Spiralling Inequality Proves National Not To The Left Of Labour – But Someone Arguably Is…

As some may be aware, New Zealand First’s official stance as applies David Seymour is to disregard the vast majority of what he says, on grounds that he is often axiomatically wrong. I’d previously considered this a bit overly partisan – even for me – noting Seymour’s strong contributions on both euthanasia and state compensation for those wrongfully imprisoned … but reading this weekend’s David vs Jacinda column, the reasoning for such a de-rigeur default position of disagreement with him suddenly snapped into incredibly harsh relief.

In Sunday’s piece, Seymour makes the utterly bizarre contention that National is, at present and in its modern form, to the left of the Labour Party. Now to be fair, this has historically been true on some occasions – in 1990, for instance, National campaigned on *rolling back Rogernomics* (before betraying the nation with Ruthanasia); and when it comes to the superannuation debate, we can sensibly argue that Labour’s previous advocacy for raising the retirement age placed it somewhat to the right of National’s (and New Zealand First’s) insistence upon maintaining it at 65. 

But none of this exculpates Seymour’s assertion from being anything other than manifestly counterfactual. 

The key piece of evidence which Seymour advances in attempted substantiation of his claim is that we’ve witnessed a shift in our nation’s tax base, which National are boasting about. Specifically, we now have a situation wherein the top ten percent of income earners in New Zealand pay more than thirty seven percent of this country’s income tax. And on the face of it, I guess you could naively presume that shifting the tax burden up the income-ladder so that the more well off pay more tax means that there’s some sort of deep and abiding commitment to progressive taxation up there in the Beehive these days. 

Except there isn’t. 

If anyone cares to remember, in 2010 the National Party made some fundamental alterations to our tax system – but they didn’t exactly make it more progressive. In fact, quite the opposite. They DECREASED tax rates for the wealthy, while INCREASING the regressive GST which we all pay (and which consumes proportionately more of lower income earners’ wages, because we don’t and can’t save as much). It also put a hole in the government’s books which has so far consumed somewhere over five billion dollars (there’s an approximate cost of $1.1 billion dollars a year in foregone revenue for the new tax levels) – but we’ll leave that aside for the moment. 

So if National decreased the proportion of their income which the wealthy pay in taxes … but the proportion of income tax paid by the wealthy has noticeably increased over the last seven years, then there’s presumably one very obvious explanation for why this has occurred. 

It’s simple – rising (indeed, skyrocketing) economic inequality. 

How else could rich people who’re taxed less wind up paying more of our taxes, unless either i) they were making a lot MORE to be taxed on in the first place; and/or ii) the other, ‘bottom’ 90% of us were making so much less as to cause a noticeable drop in the share of tax that we’re paying. 

And indeed, National’s own figures appear to somewhat bear this out. There’s been something like a twenty percent drop in the share of the nation’s income tax paid by the bottom 30% of our workers – which further substantiates the idea that those at the bottom of our economic pile are earning even less than before. 

Indeed, given the bottom 42% of New Zealand households apparently require more in benefits, tax credits and other economic support measures than they pay out in taxes to be able to survive from day-to-day and week-to-week, it seems pretty resoundingly clear that the rewards for any slow pickup in economic growth are being DECIDEDLY unfairly distributed. 

All of this fundamentally undercuts Seymour’s suggestion that National is noticeably or markedly to the left of Labour. For all its faults, it would appear fairly blatantly obvious that the last Labour Government didn’t preside over a situation of income inequality this bad. 

Although one further item caught my eye. 

Seymour cites John Key’s 2008 criticism of Labour’s last term in government being “communism by stealth”.

But when we think back to the sort of policies which might have earned Labour that particular sobriquet, I’m not entirely sure how many of them were actually Labour’s at all.

Consider: the 2005-2008 Parliamentary Term saw Labour and New Zealand First working together – during which time, we enacted such key and essential NZF initiatives as renationalizing several hundred million dollars worth of formerly private enterprise (in order to create Kiwirail); raised the minimum wage by an unprecedented amount (something like a dollar a year – while also effectively abolishing youth rates); opposed pernicious foreign trade deals; and delivered substantial personnel increases to both a key state service (the NZ Police) and a Ministry bureaucracy( MFaT). 

So really, when you get right down to it, what the Neoliberal Right of New Zealand politics were seeking to criticize about the last term of Labour when they derisively referred to “Communism by Stealth” … was actually New Zealand First core policy (meaning if there’s anybody whom Seymour should be criticizing for having a track-record to the demonstrable left of Labour … it’s probably not National, but instead New Zealand First). 

This theme was continued during the last Parliamentary term when a certain Government Minister (none other than Peter Dunne, if memory serves) referred to Winston as “The Hugo Chavez of the South Pacific” for the economic agenda which we wished to push forward from 2011-2014.

At the time, I took it as a bit of an unintentional compliment. 

In any case, and all things considered … Seymour probably isn’t the person deserving of scalding scorn and opprobium here. He’s being a bit contrarian in pursuit of a headline and rather intellectually disingenuous in pursuit of getting his point across. ‘So what’, I’m tempted to say. That’s basically what he does – and it’s mostly harmless in this instance, because the only people who’d possibly take him seriously in his assertions are those who’d presumably never dream of voting for Labour anyway (except in 1987 – when the Reds came perilously close to winning Remuera).

Instead, if you’re feeling any considerable ire over this (and really, you should be) … then it probably and presumably ought to be targeted squarely at Steven Joyce and the rest of the National Government. 

Not only have they created and presided over a situation of seriously escalating economic inequality in this nation … they have the utter temerity and arrogance to brag and boast about it as if it’s a key hallmark of ongoing economic progress. Madness! 

There’s nothing wrong with operating to the economic left of Labour. But it seems fairly patently obvious that that’s not what National are doing. If there’s any dyed-in-the-wool Cold Warriors out there in the audience, they may perhaps choose to disagree – but running a fairly broadly social-democrat economic policy is not supposed to substantially increase inequality by benefiting economic elites at the expense of just about everyone else.

That would be the economic creed of the Right Wing that Seymour’s thinking of.