Will consensus building paralyse Ardern?

Written By: - Date published: 7:14 am, October 21st, 2020 - 33 comments
Categories: capital gains, Economy, jacinda ardern, Judith Collins, labour, national, Politics, same old national, tax - Tags:

Jacinda Ardern aims to bet both ways on our future – transforming Aotearoa to rid us of inequality and poverty, and building consensus.

She has won a mandate with her historic, landslide victory but can she do both?

“I have been a consensus builder, but I also need to work with the mandate that Labour has been given,” she said in the aftermath of her electoral win.

I doubt that the two goals are compatible and my bet is that building consensus will win.

A big factor in the election landslide was Labour’s ability to spike National’s primary gun – tax. Ardern went to huge and costly lengths not to scare middle Aotearoa on tax.

While Labour announced a new, higher marginal tax rate on very high incomes (kicking in at incomes over $180k), Ardern unequivocally ruled out the Green Party’s wealth tax. And last year, she ruled out a capital gains tax despite it being the her own Tax Working Group’s main recommendation to address an “unfair and unbalanced” tax system that has produced inequality.

Her staunchness on CGT and wealth tax was Ardern’s way of taking tax off the table as central to the upcoming election. Labour knew from bitter experience that National would scare-monger on tax. Remember that before Covid, National was polling well over 40 percent, despite having a deeply unpopular leader in Simon Bridges.

Third iteration National leader Judith Collins still tried to bet the tax drum, despite Ardern’s many statements to the contrary, that Labour would kowtow to the Greens and bring in a wealth tax.

While Ardern succeeded in dousing the tax issue, it may be a pyrrhic victory as National’s scare-mongering in on tax over generations has again protected the assets of wealthy – no capital gains tax, no wealth tax, only a minor change to the progressivity of income tax.

Ardern is left almost no options to redress the unfair and unbalanced tax system that lies at the heart of inequality and poverty.

When she ruled CGT last year, Ardern said: “We can find, and will find greater ways to achieve fairness in our system. There’s a range of options but I need to go and develop that plan for 2020.”

The 39 percent tax bracket on earnings above $180k will not cut it, in terms of addressing the tax imbalance. It will raise an extra $550m, less half a percent of government revenue. Nothing else has been offered.

Even without having hobbled herself on the tax issue, the economic slump resulting from the Covid response has made social transformation a Himalayan task.

With $58 billion planned to be spent on Covid responses, Treasury forecasts the unemployment rate to double to nearly 8 percent in 2022, net government debt is forecast to hit 55 percent of GDP by 2024 and discretionary spending allowances are cut to almost nothing.

Even before Covid there was insufficient operating allowance to enact the main recommendations of the Welfare Expert Advisory Group report recommendations. The big ticket items to lift benefits by between 12 and 47 percent would have cost an extra $5 billion a year, well out of reach of the pre-Covid operating allowance.

Despite this gloomy financial scenario and the own goals Labour has scored on taxing assets, we shouldn’t lose sight of the multitude of opportunities for Labour given their outright majority.

For example, I look forward to Labour following through on Heather Simpson’s work on reforming the Healthcare system, particularly reducing the absurd number of DHB’s to a realistic number.

Similarly, it will be great to see enactment of the proposals in the Turiki Turiki report initiated by Andrew Little into decolonising the justice system and addressing the appalling Maori incarceration rate. Let’s hope they resist tinkering at the edges and move from a system of fear, punishment and control to one based on prevention and restoration.

It would be great if we developed a roadmap for an alternative aspiration of continuous economic growth – that we built on Grant Robertson’s wellbeing budget so we all work less, consume less and pollute less. Let’s see if Ardern can expend some of her considerable political capital to promote the idea of sufficient income for all, scale back material expectations in favour of more leisure, less stress and more community-activity.

We are still waiting after three years of Labour-led government for a big picture plan for science and innovation. A science-based, rather than an emotion-based, GE policy would also be nice.

Let’s have a proper immigration policy based on what is sustainable and best for Aotearoa. Policy at the moment seems to be based on which lobby group makes the most noise.

Now that the NZ First handbrake has been removed, let’s move on those initiatives they stopped – cameras on fishing boats, feebates for cars, ending three strikes in justice, promoting solar energy, putting in a tax on sugar.

And while we are at it, let’s get a whole lot more serious about waste and pollution. Instead of the Covid recovery fund being blown on shovel-ready roads, what about spending big on such things as a national energy waste plant that turns waste into energy, not just for Aotearoa but for our smaller Pacific neighbours.

Judith Collins foolishly claimed late in the election campaign that obesity was a personal responsibility, exemplifying the difference between National’s philosophy and the progressive side, which sees it as societal problem. But it would be good to develop a policy on obesity reduction so we can address the problem.

The winding back of the backbones of neoliberalism would be welcome – for example, not making our hospitals, universities, public broadcasters and the like operate as for-profit entities; ditching the Fiscal Responsibility Act that hog-ties government spending options and dismantling the market-driven model of our electricity system.

While John Key with his silly flag referendum has made this path a sticky wicket, it would be great to develop Aotearoa’s roadmap to true independence. One day we won’t have a head of state, who not only is born-to-rule but lives on the other side of the world and we can vote for him or her; we won’t have honours system based on class, we will have a country name that reflects our unique culture and yes, we may even have a flag that is unique and properly represents who we are.

Undoubtedly, there are a plethora of other laws and sectors Labour can and should turn upside down. The party has been given a powerful mandate. My question is whether Labour, and Ardern in particular, is willing to do that because of her desire to maintain consensus and not rock the waka.

33 comments on “Will consensus building paralyse Ardern? ”

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  1. RedLogix 1
    21 October 2020 at 7:53 am

    foolishly claimed late in the election campaign that obesity was a personal responsibility, exemplifying the difference between National’s philosophy and the progressive side, which sees it as societal problem.

    Which exemplifies the foolishness of the 'progressives' in imagining this is solely a 'societal problem'. This is easily demonstrated; how many people here really want the government to take full responsibility for your personal diet and exercise? Mandated meal plans, strict control of everything you eat, and mass exercise sessions for everyone?

    No-one?

    At the same time it's also obvious this isn't just a 'personal problem' either. It's easy to see how a combination of food industry incentives, relative poverty, and cultural norms combine to steer individuals down unhealthy paths.

    What if we stopped thinking that these kinds of problems (and obesity is just one of many) always had to be framed as EITHER/OR, when in reality they're a much complex class of AND issues? That there is a mutual interdependence between the individual and the society they live in, that each influences the other.

    Politically no-one wants to hear this, it's inconveniently messy, doesn't lend itself to a neat package of slogans, and takes more than three years to negotiate to a workable processes, much less show outcomes.

    My question is whether Labour, and Ardern in particular, is willing to do that because of her desire to maintain consensus and not rock the waka.

    Well yes, if the waka capsises will anyone thank them for this?

    • Ad 1.1
      21 October 2020 at 8:59 am

      Sustainable consensus – even with dairy farmers – will be worth the price of admission.

      They did it with NZSuper, Kiwibank, Kiwisaver, Fonterra formation, China trade deal, Carbon trading, and many more – and are set up to do so with RMA reform.

      This lot can do it.

      • RedLogix 1.1.1
        21 October 2020 at 9:10 am

        If you will indulge me a metaphor, the shoreline is where all the life is, it's where sea, land and air meet and tumble together in a chaotic, messy melding. It’s a place we’re instinctively drawn to.

        The much despised political centre is where the three great political strands also meet, the conservative, the liberal and the socialist. And it's where new life emerges.

        In this next decade the world is entering an entirely uncharted realm, the majority of nations will be ageing and none of the old political models will be well adapted to this inverted demography. Capitalism, socialism and fascism each in their own way are falling short of serving this new, unprecendented reality.

        This will prove one of humanities great evolutionary moments. How do we repurpose the innovative components of liberalism, the distributive power of socialism and the structured order of fascism into a new stable form we have never seen before?

        • Ad 1.1.1.1
          21 October 2020 at 10:02 am

          OMG Red. I'd just go for a surfing metaphor.

          Mostly I just see developed countries printing their way out of this, cresting, cutting back and reading the next wave coming.

          And if that strategy works this time, we really have repudiated the crisis of the 1920s into something new.

          • swordfish 1.1.1.1.1
            21 October 2020 at 5:30 pm

            OMG Red. I'd just go for a surfing metaphor.

            OMG OMG OMG THIS ↑ ↑ ↑ ↑ Sooooo much THIS !!!

        • Robert Guyton 1.1.1.2
          21 October 2020 at 11:04 am

          I agree with RedLogix. Life thrives at the edges. It transmutes also; new forms emerge at a rate far greater than on the dunes or in the ocean depths. The new political form, however, won't be a camelopard or a chimera, it'll be something we will all recognise; something/someone from our long-ago past, from the roots of our species; the Goddess Impulse. Her foot-soldier, Jacinda, is already engaged.

          • RedLogix 1.1.1.2.1
            21 October 2020 at 12:30 pm

            Evolution is both conservative and innovative at the same time. It takes bits of what works and arranges them in new configurations, with only a modest amount of novelty.

            • Draco T Bastard 1.1.1.2.1.1
              21 October 2020 at 1:50 pm

              Not always:

              We observe examples of both slow, steady change and rapid, periodic change in the fossil record. Both happen.

              • Robert Guyton …
                21 October 2020 at 1:53 pm

                Seems we smart primates were an extremely novel innovation *peers through plastic spectacle-lenses, taps keys on laptop computer.

    • WeTheBleeple 1.2
      21 October 2020 at 9:52 am

      Well said. Consensus building is more about seeing both sides of an issue than drawing a line in the sand. The only way we stop endless to and fro is sitting down and hashing it out, uncomfortable or not.

      Luckily Ardern is both complex and nuanced.

      Clear and present dangers must be addressed. Her track record for crisis is pretty damn good.

      It is yet to be seen where she will concentrate her efforts. But our PM is both aware and engaged.

  2. Ad 2
    21 October 2020 at 8:54 am

    Simon theres's no need for more fevered leftie wish-lists.

    Just read what Labours policy is.

    That's what they have the mandate to do.

    Pretty simple.

    • Robert Guyton 2.1
      21 October 2020 at 10:59 am

      Jacinda's mandate is to do what Jacinda has been doing. Simple as that.

      Depends, of course, on what you believe Jacinda has been doing.

  3. bwaghorn 3
    21 October 2020 at 9:44 am

    She should hey some guts and make the first $30k tax free and lift benefits by $100 a week and get rid of any nasty in a relationship penalties, make dental free also

    Pay for it by lifting top rates on all income over $100 k

    Do it now while there is 3 years for people to get over it .

    If she wins the next election they become permanent if she loses she gets to spend more time with the family .

  4. Maurice 4
    21 October 2020 at 10:04 am

    Focused 'attacks' on; or disadvantaging of minority groups in society simply leads to the formation of small largely single issue focused Parties.

    The lesson of the Firearms Law changes should be a clear warning of what happens and how successfully a focused push-back can be mounted.

    We now have one of the formative parties of this Parliament formed largely of the "gun lobby" and another Party removed from Government largely by being deserted by that same lobby.

    Every action has an opposite reaction – sometimes quite out of proportion to the initial action.

    • Tricledrown 4.1
      21 October 2020 at 10:56 am

      Maurice your take on reality is inflated .

      Reality Peter's days are finished Nationals vote so low ACT was the only option for a protest vote.Once National find a likeable leader again ACT will go back to being a propped up party.

  5. greywarshark 5
    21 October 2020 at 11:42 am

    edit
    What PM Ardern could do is to invite middle-income NZs to meet in each region and undertake building some simple economic models to show how the country's infrastructure requirements for everything except roads without taxing at rates that are affordable to each wage strata. Let the peeps who are trying 'to have their cake and eat it too' have a go; they are probably looking at raising the money by 'cutting the fat off welfare' spending, and making everyone pay for their education, user-pays libraries etc. NZ seems to be a doing culture, with not much thinking and analysing done each day by even a significant minority.

    Consensus is everyone agreeing to a final decision. I have been told that many meetings that occur now under neolib are apparently a 'sterile promontory' and commitment to consensus by PM Ardern's government will definitely hobble, slow, lead to no-one getting effective outcomes, or even result in such tangles there will be stasis.

    Listening to all the points that the governing policy 'team' from the parties come up with, prioritising matters for best effect, setting up pilots that carry forward the desires of the team that cannot come first on a limited budget, but will make a start on good initiatives – that will prevent paralysis.

    Deciding together what needs to be done, finding synergies between items so that one project completed flows onto another. Prioritising on that basis, virtually recycling one project team if proved capable and successful, that is one possible way to look at stuff.

    Opinions on whether consensus is overhyped:

    Wikipedia as usual has worthwhile input and analysis: https://en.wikipedia.org/wiki/Consensus_decision-making#Criticism

    https://theprimes.com/consensus Three points must be ticked, and that is regarded as an agreement on a defined outcome. But: People may say they can live with the outcome, but if they remain significantly dissatisfied, even privately, with either of the first two elements, the dissatisfaction will undermine their commitment and detract from their participation. The result is neither desirable nor affordable when team members must work well together to produce extraordinary outcomes.

    and an engineering perspective talking about 'building clarity' for effective outcomes:

    https://engineering.spreedly.com/blog/consensus-is-overrated-build-clarity-instead.html What we’ve been unintentionally creating the last few years is a loose framework that focuses on exposing a specific set of objective properties about the topic at hand, upon which a consistent set of organization-specific values are applied to produce an actual decision. The framework aims to achieve clarity first, then gives ultimate decision-making authority to the person most responsible for the decision. Here’s the basic approach:…

    This is a small scale example, but significant to the people involved, of Consensus Building leading to a really bad decision but agreed to by all because it was held to be a good outcome from a workshop of teachers keen to follow new methods advocated. https://www.usatoday.com/story/news/nation-now/2018/11/03/idaho-teachers-border-wall-latino-halloween-costume/1872399002/

  6. Draco T Bastard 6
    21 October 2020 at 12:04 pm

    Even without having hobbled herself on the tax issue, the economic slump resulting from the Covid response has made social transformation a Himalayan task.

    Nope.

    This is where the government creating money comes in. The more people unemployed the more that they government can hire with out negatively impacting the economy and thus the more that they can move forward in the transformation.

    The government doesn't tax to fund its spending. It spends to fund the economy.

    …net government debt is forecast to hit 55 percent of GDP by 2024 and discretionary spending allowances are cut to almost nothing.

    Even before Covid there was insufficient operating allowance to enact the main recommendations of the Welfare Expert Advisory Group report recommendations.

    And that is all wrong. A hold over from when there was still a Gold Standard at best.

    The government doesn't need to borrow at all. So why does it?

    The answer to that seems to be mainly to protect the money that the rich have so that they don't lose it.

    Its this ongoing republishing of the wrong data and the wrong ideas about money that keeps people ignorant of how money really works and thus continues to wreck our economy.

    Let’s have a proper immigration policy based on what is sustainable and best for Aotearoa. Policy at the moment seems to be based on which lobby group makes the most noise.

    To have a proper discussion about population and sustainability then we need to determine what is the maximum carrying capacity of the country that includes maintaining a healthy wild area.

    And, yeah, immigration policy seems to be determined by the whinging businesses rather than actual science.

    what about spending big on such things as a national energy waste plant that turns waste into energy, not just for Aotearoa but for our smaller Pacific neighbours.

    The big problem there is when we cut down waste to a small percentage of waste that we have now there won't be any fuel for such a power station and eliminating waste is the better economic answer.

    But it would be good to develop a policy on obesity reduction so we can address the problem.

    Free gyms owned and run by the government (eliminate the dead-weight loss of profit from them) so that everyone has the opportunity to go to one. Throw in some sort of enticement as well and encouragement and we might be able to start to address some of the issues that come from a modern life.

    Then put in standards for healthy food that need to be met.

    The winding back of the backbones of neoliberalism would be welcome – for example, not making our hospitals, universities, public broadcasters and the like operate as for-profit entities; ditching the Fiscal Responsibility Act that hog-ties government spending options and dismantling the market-driven model of our electricity system.

    The market system really only works for small things. The big things like power, healthcare and telecommunications which are necessities should be a state monopoly. This was realised over a century ago when the nation took over building our railways and roads (well, for roads I assume it was actually realised millennia ago). The rise of neo-liberalism and the selling off of these demand monopolies was just a big windfall profit for the rich that cost us huge amounts.

    We need a transformation of our economy so as to eliminate poverty, to stop political power defaulting to the rich and to address environmental issues. The government is presently in a position to do that due to covid trashing BAU. The question is: Will they?

    • Tricledrown 6.1
      21 October 2020 at 1:07 pm

      No DTB the way to increase the govt's tax take is to get inflation going again wages go up leaving the tax bands as they are aka Michael Cullen the tax take will go up automatically.

      Playing the long game as opposed to making radical short term changes does not go well under MMP.

      Any emergency funding required ie further lockdowns should be funded by printing until inflation gets out of control which is very unlikely.

      Printing money should be Done now to keep our $ at a low international value to keep exports viable.

      This money should be pumped into productivity gain projects and poverty aleviation not propping up Banks who are mainly investing in property speculation.

      • Draco T Bastard 6.1.1
        21 October 2020 at 1:32 pm

        No DTB the way to increase the govt's tax take is to get inflation going again

        The government doesn't tax to fund its spending. It spends to fund the economy.

        With the down turn in the economy due to the covid crisis there's a lot of room for government spending without causing excessive inflation. When the government takes up that slack inflation will, of course, return to positive value.

        Playing the long game as opposed to making radical short term changes does not go well under MMP.

        More accurate to say that it doesn't work well under Representative Democracy.

        Printing money should be Done now to keep our $ at a low international value to keep exports viable.

        The government printing money doesn't actually change that. It's the demand for NZ products and services.

        This money should be pumped into productivity gain projects and poverty aleviation not propping up Banks who are mainly investing in property speculation.

        Agreed.

        Propping up banks or, in fact, any private business is a bad idea.

        Poverty alleviation is likely to be tied into the productivity gains especially if they result in development of the economy into areas of industry that have long been neglected.

      • greywarshark 6.1.2
        21 October 2020 at 1:56 pm

        Sounds good Tricledrown. DTB makes good points but yours would fall within the known knowns of the average Kiwi.

        • Draco T Bastard 6.1.2.1
          21 October 2020 at 4:56 pm

          “What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so."

          Mark Twain

          Your known knowns are more likely to fit into the latter category.

  7. Phillip ure 7
    21 October 2020 at 1:10 pm

    Wot draco said ..I have fears ardern will do what clark did with her huge red-tide of support…not do much..just stick to the neoliberal-incrementalist playbook…and whittle/fritter that lead away..and like under clark the poor stay poor..the environment degradation continues space…my blood ran cold when I read that clark/cullen were advising ardern…I sincerely hope she ignores their more-of-the-same mantras..but I fear she won't…(and/but I do look forward to being proved wrong..if that should eventuate..)…with or without the greens ardern..like clark before her..has been given the mandate to fix what is broke…I hope she uses it..and doesn't 'do a clark’ with it..

  8. Tricledrown 8
    21 October 2020 at 1:27 pm

    Clark only had small majorities and relied on Peter Dunne "nothing" and Winston handbrake Peter's.

    • Phillip ure 8.1
      21 October 2020 at 2:02 pm

      Heh..!…in the 2002 election clark called the greens 'goths and anarcho-feminists'…(aah..!..the memories..!..eh..?..)

      • left for dead 8.1.1
        21 October 2020 at 4:26 pm

        @Phillip ure, don't forget last cab off the rank re:Maori party

        • Phillip ure 8.1.1.1
          21 October 2020 at 8:38 pm

          As a sole-parent at the time I was somewhat pissed at myself and my son being condemned/denigrated by clark as being 'the undeserving poor'…and therefor deemed unworthy of any consideration/help….we were just left to rot…hard to forget shit like that…

  9. Muttonbird 9
    21 October 2020 at 4:14 pm

    I don't like the language come from with and without the Labour party about these supposed 'National voters' who voted Labour and how Labour is going to have to look after them by not being too scary.

    Screw that. They're Labour voters now, ffs.

    • froggleblocks 9.1
      21 October 2020 at 5:13 pm

      It's not really that Labour 'have to' look after them, it's that it's in their best electoral interests to look after them.

      They could go hard-left, like how Labour after 1984 went hard-right. But they won't.

      • Muttonbird 9.1.1
        21 October 2020 at 5:51 pm

        That's how a lot of pundits are talking. Don't scare the horses as if they are more important than loyal, lifetime lefties.

        Fuck that. It is they who have joined us, not the other way around.

      • Phillip ure 9.1.2
        21 October 2020 at 8:49 pm

        Can we define 'hard 'left'..?…is fixing poverty/the environment 'hard 'left'…?..is doing s.f.a. 'centrist/consensus-building'..?

  10. Muttonbird 10
    22 October 2020 at 8:09 am

    Jessica Berentson-Shaw describes the two paths in front of Jacinda Ardern.

    Bold visions need leaders to persuade us that the necessary pathway to change, while challenging, is in our best interest. They need to campaign for the transformation that is required throughout their tenure. This is a skill we know the prime minister has at her fingertips. Will Labour put it to use this term? Looking at Labour's last term, they could go either way.

    https://www.rnz.co.nz/news/on-the-inside/428807/building-support-for-transformational-policies-crucial-to-labour-s-vision-jessica-berentson-shaw

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  • Supporting better financial outcomes for Kiwis
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