How Labour can win the 2023 election

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Labour can’t win by being a neo-liberal lite version of National. The market economy fails and is failing and it is a mechanism that doesn’t let Labour help ordinary people because it simply doesn’t work that way.

Transformation is about changing the underlying assumptions and drivers in the economy.

For example, GST is a neo-liberal tax designed to shift the tax burden onto consumers/the demand side of the economy freeing the suppliers of good and services/supply side so they can invest in their business. It hasn’t worked because GST is extremely damaging to the economy.

Firstly, Keynes identified that the strength of the economy depends on the strength of the demand side. If you are heavily taxing the demand side you are taking away the revenue stream from businesses who are producing goods and services for the domestic economy. Small businesses in particular will struggle and the economy as a whole will slow. And presto, we see the effects of GST with New Zealand being stuck in a low wage, low growth economy (it’s really a low wealth distribution economy). And low tax rates for businesses but higher tax rates for individuals compound the problems that GST makes of stripping purchasing power out of the demand side of the economy.

Secondly, if the demand side is weakened, as GST does to consumer spending, then the financial incentives to produce a good and service as the path to wealth is weakened because the profits gained are weakened. Money then starts to look for another way to make wealth. And its done this. So the scarce investment capital starts running around looking for shares, bonds, land to invest in as secure wealth holding assets (that aren’t taxed).

Thirdly, GST also significantly undermines the ability of small firms, New Zealand based firms especially, to get a start because of how GST impacts demand. A quality locally produced good or service will tend to cost more, so GST as a percentage will have a greater dollar impact on a quality good or service in pushing it higher in price compared to a cheaper/inferior good or service. People see the higher dollar impact, not the % equality, because it pushes up their opportunity cost. This creates a comparative advantage for low quality and that often comes from overseas imports. And low quality just fills up our dumps with plastic poison. GST is damaging the ability of local innovators to sell domestically and get a start.

Fourthly, when the demand side of the economy/consumers have money they tend to spend locally. So removing GST should encourage local spending and smaller local businesses should benefit. The internet purchasing makes this a little harder, but again we can take actions on that when imports arrive. At cost handling charges could be applied to imports (checking for drugs and bio-security could be significantly beefed up and the costs fully passed onto these importing consumers) these charges are not tariffs but they could significantly impact the cost of those choosing to import directly over the internet. There are some other challenges but it’s a start.

Fifthly, and of course GST is a regressive tax. Get rid of it.

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This loss of GST revenue can be recovered through raising existing tax rates, or the options I have previously outlined of taxing gross income and defining income in legislation for a non-individual as simply income that ‘comes in’. I have discussed the exceptions previously. This in effect taxes capital gains to non-individuals.

Government needs money, the costs of climate change, our need for better sewerage treatment, for better drinking water. The impacts are huge. Is it really too late to retrace the decision not to have a wealth tax? It gives a real point of difference to National (but there were better tax options anyway).

Labour needs to stop using private enterprise services to deliver public services. Private enterprise has introduced some excessive salary expectations and the cost of providing a profit for the private sector is driving up costs. That cost of profit is rippling throughout the economy. For example, we need to remember the old electricity boards for years and years ran the electricity grid very efficiently on fairly low public sector salaries..

And National are hysterical in their reckless promises. National’s policies on restoring interest deductability for rental landlords will re-inflate the housing market as a secure investment. Gone will be any chance of affordable housing. Scarce investment capital will be take away from start ups.

If National can promise massive spending Labour can to. (Not that stunningly stupid light rail idea. Use the existing heavy rail systems and build huge amounts of government state housing around exisiting rail infrastructure. Even overseas young commentators on You Tube who love rail are saying the light rail in Auckland looks ill considered and trying to do too many things. Far cheaper as well to use existing).

40 COMMENTS

  1. Stephen – Only die hard Labour supporters trust Labour to deliver on anything…not enough to be Government

  2. As a Centre-Right voter, I endorse Labour’s adopting Stephen Minto’s policies for this and future campaigns.

    • Agree with you Ada. Someone needs to break the neo-liberal strangle-hold on our economy, if not Labour, who?

    • I also endorse Stephen’s suggested policies, but from the left.

      However, I don’t believe it is good for the country to encourage Labour by electing them for another term. We can’t afford to allow them to continue to pretend to be left-wing by coercing the electorate with the faux-argument that there is no alternative to neoliberalism and the harm will be slightly worse under National and its allies. This attitude locks us into the very settings that are causing the problems.

      I would add that we need the pull the rail lines further inland. Many of the lines are far too close to the rising ocean.

  3. These are all traditional Labour Party ideas (except for shutting down the nation’s 68-route tramway system, which was a creature of the auto industry lobby).

    However, union members need to start analysing what is actually going on inside the Labour Party, because the entire front bench would likely have to be sacked if these suggestions were to happen.

    The problem is, such reporting is seemingly impossible to find. Which factions still exist? Who in the Parliamentary Party is a member of which grouping, and which trade unions support which faction? Such changes would probably require a Momentum-type organisation within the Constituency Party branches, but are there actually any Corbynistas and Bernie Bros. left in the membership?

  4. With 6 years of non delivery on their election promises why would anyone trust this Labour Government?

  5. Another way Labour can win the election is to highlight how the coalition partner Acts polices will hurt the very people they claim to care about, working people struggling. Fair pay agreements are at risk as are all public health and social services. Increasing incarceration rates will require billions of dollars to be injected and the staff to man these new prisons and more immigration equals more pressure on our infrastructure. Then we still have to deal with the fallout when those imprisoned get out more likely to create more social problems.
    All political parties’ policies need to be costed and we need to know where the money will come from, and the workers require to deliver what has been promised.

  6. Unfortunately there is NO way Labour can win the election and anyone who TRULY believes that is delusional at best. This mob have simply pissed off too many of us. Shame on them.

  7. Chippies ridiculous captains call to shut down years of work on tax reform by his finance and revenue ministers has painted Labour into a corner. If all they can come up with now is some pathetic scheme to introduce gst exemptions then they are screwed and deserve to be.

  8. unless the nats fuck up big time(which let’s face it they are entirely capable of) lab won’t get in certainly not on their non-record

  9. Well at least our Judges are getting looked after and Arderns most transparent government ever bullshit has just been reinforced again.

    “The Government is refusing to make public a suite of taxpayer-funded privileges for the country’s judges.
    The judiciary has one of the most generous pensions in the public service, with their salaries padded by nearly 40%.

    But they’re also entitled to things like chauffeurs, housing allowances, and even subsidised school uniforms.

    The benefits are all laid out in what’s colloquially known as ‘the red book’ of judicial entitlements. The Sunday Star-Times asked for a copy – but the request was denied, with no explanation.

    http://norightturn.blogspot.com/2023/08/crown-laws-counter-productive-secrecy.html

    • Mosa. Subsidised school uniforms is unbelievable. Chauffeurs, fine, protects the innocent plebs from justice officials’ drunk driving; housing allowances shouldn’t be necessary, but school uniform subsidies is more sneaky salary padding and it reflects shabbily on the judges and their professional body – if they have one- acquiescing to such cheapskate-type perks.

  10. ” Labour can’t win by being a neo-liberal lite version of National ”

    Well Stephen its worked for them before.

    1999-2008 Clark Cullen.
    2017-2020 Ardern Robertson.

    Even after they refused to listen
    1990-1999.
    2008-2017.

    As Bomber keeps pointing out LINO somehow never is prepared for government with a program and that LINO are held hostage to the neo liberal system and its enablers and have just become another part of that machinery of privilege and control.

    Its no longer who really wins , its just which of the main parties can offer the market economies powerful interests uninterrupted stable government between elections and continue to manipulate ordinary Kiwis to accept the status quo.

  11. I suppose they could give away $2b to BlackRock Inc to set up a management entity to manage the FireSale of NZs National Power Grid ffs!

  12. To answer the lead question…by a military junta is about the only conceivable method I can think of!

  13. Nationals’ new cellphone policy is nannyism from a party that claims to be against this very thing. This is also hypocrisy cause if it’s alright for our farmers to make decision about their environmental practices it should also be good enough for schools’ leader to make their own policies. Luxon is dropping again in the leadership stakes it seems the more we see of him the less we like, and we all know how important and integral good leadership is. Also, if Luxon really wants to improve education levels he will need to pump more money and resources into teaching, it is as simple as that basic 101 economics.

    • Agree. It is the prerogative of the schools themselves to make decisions regarding cell phone use, not blundering politicians.

  14. Bribery! Plain and simple!
    Grant Robertson will need to fire up his Bazooka again with another $100b!

    Exclude the rich pricks and those under 18, and those that are ineligible to vote. Every eligible person that is a NZ citizen, not anyone that has residency will be entitled to the ‘Big Bribe!’

  15. Stuff.co.nz asks us; Why is Chris Hipkins so chipper?

    https://www.stuff.co.nz/national/politics/300948597/election-2023-why-chris-hipkins-has-been-so-chipper

    Stuff reports that Hipkins has sent an email to Labour supporters informing them to a big upcoming election winning policy announcement to deal with the cost of living.

    Stuff warns that if this policy is a “fizzer” that this will disappoint the Labour faithful, a guaranteed election loser.

    If Chris Hipkins big announcement is the already previously leaked removal of GST off food, then this policy announcement will most definitely be a “fizzer” and an election loser.

    This leads us back to the question raised by Stuff.co, Why is Chris Hipkins so chipper?

    There are three possible answers:

    #1 Chris Hipkins is chipper because he is about to announce a meaningful measure to address the cost of living crisis, more than taking GST off food.

    #2 That Chris Hipkins who is a multimillionaire is chipper because he is completely out of touch with the reality faced by the average New Zealander.

    #3 Chris Hipkins is chipper because he is finding being Prime Minister just too hard and is looking toward enjoying being in opposition.

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