Key admits to doing less than a half decent job
Apparently from Key’s speech:
Ruled out: Land Tax, RFRM (risk free rate mechanism), Comprehensive Capital Gains Tax (note – this could still mean some sort of CGT), Major changes to Working for Families
Still on the table: Increasing GST to 15%, Cutting top tax rate and other tax cuts, Some sort of property tax.
So of the three potential major streams of revenue to pay for tax cuts for the rich, they’ve gone for the one that hits the poor hardest and that their mates (farmers, property developers, investors) didn’t complain about. How utterly predictable. How typically National.
Especially interesting seeing as during the 2008 election, John Key ruled out raising GST, as the Herald reported back in October of that year:
“National leader John Key said told (sic) a press conference this morning that if National is elected and does a “half decent job” at growing the economy, then increasing GST and the top tax rate will not be necessary.”
I’m no big city logician but by his own account, does that mean that Key has done less than a “half decent job”?
[Update: the above is confirmed, full text is here.]
The ball game is well and truly back on
Over at the Standard Marty G says:
What a remarkable turn-around in the mood of the Left the last few weeks. People are seriously talking about 2011 as winnable. Key’s spark is gone, the media have said ‘enough grins, John, time to actually do something’, Phil Goff suddenly looks much more like a PM in waiting, and his speech, when you see it for what it actually is – the policy/strategy plan for the remainder of the term – has given Labour supporters something they can really get behind. I haven’t seen people this positive in years.
I would tend to agree. When people asked me about Labour’s hopes for 2011 in the months after the 2008 election I would have said that they probably didn’t have a chance. National had just cobbled together what looked like a cunning balance between the Māori Party and ACT, where no single tail could wag the dog.
It was a seemingly genius arrangement that allowed them to play each of their governing partners off against each other, while they would always look like the moderate sensible mediator.
What’s more, the economy was terrible and no one blamed National. Every month their polls just kept going up, while newspaper editors the country over were talking about a three term National government. Meanwhile, Labour was battling hard to just be heard, let alone have anyone agree with them.
And Key really did seem like he might just be a leader, like he might just do something bold, something outside of the tired and predictable National play book of the 1990s that would truly benefit New Zealanders. I, like many Kiwis, was willing to give him the benefit of the doubt.
Fast forward to February 2010 and the game has really changed. National’s record stands at cancelling middle-class tax cuts and superannuation savings, halving kiwisaver, an announced but undelivered cycleway (to nowhere), increased ACC levies and cuts to its services, cancelled adult education classes (to find extra money for those struggling private schools – you know the ones, with NBA standard basketball courts!), hoisting a flag whose logo appears uncomfortably similar to that of the Maori Party’s all over government buildings, and some talk about mining the conservation estate. Hardly ambitious, more like depressing.
Then along came the Tax Working Group and with it an orgy of suggested new taxes to slap on the middle class, none of which were ruled out. Even just talk of new taxes is bad for the government, hence why Mr Key will probably (hopefully for his, the country’s, but not the opposition’s sake) rule out a GST increase tomorrow rather than letting that cancerous stick continue to be used to beat him.
All in all, the shine really seems to have come of this popular government and I fully expect the polls, particularly as the year progresses, to start to reflect this. 2011 is no longer a forgone conclusion, and the more the Labour leader realises this, the more forceful and energised he will become. We’ve already started to see it with his speech ‘the many. not the few‘ delivered two weeks ago in Hamilton.
Economic Benifit of the RWC…?
Remember when the British and Irish Lion’s came to town? They closed Courtney Place, and we all had a party? It was awesome, and I hope next year’s Rugby World Cup will be somewhat similar (although now living in Auckland, I’ve come to the realization that no one does a party quite like the Capital).
I was somewhat intrigued by this frontpage article in Saturday’s Herald:
Home available for World Cup – for a cool $120,000
Orakei resident Danny Gelb plans to rent his 454 sq metre house out for $120,000 for the two months of the Rugby World Cup. I find it mind boggling that someone would have $120,000 to spend on a two-month holiday in New Zealand. I don’t think I know anyone that could realistically afford that, but then, Mr Gelb is obviously reasonably successful at whatever he does for a living (a google search would suggest he’s a commercial mediator), he probably knows this market pretty well, and I suspect is hardly pitching it towards the domestic punter (even if the Herald was giving him a prime weekend advertising spot). If he is able to pull this off, good on him I guess – I wish I was in a similar financial position.
But it made me wonder how much the economic benefit is going to be shared around the rest of New Zealand. The Herald puts the economic benefit of the Rugby World Cup at $1.15 billion, but how much of that is going to trickle down to the working class? Or those living outside of the major centres? I seem to remember pub owners on the main road between Auckland and Wellington setting themselves up to accommodate the influx of English camper vans that were going to visit them during the Lions tour – many of these pub owners where incredibly disappointing when the influx never happened. You have to wonder whether the World Cup will bring a similar result.
And for those lucky enough to secure the high-rents like Mr Gelb is hoping, how many of them are going to spend the aditional money in New Zealand, and thus helping to stimulate the economy? Not Mr Gelb – after paying for a host, chaufeer and a chef and filling the Merc with petrol, Gelb will be taking his wife and three children to Europe for two months.
It’s great that New Zealand is going to be hosting the Rugby World Cup. It is our national sport, and will bring economic benifits. But let’s not get carried away about expectations, as reality may not be quite as rosey.
UPDATE: As an aside, I’ve just read David Farrar’s post about the threat of the Sevens coming to Auckland. God, Auckland would be brilliant for the Sevens… if they’d built the Waterfront Stadium. Holding the Sevens at Eden Park or Mt Smart would be a fizzer. Keep it in Wellington.
Youth criminal unit closure plain stupid
The decision to cut the funding to a massively successful youth justice facility in Hamilton, Te Hurihanga, just weeks after announcing support for a three strikes sentencing policy is the kind of decision we would hope not to see but may come to expect from the supposedly ‘centrist’ National-led government. What’s more, that the Māori Party can stay in support of this government after such action is a blatant insult to their supporters.
The Justice Minister, Simon Power, on Monday trotted out dodgy figures to soften the landing for this funding cut announcement. He said the programme cost over $600,000 per person, where really it was closer to a quarter of that sum. A closer look showed that he chose to divide the total spend on the project, buildings included (a one-off cost), by the amount of people who’ve graduated, thus ignoring the many more youths still in the program or approaching completion.
The real figure (still including a stack of costs for establishing the thing, which are not ongoing) is closer to $170,000 per youth. What a difference the political spin makes. One figure makes the thing sound pretty damn expensive, the other quite reasonable. You see, prison costs the taxpayer about $100,000 per person per year, and that doesn’t even begin to factor in the costs of crime to victims, the Courts and other social service providers like the Police.
These youths, none of which have re-offended since graduating the program, had each recorded dozens of offences before entering it. They were becoming hardened criminals. But not since. This is simply an astounding result, which we should be celebrating by rolling out this program all over New Zealand. So why on earth cut it, like National just has? Was it because it was a success story of the last government’s slightly more progressive approach to corrections and justice policy?
Or was it because Minister Collins needed a few spare extra dollars for the over priced PR exercise that is shipping container prison cells, which aren’t even cheaper than building normal rooms – they just look tougher on crime? Or was it that Mr Power forgot that Māori make up over half of the prison population (and that three-quarters of those have their first prison sentence before their 20th birthday) and that targeted programs that actually work for Māori youth offenders are probably the single best thing the country could be doing to reduce crime?
That the decision to cut this proven-to-work youth criminal intervention program was made by a Justice Minister who we know has at least half a brain, is simply depressing. That it came a few weeks after a three-strikes policy was announced to placate the ACT party, which will probably have the unintended consequence of leading to more rapes and murders (in prison) because without the possibility or parole life-timers will have absolutely nothing to lose, is depressing.
That we are not in a position yet, as a society, to see that the fence at the top of the cliff is preferable to the ambulance (or more fittingly, the howling mob) at the bottom, is depressing. We can do better.
Goff speech hits mark walloping bludgers at both ends
National have couched most of their decisions in office thus far in terms of the recession: belt tightening, constraint, cuts here, cuts there, just like the ones ‘mums and dads’ are having to make around the kitchen tables of New Zealand. Labour realises that undermining the overt ‘need for constraint’ message is key to undermining National’s supreme popularity in government, and their ability to cut public services without paying any political price.
In his State of the Nation speech delivered to 250 odd Hamiltonians (myself included) at the Ferrybank lounge, titled ‘The Many. Not the Few‘, Labour leader Phil Goff reminded us that the world was now out of recession, “the IMF says the world economy will grow by 3.9 percent this year, lets call it 4 percent” he said, and that “hard-working kiwis must share in that recovery”. Naturally, he linked this message to the Tax Working Groups recommendations and the Nat government’s likely response to it, that is, a GST increase in return for a tax cut for the “wealthy elite”. His claim that Labour would oppose such a GST increase was met with loud applause.
For me, the most interesting part of the speech concerned ‘hitting bludgers at both ends’. Goff started off by blasting finance company bosses who screwed over the life savings of little old ladies while sheltering their own personal wealth from the losses incurred by their company’s. Interestingly, here he refereed to the 50% of the wealthiest 100 kiwis who are not even recorded as paying the top tax bracket (because of avoidance), which was actually a tactical devise employed by the right to justify getting rid of the bracket.
Next he walloped the well publicized and much hated ACC and beneficiary abusing cases (the guy on ACC with a sore back for five years who was videoed moving large boulders while landscaping his back yard, and the Christchurch white-supremacist gang family who’ve been on sickness benefits for 20 odd years because of ‘marijuana addiction’) saying that no one, weather on the top or the bottom of the heap, should be shafting their fellow hardworking kiwis. This double ended attack on bludging and corruption can only be a win win. I can’t imagine anyone, perhaps apart from those specifically under attack by Goff, disagreeing that something serious really needs to be done here.
Of course, the thing that most titillated Guyon and Garner’s gaggle was the Public Service Chief Executive pay cut bit. In terms of the politics of it, well its a healthy little bit of populism that won’t warm anyone, so why the hell not? (heck its good enough for the British Tory’s!) I’ve always thought that 500-600 thousand dollars a year seemed like an awfully large amount of money for any one person to receive as a salary, especially when that salary is being paid out of taxes.
People enter parliament or public service leadership positions because they actually want to serve. Foreign Affairs Secretary John Allen, for instance, gave up a salary of $1.2 million at NZ Post to serve his country (he took a pay cut of $600k for goodness sake). If you want to be filthy rich you best do it some place else and without public money, thank you very much.
And frankly, while were bagging on public sector CE’s. I just don’t buy the ‘oh but they will go to the private sector if we don’t pay them heaps line’. Show me the private sector (in Wellington) that is looking for an extra 30 executives to pay a total of 15 million dollars plus per year. It doesn’t exist. Of all the folks living in Wellington that I know, the wealthiest ones work in the public sector (Senior Advisors on nearly a hundred grand or Senior Managers earning double that). But they’re not all through the wider state sector, not by a long shot. God knows the staff of Radio NZ aren’t in danger if becoming millionaires any time soon.
Basically it was a solid speech, which had something for everyone, laid out a clear path and a clear attitude for Labour in 2010. I got the feeling that the journo’s present were impressed by it too. Those wanting to know where Goff and Labour stand on the big issues have no place better to look.
For further reading: here’s vernon’s, danyl’s, farrar’s, eddie’s & lew’s takes.
Kaine Thompson on Labour’s future
There is a very interesting post on Grassroots Labour by former Beehive staffer Kaine Thompson.
Kaine, who clearly has had some serious conversations about the decisions Labour has made in opposition, goes out on a limb and puts it all together in this blog post, which he admits may alienate him from some or ‘come at a cost’.
Good on him. It’s well worth a read.
(Hat tip: Trevor)
GST increase would end honeymoon in minutes
Prediction: If National raise GST at Budget 2010 and Labour oppose it (which they will), National and Labour will be polling neck and neck by this time next year.
There is actually a decent chance National will increase GST because it’s the one tax, unlike capital gains and land, that their base would accept in return for a top-tax-rate cut.
However, it is the one tax increase that everyone will notice, everyday, every time the swipe their Eftpos cards.
Herald on Labour and Ratana
Today’s Herald Editorial opens: The Ratana Church has made its expectations of the Labour Party very clear. It wants four Ratana candidates for winnable seats on Labour’s list at the next election. It is a demand the party cannot meet.
Indeed. If 8% of Māori report Ratana as their religion, they keep getting snotty at you while praising your political opponents and they demand a bunch of reserved list places for their mates, why bother?
New tax regime could be ‘equality neutral’
The release of the Victoria University Tax Working Group (TWG) report has been met with mixed reactions. Business NZ don’t want a land tax, are concerned about a Capital Gains Tax, but wholeheartedly support dropping and aligning the top income and business tax rates to 30 percent.
The CTU and the Greens don’t want GST increases but are happy to see taxes on property investment. Labour welcomes the report but urges the government to take quite seriously its equity implications, for fear of hitting the ‘hard working middle class’ who own property but wouldn’t benefit much from the income tax cuts, all while National doesn’t want us to get our knickers in a twist, saying “there is plenty of time for debate”.
The possible implications of this report, if its put into action, are huge, both in terms of benefits and risks. If the bulk of the recommendations were implemented this reform would approach in magnitude the neo-liberal reforms of Roger Douglas in the mid 1980s.
The genius of the TWG report is that it doesn’t prescribe a set of specific rates and cuts, but merely provides a guide for where change ought to occur, based on what they, rightly or wrongly, think is ‘wrong’ with the tax system.
In short they suggest cutting middle and higher income taxes to 30 percent, and paying for this with a Land and Capital Gains Tax. They also suggest GST be increased from 12.5 to 15 percent, although the money gained through that measure would likely be almost soaked up by the ‘equity provisions’ required, say through a tax-free threshold, to ensure such an increase didn’t hit the poor too hard.
Interestingly, the TWG’s suggestions could, if implemented ‘fairly’ be a) revenue neutral (ie they would create the same amount of tax revenue for the government as the current system does) and b) just as progressive, or fair, as the current system.
Cutting income taxes (especially the top rates) would advantage the wealthy, but a Lands and Capital Gains tax would disadvantage them, as they own the bulk of such assets. If the levels of tax cut and new tax were set right, the balance could be such that the average wealthy person would be no better or worse off than they were before.
The same measure could be applied to the average middle class and poor person, although I imagine a tax-free threshold for income tax would be required to offset the Land and Capital Gains Tax losses by the middle class.
It is possible for this entire exercise to be ‘equality neutral’ in that the gaps between the rich and poor are unchanged, and this is the challenge*. If this balance was met the advantage would be a more efficient tax system and a faster growing economy, without an obvious downside.
I have serious doubts however, that National would keep all this in mind with their changes to the tax system. It is more likely that they would abandon the Land and Capital Gains aspects of this plan because they are ‘politically difficult’, while using the TWG report as a good excuse to cut income and corporate tax rates.
*Personally i’d have no problem with a system that redistributed more wealth from the haves to the have-nots, but I realise that is not politically possible, especially under a National government.
Are the Greens back on message?
Interesting, in the light of posts like these, to hear Metiria Turei on Radio NZ’s Summer Noelle this morning honing the Green party’s social equity messages.
When asked to summarise the year’s priorities she said words to the effect of “continuing to push our Green New Deal (which is the Green Jobs stuff) and focusing on eliminating poverty in New Zealand”.
When given the chance she stressed her working class collectivist background and strongly refuted the claim that the Green Party had abandoned representing the poor.
Sounds like there has been some good thinking over the summer and that the Greens realise how important the social issues are to their constituency, and how little they have to gain from ‘preparing themselves’ as coalition partners for a future National-led government.
Whanau Ora could provide Labour opportunity over National
The only hit National really took in the polls last year, if you could even call it a hit, was a mixture of some bikey and ACC backlash mixed with the suspicion over concessions to the Māori Party around the Emissions Trading Scheme (ETS).
Worse for National, it created a deeper story that Labour could begin to tell: Enter Goff’s Nationhood speech, which while derided by some on the liberal left as dog-whistle politics, succeeded in consolidating the meme that National was ‘in bed’ with the Māori elite (the big forest owners of Ngai Tahu in this case). This meme continued to slow cook over the summer months and could boil into action later in the year.
This year will see the Māori Party trying to progress its Whanau Ora policy platform which could see Vote money from Health, Education, Welfare and Justice, flow directly to Māori providers (the Whanau Ora Taskforce is about to complete its cycle of report backs to Ministers).
Ms Turia, in June last year called it “the way forward to achieving a future where whanau determine what is in their best interests.” So it will be very interesting to see what actually comes out the process.
What it could mean for Māori wishing to continue to use the services of the ‘mainstream’ public hospitals, schools, courts, prisons, etc I’m not sure. After all, we can’t carve off 10-15% of a department’s budget, give it to some other provider and then continue to offer the same public service on less money, should 10-15% of the population choose not to head off to the new provider.
Intellectually, Labour should have no problem opposing the large-scale devolution of public funds to what may essentially be private providers, who may or may not be as accountable to Ministers as their competition, we shall see. Labour after all is the party of a large and centrally controlled state sector.
So when the Whanau Ora legislation hits Parliament for debate, if it ever gets that far, you might well expect Labour to oppose it, and in doing so they wouldn’t be engaging in opportunistic dog-whistle politics, but staying true to the party’s principles.
The flip side though is that if Labour goes on the attack over Whanau Ora (and National’s support of it), the same accusations that were laid after Goff’s Nationhood speech will again rear their ugly heads. Can, or will, Labour handle that fallout? My bet is they will.
Greens environmentalist only message banishes them to obscurity
2009 has been a bad one for the Green Party. Opportunities have been cropping up left, right and centre (excuse the pun), but the Greens have, as the NZ Herald’s political columnist John Armstrong put it, “been missing in action”.
Things started to go south for the Greens when one of their most effective troopers, Sue Bradford, announced she was stepping down as a direct result of her not being elected to the party’s co-leadership. Instead, the younger and less divisive Metiria Turei got the nod.
Unfortunately for the Greens, Met has failed miserably to improve her party’s fortunes and is now widely seen as having underperformed in the role so far.
Labour’s seemingly tactical abandonment of the role of chief cheerleader for identity politics (in an effort to recapture the bluer-collar Waitakere man) created a political vacuum in the liberal-left sphere, but because of the Green Party’s desire to the ‘environmentalist’ party of the centre, like that of the German Greens, that and other chances went wanting.
The Green Party wanted to work with National. They even signed a Memorandum of Understanding on the subject. A few months later… they had to scrap part of it. What a debacle.
The retirement of Jeanette Fitzsimmons, expected to be before the 2011 election, will be another blow for the Party. Jeanette is the intellectual brains trust of the Green movement in New Zealand.
When it comes to climate change, journalists go to National’s Nick Smith and Labour’s Charles Chauvel for ‘comment’ then they go to Jeannette to find out what the hell is actually going on.
She probably knows more about the international climate change policy framework – and the negotiations that have just rather unsatisfyingly concluded at COP15 in Copenhagen – than a number of New Zealand academics who might claim to specialize in the subject. And soon she will be gone.
The Greens are at a crises point. To gain the relevance they once held (and grow it) they must go back to where they began. They must become New Zealand’s party of the economic, social and environmental left. The modern, urban (and dare I say it, academic), socially liberal left.
There are cities full of potential Green voters – especially among women and the young. They should be the target.
Metiria needs to get out front and loud on the liberal issues and be in the Nat’s and Labour’s faces, if she does this well enough she might just pull in the votes of those poor lost souls wandering around in a daze with those little red ‘We Miss Helen’ badges on.
Phil Goff gets his bounce
Last night’s TV3 poll shows Labour up three and a half percent, while National are down nearly five. More importantly for Mr Goff, he has finally risen above Helen Clark in the preferred Prime Minister rankings.
There is also good news for the Greens as they head back towards to eight percent mark after a few dangerously low polls in recent months. National still maintain a commanding lead with fifty-five percent of the vote in this poll, but the narrowing will concern Mr Key, especially if the trend is confirmed or continued in further polls.
I would say that this small turn around is not just because of Phil Goff’s Nationhood speech (which succeeded in making him, rather than Key, the focus of much media comment), but rather because of National’s dubious dealings with the Maori Party over the ETS legislation, which is now law (and add to that a few thousand bikies disgruntled over proposed ACC levy hikes).
Folks might not really understand the intricacies of emissions trading, but they can spot a mongrel when its barking in their face, and Mr Goff’s speech did act to draw attention to the deal and its unsavory undertones of ‘dodgy deals with elite iwi’ which, expectedly, would be unpopular with the vast majority of kiwis.
Astonishingly*, there has been no en masse liberal leftist abandonment of Labour for the Greens as a result of Goff’s speech on race relations, or the caucus’ backing of it. Who would have though. I can only imagine that Lew and Idiot/Savant were not polled (or perhaps would have voted for the Greens anyway?).
With the trickle of negative press stories about New Zealand coming out of the COP 15 in Copenhagen and with one more attention grabbing excursion from the Leader of the Opposition in the new year period, we could almost be excused for expecting another poll like this to come our way soon.
* implies sarcasm
A week at the beach
I’ve been on holiday in the Coromandel for a week. Been fishing, swimming and drinking gin and tonic. It’s been swell. So not that interested in news, but I did try watching the occasional 6 o’clock TV bulletin which, unfortunatley, just made me want to self-harm.
But I have been keen to keep tabs on the fallout from Phil Goff’s speech (earlier in the week the Herald twisted the knife with this rather negative editorial). What was interesting was Linda Clark’s discussion on TV3’s Sunrise (the show, which I’ve never before bothered to watch, is so bad it makes me want to watch Paul Henry).
Linda made some interesting points (just try to ignore Oliver Driver and Carly Flynn laughing like teenagers and making sideways glances at each other as they try and read the news).
She basically defends Goff’s actions, making the point that he is from the “Ken” school of Labour as opposed to the “Marian” one. Ken is the blue collar, mostly male and often pro-union, Labour voter, while Marian is the urban, liberal, mostly female voter who “tends to wear more expensive perfume” (like her, she admits).
Also worth noting has been up-and-coming political-commentator-of-the-left Andrew Campbell’s wee tanty in reaction to the Labour caucus’s decision to “close ranks” and back Goff and his speech this week. To be fair to the caucus, there was no alternative. As many have noted, the mere fact that the question was being asked isn’t good news – just ask Liverpool coach Rafa Benitez what that’s like.
Also this week, Wellington “insiders” Trans Tasman released their annual review of MP’s which saw Speaker Lockwood Smith go top, trumping even our god-like prime-awesomeness-minister, Mr Key. Colin Espiner gives his take, but I prefer Danyl Mclauchlan’s. I have nothing to add. Living in Hamilton means I really don’t have much of a clue about such things, I only know what I read in the paper. heh.
Finally, I’m not sure what to make of (or where to start with) this NZ Herald editorial which states the obvious over the section 59 repeal (that omg the sky hasn’t fallen in, and yes, people still smack their kids, but the real nasty ones won’t, just maybe, be able to get away with it so much anymore) but fails tremendously to note the incredible hypocrisy and irony, of it being written in, wait for it, the NZ Herald.
I basically just can’t be stuffed googling “Herald” and “Anti-smacking” to link to a zillion ridiculous articles which would make this point stronger, because I know you know they’re there and have read them. I do though look forward to reading whatever James over at Editing the Herald has to say about that one (at time of writing he hasn’t found it).
Now where is my sun lounger. Yes, I am aware that is 12:26 am.
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