Capital Gains Tax mooted; National, A.C.T. cry foul


Yesterday morning the Tax Working Group formed to assess the state of the tax regime and recommend appropriate changes, finally delivered its findings. The findings, whose recommendations included a Capital Gains Tax, and a plan to redistribute much of the tax take gained from the C.G.T. in a tax cut, have fulfilled a promise for comprehensive tax reform that was made at the 2017 election.

An announcement that was surely to upset National and A.C.T. did not disappoint in that respect. A.C.T. immediately announced its plan to ditch the C.G.T., labelling it Labours Envy Tax. National was equally unimpressed – somewhat hypocritically for a party that just had nine years to address the issue. That said, they did announce the tightening of rules around the taxation of profit from property sales in 2015.

National and A.C.T. however need to understand that there is more that a C.G.T. covers than just property. It covers the sale of stock, bonds and precious metals as well. The last one has potentially significant value as the value of minerals used in electronics, that are ditched without recovering the metals – especially rare earth elements – is slowly realised.

But is the C.G.T. really that bad? Is it really a tax in an attempt to curb the accumulation of wealth through honest means? Or is it to check the acquisition of property for wealth that one does not honestly have any real use for, but accumulated anyway? I think it is the latter, as no one, except maybe the Greens are suggesting that the family home, the fortress of every New Zealand family able to afford such a place should be taxed and nor should the estate inherited from deceased people.

I have not a problem with millionaires. A millionaire might have been something big in the 1970’s, but now a multi-millionaire or billionaire is more like the new millionaire or multi-millionaire. And if the wealth is the result of starting a business and turning it into a major revenue gathering machine, all I can say is well done. So, this idea that people hate wealth is not true. A better perception is that the left dislike the accumulation of wealth so obscene that it makes up half the total wealth in the world – we are talking about wealth accumulated by only a few dozen people.

And I am not saying a C.G.T. is fool proof either. It is not and – if it get it gets implemented – a range of opportunities will arise for National and A.C.T. to more credibly attack Labour as the C.G.T. is implemented. Whether it is just who is subject to it; how much they pay and so forth are good starting points and there will be others.

But right now when we do not even know if Labour will implement it or any other changes recommended, National and A.C.T. can go suck a lemon and contemplate whilst tasting its bitterness, how a bunch of people more familiar with the N.Z. tax code came to these conclusions.

In Mixed Member Proportional era we are still very much First Past the Post


In 1993 New Zealand voted for the Mixed Member Proportional (M.M.P.) system of representation to replace First Past the Post (F.P.P.). The historic vote changed how New Zealanders vote at the polls. It was an attempt to broaden the spectrum of political parties so that more fringe leaning parties such as the modern day Green Party of Aotearoa New Zealand and Association of Consumers and Taxpayers (A.C.T.) could be represented.The new system as it stood in 1993 was also intended to hold in check by requiring coalition arrangements with other parties, some of the more extreme policy.

But 22 years and 7 election cycles later, are we really an M.M.P. country?

If one looks at the range of parties that have existed in the M.M.P. era, one could argue that on the first count, yes M.M.P. has succeeded in doing what it was meant to. Since 1996, in one form or another a host of minor parties have existed and been part of coalition arrangements, or formed out of disgruntlement with bigger parties. They include the Alliance, Greens, New Zealand First, Maori Party and Mana, A.C.T. have all had time in Parliament. New Zealand First and the Greens as well as A.C.T. are the only minor parties currently in Parliament.

Outside of Parliament two notable attempts at creating brand new parties centred around well known figure or a businessman with a high profile have occurred. One is Conservative Party of New Zealand, which was led by Colin Craig and has contested the 2011, 2014 elections before Mr Craig brought himself into disrepute with alleged advances on his female secretary. The other is The Opportunities Party, which is run by Gareth Morgan, a prominent businessman who is perhaps better known for his crusade against domestic cats because of their predation of bird life. T.O.P. might have done better in the 2017 election had Mr Morgan resisted calling now Prime Minister Jacinda a “pig with lipstick on”.

Neither of these two external parties have made the 5% of the party vote threshhold or won an electorate seat to claim a space in Parliament.

And then there is New Zealand First. Originally the party that made National and Labour look nervously over their shoulders, the party that had the best policy platform of any in Parliament along with a charismatic leader in Winston Peters, New Zealand First are still in Parliament supporting Labour in this particular instance. However the brave policy making, the determination to stand on principle and the slow natural, but relentless aging of Mr Peters who probably has no more than one more term left in him if even that, is gone.

However, the state of the political parties these days is not entirely their fault. All have spent much time and effort trying to mobilise the youth vote where the 150,000 people between ages 18-24 stayed home in 2017 would have done much to swing results had they made the effort. And if one looks at the reasons, perhaps a lack of civics being taught in schools compulsorily, a loss of confidence in politicians or the system.

Of National and Labour though, even after 22 years, there is no doubt that these are still very much the right and left of New Zealand politics respectively. Never mind that there is a centrist party in New Zealand First, a Green Party and an advocate party for consumers and taxpayers. Even after all of this time – and some spectacular political fails along the way – none of them can do anything without the co-operation of National or Labour. Just like in 1990 when Ms Ardern and A.C.T. leader David Seymour were still at Primary School, Mr Bridges in High School, when Mr Peters was a National Party Member of Parliament.

Whilst the number of parties in Parliament has fluctuated considerably in that time, the thinking and the acting in an M.M.P. environment and rapidly changing world is still that of an F.P.P. Parliament.

 

Analysis suggests $28 billion loss if NZ oil and gas ban happens


An analysis of the intention to phase out oil and gas with no new exploration allowed, suggests that New Zealand might lose $28 billion IF the ban goes ahead. The ban, which was announced last year by Prime Minister Jacinda Ardern was meant to address the impact of carbon from man made emissions on the climate.

I say IF for a simple reason. At some point, National is guaranteed a return to power and possibly with A.C.T. as a coalition partner or supporting party. It is only inevitable that one or both parties or some other combination of centre-right parties will try to either overturn the ban, or so weaken it by indirect action that it is no longer a workable mechanism of reducing our man made carbon emissions.

The concerns I have about the likelihood of succeeding in completely winding up oil and gas exploration are matched by concerns about the feasibility of electric cars. Yes there might be a surge in the number of Nissan Leaf’s entering the market, along with new models from Toyota, Mitsubishi and Kia, but looking at the range of these vehicles, only two of them could make the 189km trip from Christchurch to Kaikoura even if they left completely charged up.

Other companies – namely Tesla, Renault, B.M.W. and Hyundai – offer vehicles in New Zealand as well, but the prices as an article on Stuff in October 2018 suggested are far higher. Who is likely to want to shell out for a N.Z.$59,000 Hyundai Ioniq EV? For that matter when one considers disposable income in most New Zealand households, who can even afford one?

The death hold Toyota Corolla’s have on the small vehicle market is growing. A hybrid version now exists, which is basically $38,500 and their very popular petrol version continues. Toyota also have medium size Camry’s, again with a hybrid option.

There is another problem too. Many New Zealanders simply don’t see the need for flashy complicated vehicles and as long as they can get cheaper ones that have had numerous owners and still run fine, then it is a losing argument on simple economic grounds.

Also IF this ban is to be effective, New Zealand needs a comprehensive plan in place to make this happen. So far all I have seen is Green Party chest thumping over getting the ban in place and a lot of hot air from National and A.C.T. about how the economy will be crippled whilst completely ignoring the environmental impacts. A New Zealand Energy Voices advert on Facebook promotes oil and gas.

 

National slumps; Greens-Labour could govern alone


The headline says it all – almost. A new poll out today shows National having fallen behind Labour for the first time since Labour lost office in 2008.

The latest Newshub/Reid Poll shows that Labour are up to 47%, which would make them the largest party in Parliament at 56 seats. That is the number that National currently hold. Combined with the Greens who are steady on 5% and entitled to 6 seats Labour could govern without its other coalition ally, New Zealand First.

All parties except A.C.T. shed seats to Labour in this rare instance. The Greens lose two, to become a 6 piece caucus. New Zealand First disappear completely and National are down to 50.

This must be sobering news for New Zealand First. It has been consistently under the 5% threshhold to have a presence in Parliament without an electorate seat. At 2.9% it would suffer an even worse defeat than that which was inflicted on it in 2008. Whilst the party has seen bad luck before, much of that was not of its making but the work of dirty politicking by other politicians. That does not apply in February 2019.

New Zealand First shed supporters, including myself after it supported the Trans Pacific Partnership Agreement. But other people left, expressing concerns about the internal state of the party, which has had to deal with dwarf throwing, the collapse of its South Island support and also the activities of Shane Jones. On one hand Mr Jones who is Minister for Regional Development is proving popular because of his work with the regional development fund, but on the other his refusal to allow cameras on board fishing vessels has sparked the ire of labour rights advocates.

It must also be sobering news for National. For the first time since 2008 it is less popular than its arch rival. At 41% it would get 50 seats in the House. Combined with the solitary seat of its natural ally A.C.T., it would have 51 seats and be well below the threshhold of being able to govern.

National find themselves in a difficult spot. Environmental issues have clearly become more important than many National Party Members of Parliament and their constituents want to admit. The worsening effects of having so much carbon in the atmosphere and in the sea is leading to an increasing pressure for comprehensive reform, except that neither party really knows how – and the Green proposals are seen as too radical and out of touch.

But it is National leader Simon Bridges who must find this most sobering. Mr Bridges has been over taken by Judith Crusher Collins in the preferred Prime Minister stakes. This will excite her fans on the solid blue right wing of the party. Ms Collins, despite her dismissal as a Minister of the Crown for corruption and links to the Oravida scandal, remains a darling of the right wing of New Zealand politics who are itching for a deeper shade of blue than what was offered by Messrs John Key and Bill English.

For Labour and the Greens though, this must be a welcome breath of fresh air. It comes after concerns about the slowing economy, the failure of Kiwi Build and the ongoing concerns about justice, health, among other things. Labour will be wanting to build on this as it looks towards the 2020 election.

Challenges facing the minor parties in 2019


The new year has begun and in a few weeks Parliament will be returning to our television screens. Members of Parliament will be coming back after the Christmas break refreshed and ready for another busy year. In this article I look at the achievements of 2018 among the minor parties and what to expect in 2019.

Association of Consumers and Taxpayers (A.C.T.):

The one man band of David Seymour can do only so much. A rebranding of A.C.T. is not likely to result in any significant internal change. Unless A.C.T. can get more than 1.0% in of the party vote at the next election and Mr Seymour holds his Epsom seat, A.C.T. will not grow. A complete dissolution of the party and starting over from scratch is not likely to help either because it risks losing the Epsom seat and destroying whatever replaces A.C.T. Mr Seymour, unlike the larger parties does have the advantage of being able to pick the battles that A.C.T. wishes to engage in, such as economics, charter schools, deregulation, justice and Mr Seymour’s pet “End of Life Choices Bill”.

Green Party of Aotearoa New Zealand:

To be a Green Party member right now must be one of the more exciting things happening on the left of the political spectrum. It is a chance for the social justice crusaders to make good on their promises of so many years, a chance to enact some Green policies. Priorities in 2019 will include pushing for a euthanasia bill to be passed in Parliament, which might find them in the rare and unusual position of supporting A.C.T. – politics can create strange bedfellows at times – in getting David Seymour’s End of Life Choices Bill through. It will also see more progress being made on the landmark announcement in April last year that New Zealand will be rid of oil and gas by 2020, which is something I am watching closely, not least because I do not believe that this is realistic given the economics of alternative energy sources.

Internally the Greens have a few challenges. Marama Davidson’s crusade to reclaim “the c word”, deserved the derision it got from all corners of the internet. I am sure Green party strategists must have shielded their faces from the sight of her making that speech. Attacking the Defence Force as it undergoes necessary equipment upgrades not only to pursue the many non military activities it assists in such as disaster relief, fisheries enforcement and search and rescue will appeal to the far left peaceniks, but not their Labour or New Zealand First colleagues.

New Zealand First

My old party will be proud of what it has achieved in 2018. Minister of Foreign Affairs, Winston Peters had a stellar year with an injection of funding for South Pacific affairs, and being able to meet numerous foreign counterparts. Minister of Defence and former soldier Ron Mark will be pleased that he was able to get one major Defence Force acquisition signed off. Minister for Children and Minister in charge of Oranga Tamariki, Tracey Martin also enjoyed a good 2018, being able to enact changesĀ  that were stalled by the previous National-led Government.

It will also be a year of major challenges. New Zealand First exists in Parliament because of a core of extremely dedicated party members and volunteers. However its internal organization is lethargic and at election time almost freezes, like it does not know what to do. It’s lack of emphasis on South Island members and electorates has seen many committees be abandoned and left to wither on the vine. Only one Member of Parliament is from the South Island. Addressing these issues will have significant benefits for the 2020 election campaign.

So, with 2019 now underway and New Zealand just waiting for Parliament to resume next month, commentators are waiting to see whether the proverbial dogs (National, Labour) wag the tail or the tails (A.C.T., Greens, New Zealand First)wag their masters.