The Spinoff re-published political commentator Bernard Hickey’s absolutely brilliant critique – actually a trashing – of PM Hipkins/Labour’s abandonment of any capital gains and/or wealth tax during their political tenure.

In a statement reminiscent (to a quasi-American) of presidential candidate George H. W. Bush’s 1988 – “Read my lips: no new taxes” – campaign pledge, Hipkins announced this week:

“I’m confirming today that under a government I lead there will be no wealth or capital gains tax after the election. End of story.”

It worked for Bush.

Contrary to its intent, Hipkins pledge will guarantee Labour’s loss this October. Because to its own core constituency, it reveals Labour ‘leadership’, insofar as that means Hipkins, is soulless and gutless.

Particularly galling is abandoning any wealth tax, arguably an ‘easier’ impost to implement and one polls indicate a majority of Kiwi endorse (Newshub-Reid Research poll in May – 53% support, 35% oppose).

As Hickey noted referencing Treasury pre-budget advice: “Treasury said it would have applied to 25,000 individuals (0.5% of the population) with $5bn in assets and raised $3.8bn/year by 2025, in order to allow the first $10k of income earned by all to be tax free: effectively a $1,000 a year tax cut for the 95%.”

Says Hickey: “The future of Aotearoa’s political economy will now remain frozen in its stagnant, unequal, unjust, unproductive and unhealthy state for the foreseeable future … 

“Any renters without family resources or strong prospects of marrying into wealth need to know they now have no normal pathway to home ownership for their families for another generation. Realistically, they should look to migrate to Australia, which has a capital gains tax that helps fuel higher capital investment, higher productivity, higher wages and a much better prospect of saving a house deposit after the rent (albeit high and rising) is paid.”

At least National and ACT have the balls to stand up proudly and transparently for their privileged constituency.

Whatever your political persuasion, I can’t urge you strongly enough to read Hickey’s full column here

If you lean to the right, you’ll applaud the skill with which he eviscerates Labour. If you lean to the left, you’ll be so angry that come election day you’ll either vote Green or not vote at all … in either event hopefully setting in motion a cleaning out of rubbish Labour politicians who stand for nothing.

Surely Finance Minister Grant Robertson and Revenue Minioster David Parker (whose study evidenced the extent of under-payment by NZ’s wealthiest) know that they’ve just acquiesced to pandering to the 0.5% wealthiest of the population. Shame on them!

Indeed, Hickey quotes Green co-leader James Shaw, who said it so well:

“For too long, governments have been tinkering at the edges – constrained by self-imposed refusal to tax the wealthy – instead of taking the bold decisions people need right now. If political leaders are not willing to take those decisions on behalf of the people of the country you purport to lead, then why be in politics at all?

Shaw continues: “I would argue that any party that stops short of promising to change the tax system so we can lift every family out of poverty is actively choosing to make life harder for thousands of people.”

Amen!

So what to do?

Hickey says: “Things can be done by those with the luxury and privilege of owning their own homes and believing the situation needs to change. I’m choosing to report the heck out of the situation and call bullshit on it whenever I can.”

I’d like to hear more from Hickey on his first point. And I’m squarely with him on the second.

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13 Comments

  1. One ‘solution’ could be for Labour to change leader (once again). It worked with Ardern. Parker anyone?

  2. Hi, I completely agree with your comments. In my opinion, Labour’s lack of courage discloses a serious lack of passion and effective political leadership and they will probably lose the election of because of it. I hope, even with the disruption it would cause, that he is replaced with someone who is willing to stand or fall representing those values – at least then, if the likely loss occurs, Labour then lives to fight another day.

  3. I agree and have written to the Hopkins Robertson and our local MP to express my disgust at this cop out action. Gutless is right!

  4. Its a shame, and yes, there are disappointments in Labour’s decisions in some areas.
    But would a National government give you what you want?
    Even less likely I think.
    Shall we aim to keep the gains Labour has made in moving the country forward in some important areas, or shall we take leaps backwards in those same areas?? Look more widely into other areas that don’t glean headlines.
    Don’t give the media the power.
    All the ‘politicking’ going on during the election run-up elicits great headlines.
    Weigh up the policies of the two main parties, as its one of them we will get.

  5. Five facts to consider. 1. The Government rules out a wealth tax that would have applied to 0.5% of the population( aka the most wealthy in asset terms) and generated circa
    $4Bpa. 2. The Government says it can’t afford to pay the full costs of additional flood protection and managed retreat so needs to cost share with local government for this. 3. There is a widely and treasury reported infrastructure deficit in Aotearoa pf over $200B
    much of which falls within the local government (and now 3 waters) domain. 4. The local government share of this infrastructure deficit and managed retreat costs will need to be paid by the ratepayer. 5 Rates are a wealth tax paid by all property owners regardless of their actual ability to pay, income or debt levels. Go figure.

  6. Much as I agree that we need a wealth tax, taxation is not the only problem. I would welcome an article in BayBuzz about the economy. Many economists are now refuting the conviction of neoliberalism that the economy must keep growing whether we thrive or not. That conviction lies behind the soaring inequality and biodiversity loss and climate change. How about it, Tom?

  7. Labour’s nuclear moment… how to blow up a government. sigh. But for all that, there are many good things they are doing that will be lost if NAct takes over. So, best to vote either Greens or Te Pati Maori to put some spine and guts back into Labour… and drag them to their senses, for our lasting benefit.

  8. Those of us you were interested in Jeremy Corbyn’s quest to lead Labour into government in the UK understand the incredible challenges a “real left” party faces in today’s landscape. Some journalist suggested his policies would turn away wealthy party donors, and asked if he didn’t want their money? Corbyn answered that he did want their money, but he want them to contribute to the whole country by paying their fair share in taxes instead of party donations.
    Corbyn was vilified by the corporate owned media (as well as the BBC) with lies and accusations (https://www.opendemocracy.net/en/opendemocracyuk/media-attacks-on-corbyn-show-he-s-threat-not-irrelevance/) and the Forde report (https://socialistworker.co.uk/news/forde-report-shows-labours-no-place-for-socialists/) gives insight how Corbyn was undermined by factions within his own party.
    Given such a landscape, a true left Labour leader would need to wear a sheepskin to stand any chance of winning an election.

    1. Pete, after Labour’s landslide victory in 2020 Jacinda Ardern’s “no capital gains tax under my watch” meant that Labour started to look like a Tony Blair govt walking the tightrope of trying to pander to the centre vote. Perhaps the current Labour caucus can convince Chris Hipkins he needs to do a personal “re-set” so the next government has the financial base to pay for their significant social policies. Let’s see what the rest of the team think.

  9. I’m absolutely gutted that Labour doesn’t have the guts to propose and follow through with policies that will really work towards ending poverty as we know it. But what’s the alternative? I shudder to think what National will do if it comes into power – vastly increase the jail population (for one), reduce taxes for their wealthy mates and donors, build irrigation dams in irreplaceable conservation areas, re-introduce petroleum exploration and extraction, increase mining of coal and precious minerals on/under conservation land (as Barbara Kuriger has already confirmed), promote the ever-expanding development of suburbia on prime agricultural land, re-introduce the three strikes legislation (via ACT), delay bringing agriculture into paying for their GHG emissions, and so on and so forth, ad nauseam. That leaves the Greens, Te Pati Maori and TOP, unless Labour still manages to pull an incredibly attractive rabbit out of the hat in the next few months…

  10. This doesn’t look right “Treasury said it would have applied to 25,000 individuals (0.5% of the population) with $5bn in assets and raised $3.8bn/year by 2025”. I doubt 25,000 NZ people have $5bn in assets each. I think that figure should be $5 million.
    If you’re talking envy taxes, people need to be sure how envious they actually are.

  11. It’s time we heard what the rest of the Labour team thinks.
    How on earth does Chris Hipkins think the Government will pay for the cyclone recovery now that he’s done an “own goal” and ruled out a fairer tax system? For the last three years David Parker and Grant Robertson have been researching a fairer tax system which would make the first $10,000 tax-free each year and fund a “Tax Switch” by increasing tax on earnings over $5 million. The recent report from Inland Revenue confirmed the findings of the Tax Working Group chaired by Michael Cullen, namely that the current tax system is grossly unfair. The General Election is the chance to gain a mandate for a fairer tax system so all the people who lost their homes from Cyclone Gabrielle will no longer be dependent on charity through no fault of their own. Pauline Doyle, Napier

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