Saturday, 26 August 2017

Transparently Opaque: What, exactly, is the “this” Jacinda is inviting us to do?

Let's Do What, Jacinda? You are only too aware, Jacinda, of what needs to be done to heal the harms inflicted on New Zealanders these past nine years. You also know they cannot be healed on the cheap. Strict adherence to the Labour/Green “Budget Responsibility Rules” will force your government to break its promises – to break your promises.
 
IT’S NOT TOO LATE, JACINDA. Not yet. But it soon will be. If you keep following the economic and fiscal track you’re on, then the campaign that started with such promise will end in some sort of tawdry compromise with an already discredited status-quo. Or, even worse, in yet another electoral failure. If you begin your career as Labour’s leader by deferring to the Powers That Be, then you will spend the rest of your political life living in fear of them.
 
“Let’s do this”, your own brilliant slogan, works because it communicates fierce personal determination and raw political urgency in equal measure. But, the person who says “let’s do this” doesn’t immediately add “but only if my colleagues concur”, or, “providing the business community doesn’t object”. The power of the slogan lies in the reassurance it offers that Jacinda Ardern knows what needs to be done – and is not about to let anyone stop her from doing it. Labour has already endured four equivocal leaders, it absolutely does not need a fifth.
 
But that is what you have begun to do, Jacinda: equivocate. On the subject of taxation, in particular, there is a growing sense that you’re not being straight with the electorate.
 
You could have looked your fellow New Zealanders squarely in the eye and asked them to tell you, honestly, whether they believe that enough has been spent on housing the homeless, improving mental health care, upgrading our hospitals and schools, expanding public transport and cleaning up the environment. And, when they said “No”, you could have asked them if they were willing to pay just a little bit more in tax to make good New Zealand’s shocking social deficit. And, when they said “Yes”, you could have nodded decisively and said: “Right. Good. Let’s do this!”
 
Instead, you have waffled-on about handing over the re-design of New Zealand’s taxation system to a “working group” of “experts”. Telling your inquisitors at the NZ Herald that you were being forthrightly “transparent” about being frustratingly opaque – as if that was a good thing!
 
One of those inquisitors, the business journalist Fran O’Sullivan, was speaking no more than the truth when she told “Morning Report” listeners that a party which has been in Opposition for nine years has had more than enough time to sort out exactly what they want to do and how they intend to pay for it. Because, if the people we pay $170,000 per annum to sit in the House of Representatives aren’t “experts”, then who the hell are? A bunch of bank economists and corporate tax accountants? Are you seriously going to ask people like this to design your Labour government an equitable system of progressive taxation? Really, Jacinda? Really!
 
A week or so ago I urged you to reach back into Labour’s past for inspiration about how to pay for your promise to build enough houses to accommodate all those New Zealanders in need of a place to call their own. This week I’m recommending you take a look at the “working group” of “experts” who designed Labour’s social welfare reform “package” back in the 1930s. The artist and author, Bob Kerr, called them “The Three Wise Men of Kurow”.
 
Arnold Nordmeyer, Andrew Davidson and Gervan McMillan rough-out New Zealand's future social welfare system around McMillan's dining-room table. Watercolour by Bob Kerr
 
Kurow is a tiny town in North Otago situated above the Waitaki River. In the grim years of the Great Depression it was a place of considerable privation and distress. Determined to relieve that distress were the local doctor, Gervan McMillan; the local Presbyterian minister, Arnold Nordmeyer; and the local schoolmaster, Andrew Davidson. Between them, these men devised a scheme to take care of the workers on the nearby hydro-electric project and their families. Working around McMillan’s dining-room table they went on to rough-out a way of scaling-up their highly successful local effort into a nationwide welfare scheme. McMillan and Nordmeyer, who were Labour members, presented their ideas to the Party’s 1934 Annual Conference – which seized upon their plan with eager hands. Four years later, the First Labour Government passed the Social Security Act.
 
Nobody paid these men for their nights around Gervan McMillan’s dining-room table. No one supplied them with detailed Terms of Reference. No public relations firm was engaged to “sell” their ideas to the voters. “Let’s do this!”, said the three wise men of Kurow, for no better reason than “this” needed to be done – and Labour was willing to do it.
 
You are only too aware, Jacinda, of what needs to be done to heal the harms inflicted on New Zealanders these past nine years. You also know they cannot be healed on the cheap. Strict adherence to the Labour/Green “Budget Responsibility Rules” will force your government to break its promises – to break your promises.
 
The increased public spending New Zealand so urgently needs can only be funded in two ways. Either it is paid for out of an expanded revenue base, or, out of an increased deficit. Unfortunately, Jacinda, you appear to be ruling out the former, and the Budget Responsibility Rules are ruling out the latter.
 
So, Jacinda, when you say “Let’s do this”, what, exactly, do you mean? Don’t you think it’s time for you to be completely transparent about what “this” is – and to whom it is done?
 
This essay was originally posted on The Daily Blog of Saturday, 26 August 2017.

33 comments:

Guerilla Surgeon said...

While I like the fact that you are calling on them to commit, you know damn fine they are not going to commit to anything that might offend anyone before an election. Their focus groups (whatever the fuck they are) will have told them not to. The right wing of the party will have told them not to. And Jacinda seems to belong to the right wing of the party anyway? The words increase and tax will not pass their lips – together.
Actually I think the first thing they should do is get rid of or at least reduce the GST which is a totally regressive tax, and has no place in any Labour Party policy mix. But you know they're not going to get rid of that either. I think in Britain at least they don't have it on food? Which is probably one of the reasons why I'm constantly hearing that New Zealand cheese is cheaper in Britain than New Zealand.

Polly. said...

Chris, you raise pertinence:
What exactly are we being asked to purchase?.

Unless the economics can be matched by the economy then inflationary pressures will take off and every one will be poorer.

The free press of NZ need to sharpen their minds and their pencils if they wish to be seen as a relevant force in our elections.
WE all need to cut the crap and start getting real.
Our Nations future is at stake.

Seb H said...

Post Budget Analysis


Nordmeyer
the bespectacled Presbyterian

delivered what most working men
dreaded most

gaspers grog and petrol up
in taxes

1960 a charge at the ballot
box

a one term government
explained


C.A.J. Williams


from '35 Short Poems'
published by The Buttress Press, Wellington
2016

Victor said...

Labour is in a bind.

On the one hand, its right ear is telling it that fiscal responsibility is (and ever will be) King and that electoral perdition awaits those who do not bow the knee.

But its left ear is, I suspect, listening to what's happened overseas (and particularly in the UK) where long-standing expectations have been substantially frustrated, apparently by boldness of vision.

Into this confusing mix gets thrown the general ideological confusion of our times, the surprisingly inadequate work of Labour's wonks and the new leader's energy and sense of urgency without clear direction.

Her (media graduate's?) tendency to dance around issues is also part of the problem. If she attains office without correcting this trait, it will, in time, become as annoying as John Key's "smile and wave" or Helen Clark's "time to move on".

Anyhow, the result, at present, is a combination of vagueness and of promises that seem bound to be broken. Oh for the ostensible clarity of Auntie Helen's Pledge Card!

Arguably, one ear or the other now has to be listened to. If so, it's too late to listen to the right hand one without appearing to be weak and wobbly. If that's the case, for good or ill, the left ear will now need to become dominant.

Alternatively, you might find that enough people are impressed by youth, energy and a widely diffused passion for change, to carry Labour into office, with its policy confusion unresolved. Think Obama, Trudeau and Macron!

If so, once in office, Labour would have a very rough first year, which, in turn, would have significant short term implications for our economy.

That said, another three years of the current mob is likely to be even worse.

So, I still want to do "this", whatever "this" is, whilst feeling a mite troubled by my own rather uncharacteristic lack of circumspection.

Victor said...

GS

Wholly agree that GST needs to be markedly reduced.

What I wouldn't want is an administratively complex and expensive reduction or abandonment of GST on food only.

Jens Meder said...

In my humble opinion, if Labour raises taxes only for more income redistribution and no increased wealth creative savings and investment rate at all - and wins the election - it will last only one term.

But if Labour comes out with the economically most CONSTRUCTIVE - not CONSUMPTIVE - policy like say converting the proposed freely consumable tax reductions money into NZ Super Fund contributions with their immediate investment in housing and infrastructure construction (and with an unconditional $1000.- KiwiSaver kick-start to all who have not received it yet, from cradle to grave) - and becomes the political leader from the CENTER by raising national wealth by and for ALL - Labour can be and make NZ an innovative world leader again at least until National starts competing with Labour in the centrist policies of UPWARDS FOR ALL.

Kat said...

So much hot air Chris, your almost as bad as Wayne Mapp with this piece. This is not 1935. Jacinda Ardern has to get Labour into govt first. Repeat, Labour into govt first. Then lets get the ball rolling and the game going the way we want it. Time to be a TMO after Labour get into govt.

pat said...

think its called fighting fire with fire.....cast your mind back to the past 3 election campaigns run by National and see the similarities in strategy...sauce for the goose etc

Patricia said...

Isn't the MOU between Labour and the Greens now dead in the water? If that is the case that silly Budget Responsibilty Rules no longer applies. The Surplus/Deficit nonsense which treats Government budgets as if they were merely a collection of households budgets must be ignored. Labour just needs to say they will allocate the money that is available very differently from how National would do it. It is the people that matter not just Businesses

Charles de Sud said...

Let's Do This probably means let's pull off a card trick, a marketing coup, a win for form over substance, to grab power. But she is not a fool and does not want to be a five minute wonder so ....

Seb H is right. Workers want more pay, less taxes and a government out of their lives. They are grown ups. They will give to charity to help the truly needy. They are generous as all good people are. The majority are generous. Welfare States kill this, and civil life. Only those who refuse to grow up want the nanny welfare state. And see, it has failed everywhere. I'm in France now, a prime example. Beggars and layout young men everywhere. Tax avoidance rampant. Unemployment high & permanent. Cultural decline due to stupid socialist immigration policies influenced by their false guilt from imperialist days.

Ludicrous too to compare the really old days with the lush economy & lush vast welfare of today which means those who are working for relatively low pay today DO NOT want higher taxes, to see their wages taken and given to those not working or worse., to the so called middle class who are oh so good at harvesting the 'generosity' of Labour governments. Generous with working peoples' money that is.

So this (former Mormon woman I'm told - woohoo) is trying to look sensible, and of the conservative left which she probably is. She is right to do so, not that she has earned the right to govern yet. She needs 3 years (could well be less with WinFirst in the mix for the last time) in opposition to form her own sound sustainable policies, which no doubt you can debate with her Chris. But her first job is to put Labour seriously back on the agenda wipe many new MPs, and wipe out the false Greens. She's looking good on that first goal.
One step at a time or you may trip.

Anonymous said...

Labour will do what Labour has always done if elected.
If will tax the economy hard and borrow like crazy to give to the very people who contribute the least and make the poorest decisions.

Once they've killed the golden goose, they will hand it back to National to resuscitate. This is why Labour never stays in power as long as National. It cannot resist the temptation to spend every dollar they can steal from people.

Guerilla Surgeon said...

" Workers want more pay, less taxes and a government out of their lives. They are grown ups. They will give to charity to help the truly needy. They are generous as all good people are. The majority are generous. Welfare States kill this, and civil life. Only those who refuse to grow up want the nanny welfare state. And see, it has failed everywhere. I'm in France now, a prime example."
Utter bullshit. Give as an example if you would be so kind of a libertarian state that has worked. There are several states in the US that have gone down the libertarian road, and they are all economic train wrecks.

David Stone said...

https://www.youtube.com/watch?v=loWBedviMEQ&list=RDloWBedviMEQ#t=118
D J S

Victor said...

Charles de Sud

"They are generous as all good people are."

At face value, that's a tautology.

If, alternatively, it's to be taken as a description of most people's attitudes, then it fails to explain why most charities are feeling the pinch.

"I'm in France now, a prime example"

I agree France has its problems and that some (though not all)of these stem from a lack of encouragement for business and an over-regulating economic culture.

But, If Labour did everything that even Chris wants it to do, New Zealand would still be a paragon of economic liberalism compared to La Belle France.

Sometimes, it takes radical action to restore the juste milieu.

Besides, when were the French ever not into tax avoidance (nay evasion)big time?

That's why they pioneered VAT.

peter petterson said...

Good advice. Lets do it Jacinda.

sumsuch said...

"This', just what I thought today going by the signs, remembering the previous 'personalities'. You and Bryan Gould are noodling away continuously at it, and I'm wandering toward Mana in the absence of James Shaw explicitly taking up the standard for the poor. Seeing Kelvin Davis on 'Backbenchers' was the opposite of enthusing.

I read Jerry Rubin's book 'Do It'. The fury of a petrol fire. It's been 40 years since people implicitly trusted the Labour Party.

I haven't been able to listen to Guyon Espinier's interviews of old PMs because of earwaxical distaste for them and their rationalisations, but in an ad Moore expressed reserve about Douglas's extremism. Only 30 years on, the 'personality' in this case, Lange.

I half accepted the no increased taxes on the basis of a survey business was dead against it but accepting of the living wage. English's 2010 tax decrease for the rich during the Great Recession was despicable. Tho' understandable as an election ploy in 09.

There should be more fury and less tactics, pro publico.

Richard said...

Politics is the art of the possible.
To get anything done Labour and Arden underlined have to win.

The so-called policies of English and co have dribbled out are banal puffer. National have dribbled out are cant or puffery so far. A goodexample is the Dunedin hospital smorgasbord of options

What is needed now is just to say " this is what we will do fullstop"
And keep being upfront.
No one today expects miracles given
the circumstances.
I contend even the prospect or hope of a very modest uplift in the fortunes of working and marginalized voters is enough incentive after the last governments punitive demeaning approach

Pinger said...

If you look into Ardern's background she worked as a 'researcher' in Phil Goff & Helen Clark's offices.

In the UK she worked in Tony Blair's office.

This background reeks of neo-liberalism.

Seb H said...

@ Charles de Sud

The C.A.J. Williams poem 'Post Budget Analysis' is more a reflection on the Nordmeyer 'Black Budget' which looking back now, was, unnecessary.

Victor said...

Anonymous@09.02

Where exactly were you between 1999 and 2008?

In some sort of parallel universe?

Nick J said...

Scary but true. I worry that she is infected with both neo liberalism and post modernism.

There again she may be captured by no conviction other than making life better for all. That's one up on National.

greywarbler said...

Anonymous at 9.02
Don 't you come onto a post that is attempting to discuss politics and diferent wasy of adapting to new developments, and then give us some sludge that you have dredged up from something that you have always said because that is what the people you mix with always say. Buzz off and do some deep reading and don't tie our discourse to a stone and fling it in the polluted 'Ole Man River.

This is you:
Labour will do what Labour has always done if elected.
If will tax the economy hard and borrow like crazy to give to the very people who contribute the least and make the poorest decisions.

And now the reality is that National are borrowing like crazy to get their imports into the country, and to help pay for their overseas ventures which often turn belly up, and are puring millions into building transport and houses in the same way as they did in the 1970's, after which they stopped attempting to think for themselves and for the country's advantage, only their own.

Jens Meder said...

Guerilla Surgeon -
Since vulgar language might be just a sign of not knowing any better rather than relevant evidence in support of a point to be made,
I am not frightened to challenge your argument, that Labour's priority policy should be in partial or all-inclusive reduction of GST, because:

1. GST is an egalitarian tax that achieves participation by 100% of the population, including those without taxable income.

2. Its regressive nature is irrefutable evidence of the basic justice in the progressive rate income tax principle.

3. Tampering with it to make the collection of less GST at a higher cost is not in the economic efficiency interests of a heavily taxation revenue dependent
welfare state.

And rather - with what sensible arguments would you oppose an increased rate of GST for the purpose of a higher rate of national wealth and retirement security generation through resuming a permanent rate of NZ Super Fund contributions ?

Guerilla Surgeon said...

"1. GST is an egalitarian tax that achieves participation by 100% of the population, including those without taxable income.

2. Its regressive nature is irrefutable evidence of the basic justice in the progressive rate income tax principle."

3. GST is cheap to collect, and that is its main attraction to most politicians.

4. It's egalitarian nature depends on how you define egalitarian. I would not define it as such.

5. Maybe it's just too early in the morning, but I can't make sense of your other arguments. And I am not in favour of "tampering" bit of getting rid of it altogether.

Bushbaptist said...

Good points Jens but I must disagree. GST is a Flat Tax that unfairly targets low income earners. We all need our daily bread and the GST on said loaf is the same regardless of the income of the buyer. Let's say that the GST on the loaf is $1 (just an arbitrary figure), that $1 is a larger part of some-one's income at $12.00/hr than it is on some-one whose income is $500.00/hr. That is why GST is regressive.

Jens Meder said...

GST is egalitarian in the way that no one is excluded from it - we are all sharing in the burden.
Yes, it is regressive, proportionally a higher burden to lower income earners - but please note, Bushbabtist, that this justifies a progressive rate of income tax, opposed as "unfair" by all the flat tax advocates.

Guerilla Surgeon, do you not remember, that the income tax reductionsof 2009 reduced taxation revenue by $2billion a year, about the same amount contributed to the national (retirement) wealth creative NZ Super Fund - and what was raised by increasing GST by 2.5% at that time.

In other words it is clear, that 2,5% of GST could be wealth creative at the same rate as it was when the NZSF was started, and can do so again.

If that still means nothing, some to the point discussion would be desirable to clarify it all.

David Stone said...

GS, JM and Bb
And of course foreign recipients of earnings from their New Zealand investments/ businesses pay no GST at all because they don't buy anything here. But that's at least consistent as they seem to have to pay fuck all income tax here either.
Cheers D J S

Victor said...

Jens

"2. Its regressive nature is irrefutable evidence of the basic justice in the progressive rate income tax principle."

So are you saying that we need to balance progressive taxes with regressive ones?

If so why?

Is it because you think we shouldn't have too much of a good thing?

If not, what?

greywarbler said...

Bushbaptist
Thanks for that clear example of GST regressive taxation. It is handy to trot out for anyone trying to explain it to the wilfully ignorant.

Jens Meder said...

Victor - can you not see that it is simply for the sake of egalitarian fairness to rectify the relatively higher proportion of a flat rate GST on low incomes with a fairly (not punishing) PROGRESSIVE income tax rate on higher incomes ?

WE cannot have a competent government without taxation revenue, and therefore is it not a natural priority to have it as fair and effective as possible WITH PARTICIPATION BY 100% OF RESIDENTS, and not have the latter divided into 2 functionally separate classes ?

sumsuch said...

I misheard Moore's 'regret' about Douglas -- 30 years isn't enough. Maybe if you'd been rewarded enough Chris you wouldn't ... The bought-off ruling class.

I hold it in Prebble's favour his media-palpable confusion at Anderton's case against '84 in the '99 debates. And admission after that election the '84 govt hadn't looked after the people Labour was supposed to be there for.

And, yes, I just want to say this, when Muldoon said ' I love you too, Mr Lange' he, not Lange , was right.

Victor said...

Jens

Yes I do see that there's a smidgen to be said for demanding tax from everyone, as it serves, at least notionally, the concept of us all being participants in our society.

For this (not enormously important) reason, it might not be a wholly bad thing that, for example, benefits get taxed. But it does mean, in that instance, a whole heap of otherwise useless and egregious hassle, intrusion, worry, bullying, perverse incentives and bureaucratic expense.

But GST is a latecomer to our taxation system and, by its very existence, has made that system less progressive.

There may now be a fiscal case for its retention. But it's an inherently socially harmful tax and needs, to my mind, to be reduced, as part of an overall drive towards a more progressive approach.

More broadly, Jens, it seems to me that our essential difference is that you tend to append what I think of as moralistic arguments to various forms of taxation and expenditure, whereas I look only to the long run good of the economy and society and the immediate and medium term needs of the most vulnerable therein.

I sense a concern on your part for admirable concepts such as "justice" and "equity". But I've never understood how such concepts can have any place in processes as arbitrary or as morally complex as the accumulation or non-statutory distribution of wealth.

Ultimately, capitalism comes down, as Ira Gershwin pithily put things, to "nice work if you can get it".

The role of the state is to regulate and encourage this untidy, wasteful but wealth-creative process, whilst also caring for those many human needs that the market cannot meet on an adequate scale and ensuring the ongoing viability of our society, economy and eco-system.

Again, my concerns are neither justice nor equity but utility and humanity.

Here's what Ira (and Ella) had to say about this subject. If it's your kind of thing, enjoy (with particular reference to the opening lines and with an awareness of the different cultural context of them days):

https://www.youtube.com/watch?v=Vu0JjhbaVbE

jh said...

I had a dose of reality talking to my friend last night. Some years back he had a woman in his rental property; her son was paying the rent. She asked for a reduction: "I don't see why I should subsidise her" he snorted. Now he is most concerned about tax, reeling off the weekly cost of rates and insurance ($72) on a different rental. He says he usually votes National, but isn't sure this time . Being an ex-trout fisherman he is concerned about rivers. Anyway, I was reminded that people don't think beyond their own back yard.
If John Key has distributed the capital gains that fell off the back of a truck people would (did) snatch it up, adjust ego and status upwards and snort at any bludger who thought otherwise.