Not In It For Them.

ByChris Trotter

OH DEAR, OH DEAR, OH DEAR, the political class is extremely displeased with the Labour Government. Against all responsible advice, the Prime Minister has announced the removal of GST from fresh and frozen fruit and vegetables. Who knew there were so many economists and tax lawyers in our unhappy little country? Or that they could all become so very cross on cue? We shouldn’t be surprised, though. Not really. A state so bereft of sensible tax policy did not get that way by accident. How many economists and tax lawyers does it take to prevent a meaningful redistribution of wealth? Now we know.

And oh, what a giveaway. All these middle-class objections. All these silly, cavilling, nit-picking political journalists. None of them able to see what’s happening right in front of their upturned noses. All of them arrogantly unaware of their starring role in Chris Hipkins’ shrewd political drama. If they realised that what they are doing is exactly what Labour’s strategists want them to do, I wonder, would they go on doing it? Probably. These newshounds have heard Pavlov’s bell ring one too many times.

So, what is Chippy’s cunning plan? Why is the sound of the whole Press Gallery criticising his GST policy music to the Prime Minister’s ears? Simple really. When Labour’s electoral base hears the media pack howling down a policy aimed at helping the sort of people political journalists wouldn’t be seen dead with, then they are even more disposed to give “their” party the big thumbs up.

The same principle is at work in relation to the condemnatory commentary of the economists and tax lawyers. They’re experts, remember, extravagantly rewarded shills who think they know best. And who, these days, trusts extravagantly rewarded shills who claim to know more about your world than you do? The more the “experts” criticise Labour’s policies, the more credibility those policies acquire. To paraphrase the old pro-MMP poster: “If you want to know why you should back Labour’s GST policy, then just take a look at the people telling you not to.”

A cynical and manipulative misuse of the post-Covid zeitgeist by politicians who have lost even the memory of their moral compass? Well, duh! How else would Labour’s critics suggest it recovers the political momentum it has so clearly lost? (Thanks Stuart. Thanks Michael. Thanks Kiri.) And, no, the answer has nothing to do with releasing the sort of policy that makes old lefties like me jump to their feet and cheer. We are a wasting electoral asset – fewer of us to cheer with every passing year. No, political momentum comes from announcing policies that you already know “your people” want. Call that cynical if you want to, but it’s a helluva lot better than announcing policies your supporters don’t want.

And, sorry, but if the word from Labour’s strategists is to be trusted (a big “if” I’ll grant you!) then a wealth tax and a capital gains tax both fall into the category of policies the average Labour voter doesn’t want. Chippy and his inner circle, ably assisted no doubt by Talbot Mills, “focus-grouped” the “tax switch” put together by Grant Robertson and David Parker, and the assembled “ordinary voters” are said to have given it the big thumbs down. God knows why. But, God’s not answering his cellphone.

So, what’s a government to do? It gets sneaky, that’s what it does.

When Nicola Willis told the world that Labour was planning to take GST off fruit and vegetables, my first thought was that someone in Treasury or the IRD had leaked it. Some dyed-in-the-wool neoliberal for whom the very idea of messing with New Zealand’s “pure” goods and services tax was an abomination. Some bureaucrat who thought that by allowing National to release the information early, the Government would be warned-off the idea by the vociferously negative response. But, now, I’m not so sure. Now, I’m coming round to the idea that it was actually Labour’s campaign-team that leaked the GST policy to National.

Think about it. Robertson’s and Parker’s tax package allegedly tested badly with the punters, so Chippy issued his “Captain’s Call” and pulled the plug. But, the polling agencies reported solid support for the idea – raising the possibility that Captain Chippy had made the wrong call. With Labour still needing to make some announcement on tax, someone needed to come up with a cunning plan – and soon.

In retrospect, the plan was better than cunning – it was brilliant.

Labour leaks its GST policy to National. National denounces it. The media follows suit. The Old Left decries the initiative as too little, too late. The economists and tax lawyers join the debate. They are not impressed. It looks as if Labour is on a hiding to nothing with its GST policy.

Except, while all this is going on, Labour’s pollsters are hard at work measuring the reaction of Labour’s working-class supporters to the GST off fresh fruit and vegetables policy. No focus-groups this time, but honest-to-goodness scientific opinion sampling. And, guess what? The poll data showed Labour’s electoral base loving the policy. They were all for it. Chippy and his team were on to a winner.

More to the point, all that negativity from the Nats, Act, the news media and, of course, the “experts”, hadn’t dimmed the party’s enthusiasm. Labour voters weren’t responding with their heads, but with their hearts. As far as they were concerned, Labour was doing something to help people like themselves: people without fancy degrees and six-figure salaries; people without mortgage-free houses and tons of money in the bank; people with no reason to like or trust the pointy-heads putting the boot into Labour’s plans.

Chippy’s and Robertson’s speechwriters got it. From now on, like Donald Trump, they would “love the poorly-educated”. Now there was no need to justify Labour’s policies to the economists and the tax lawyers, no need to fear the woke media pack. So long as the Prime Minister and his Finance Minister kept reiterating that they weren’t introducing the policy to win the approval of the “purists”. So long as they insisted that they were changing the rules for the benefit of “all those people out there who are doing it hard”.

Cynical? You bet! Socialist? Don’t be silly! But, you know what? It works. The louder the political class howls its disapproval, the tighter Labour’s voters close ranks around “their” party.

Who would have thought it was so easy?

Similar Posts

- Advertisement -

61 Comments

  1. Oh how I love David Seymour, let me count the ways. I’ve been lurking on this blog a while and thought I would post something on a concept that I’ve wondered about, the concept of trickle down moronic idiocy, straight out of the Trump playbook. The idiocy of wanting to reinstate tax deductibility on investment properties, because this would somehow improve the rental situation and help renters, oh how my heart goes out to that sentiment. And the Act party being against the removal of gst from fruit and vege, because, wait for it, it would mostly benefit wealthy people. Firstly everyone rich or poor, has to eat. And secondly, since when did Act want to avoid helping the wealthy. And if Act is so against helping the wealthy (eye roll), they should be against reinstating investment property tax deductibility, but they wont, because their logic is more supple than a top yoga contortionist. Helping rich landlords, somehow helps poor renters. Helping consumers buy fruit and vege, somehow harms someone somewhere, oh wait, it helps poor people less, and therefore must be bad. And you know the minute the govt changes, Act will get rid of the gun register and allow machine guns back into the country, and then will they revert to the upside down NRA argument, that more guns in the hands of law abiding citizens will reduce gun violence (FFS). Just as a refresher for anyone who graduated from kindergarten – fewer guns is what reduces gun violence.

    1. Destroying the Worlds simplist GST system to garner a few votes at the expense of many small business is shameful

      1. yep – should have gst altogether and implemented cgt, lvt and ftt. centralise local govt. and let the AI run the place. and luxon talks of wasteful spending. lol – he won’t cut shit except his own contributions to society.

    3. Nailed it Sue. I also note Luxon of Nazareth making comments about restrictions of foreign ownership of housing. But he wants to help local first home buyers of course

  2. Tweaking GST in this way does not directly help the poor, it produces a few dollars savings for everyone including those who don’t need it. Those who actually work with the poor claim that the poor would benefit much more by increasing the funding to the infrastructure that’s already in place – and that’s the green purchasing card system already administered by MSD.

    1. So people like myself and my family where our salaries mean we earn too much to have a community services card, meanwhile we struggle day to day to pay our mortgage and feed our two young children don’t deserve a little bit of support now and again?
      The best thing the Government did in the last term was the almost universal cost of living payment and universal half price public transport. Those two initiatives made a huge difference to our family and I am dreading when Metlink introduce the full fares on 1 September. Public transport is not cheap!
      The best thing the left can do to bring the centrist voters along with them is to make as many changes universal, so that everyone benefits.
      GST is a regressive tax that punishes low income kiwis the most. Any initiative to reduce the amount of GST paid overall will disproportionately benefit low income NZers the most, even though those on higher income also benefit, just to a smaller extent.

  3. You have more confidence in the Labour leadership than I do, I suspect that the best explanation for their actions is that they are out of touch about how real people think.

  4. It all depends how Talbot Mills or whoever surveyed voters, how those questions could only have one answer. The one Labour paid for.

    Labour aren’t clever, they are dishonest though and most especially retarded. The latest yesterday was their flagship immigration fast track policy is seeing victims of it royally defrauded of their meagre resources by charlatans posing as accredited immigration consultants or employers because of a deeply flawed unpoliced accreditation system. The system is so poorly thought out, it is breath taking and internationally embarrassing. But it’s premium Labour 2017-2023.

    So come this election all Labour have is clever politicking, burying information, slight of hand, get it out of the headlines but don’t fix it because they don’t know how and abysmally thought out policy, starting some time in the next decade.But the longer we as a nation live of the sugar diet these idiot politicians feed us the sicker we get.

    If it’s not transparently obvious by now to the average voter, Labour are useless, underhand and are not the answer. A mindless removal of GST on fresh fruit and vegetables is something that has a ton of negative consequences for virtually no gain is exactly the kind of policy and party you don’t want in government!

  5. A Trotteresque thought experiment…the fact is David Parker was on the outer after the IRD confirmed the inequity of the tax system which favours the better off.
    https://thespinoff.co.nz/politics/28-04-2023/bernard-hickey-and-david-parker-get-down-to-brass-tax

    Many people do support GST off fruit and veg despite the experts pile on this week, it makes a slight price adjustment and highlights actually eating healthy food!–what a terrible thing…

    Cap’n Chippy’s CGT/wealth tax call was disastrous, but perhaps not yet fatal in terms of a narrow electoral win.

    My thought experiment is if Labour/Greens/TPM achieve a narrow victory there will be a shift in the Labour Caucus if they can bring themselves to form a Govt. that supports the Greens basic income and TPM tax policy.

  6. In essence this article say that Labour’s base is financially illiterate. Something that has been obvious to the rest of us for decades. Because that’s why they’re poor.

    1. Good comment Andrew. Few if any business people would be Labour supporters of this current mob ascthey do not seem to know which way is up.

    2. The Joyce 11 billion hole and Key/English with their GST increase, income tax decrease that was supposed to be fiscally neutral but cost millions instead is enough to show that financial illiteracy is across all political party supporters

  7. ” How many economists and tax lawyers does it take to prevent a meaningful redistribution of wealth? Now we know.”

    As an economist I find this annoying. Time and again the politicians get presented with good advice from tax lawyers and economists.

    CGT

    Land value tax

    Lift capital per capita to grow real incomes

    Enable more housing to be built

    And time and again the politicians do what they will to get elected. They govern by focus group, so you get GST off fruit and vege instead of a land value tax.

    Don’t blame us for the incompetent waffle the spineless muppets the rest of you vote for spout out.

    You get the government you deserve.

  8. “Covid is gone” is another sloppy electoral ploy. It surprises me that Verrall shows her face in public. Had she and Logie never left Invercargill, the broader community would be healthier IMO. Best of luck to the health workers and all unwell persons.

  10. Chris draws a long bow here but may very well be right. Some recent Labour moves have also been so fundamentally stupid, undercooked, or negligent in the promotion dept that you basically have to pray there is some ulterior “strategy” that even Baldrick couldn’t come up with at play. eg deliberately driving voters to the Greens and Te Pati Maori in order to boost their badly needed electoral/coalition results?

    However the bigger challenge for Labour is getting these very Labour people who support taking GST off fruit and veges – especially those in the lower socio-economic areas that will most benefit – out the door to actually VOTE.

    The result of the recent Auckland mayoral elections springs to mind…

  12. Another good analysis Mr Trotter. Especially your comment- “Who knew there were so many economists and tax lawyers in our unhappy little country?”
    During the height of the covid pandemic who knew there were so many epidemiologists in our country?
    Perhaps the epidemiologists have metamorphosed into economists as that’s where the money is now.
    Further to your theory that Labour leaked to Nicola – In retrospect, the plan was better than cunning – it was brilliant.
    Keep it up. You’re getting better.

  13. Interesting CT. I think you are right about the Cause and Effect on this but my big question mark is over whether we really believe Labour has the smarts to pull this off deliberately or whether it is happenstance. I suppose the Chipster has been around a long time and will have picked up some things over the years.

    Pity that despite the GST moves they are still not a social democratic party.

  14. Labour strategists could be as smart as Chris suggests or they already could see they were losing voters to Winstons no fruit & vege gst. If it was the former they would have scrapped gst off all food or better still scrapped gst because it’s a regressive tax that cruelly hurts the poor more than the wealthy.

    1. The Removal of GST off Fresh Fruit & Vegetables has always been NZF _Policy since Adam was a Cowbqy !!!

  15. My first reaction was this is stupid to complicate GST. In reality its quite trivial as it’s only supermarkets and fruit shops who only need to change some parameters in their software. Going forward why not remove GST off all healthy food. No need for sugar tax.

    1. What about fresh fruit growers now being unable to claim back gst inputs on their products they have grown? All that fertilizer cost and diesel etc will just be added onto the cost of the fruit anyway and therefore not much difference in price.

      1. Where are you getting your information from you need to discuss this with your accountant.

    2. Their software will already handle variable gst rates per item, and as for what is and isn’t liable just copy what australia does they went through this debate years ago.

  16. But Chris your so called shill’s are right. The GST move is dumb in economic terms. Labour if they wished to help the poor could have down something more targeted with much much lower deadweight costs. Politicians are despicable people. “Party before people”is that how it is with Labour!

  17. NZ is not just anymore and too many people are getting away with appalling behaviour and ethics and the Labour government is spraying money around with no regard to how it is spent and controls on it.

    NZ justice! Pathetic $3000 fine for stealing from a Pacific Island Woman’s violence charity!!!

    “Sio was chief executive of the charity, which got $2.5 million yearly funding from mostly the Ministry of Social Development, the Ministry of Justice and the Department of Corrections.

    The pair stole about $260,000 with fake invoices from suppliers and authorising cash cheques to pay them. Sio and Uitime cashed most of these cheques for themselves.

    “Instead of using the funding given to the charity to make a difference to the lives of her community, Ms Sio abused her position of trust and responsibility to steal $44,000,” SFO director Karen Chang said.”

    Serious Fraud Office fines Betty Sio for stealing from Safety and Prevention Project charity
    https://www.nzherald.co.nz/nz/fraud-office-fines-betty-sio-for-stealing-from-safety-and-prevention-project-charity/FBKBN7ZLWBD2VC3UBSXCDEHKBM/

    Tired of seeing the slap on the wrist from our justice system and how much money is being redistributed to fraudsters from the taxpayer while victims get nothing.

  18. Very good Trotter ,the ‘peanut butter conspiracy’ is…spreading…will it be exempt from…G.S.T?

    1. The peanuts and the butter will be Exempt from GST, however the salt and the preservatives will not be GST Exempt.

      1. You’re so onto it. The trouble is with f&v is that it is a nightmare to properly police. And what abart the workers? The suppliers to s/mts can already be manipulated down for price, so how do we know what no tax would like like on this load of pears and heads of broccoli?

        Acsh I think GST should come off all food even cooked in pluto. restaurants. If people can be got out eating then the country looks prosperous and gummint can tax the restaurants in the ordinary way. Tourism and eating out are a main business sector. Keep them at it, make room for the little guys and give business a fillip and not just a fillet to those who can afford them.

  19. The Removal of GST off Fresh Fruit & Vegetables has always been NZF _Policy since Adam was a Cowbqy !!!

  20. GST should be reduced to 9% and the simps in the beehive should have their income cut in half, and let the audits begin! how ridiculous and annoying and impossible these middle managers are in NZ, it is a wall thicker than the great wall in China.

  23. I propose a closed leisure economy where everyone outside, pays to play. A nature reserve – where we all go feral – a few AI pleasure chips behind the ears will do it. Wet World.

Comments are closed.