GUEST BLOG: Gerard Otto – What Transformational Government looks like.

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About a year ago the New Zealand political commentariat was doing it’s nut about how this government was promising to be transformational but living in a straight jacket called Budget Responsibility Rules.

Why not borrow tens of billions more some cried?

Why not build 500,000 houses instead of only 100,000?

The money tree was laden with free money and we were delivering surpluses so how about Christmas every day for noble causes?

At the time I recalled the Mainlander Cheese advertisements that told us “Good things take time” and that the first budget of a new government was no final measuring stick to apply to a promise to be “a transformational government”.

The actual words used by PM Ardern, that nobody quotes from the Speech from the throne are :

“This will be a government of transformation. It will lift up those who have been forgotten or neglected, it will take action on child poverty and homelessness, it will restore funding to education and the health systems to allow access for all, it will protect the environment and take action on climate change, and it will build a truly prosperous nation and a fair society, together.”

We all saw $5.5 Billion go to the families package almost immediately. The effect was to lift tens of thousands of children out of poverty almost immediately.

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Plus who can argue that Budget 2018 did include $3.2 billion extra for health services over four years.

Record spending on Health.

Plus an extra $1.6 billion went to early childhood education and was a boost for students with higher learning needs.

Did the ban on off shore oil and gas exploration help protect the environment too? Given the serious risk of spills and possibilities that sonar pulsing and drilling upset endangered dolphins and marine life?

If you don’t think much of that try this :

“The agreement between Labour and the Green Party also provides for up to $1 billion of new investment to be stimulated in low carbon industries by 2020, kick-started by a government-backed Green Investment Fund of $100 million.”

It’s hardly the case that National were doing this sort of thing in its long nine years of playing the fiddle while Rome burned.

The Speech from the Throne also included this promise about tax :

“The government will review the tax system, looking at all options to improve its structure, fairness and balance, including better supporting regions and exporters, addressing the capital gain associated with property speculation and ensuring that multinationals contribute their share. Penalties for corporate fraud and tax evasion will increase. Personal income taxes, taxes on the family home and GST will remain at the same rates as they are today.”

As pledged during the election campaign, any significant decisions on tax changes will not take effect until the 2021 tax year.

Right now the Coalition are delivering on that promise and “better supporting the regions and exporters” probably spells good news for farmers ( despite the drama right now ) by April 2019 when final decisions are made.

But property speculators are going to take a canning.

The Housing crisis is partially about them, and the joyride they have exploited for decades while wage increases stayed close to the CPI.

To a lesser extent it is about immigration and a failure to supply houses at a rate that tackled house price inflation.

But wait – now we have also discovered the net population gain from migration may be around 27% lower than the previous data suggested.

Under the new system, Statistics NZ said 105,900 non-New Zealand citizens arrived in the country on a long term basis in the 12 months to November 2018 and 54,700 departed, giving a net gain of 51,300 non-New Zealand citizens.

Remarkably a transformation of sorts has taken place here, simply by measuring the flow more accurately.

Had we all been spooked by numbers inflated by 27%?

Yes we had.

It was back back in 2014 that a net gain number was around 50,000 new citizens but even then it was actually 27% lower.

We still have massively inflated house prices whilst the rate of inflation has recently plateaued somewhat.

Now a transformational CGT will help to suppress that inflation on a longer term basis.

The party is over for the speculators, time to go home.

Speculators may well put up their assets for sale and prices fall as houses sit unsold – which is all part of inter-generational transformation.

No foreign buyers allowed sorry.

The greedy may raise the rent – but slowly they will lose against the competition as the overall mix adjusts.

Young people might start to be able to buy their first home without the need for a $200,000 deposit in Auckland.

This is what transformational government looks like.

Newstalk ZB is outraged.

The moaning and bitching of the mob of wealthy benefactors now reaches fever pitch because they may have to play fair.

Labelling people socialists and communists is rife while the government starts to make the big changes that selfish, privileged nation wreckers are damned they will see happen, as long as they can enjoy the inequity of their ill gotten gains at the expense of all our great grandchildren and a more egalitarian future.

 

Gerard Otto is an activist and a writer.

10 COMMENTS

  1. Nice quote there, Gerard.

    “This will be a government of transformation. It will lift up those who have been forgotten or neglected, it will take action on child poverty and homelessness, it will restore funding to education and the health systems to allow access for all, it will protect the environment and take action on climate change, and it will build a truly prosperous nation and a fair society, together.”

    Words come easily to politicians. Sound policies do not.

    NZ is just as dependent on imported fossil fuels as it was before the last election.

    The environment (both local and global) continues to be sacrificed in order to prop up living arrangements that have no long-term future.

    There is still no public debate about anything of long-term significance.

  2. Blind as a bat. If you’re a fan of green washed business as usual & gutless mediocrity then of course all this tinkering will look rosy. The underlying source of all our problems is dog eat dog capitalism, our materialistic mind set, unbridled consumerism, rugged individualism & a world run by liberal globalisation fanatics.

    If you’ve got a magic wand that turn things upside down & around by transforming all these individual & collective negatives into life affirming positives the all power to you.

    • Good grief.

      So unless everything is solved immediately and magically by wiping out capitalism and materialism, then there is no point in any improvements being made at all? No nothing is worth doing? It’s all hocus pocus ?

      Yeah, that’s no solution ranting in the bush stuff of ideological theorists- big talk and no real world pragmatic solutions – but blistering defeatism for anyone who is doing something to improve things.

      Ground control to planet earth – back to reality.

      • How does passing the CP-TPP into law help overcome rampant neo liberal global capitalism? A deal some called “NAFTA on steroids”.

        If there’s any Socialism to be had from this govt or its predecessor in my opinion its for the 1% only.

        • The economies been growing at 4% through the awful year after Labour signed up to TPP11. While not all the TPP agreements doing it’s definitely been far from a disaster. Let’s not forget oil exploration has been banned somewhat, so if there was to be a disaster narritive it would be all over the news but it isn’t, because there is no disaster to be fearful of. The only disaster waiting to press go is National.

      • Oh my my haven’t we got our party political, business as usual nose out of joint. This God forsaken unimaginative country treats its visionaries with absolute disdain, which is why we’re resilient, live beyond the fringe & scream at those who’re too blind to see from the mountain tops.

        Mess with me at your peril Herr Otto for I have an inkling of our nations true, trail blazing, beacon of hope destiny & it’s wondrous to behold; so I’m biding my time until those of your ilk have finally fallen by the wayside & conditions are ripe for those who dare to dream big to come to the fore, take the reins, & lead us out of the muddling chaos into a brave new post-globalisation era.

        The Prophet of Zealandia

        • Don’t know about messing with you, but I’d question you. I mean Zealandia sounds like some name a child would come up with. Why not just Aotearoa.

  3. … more propaganda… for a start… no foreign buyers… people from OZ and Singapore can by property in NZ as well as anybody who is resident such as on a temporary work or student permit… and OIA has actually agreed to more foreign sales under the new government. Anybody in the world can buy assets and new builds here.

    One of the biggest problems is that many commentators are so busy regurgitating government and MSM propaganda that is incorrect and fudging the figures…. sadly it backfires when Labour embark believe their own press and cheerleaders (secretly cheered on by the right wingers) make them feel they are on the right track and keep on tightening the noose.

    The left cheerleaders telling labour how great they were and to believe their own press aka on capital gains, immigration etc, kept a left government out of power for 9 years and nearly wiped out the Greens who have gone on their own side show in recent years because like the Natz having a barista leading their campaign, it isn’t exactly cheery if the most a government can promise is a bit of a raise in benefits which goes nowhere in today’s out of control prices in NZ…

    Keep saying what an amazing job Labour and Greens and NZ First are doing and everything is honky dory, but then don’t be surprised when the next election comes around Labour are totally blindsided when nobody turns out to vote as people’s person experience does not match the Labour and their cheerleaders hype… and the anti immigration group NZ First sold out on TPPA and immigration.. while the Greens are still in their bubble thinking getting everyone legally high is enough of a message…

    Best advice is that Labour and the lefties be honest and actually talk to ordinary people not the talk fest, pokies and now professionalised groups vying for government coffers from social housing to construction and donations from migrant groups…

    When people don’t have that affordable rental property due to rental shortages and are homeless or in a hotel while the government celebrates in a Marie Antoinette style healthy homes and Kiwibuild , more people don’t have that job and see high costs from government decisions …. and the middle class in Auckland have been subjected to up to 3 new taxes by the council alone… while the council waste more money on Stadiums, Marinas, cruise ships, airport transport and sports event bail outs for the elite….

    • Yes, I must be more careful to spell out any exceptions due to Free Trade agreements to a general ban on non residents from buying existing residential houses (which is what I was referring to not land ). I should also include land and large apartment blocks…in case a pedant points out how the whole article is propaganda based on one single point of nit picking 🙂 Nobody is saying all is great – all I am stating here are the actual improvements made so far against what was actually promised regarding being transformational. If you can’t handle that, then for sure imagine that Labour’s lead over National will shrink to zero – AFTER – polling shows the CPTPP etc did not really damage the Coalition at all, in fact it’s extended it’s margin since the election. Good luck with that wishful thinking 🙂

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