Rail lines laid for Tax Working Group, its destination clear

It seems to me that the course on which the Tax Working Group is set to run travels in the direction of the capital gains tax Labour campaigned on.

When I was a political science undergrad at Victoria University, one of the best pieces of advice I ever received was to watch the old BBC series Yes Minister. According to the lecturer, the program was very educational on the subject of how government works. And so it has proven.

Take the episode in which Jim Hacker, the minister, agrees to support the sale of a building in his constituency. The purpose is to enable the local council to use the proceeds to lend money to a struggling soccer club. But because the building has heritage status, and the buyer wants to turn it into a supermarket, planning consent is required.

But this is not thought to be a problem. Despite its age, the building is not particularly notable from an architectural perspective and, indeed, is something of an eyesore. And while it currently hosts an art gallery, the paintings inside are about as mediocre as the building is. On the substantive merits, there’s a very good case for delisting.

All this is accepted by Sir Humphrey Appleby, the permanent secretary of Hacker’s department. Once he learns of the scheme, he is determined to derail it. The idea of the arts being sold out for the support of something as vulgar as sports horrifies the snobby civil servant.

In any event, there has to be an inquiry from the Ministry of the Environment into the requested de-listing. At the outset, Hacker is quite complacent in his assumption that the process will be totally impartial. Until, that is, someone explains to him, ‘‘railway trains are impartial too, but if you lay down the lines for them, that’s the way they go’’.

Sir Humphrey and Hacker enter into a low-level war to lay down the ‘‘guidelines’’ that will govern how the inquiry will be conducted and the identity of the planning inspector who will complete the report.

So it may prove with the new Government’s ‘‘Tax Working Group’’, which is to be charged with recommending changes to our system of taxation.

The marketing for this group is that it will be something like what is known in the United States as a ‘‘blue-ribbon’’ commission. Such groups are used to study and report on some vexing or technically difficult matter so that the Government and the people will have the benefit of an independent view free from the intrigue of politics. For that reason, members of the group are usually experts in their fields, free of party political connections.

Such committees may not be as independent as they are marketed, of course. They can be used to allow a Government to cloak its decision-making with a veil of nonpartisanship. This is particularly so when the railway tracks have been laid by the appointing Government to ensure arrival at a certain destination.

It’s probably too early to say that the new Government’s Tax Working Group will perform this function, but there are grounds for concern. The appointment of Sir Michael Cullen, who was the minister of finance in the last Labour Government, hardly screams ‘‘non-partisanship’’ or ‘‘independent expert’’.

But the biggest hint lies within the terms of reference. The Tax Working Group is apparently charged with assisting the Government to achieve its aims of creating a system that is ‘‘efficient, fair, simple and collected’’ and treats ‘‘all income and assets in a fair, balanced and efficient manner, having special regard to housing affordability’’.

But, in looking into these matters, some things are off-limits. For example, the Tax Working Group will not be able to look at increases to income tax or GST, the reintroduction of death taxes or any taxes that would involve ‘‘the family home or the land under it’’.

Perhaps I am too cynical, but it seems to me that the course on which the Tax Working Group is set to run travels in the direction of the capital gains tax Labour campaigned on in 2011 and 2014. Professional services firm EY seems to think so, saying that ‘‘there is a risk the TWG will be captured by interest groups and concentrate unduly on capital gains tax design issues at the expense of radical blue-skies thinking or economic efficiency’’.

After the 2014 election, Labour dropped a capital gains tax as formal policy. It was too controversial and politically difficult. After being selected as party leader, Andrew Little said that the policy was one of the reasons why people weren’t voting Labour.

But if an independent panel of disinterested experts were to suggest such a tax – well, that would be different, wouldn’t it?

Anyway, the Tax Working Group leaves the station in a few months. The estimated travel time is about a year. I think we can hazard a guess as to the destination.