It’s as potent as a shandy but wealth tax has appeal
New Zealand has five political parties in Parliament, ranging from the far Left to the far Right. That’s the official version, anyway. If you take a look at the allegedly far Right one, while it’s tinder dry on economic issues and contains a few gun nuts on its list, ACT indulges in little of the anti-immigrant rhetoric used by far Right parties in places like Germany.
You have to travel all the way into the centre to NZ First to find a party with a strong history of anti-immigrant sentiment – and even then its actions are far less than its words. Go a bit further Left and you will find the party that published ‘‘Chinese’’ names to demonstrate supposed foreign ownership of Auckland houses.
But what about issues like economics and taxation? I’m not sure there’s that much difference there, either. The economic policies of a real farLeft party – like France’s Left Party led by JeanLuc Melenchon, with its 100 per cent income tax on earnings over €360,000 a year – would make James Shaw quake in his Hush Puppies.
Our five parties have an unspoken consensus that corporate tax must stay low, that indirect taxes must rise and direct taxes must fall, that our crippling – for the poor – GST rate of 15 per cent must remain, and that corporate tax be modest. There may well be merit in some of these ideas, especially for those of us who remember Rob Muldoon running the economy like a Polish shipyard, but it’s interesting that in global terms, our five little parties aren’t all that different.
For many years the Greens called for a capital gains tax and when Labour finally had the courage to support it the party got spooked at election time and then couldn’t get it past NZ First. Not content to sweat it out in the hope that Winston Peters retired or didn’t make 5 per cent, our prime minister promised that we would never have a CGT under her leadership.
Let’s also remember that the savage social welfare cuts introduced by Ruth Richardson in the 1990 ‘‘Mother of All Budgets’’ were not changed by successive Labour administrations until National under John Key awarded them a modest increase.
There is an unspoken, and sometimes spoken, feeling among many New Zealanders that those on benefits are lazy and wholly responsible for their plight. Many Kiwis feel outraged when they see beneficiaries having children or eating fast food. This outrage is not limited to National supporters, whose former leader John Key said beneficiaries made ‘‘bad choices’’, but former Labour leaders and supporters as well.
Now that some airline pilots, restaurant owners, travel agency employees and other ‘‘hardworking New Zealanders’’ are among the unemployed thanks to the Covid-19 crisis, have Kiwis softened their punitive stance and accepted that some people become beneficiaries through no fault of their own? I’d like to think so but don’t see a lot of evidence.
Even more incredible is that if we look at the socalled conservative 1960s governments of Keith Holyoake in New Zealand and John F. Kennedy in the US, the wealthy were paying personal tax rates over 50 per cent. S o when we look at the Greens’ ‘‘far Left’’ wealth tax, we have to remember that it is a slightly Left-of-centre party big on the environment and with the Right-wing ‘‘realist’’ faction of its party firmly in control. To pay the Greens’ wealth tax you have to own an asset worth more than a million dollars. Even then you only pay a small amount of tax based on the amount over a million. So all those residents of leafy Wellington suburbs, mine included, can relax – especially if you co-own a house. Even if you own a million-dollar house and a million-dollar company, you’ll more likely be paying your accountant more per year than the wealth tax.
So what’s this maligned tax to pay for? A universal basic income of $325 a week. For many of us, living on $325 a week would be incredibly difficult. It’s hardly largesse. But already, there are howls of anti-socialist outrage not seen since Jim Anderton suggested a Kiwi-owned state bank might be a good idea – an idea that now even the National Party supports.
Though it’s about as potent as a shandy in global terms, the wealth tax will be good news for the Greens. It’s a tangible way to start to redistribute wealth and will appeal to Labour’s Left who might support the Greens in order to guarantee they pass the 5 per cent threshold.
Though the prime minister doubts the tax will earn as much as the Greens said it will – and I suspect she has a point – the policy is also good news for Labour.
Should it be re-elected, Labour can come up with a wishy-washy centrist scheme to address child poverty and inequality and when there are howls of outrage from the anti-beneficiary Right, Labour can say, ‘‘it’s very moderate – nowhere as radical as what the Greens were proposing’’.
Though it’s about as potent as a shandy in global terms, the wealth tax will be good news for the Greens.