed changes to the Education and Training Amendment Bill will ensure charter schools have more flexibility to negotiate employment agreements and are equipped with the right teaching resources. “Cabinet has agreed to progress an amendment which means unions will not be able to initiate ...
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    4 days ago
  • Commissioner replaces Health NZ Board

    In response to serious concerns around oversight, overspend and a significant deterioration in financial outlook, the Board of Health New Zealand will be replaced with a Commissioner, Health Minister Dr Shane Reti announced today.  “The previous government’s botched health reforms have created significant financial challenges at Health NZ that, without ...
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    5 days ago
  • Minister to speak at Australian Space Forum

    Minister for Space and Science, Innovation and Technology Judith Collins will travel to Adelaide tomorrow for space and science engagements, including speaking at the Australian Space Forum.  While there she will also have meetings and visits with a focus on space, biotechnology and innovation.  “New Zealand has a thriving space ...
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    5 days ago
  • Climate Change Minister to attend climate action meeting in China

    Climate Change Minister Simon Watts will travel to China on Saturday to attend the Ministerial on Climate Action meeting held in Wuhan.  “Attending the Ministerial on Climate Action is an opportunity to advocate for New Zealand climate priorities and engage with our key partners on climate action,” Mr Watts says. ...
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  • Oceans and Fisheries Minister to Solomons

    Oceans and Fisheries Minister Shane Jones is travelling to the Solomon Islands tomorrow for meetings with his counterparts from around the Pacific supporting collective management of the region’s fisheries. The 23rd Pacific Islands Forum Fisheries Committee and the 5th Regional Fisheries Ministers’ Meeting in Honiara from 23 to 26 July ...
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    7 days ago
  • Government launches Military Style Academy Pilot

    The Government today launched the Military Style Academy Pilot at Te Au rere a te Tonga Youth Justice residence in Palmerston North, an important part of the Government’s plan to crackdown on youth crime and getting youth offenders back on track, Minister for Children, Karen Chhour said today. “On the ...
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    7 days ago
  • Nine priority bridge replacements to get underway

    The Government has welcomed news the NZ Transport Agency (NZTA) has begun work to replace nine priority bridges across the country to ensure our state highway network remains resilient, reliable, and efficient for road users, Transport Minister Simeon Brown says.“Increasing productivity and economic growth is a key priority for the ...
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    1 week ago
  • Update on global IT outage

    Acting Prime Minister David Seymour has been in contact throughout the evening with senior officials who have coordinated a whole of government response to the global IT outage and can provide an update. The Department of the Prime Minister and Cabinet has designated the National Emergency Management Agency as the ...
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  • New Zealand, Japan renew Pacific partnership

    New Zealand and Japan will continue to step up their shared engagement with the Pacific, Foreign Minister Winston Peters says.    “New Zealand and Japan have a strong, shared interest in a free, open and stable Pacific Islands region,” Mr Peters says.    “We are pleased to be finding more ways ...
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    1 week ago
  • New infrastructure energises BOP forestry towns

    New developments in the heart of North Island forestry country will reinvigorate their communities and boost economic development, Regional Development Minister Shane Jones says. Mr Jones visited Kaingaroa and Kawerau in Bay of Plenty today to open a landmark community centre in the former and a new connecting road in ...
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  • 'Pacific Futures'

    President Adeang, fellow Ministers, honourable Diet Member Horii, Ambassadors, distinguished guests.    Minasama, konnichiwa, and good afternoon, everyone.    Distinguished guests, it’s a pleasure to be here with you today to talk about New Zealand’s foreign policy reset, the reasons for it, the values that underpin it, and how it ...
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    1 week ago

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