What a mess. What a pickle for the left. Labour, the party of ‘hard working’ New Zealanders, showed us just how super-wealthy the top 5-10% uber rich actually are, and then ruled out any kind of increased tax share from capital . Setting it up to fail, they gave Treasury the task of designing a tax-free threshold paid for by a new net wealth tax.
So what were Labour’s political advisors thinking? How would giving an extra $20 a week to nearly everyone, paid for introducing a hugely complex wealth tax of $4 billion ever going to be any kind of answer to the grave challenges NZ faces? Once the $4 billion was frittered away in a tiny tax break for everyone what about the tax revenue needed for everything else?
The termination of the neoliberal experiment is delayed yet again, possibly by a decade. The only party that could lead right now with bold policies has given up.
Let’s start with the real problems we face: an industrial scale foodbank industry entrenches a highly economically inefficient method of food distribution and reinforces food insecurity; an increasing desperate number of families cannot feed themselves while holding onto their high-cost housing; transience, mental and physical sickness, kids out of control, flooding and homelessness undermine the productivity of our key workers just when we need them most. Evidence of social disintegration and disaffected youth is all around with ramraids the tip of the iceberg; a struggling health system coping with a dramatic ageing of the population and suffering the aftermath of an upsurge of preventable diseases of poverty and the pandemic; an education system that fails too many children and is burning out teachers; universities on life support, and the unfolding climate catastrophe with the irreversible loss of productive land, infrastructure issues and the costs of managed retreat.
This is not the time for a $20 a week, a block of cheese, tax shift. At the very top end of the wealth and income distributions, wealth accumulation continues unabated, with those with excess money untouched by the measures implemented to reduce inflation. The price mechanism does not work when you have so much money you don’t care what you pay for things. The worst is that our scarce real resources are being sucked into to ever more vanity projects, elaborate and investment housing. The steel, concrete, labour, wood, appliances, roofing, plumbing services all have alternative and better uses but we are too blinded by the dollar signs of our pretend wealth to see it.
Labour’s abrogation of duty opens the way for the next unconstrained speculative housing boom under National/Act.
To quote Hamlet
the native hue of resolution Is sicklied o’er with the pale cast of thought;
And enterprises of great pith and moment in this regard, their currents turn awry,
And lose the name of action.
Please–after 30 years of taskforces/treasury reports let there be no more time spent on futile comprehensive wealth taxes or CGT flights of fancy. And please, no more talk about a zero-tax threshold that is completely incapable of resolving pressing inequality issues.
Instead let’s have fewer excuses and some practical and immediate action.
Meaningful money must be redistributed from the top third to the bottom third. But we cannot stop there. Over and above that revenue must be found for large investments in the physical and social infrastructure.
Lets start with the broad base low-rate income tax system and make sure it actually is broad based by including the income from housing that currently escapes
- Beginning 1 April 2025, aggregate an individual’s equity held in residential real estate using current CV less registered first mortgages. After a $1- 1.5 million exemption, ($2-3 m for a couple) treat the equity held in housing as if it were in a term deposit at the bank generating taxable income. Terry Baucher and I have estimated that a 2-4% imputed income (Fair Economic Return) could generate an extra $3-6.6 b in tax revenue while affecting only the top end. Good landlords will find this approach relieves them of complex expensive accounting returns, others will have an incentive to rent their empty houses or sell them. Houses held in trusts unallocated to individuals and non-resident owners are taxed at the trust rate.
- Suspend the annual borrowing of $2.2 billion for sharemarket investment in the NZ Super Fund (NZSF) and divert that borrowed money into real investment in the next generation. Treat such spending as part of the capital account as is the current contribution to NZSF. It is bizarre that we believe putting this money into the fund makes it affordable to pay NZS to millionaires at 65 who are still in paid work; it does not.
- Treat NZSuper as a non-taxable grant and put superannuitants on a separate tax scale for those who opt in, to claw back $1-2 billion per annum from those high income, wealthy superannuitants.
Then immediately do the sensible cost-effective reforms to Working for Families (WFF) that would make a real difference to struggling families both on benefits and in low paid work. Fix the benefit system and relationship rules. Forgive student debt progressively for those who stay in New Zealand cancel MSD and WFF debt. Invest heavily in early childhood education, food security, disability sector, Māori and Pacifica health.
Direct the freed, real resources from speculative housing to the desperately needed investment in state housing , public health, high quality education at all levels, and climate crisis management.
A new slogan instead of a real plan is a cruel joke.
Interesting ideas. I would add a few more basic policies that should be restored:
• Restore the universal Family Benefit, at the 1958 real rate
• Immediately abolish the G.S.T., and abolish all tax cuts (return income tax to 1949 levels, and company tax to 1976 levels)
• Restore the social security payroll tax, and return all pensions to 1970 real-rate levels
• Raise incomes by re-orienting the economy back to high wage, high value-added production (reverse all tarriff cuts, return to state Industrial Plans and the import licencing system)
• Full Employment Policy to abolish unemployment once again, including a defined job guarantee
• Restore the I.C.A. Act with 1936 Amendment, re-enacting all industry awards, universal trade union membership & the 40-hour week
• I.C.A. Arbitration Court precedent would return the basic wage to the level sufficient to support one homemaker and three children
• Many abolished penalty rates would return once old industry awards were re-enacted
• Currency reset to restore sound money, returning to consistently falling prices (and protecting real income rates) — by restoring full convertibility to gold, at a fixed weight per dollar (in line with proposed new B.R.I.C.S. currency)
@ KR
Quick! Run outside! You need an urgent rush of oxygen to your brain!
Not often I agree with countryboy but on this occasion I do.
KR that’s complete nonsense.
The import license system lead to high prices and supply shortages .It was a licence to print money for those awarded licence.
We basically have full employment now as anyone who wants to work in all levels of skill can find work if they are willing to .
A wage set by a government department and not based on productivity leads to businesses going under or prices rising to cover lost revenue .The State run railway was a typical example of over staffing and ineffective work force . The problem was when the railway was privatised there was no oversight and the cuts went too deep and nearly destroyed it.
The state does not make a good job of running businesses but should be there as a watch dog to keep private businessse in line to safeguard the publics right to service at a reasonable price.
anyone can find work trev at below the minimum wage and a gig rather than an actual job….fancy it trev?
Great plan.
It will make NZ seriously competitive in a globalised world…….. how?
Care and/or fairness without sanity is a delusion or should that be an illusion?
Both!!
It is rather convenient that once the great powers already came to dominate world industry and finance, through decades of protectionism and subsidies — and thus providing them sufficient wealth to embark on social reforms, to placate the exhausted toiling masses — that they should suddenly then force Free Trade on all the weaker countries.
“It is a very common, clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him…
Any nation which, by means of protective duties and restrictions on navigation, has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness — to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth.”
— Friedrich List
The motive impulse of imperialism laid bare. It also might be worth a mention, just how this great power domination of global industry and finance is enforced.
And what happens to any smaller weaker nation that tries to get out from under this great power domination, and dares to assert its economic and political independence.
https://www.zinnedproject.org/news/tdih/jacobo-arbenz-guzman-deposed/#:~:text=On%20June%2027%2C%201954%2C%20democratically,committed%20widespread%20torture%20and%20genocide.
That sounds horrific. Unless… Can I have an import license please?
“The problem with socialists is that they eventually run out of other peoples money”
Maggie Thatcher
and the problem with maggie was she eventually ran out of and squandered the uk oil wealth on her crackpot schemes robbie
Which is a problem the squillionaires do not have eh…record profits are in effect unpaid wages to the worlds working class. Billionaire parasites wallow in “other peoples money”–until the majority organise to take it off them.
All wealth is created by human physical and intellectual labour applied to the worlds resources and technology. The class represented by Capital and Finance Capital appropriates most of the benefits because capitalism allows private ownership and armed enforcement.
Eco Socialism is the future, if you want one…
@ r etc.
The problem with neo-liberals like scum bag thatcher is they invent pearls of wisdom to create amongst themselves a buffer zone of logical fallacies to protect themselves and their minions from the truth and the truth is that they do nothing while expecting everything and if it means lying, swindling and deflecting responsibilities then so be it.
Yeah, Thatcher was wrong about lots of things.
The trouble with rampant capitalism is that eventually the peasants revolt and cut off the rich folks heads in the streets too.
Then replace them and do the same thing.
yup bob the lefty but at least we get a brief period of bathing in their blood and gore
Thatcher was the cause of many people needing welfare, with her policies and job cuts. Do capitalists not use other people’s money to make a profit?
The late and great Glenda Jackson pays tribute to Thatcher, 2 days after Thatcher’s death:
https://www.youtube.com/watch?v=BRqdQMlIiYc
Socialists don’t need other people’s money. A sovereign state can create its own money – out of nothing. The wealthy pretend that this is not true, so that the workers can be clobbered with (unproductive) interest payments.
Thinking that the party that introduced neoliberalism to No Zealand can somehow lead the charge towards dismantling it is patently deluded. Sticks and stones… when, not if.
“Labour’s abrogation of duty opens the way for the next unconstrained speculative housing boom under National/Act.”
This sums up the neo-liberal tag team.
The trouble was that the supposed threshold for the proposed Labour wealth tax ($5 million, excluding the family home) would have caught just about every farm in New Zealand, other than hobby farms. It would have also caught a large number of relatively small to medium businesses.
The Treasury estimated that 46,000 taxpayers would have been caught, which is around 1.5% of all taxpayers. But all taxpayers include just about every one over 16, including all those who are retired. If you take the key years for wealth creation and accumulation (40 to 65) and prior to retirement, where a fair bit of divestment to family takes place, then the percentage of taxpayers caught would be much closer to 5%, perhaps higher than that. Particularly if you only count those in work and in business. This is a much bigger group than the uber rich. It is not just the 5% actually caught, but also all those who are striving to get into that group.
The PM, by intuition and no doubt by solid research from within the PM’s Office, would have known the the wealth tax being proposed by Clark and Robertson would have caught virtually the entire farming sector and a very large percentage of small to medium business. By small to medium, I mean businesses that employ more than 5 people, not the sole traders where the business income is essentially the same as most middle income earners on wages and salaries.
Would Labour have any chance of serving the level of sustained political attack that the farming and business sector would have levied on Labour? The focus of such a campaign would not have been on the genuinely rich, but on New Zealanders that a large percentage of New Zealanders can have some level of identification with. Imagine a husband and wife in their gumboots on their 400 cow dairy farm, in a pretty normal house with their 10 year old ute. Hardly fits most people’s definition of rich, yet their farm, depending on location, could easily be worth $10 million.
oh wow wayne farmers would have to pay TAX on assets…clour me offended–not, bout time they chipped in
That is rich, Wayne.
In order to provide services, as per the social contract and allow the poor to manage, the nation needs money.
A tiny reduction in luxury to allow fellow citiizens to live a basic life.
If that creates any hardship NZ has services. For example, if surgery is required – and maybe an insurance payment was overlooked rendering the claim void – there is the waiting list in the public health system. Alternatively, they could pay – even taking a loan if the cash is not available. Something most of those waiting for the heaving and dysfunctional health system can’t do.
If representing the genuine needs of the poor threatens Labour’s election chances and it chooses instead the luxury of the rich, Labour is null and void. It is not Labour. It needs to end so it can be replaced by those who represent constituents and democracy itself rather than its own pointlessness and personal self-interests.
Yes, the productive sector is there (their’s?) to milk……… where did they go, where did they disappear to, “David Parker”?
Reality is difficult to contend with when one needs to move from feelings to creating a new deal.
We all know what we want but few have the guts to get us there.
Fairness to all or care to those who need care. Difficult choice, but this is our only option when we no longer believe in growth…..
Well said Wayne.
You must have noticed on this site how much the Left hate farmers?
Why?Jealousy?
And you would have noticed on this site how the Right hate lower to middle income earners, nurses and teachers etc.
Why? Don’t have enough money to donate?
that is exactly why the net wealth tax was never going to fly. The FER approach is very straightforard and based on sound economic principles. We start with housing– might include some selected other assets over time but TBH I dont care of the wealthy have money in farming or business or art or boats but I do care about the resources they tie up in housing.
I agree with you Wayne. I don’t think it was a particularly wise tax to consider in the first instance given that it targeted farmers who make up quite a large segment in New Zealand in business.
Farm wealth would generally comprise the value of the land less outstanding mortgage debt. After making that calculation I would think that many farms would not qualify for wealth tax.
Thanks Susan.
Labour have failed on every front and they deserve to go down. I cannot believe that a party that had an incredible mandate failed so badly. In the first 6 weeks there are many things they should have done, like increase benefits, stop stomping on those who are solo parents and those who haven’t got jobs. The results by now would show up as plusses for this country. There would be fewer kids and parents without food, fewer teenage pregnancies, there would be fewer in prison.
If you haven’t read the Spirit Level, do it now. This shows all the pluses if we have a more equitable society.
I won’t be voting for them, nor the Greens who have got hung up on pronouns.
Te Pati Maori – if we get it right for Maori we get it right for everyone. They want us out of 5 Eyes, what party has ever said that, not even the Greens. Their tax policy isn’t out yet but it will be a cracker, better than the Greens.
READ IT NOW!
So who are we gonna vote for? Fuck ACT& da NATZO they’ll make life worse for ordinary NZers even the smaller parties are full of shit!! The system is rigged always has been nothing gonna change even by changing the current regime.
Good one Susan. Thanks.
Our politicians are failing us. “In it for you” is so vapid, so vacant, so meaningless when the only thing they offer is failure.
There is hope in tax reform, justice reform, but democracy is waning, and SYSTEM CHANGE is necessary.
REM 1988: WORLD LEADER PRETEND “I built the wall, I will be the one to knock it down.”
We haven’t stopped building walls, they have just become virtual.
the labs are suffering blairite levels of mediocre lying
Ah Jesus. Too much!
All we have to do is beg for a royal commission of inquiry into the complex Kiwi world of after-the-farm-gate profiteering on a scale that’d make the Sicilian Mafia blanch with envy.
Farmer money literally built AO/NZ. Yes it did. I know, I know. You don’t like the thought of that. Well, get over it. Farmer earned money derived from exporting our world class farmer-grown goods to Europe and the UK etc literally built AO/NZ’s cities and their connective tissues that are our rural towns. Farmer money built the roading, rail and communications. Farmer money, once swindled, built our cities, our towns and our hyper rich who take as much as they can, and that’s quite a bit, and return nothing thanks to our IRD which is more corrupt than a high-rise full of futures traders on all the coke they can get.
The real reason why our AO/NZ’s faltering economically ( And by association our societies and communities ) is because the rich parasites, like all good parasites, just keep sucking. They’ll suck and suck and suck until all the money’s gone then they’ll fuck off to where ever their money’s lying in some tax haven and there, they’ll die of old age in fat, blissful arrogance.
We, in the meantime, must suffer from deprivation and hardship. I mean, someone’s got to pick up the tab, right? I promise you, the revelations of a public royal commission of inquiry into our politics and our economy spanning at least the last one hundred years would make your fucking eyes water. Aye Boys?
What you reckon of this, you scum bags.
The Paradise Papers.
https://youtu.be/r8mdNahdo4M
Farmers. No. Not you grubby natzo lickers but you! Yes you! Help!
The Guardian
“Invest in small farmers or world will face regular food crises, says UN agency chief.
Billions needed for water and soil conservation to boost resilience in small farms, says new head of UN’s agricultural financing arm”
https://www.theguardian.com/global-development/2022/oct/06/invest-in-small-farmers-or-world-will-face-regular-food-crises-says-un-agency-chief?utm_source=pocket_saves
Introducing tax free levels further put the poor into the realm of ‘people being carried by the hard-working wealthy’ ahem! They will say that ‘these people pay no tax and just take advantage of we taxpayers’ (while their accountants are spreading the word about what tax breaks are open to them).
This is how they think, those who are comfortable. 80% of them are totally self-centred and determinedly ignorant of how society works, and never think objectively. Such don’t-care people are not aware they belong to a class (wilful ignorance) and further, deny there are classes or if there are that there are high borders to surmount. We follow an economics developed by the upper class which in the USA mean that a few of their Presidents have not paid tax at all, quite legally.
CV is a terrible measure of equity in a house. My CV is 40% higher than the best price I could get on the market.
That would be paying tax on equity that doesn’t exist and homeowners would push back big time.
An index to reflect general price movements could apply annually between CV valuations
Capitalism fails again. Neoliberalism fails Capitalism again.
NZders IQ fails them. NZ’s politicians fail NZ society again.
The NZ political system fails to deliver again.
What can be learned from all of this?
Hurry up! The world could blow up in a nuclear War at any time!
The shits just got reels!?
New Zealand does not need taxes to create a better New Zealand. Certainly taxes are needed to reduce inequality in New Zealand and I think we should go back to the top tax rate of yesteryear – 68%. But we are a sovereign and can issue its own currency. I would recommend Chris Hipkins say that to himself every morning when he wakes up and every night before he goes to bed.
In my view there are three essential things.
1. Housing. A fixed low interest rate for 30 years for first home buyers.
a. A CGT on all housing except the family home.
b. A freeze on all rents
2. Health. The amount of NZ dollars(Chris?) needs to be greatly increased starting with the salaries of all our health professional initially to improve their lives but also to attract overseas graduates.
a. Government needs to pay GP costs. New Zealand dollars again Chris.
3. Education.. Once again huge increase in the salaries for all education employees. New Zealand dollars again Chris
a. More schools.
b. Lunch for all school children.
c. NO school fees
d. Increase in free school bus services in country areas
e. Extra free tuition for any disadvantaged children.
f. Limit of 15 children in a class
Last but not least to answer the inflation bogey. Freeze all prices for two years which will be reassessed as to whether it will be cancelled or not at the end of two years
Anything else?
While we need taxation of the rich to reduce inequality and in my view it should be at the old top rate of 68% it is not needed to run the Country. New Zealand is a sovereign country that issues its own New Zealand dollars. In fact I want Chris Hipkins to say every night before he goes to bed and again in the morning ‘New Zealand issues its own money and therefore can buy anything in that currency’.
In my view there are three things that should be done immediately.
1. Housing.
The government should create an institution that provides low interest rate fixed term loans in New Zealand dollars (Chris?) for 30 years to first home buyers.
a. Rent fixed for two years.
2. Health
Massive increase of New Zealand dollars (Chris?) into the health system
a. New Rural hospitals.
b. In addition a large increase in salaries for all health workers (New Zealand dollars Chris) this is not only to benefit our New Zealand staff but also to attract foreign graduates.
c. The government to pay for all GP costs. (New Zealand dollars Chris)
3. Education
a More schools
b. Class sizes limited to 15.
c. Massive increase in teachers salaries (New Zealand dollars Chris)
e. no school fees
f. More free school buses
g. Assistance for all disadvantaged children. (New Zealand dollars Chris)
All benefits to be indexed to inflation and wages. Tax brackets to be adjusted annually
To deal with the inflation bogey man all prices are to be frozen for two years and after that to be reviewed as to whether it should be continued.
Any other ideas?
Labour are about to announce their tax policy, let’s see if it will amount to more than Nationals tax policy of an extra $2 a week for the lowest income earners?
I think we need to remember too that the $20 per week was only if you had taxable earned income so many of the very worst off would get next to nothing
That says a lot about a party Susan and it’s supporters who state National will govern for ” all New Zealanders”.
But I guess that’s common knowledge.
Bert as usual you are confused.
Bob you continue to be boring, haven’t you got a child to kiddy fiddle somewhere.
This from no right turn.
” Last week, Labour chickenshitted out on a wealth tax, with Prime Minister (for now) Chris Hipkins ruling it out as long as he holds office (which sortof suggests a solution, doesn’t it?) But taxing wealth to build a more equal Aotearoa wasn’t the only thing they chickenshitted out on – they also refused to break up the rapacious supermarket duopoly which is robbing us blind. Why? Largely it seems because they’d get the blame if it went wrong, and so they’d rather let Foodstuffs and Progressive keep screwing us than do anything about it. And today, there’s the icing on the cake: a consultants report advising that the government’s current half-measures are ineffective and will condemn us to another 20 years of supermarket robbery: ”
http://norightturn.blogspot.com/2023/07/the-government-of-doing-nothing.html
Caught around his ankles mid change from short-term to long-term in the minds of electors. Parker and Robertson suddenly discover they’re ‘change’ politicians. After all this time (40 years) carrying coal for the rich can anyone ‘talk’ for the people and reality. Of course not.
But, unlike Yankland, we have room for a Leftie to come out of the blue. Not you ‘Left’ bloggers, who have bent far too much to present, vile, circumstances in passing.
I can’t explain how disappointed I am in our popular Left Blogs. Warped. Rather than the straight line to the truth I expect. And that is entirely clear.