No wonder Winston Peters objected to the Coalition Government being called Labour-led. Because, on matters of most importance, it’s led by New Zealand First. And even though Fortune Magazine this week said Jacinda Ardern was the second most powerful leader in the world, that would make Winston the first.
New Zealand First (NZF) has outsmarted the Labour Party, who are shackled by the Financial Responsibility Rules on one hand, and Winston on the other. Despite all the adulation and political capital for Jacinda Ardern domestically and internationally, Winston, has shown us all how implementation of a Labour agenda is at New Zealand First’s discretion.
With the economic largesse and the political platform afforded Shane Jones by the Provincial Growth Fund; the apparent permission he’s been granted to act with impunity, taking his blokey bombastic cronyism too far; and the New Zealand First veto on matters of progress involving even key Labour Party policies, it’s clear who’s boss, and it’s not Jacinda Ardern.
Labour loyalists say that makes it even more important to vote for a stronger Labour representation at next year’s election, so in the future the bigger party is not beholden to a minority whose ambitions thwart Labour’s own.
But there’s no shrewder a politician than Winston Peters. He’s the oldest currently serving MP. He has been in Parliament almost continuously since 1978. He’s been an MP almost as long as Jacinda has been alive. New Zealand First celebrated their 25th birthday this week. So let’s not forget what a survivor Winston has been, through decades. He’s seen more Governments come and go, than anyone else in the House. The concessions NZF have already secured for their key constituencies, almost guarantee them a strong enough showing in the next election to continue to secure disproportionate power. As their skills at negotiating coalition agreements show, they don’t need a majority of seats to assert majority forms of power. The 5% threshold or a constituency seat will likely again provide the party with the balance of power, with a veto on forming a government and then on policy. They’re pretty good at the game.
Some observers say Jacinda’s CGT backdown is a humiliating defeat. Some say it’s a pragmatic move. Some say she could never win in this debate, others say she didn’t even try. Either way, she’s left to carry all the political costs from that decision, while NZF come out victorious in upholding the interests of existing capital and the landowning class, ‘home owning mums and dads’, and the ‘kiwi way of life’.
Jacinda said she didn’t have a mandate to implement a Capital Gains Tax – an arguable point given her popularity, her own stated belief that a CGT was needed, and the redistributive role that the Capital Gains Tax proposal was intended to play. Her announcement that the CGT is dead now and for as long as she’s leader, has handed a victory to National and Simon Bridges too. Out-foxed by Winston and scared off by National’s barking at shadows, she’s rolled over and given up important tools that she believed in as remedies for some of her – and the country’s greatest concerns.
Some commentators suggest the disappointment in Labour is misplaced, because a Capital Gains Tax with exemptions would be inefficient. ‘Other tools might do the job better’. ‘The proposed CGT was to be fiscally neutral anyway’, or ‘it wouldn’t raise enough because of the loopholes’, and ‘addressing poverty and equity really requires broader structural change’. So ‘economically at least, the ‘about face’ is not such a big deal’.
But the Capital Gains Tax was a big deal. It was a big deal politically. It was a big deal for the Labour Party and for Jacinda personally. It was her ‘Captain’s Call’. It was important to her, and she’s ‘disappointed not to see it through’. So even if it wasn’t going to be the perfect tool, this defeat is more significant because it would have been an attempt at least, to balance investment in houses against the more productive sector, to balance tax equity among the working and the middle class, between renters and owners, between those who own homes, and those who probably never will. It’s a symbolic and a substantive defeat.
I have home owning friends who are relieved that their home / house investments won’t be taxed. They were usually the lucky ones, who managed to buy a house – or several, when they were cheap, interest rates were low, and had help from family. But they don’t want anything to affect the value of their property or potential income. I also have friends who work just as hard who will never own a home, who feel betrayed. I see people who say the battle goes on. We just have to organise, mobilise. Struggle on. And there are those who say the battle is already lost, when Saint Jacinda the Kind can’t negotiate even an imperfect policy response that’s widely seen as a generally only a modest step in the right direction.
Jacinda’s Prime Ministerial performance has been lauded as professional, intuitive, and compassionate, showing great communication skills. A soft media approach is running in the news this weekend, as a counter to the bitter CGT response last week. Today mainstream media reported that Jacinda met music star Pink with their kids, when Pink was touring last September. An event from 2014 when Jacinda shared a ride with some stranded travelers is also doing the rounds again now. Forget the Capital Gains Tax, infers the narrative – as well as being compassionate and communicative, Jacinda is also cool!
But cool has its limits. We need courage. We need leaders with courage to stand up to outdated thinking, to conservative thinkers, we need courage to change the status quo. But in the CGT debate market rules prevailed again. In the rule of New Zealand First and the conservative nature of this Government’s responses to social and environmental crises, it’s business as usual. The CGT debate shows that conservativism trumps compassion, and compassion shackled to neo-liberalism is neo-liberalism all the same.