Winston Peters and Neo-liberalism, Beat Compassion and Cool.

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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.

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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.

32 COMMENTS

  1. Well I think the Prime Minister of New Zealand, Jacinda Ardern ought to worry about her ambitions for change rather than worrying about ours. Including such things as a fundamental reexamination over the failures of 3 successive elections and 4 party leaders and go to the policy issues in fact The Labour Party’s phoney fiscal policies at the last election and the one before. The Adsense of any wages policy that was even believable or credible before The Honourable Willie Jackson parachuted in. The Adsense of any health care policy on national health and abdicating any responsibility on health while Coca Cola Colman fiddled with health so they had no health policy. The lack of any policy related to industry development, training and lack of educational resources to back stop business. All of the key issues that matter to the way in which the nation functions that you do not learn it as you go along.

    So instead of applying ourselves to what we can change and what really matters we ask ourselves the most difficult questions about how to attach kind and economically driven legs to a fiscal fish where in fact all governments generate there own process of change well certainly Phill Twyford and Robertson and Jacinda gave Kiwi Build a crack and this change naturally comes from the leadership, the party and the government. So you’ve got the Prime Minster who’s the director of change and the chief economic person in Robertson and other senior portfolio holders as well as an employment minister who has taken it on his own initiative to preside over falling unemployment states and didn’t need to be pushed and prodded and dragged along where NOVA pay was and where we are still failing.

    So the point is that we generate our own enthusiasm because we can focus on contemporary issues. What Jacinda has to do is focus on how to beat The National Party 3 times in a row because once is a fluke and why a fraudulent appeal to raise taxes is not a great vision for change and on the front pages of every news rage will be Simon Bridges saying that he is the real weapon for change and right next to that you’ll have reasons for why those tax cuts. Y’know…, the real tough policies of handing out tax cuts.

    So why don’t we get off the poll dancing and get down to a bit of policy.

    • Join the Yellow Vests, Castro! The Tararuas don’t compare to the Sierra Maestra where Castro hid out with Che Guevarra! Too cold and wet.

      The climate in Cuba is sub-tropical with cool trade winds providing some relief from the heat and humidity. The average year-round temperature is approximately 26°C and there’s plenty of sunshine.

      With satellites and modern tech a guerilla band in the tararuas would be quickly located!

    • Agree. Jax, Twyford and a few others are neo-libs dressed up in red rags. On the whole, Winston and NZ First seem the least neoliberals in parliament.

    • Castro hopefully to become a Yellow Vest ( More realistic! 🙂

      “At the risk of seeming ridiculous, let me say that the true revolutionary is guided by a great feeling of love. It is impossible to think of a genuine revolutionary lacking this quality.” – Ernesto Che Guevara.

      keep going Castro!

  2. “Either way, she’s left to carry all the political costs from that decision”

    She would have carried the cost of the other decision too, and she rightly assessed that it would be a heavier burden.

    “We need courage. We need leaders with courage to stand up to outdated thinking,”

    It took courage to go against her stated preference, her senior advisor in Cullen and his advisory group too. But note that Cullen had 9 years when he could have implemented a CGT himself.
    This decision and the way she made it won’t cost Jacinda anything at all.

    D J S

    • Many a comfortable rental property owning boomer is smirking along with you Mr Stone.
      Not so sure about the people living in cars going in to winter, I think they will be “disappointed” Arden didn’t see it through.
      The politics of kindness- as applied to the upper middle class.

      • If you think that CGT was going directly to house people living in cars OK. But why not just increase top income tax rates? Stop corporate profits going offshore, build a meaningful number of state houses, make it illegal to own several houses and keep them empty? The govt could forcibly take over the rent of empty houses , pay the owner a market rent and place people in them. That would cool the market pretty quick.
        Government and or local bodies as overseas need to get hands on to house people without means like they do in other countries; like we did with state housing long ago. They have to be prepared to be a landlord again, not a property developer. I have 2 nephews who are building apartments in Auckland. Everyone has seen some of them. Many even of these are being bought by people who have no intention of either letting them or living in them. The speculative gain is all some buyers are looking for. The government has to do something much more direct than to share in this speculative gain to remedy this .
        D J S

  3. Yes I am for fairness for all but Jacinda did eagerly sign us up for TPP didn’t she?f

    She needs to care about kiwis firstly not all the rest of the world.
    We have many things so wrong now after nine years of natZ “slash & Burn politics” so please Jacinda ” remember “compassion begins at home”.

  4. CGT is dead in the water. A huge win for conservatives. Looks like getting the whole country on board with “compassionate and progressive policies” is harder than herding cats. People do not give their money away. Period.

    The sooner JA buggers off to some worthless job at the UN the less damage she and Labour can inflict on the rest of us.

  5. Andrew Little, when he led the party, was also sceptical of capital gains taxes. However, now that the CGT distraction is out of the way, they can concentrate on more effective measures. Whether they will do so though remains to be seen.

  6. I doubt Winston did in fact block the implementation of CGT.

    Sure, he claimed it as a victory, but it’s also noticeable that Jacinda has been lukewarm about it since her election. It was a half baked policy she’d inherited.

    If she’d been really sold on it, why appoint a tax working group? She was definitely keeping her distance all along.

    There was a broad based outcry over CGT, especially with the cavernous loophole of the ‘family home’ that would allow the most egregious offenders escape it. It would be difficult to implement and lots of tax experts were going public saying it was a bad idea.

    So rather than Winston ruling this government I think she did the prudent thing to increase her chances of survival at the next election.

  7. There is simply not enough unity in this country’s population, those who managed to obtain property, whether through ‘hard work’, sacrifices or simply by inheriting it, they will cling to their privileged life situations as much as they can, nobody will give up assets and forms of wealth without a fight, except one like ‘Jesus’.

    But the number of persons forcing to rent is growing, and will continue to grow. So it may take time for those to get the upper hand.

    So yes, it was partly NZ First and Winston that stopped the CGT being introduced, but they also did it with having in mind the power and influence of the property owning middle class, or the upper middle class.

    They are committed voters, those who have nothing are less likely to vote, as we know, so politicians and parties will consider the consequences of upsetting those who are committed voters, less so the interests of the silent and powerless non voters and undecided voters.

    We have the same challenges, even greater ones, to deal with when it comes to environmental and climate change issues and needed policies. Who will dare to introduce policies that will take conveniences away and make life more difficult for so many?

    There will only be improvements if people learn to make sacrifices, and again, few will be prepared to do so, as consumers have become addicted to a wasteful and polluting life style.

    Change may only come if it inevitable, due to serious disasters happening.

  8. It’s not even market rules prevailing. There were plenty of economic commentators and investors who supported the CGT both at an investment and fairness level – it has potential positive economic outcomes but they were not argued for.
    What has happened here is that a small but powerful lobby group representing only a portion of the “property owning class” have shouted loudest and most angrily and the media has simply dissipated in front of it.
    It reminds me of Brexit – a minority of very angry and vocal individuals simply dominate the discussion. The journalists and other voices don’t push back and instead defer in sympathy to the clearly upset Brexiteer.
    So it is with CGT – the more reasoned and nuanced debates about future government revenue and fairness are simply not heard as those who hold those views politely remain quite so as not to further upset the already angry – “I’ve worked hard for this/this is my pension/why should I pay more tax/this will destroy the economy” person before them.
    I feel like this is an Obama moment for Jacinda – when pragmatism and the “job at hand” become the driving factors of her political direction over and above the idealism that may have originally got her into politics.
    When leadership changes from being the idealistic vision we project onto someone to the reality that they are just someone doing a difficult job with constraints, limitations and disappointment.
    Saying that it does feel like a huge body blow to long term Labour supporters but I think it goes much deeper and wider than Jacinda or even the current Labour leadership.
    Across the NZ electorate there is a chasm of economic ignorance and by that I mean macro economics – sure lot’s of Kiwi’s run businesses or household budgets – but it is this very perspective that blinds them to the big picture.
    Without a broader and fairer tax base going into the future and with the share of national income going to labor in decline – it is possible that the very assets being protected now from CGT may lose value in the long run as government engagement in the economy shrinks.
    If this happens – the value of property and business assets will become less reliable.
    For example – rental subsidies to low income house holds may have to go to reduce government spending which will immediately reduce the available pool of tenants who can pay market rents.
    The money available to councils to develop and maintain the types of infrastructure and environment that supports and sustains the value of business and property assets will also decline and costs pushed onto individuals.
    Between to 1852 and 1879 in NZ you could only vote in elections if you were male (presumably European), over 21 and an owner or leaseholder of property. Universal suffrage for men over 21 was introduced in 1879 and for women in 1893.
    Ultimately providing a tax free form of income to a small segment of your asset owning citizens and then refusing to allow non property owning citizens to have a say on this takes us back to NZ’s pre 1879 form of democracy.
    It is an inversion of the “no taxation without representation” concept. Asset owners in NZ get “representation without taxation” as things currently stand.
    I don’t understand why this can’t be explained to the NZ public by a strong leader with good communication skills.

  9. Great Post @ CR.
    Clear and direct. A shiver must surely be galloping up the spine of winston peters’s bent little back.
    It’s too late to introduce a CGT anyway. The traps are sprung. There are too many people now having been lured into the inhuman position of being ‘I’m alright Jack.” while they walk past the homeless, while people are living in garages and cars.
    What is a CGT in reality? It’s a myth. It’s a complex logical fallacy. When the gargantuan foreign banks are here making more off us than anywhere else? Any tax, any increase in salaries and wages, any improvement in our way if life will ultimately be siphoned off by Them.
    Never mind our politicians. They don’t matter. They pretend they do and wouldn’t you? On $ix easy figures plus entitlements and reimbursements and generous pensions? And all you had to do was lie, then maintain that lie for as long as you can? These are modern times. It’s de rigueur in fact. It’s entirely fashionable and acceptable to lie and decieve. As equally as it’s so to walk past the wretched and suffering homeless living in our city’s streets. The abnormal has become normal.

    Before any changes to our tax system, the banksters must go.
    winston peters? MMP was created for him. MMP’s the perfect syringe to use to inject his Machiavellian-logical fallacy objectives into us at the behest of his masters.
    Below, is an interesting interview with the ever awesome Noam Chomsky.
    He details how majorities are easily led by their predjudices and beliefs into voting for those whom they might not otherwise. Sounds like MMP to me.

    https://boingboing.net/2019/04/20/useful-idiots-r-us.html

    • “when gargantuan foreign banks are making more off us then anywhere else”

      The answer to the foreign banks is simple, no revolution needed, go along to your local TSB bank branch and open an account with a wholly new zealand owned bank. If you are not with the TSB already stop crying and act

  10. “.. even though Fortune Magazine this week said Jacinda Ardern was the second most powerful leader in the world, that would make Winston the first.”

    Question:
    You’re in a race and you pass the second person, what position are you now in? lol

  11. Just imagine if we had had MMP in 84..squalid old Roger would have been ” rogered”. System is working methinks.

    • I always thought that MMP, after years of rejection while Social Credit was pushing it, caught on when the electorate saw how it would have stymied rogernomics as the minor parties would have rejected it. FPP gave the govt absolute power.
      So we brought in MMP to prevent a government ever having the absolute power to make such diabolical changes to our again . Only to make it almost impossible for any government ever to reverse it. That seems to have been the case.
      D J S

      • The country has a lot to thank Winston and NZF for otherwise the country would be in an even bigger mess than it is now under the previous National & Labour Governments ?

    • Of course it was a smart political decision.

      1. Old white people determine governments
      2. Old people didn’t want a CGT
      3. If you want to be in government, it’s not politically smart to support a CGT

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