I agree with Arundhati Roy: We have a “portal” to break with the past and imagine a world anew

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It is obvious that there will be a Labour-Greens government after the election given their 20 point advantage over National and Act in the polls. With luck NZ First will be eliminated. Winston Peters is occasionally on the right side of some issues (minimum wage, heavy rail) but is a brake on needed changes to empower unions and migration reforms.

Labour will form a coalition with the Greens whether they can form a government on their own or not. This is MMP politics, they know they will be needed in the future.

The Greens can press the advantage if they are needed to form a government, just as NZ First has done in the past. But the Greens should prioritise making policy gains not trophies like the Deputy Prime Minister’s position which was prioritised by NZ First and The Alliance under Jim Anderton.

This is not the tail wagging the dog. Many Green Party policies are actually overwhelmingly favoured in many polls on the issues that are of concern to New Zealanders. But policies to actually deal with the existing problems meaningfully have been resisted by Labour and National because they are locked into a strategy of protecting the status-quo rather than challenging it.

It is understandable for the National Party which is simply a tool of big business to be a conservative brake on change or a promoter of free-market fundamentalism, but it is unbecoming for a party that claims to represent working people like Labour to do the same.

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However, both Labour and National were complicit in the so-called neo-liberal revolution of the 1980s and 90s that locked in a pro-business framework for every aspect of the state’s operations. Labour has refused to challenge its own legacy of pro-market fundamentalism being imposed by the state since then. This conservative, piecemeal orientation on issues has become baked into the DNA of the Labour Party, preventing them from taking any fundamentally progressive positions.

One product of this new system was the creation of a powerful class of highly paid executives who dominate private businesses and state and local government agencies. They appoint themselves to various jobs for a three to six year term and then move on with no responsibility being taken for success or failure – however that may be measured. Often their behaviour is venal and corrupt and again there are no consequences if caught except to maybe have to go to another country for a while.

The CEO job description seems to be limited to the need to “cut costs” wherever they go. Cutting costs means cutting workers wages, whilst boosting the incomes of themselves or board members, or paying dividends to shareholders. A perfect example is the current BNZ Chairman and former CEO of Auckland City Council, Doug McKay, who denounced Waiheke Island residents as “full of lunatics and activists.” They can often preside over a failing business and still get appointed to another role. That was true of Doug McKay also.

The merged Auckland City Council was established by the National/Act government to eliminate forms of elected control over public assets. New commercial boards were stacked with business people and highly paid CEOs with a corporate background like the Auckland City Council itself. The highly paid board and chief executive at Watercare had one job to do which was to ensure supply but they failed. The Ports of Auckland, as another example, fought year after year against its workers getting basic union rights and collective agreements.

This entrenched system of corporate control is considered to be too powerful to challenge or to move in a new direction. So, Labour is reduced to looking for ways to solve problems by simply incentivising and rewarding good behaviour by paying people to do the right thing. The problem is that it is often still more profitable to do the wrong thing. That is why farmers remain exempt from paying their share under the Emissions Trading Scheme which is meant to produce favourable changes for the climate.

The Labour Party’s fear of challenging this system means its proposals for the climate, cleaning up rivers, welfare reform and expanding access to a living wage, fail to make real progress.

Even the policy that the Prime Minister announced as her priority – eliminating child poverty, has essentially stalled according to the group that should know, the Child Poverty Action Group.

The post-Covid world, however, gives us another chance to address all the issues where action is needed.

The wonderful Indian writer Arundhati Roy described the crisis we face as a portal:

Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next.

We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.

In the post-Covid world no one can claim we don’t have the money to do what is needed. The debate is simply over how we spend the money we print. Of course, there will be financial and monetary limits to that process which we will encounter, but everyone accepts we need to spend billions of dollars. But, is the current spending of those billions on simply keeping the current system ticking over really the limit to our imagination and ambition?

Labour’s refusal to put forward policies they know will be popular to fix the climate and rivers, and to give beneficiaries a real boost to incomes, means the Greens have a responsibility to demand that the new government do so.

There are also huge infrastructure deficits in health, education, transport, and energy because previous governments refused to tax the wealthy whilst unfairly overtaxing working people. Wealth inequality has exploded to extortionate levels in New Zealand like everywhere else in the world. New research shows that the wealthiest 1% of around 38,000 people “have $141bn in trusts. Another 150,000 or so people, rounding out the rest of the wealthiest 5%, have trusts worth a further $122bn.” These trusts are used to conceal wealth and avoid tax. Overall, the wealthiest 10% have 59% of all the country’s assets, and the middle classes around 39%. That leaves the poorest half of the country with just 2%. The billionaire class internationally has massively increased their wealth during the pandemic  Share markets and property values also continue to reach new levels of grotesqueness. Meanwhile millions of ordinary working people have lost their jobs. There is no better time to say to the 1% it is time for you to pay your share.

The tax reform proposed by Labour does nothing to address these issues. Restoring a new rate of 39 cents in the dollar for those who earn over $180,000 a year will only affect 2% of taxpayers and bring in a modest $500 million a year. New Zealand has relatively high rates of tax on ordinary workers’ incomes compared to other countries and we are one of the few who have no exemption from tax for the first $10,000 or $20,000. This allowed the National Party to pretend to be a friend of the workers by proposing some modest “temporary” tax cuts for them.

But, the Labour Party has ruled out any tax reform to target wealth and the growing intergenerational inequality that goes with it.

It was simply politically stupid not to allow a reform of the whole system of taxation to be explored by the Tax Working Group. As a consequence, they ended up proposing a capital gains tax that couldn’t be explained politically. What was actually needed, was a reform that told 80% of working people that they would pay less tax, the next 10% would pay much the same but the top 10% would pay significantly more through various wealth taxes. That would have been achievable without scaring the horses over taxing home ownership when that would be seen as an additional tax on some working people’s retirement homes without reducing their other taxes at the same time.

The Greens actually did make their own proposal for a limited wealth tax quite effectively with a policy that only taxed “net” wealth above $1 or $2 million and used the extra tax in a targeted way to pay for a significant increase in incomes for non-working Kiwis.

For that reason alone they deserve the party vote this election to keep dragging Labour towards policies that the overwhelming majority of people want to see implemented. It will be a small step towards the portal that we all dream of crossing though.

21 COMMENTS

  1. Mike, I absolutely agree with what you say about the system being rotten to the core, overloaded with overpaid executives who are incompetent and greedy, but cannot be held to account because there are no mechanisms to hold them to account, and able to continue rorting the system because there is a closing of the ranks to keep things as they are.

    And I agree that Labour has been playing around at the margins, failing to tackle the root of the problem(s) because they don’t want to rock the boat or are scared to do so, or are personally benefiting from BAU.

    However, we have reached the inflexion point, the point of discontinuity, with respect to energy, the environment and Ponzi finance (just as has been wared would happen by thousands of experts in their fields -and all ignored).

    Covid-19 has been the ‘detonator’ that has exposed the extreme fragility and inherent contradictions and inconsistencies of the system, which has been ‘running on the fumes; of hope and complacency, and manipulation and corruption for years.

    Gail Tverburg, noted for her activism on the energy front since the days of ‘The Oil Drum’ (early 2000s), provides a good guide to what to expect over the coning years, as the system collapses and governments become increasingly desperate to maintain the semblance of control.

    The article is too long to post in its entirity but a snip gives a good idea where we are headed:

    ‘Figure 7 shows that international trade was rising as a percentage of GDP for many years, and it hit a high point in 2008. Since then it has bounced around a little below that high point. In 2020, it will clearly take a big step down because of all of the cancellation of trade related to COVID-19 restrictions.

    We saw earlier that commodity prices tend to fall too low for producers. Indirectly, this means that profits tend to fall too low. Interest rates tend to follow these low profits down, since businesses cannot afford to pay high interest rates.

    With these low profits and low wages, the financial system gets strained. “Debt and more debt” seems to be the way to fix the system. Growing debt at ever-lower interest rates is encouraged. These low interest rates tend to raise asset prices because monthly payments to buy these assets fall with the falling interest rates. Stock markets tend to rise, even when the economy is doing poorly.

    If the many strange approaches I outlined in Section A are used to add even more debt to keep the system afloat, eventually some part of the system is going to “break.” For example, banks will stop issuing letters of credit with respect to purchases made by buyers that don’t seem sufficiently creditworthy. Banks may stop trusting other banks, especially if the banks do not really seem to be solvent. At some point, the international financial system seems likely to start “coming apart.” Eventually, the US dollar will stop being the world’s reserve currency.

    My guess is that a new two currency system will develop. Governments will issue a lot of currency for local use. It will not be useful for buying goods from other countries. Much of it will be used for buying locally produced food and other locally produced goods.

    Very little international trade will be done. Any international trade that will be done will occur between trusted partners, at agreed upon exchange rates. Perhaps a special currency will be used for this purpose.

    In this new world, individual countries will be very much on their own. With very little fossil fuel, countries will tend to lose electricity availability very quickly. Transmission lines will go unrepaired. It will become impossible to fix existing wind turbines. Road repair will become impossible. Electric cars will likely be as unusable as gasoline powered ones.

    There will likely be fighting about resources that are available, leading to countries subdividing into smaller and smaller units, hoarding what little resources they have available.

    Note:

    1Energy prices tend to fall too low because, as the economy gets more complex, wage and wealth disparity tend to grow, reflecting differences in training and responsibility. The problem occurs because low-paid workers cannot afford to buy very large quantities of goods and services produced by the economy. For example, many cannot afford a car or a home of their own. The spending of high-paid workers does not offset the loss of demand by low-paid workers because high-paid workers tend to spend their wages more on services, such as advanced education, which require proportionately less energy consumption. Ultimately, the lack of demand by low-paid workers tends to pull down the prices of oil and other commodities below the level required by producers.’

    https://ourfiniteworld.com/2020/09/23/reaching-the-end-of-early-stimulus-whats-ahead/

  2. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.

    Inspiring words. Many thanks.

  3. The overwhelming majority of people don’t want radical tax reform. Jacinda Ardern has called this issue correctly. She knows that there is an acceptance for a higher income tax rate (39% above $180,000) but not much beyond that.
    In the first debate she said she accepted the voters views on CGT, that is, the majority oppose CGT. If voters oppose CGT, they certainly oppose wealth taxes.
    What you analysis of the spread of taxpayers fails to do is to look at taxpayers lifecycles. Virtually no-one in their 20’s is on a high income. But in the 30’s and 40’s many are. Similarly with capital. Relatively few people in their 20’s own a house. But they do in their 30’s and 40’s. By the time people are in their 50’s and 60’s, many will own a rental property or a beach house. Not just a tiny 10%, much more like 30%. Probably over half of New Zealand has access to a family (extended) beach house, even if they don’t directly own it. All of those people will be affected by a CGT or a wealth tax. So that is why these taxes are opposed so much. You are also forgetting about aspiration. Many people aspire to own these things, even in their younger years, or even if they don’t quite do it.

    • I think you are right. People have a sense of entitlement and won’t give it up. Therefore, many of the people with a sense of entitlement [that you have mentioned ] will not cope at all well with the unravelling that is accelerating. Apparently, they would rather become impoverished (or even die) than change their ways. So they will. And they definitely prefer throwing their progeny ‘onto the fire’ to becoming informed about the factors that WILL determine the future.

    • A real Prime Minister carrying a decent set of balls does not allow millions of voices into there heads just to influence their right to rule. Leaders have to make objective decisions unburdened by the cross of society on there back.

    • Any CGT would not be charged on the family home or beach house. But would be on houses bought with mortgages to rent out for eventual capital gains. We have huge wealth and income inequality in this country how else to address this destructive distortion accept with appropriate tax policies?

      • On second thoughts even family homes could have cgt levied according to the extreme market bubble distortion which has occurred. E.G. where i live the GV of this house has catapulted upwards by $360,000 since 2016. This is insane! I bought the house as a HOME not a get rich by capital gain instrument.
        A fair increase in value could be arrived at and the rest taxed away on point of sale .
        All that huge inflated money could be used to make NZ a truly great place to live for all and not just the few.
        Also boot out private australian banks like the ANZ. One kiwi bank for kiwis and no lending to become upstart petty landlords!

        • One reason why the family homes should not be subject to CGT is that their owners do not get tax deductions for outgoings such as interest, rates and maintenance, paid over their tenure of the property. If capital gain is to be treated as profit (though technically it is not actually profit) then expenses relating to that property should be tax deductible, in accordance with the income tax act.

  4. The Greens policy is to tax the rich to help the non working people to get more .The problem with that is why are they not working . I am happy for my tax to support those unable to work due to disability or illness and single parents should not be forced into working full time but too many decide working is a way of life they decide to avoid .

    • One reason is the differential between working income, say the minimum wage and the welfare support that you can get for just staying in bed. It’s not worth getting out of bed to be used and abused for and xtra ten bucks a week. Would you? And before all you far right trolls start up, the minimum wage is NOT the problem.
      The shitty low wage economy that most of us have to endure is THE problem. You need to walk the talk to understand this, which is why so many don’t get it, Trev.

      • I stand to be corrected but looking at the figures I worked it out at $200 difference between the minimum wage and the benefit.If it is a 40 hrs job plus if you can work overtime or a second job you can get ahead.
        The problem is many jobs are now flexible hours with no security of hours. I was on a benefit once and got a part time job earning $100 knowing I could earn $80 what I did not know was that if you earn a $1 you lose the accomadation benefit of $50 That was not fair .

    • Another reason is mental health issues that inflict so many in this country, long term illness, disease, disabilities, accidents etc. The list is very long indeed. And yes there are those who just want a free ride thru life on the tax payers expense, but I reckon not as much the sleepy hobbits reckon – certainly not the lot.

  5. The question is: do we want more economic growth, given that this is likely eventually to push us over the edge global warming wise. But if not, why would we want to force people into jobs

  6. Rats in barrels comes to mind
    As does some pigs are more equal than others.
    Chickens roosting anyone?
    Lazy shepherds, and lost sheep
    The last round up heading for the lost ark..

  7. ” Many Green Party policies are actually overwhelmingly favoured in many polls on the issues that are of concern to New Zealanders”

    Then why isn’t this translating into electoral success? It’s plainly obvious to the rest of the planet that they’re woke nut jobs.

      • It’s this bit from the Greens defence policy that can never be allowed to happen as well as the whole thing needs to be kept well away from the cabinet:

        “Policy Positions

        6.1 Investigate extending the reserve forces and reserve training to a wider
        section of the population as appropriate to individual abilities and
        inclinations.

        6.2 Investigate the development of civilian-based defence in which some
        citizens are trained to resist aggression or usurpation by withholding
        cooperation and by active non-cooperation rather than military force.”

  8. Mike you are not right thinking that the greens are all about better “heavy rail read this which explains the truth that greens are not saying they will use heavy rail in their new green plan announced today.”

    CEAC To Green Party Use Rail Freight Not On Road For Lowered Climate Emissions Air Pollution.
    Wednesday, 30th Sept 2020.
    Press Release: Citizens Environmental Advocacy Centre
    https://www.scoop.co.nz/stories/PO2009/S00440/greens-announce-bold-plan-to-ensure-nz-transport-tackles-climate-change.htm In this plan, “Greens Announce Bold Plan To Ensure NZ Transport Tackles Climate Change” CEAC challenges Green Party to consider using ‘Rail Freight’ in large amounts now, to tackle ‘Climate Change’, as their policy does not explicitly show they are planning for large scale shift to rail in their only cloudy reference to ‘Heavy freight’ they say, “Set standards and incentivise heavy freight to transition to zero emissions vehicles and be 100% powered by renewable energy by 2050.” This is way short of our need for urgent action on climate change, as we are now running out of time.
    Importantly switching to use of rail now will give our community cleaner air and improve our health and wellbeing, there is the proof of the serious health issues the Green Party must consider why we need to switch to rail now and reduce the serious toxic particulate pollution emissions from truck diesel burning and tyre dust emissions communities are now threatened by more use of road freight. https://www.ucsusa.org/resources/diesel-engines-public-health
    https://www.news18.com/news/world/new-research-links-air-pollution-to-higher-coronavirus-death-rates-2569253.html
    This Harvard analysis is the first nationwide study to show a statistical link, revealing a ‘large overlap’ between COVID-19 deaths and other diseases associated with long-term exposure to air pollution of fine particulate matter.
    Coronavirus patients in areas that had high levels of air pollution before the pandemic are more likely to die from the infection than patients in cleaner parts of the country, according to a new nationwide study that offers the first clear link between long-term exposure to pollution and COVID-19 death rates.
    In an analysis of 3,080 U.S. counties, researchers at the Harvard University T.H. Chan School of Public Health found that higher levels of the tiny, dangerous particles in air known as PM 2.5 were associated with higher death rates from the disease.
    For weeks, public health officials have surmised a link between dirty air and death or serious illness from COVID-19, which is caused by the coronavirus. The Harvard analysis is the first nationwide study to show a statistical link, revealing a “large overlap” between COVID-19 deaths and other diseases associated with long-term exposure to fine particulate matter.
    “The results of this paper suggest that long-term exposure to air pollution increases vulnerability to experiencing the most severe COVID-19 outcomes,” the authors wrote.
    • This evidence is yet another case for increasing the use of rail freight over road freight;
    • To lower air pollution particulates ‘save public health’ in this new Harvard study.
    End.
    New Harvard study shows heavy traffic particulate air pollution exposure through Cities with Ports has the potential for a public health threat to those who suffer Covid 19 deaths and other diseases associated with long-term exposure to air pollution from ‘fine particulate matter’.
    More evidence;
    Diesel engine exhaust air pollution is causing most of the city air pollution is studies such as https://www.ucsusa.org/resources/diesel-engines-public-health
    this statement from “The union of concerned scientists”
    Quote from; Health impacts of diesel pollution
    Diesel-powered vehicles and equipment account for nearly half of all nitrogen oxides (NOx) and more than two-thirds of all particulate matter (PM) emissions from US transportation sources.
    Particulate matter or soot is created during the incomplete combustion of diesel fuel. Its composition often includes hundreds of chemical elements, including sulfates, ammonium, nitrates, elemental carbon, condensed organic compounds, and even carcinogenic compounds and heavy metals such as arsenic, selenium, cadmium and zinc.¹ Though just a fraction of the width of a human hair, particulate matter varies in size from coarse particulates (less than 10 microns in diameter) to fine particulates (less than 2.5 microns) to ultrafine particulates (less than 0.1 microns). Ultrafine particulates, which are small enough to penetrate the cells of the lungs, make up 80-95% of diesel soot pollution.
    Particulate matter irritates the eyes, nose, throat, and lungs, contributing to respiratory and cardiovascular illnesses and even premature death. Although everyone is susceptible to diesel soot pollution, children, the elderly, and individuals with preexisting respiratory conditions are the most vulnerable. Researchers estimate that, nationwide, tens of thousands of people die prematurely each year as a result of particulate pollution. Diesel engines contribute to the problem by releasing particulates directly into the air and by emitting nitrogen oxides and sulfur oxides, which transform into “secondary” particulates in the atmosphere.
    Diesel emissions of nitrogen oxides contribute to the formation of ground level ozone, which irritates the respiratory system, causing coughing, choking, and reduced lung capacity. Ground level ozone pollution, formed when nitrogen oxides and hydrocarbon emissions combine in the presence of sunlight, presents a hazard for both healthy adults and individuals suffering from respiratory problems. Urban ozone pollution has been linked to increased hospital admissions for respiratory problems such as asthma, even at levels below the federal standards for ozone.
    Diesel exhaust has been classified a potential human carcinogen by the U.S. Environmental Protection Agency (EPA) and the International Agency for Research on Cancer. Exposure to high levels of diesel exhaust has been shown to cause lung tumors in rats, and studies of humans routinely exposed to diesel fumes indicate a greater risk of lung cancer. For example, occupational health studies of railroad, dock, trucking, and bus garage workers exposed to high levels of diesel exhaust over many years consistently demonstrate a 20 to 50 percent increase in the risk of lung cancer or mortality.²
    CEAC to Green Party; We need regional NZ rail to reduce the alarming increasing rate of truck freight emissions & diesel particulate air pollution as road freight transport is a large use of fuel and emitter of carbon emissions & air pollution confirmed by these studies.

    https://www.ucsusa.org/resources/diesel-engines-public-health

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