The left lambasts Labour’s CGT capitulation

Labour didn’t just limit what the Tax Working group could include in any Capital Gains Tax, they didn’t just water down the subsequent TWG recommendations, they didn’t just drop any changes to capital gains taxing, Jacinda Ardern ruled out doing any CGT while she remains leader of the Government.

It wasn’t just a capitulation to Winston Peters. Ardern back down from a policy she said she supported. She ruled out going to the next election with any sort of CGT proposal as she had previously promised, presuming she is still leader then.

And the left, who wanted so much to have a ‘fairer’ tax system, and who wanted the Government to live up to it’s own labelling as transformative, are pissed off.

From Political Roundup: Progressives despair over the CGT decision

Danyl Mclauchlan argues that the CGT programme was one of four key policies agendas for this Government – the others being KiwiBuild, the Carbon Zero Act, and the Wellbeing Budget – and there are clear problems now in delivering them – see his column, Four months in, Labour’s ‘year of delivery’ is a disaster.

He despairs that Labour axed the tax after first initiating “one of the most bafflingly disastrous public policy debates imaginable, making John Key’s flag-change campaign look like the Normandy landings”.

He says any strategic wins from ditching the tax, will come “at a cost of one of Labour’s most important, long-term policies, and it was their failure to control their coalition partner or even attempt to make the argument for taxation reform that forced them to pay such a bitterly high price.”

Mclauchlan argues that Ardern could have won the debate and got a mandate for the changes, but simply didn’t bother.

That’s how it appears. She appeared to do nothing to fight for the CGT she proposed. It also appears she left James Shaw and the Greens out in the cold. Shaw has tried to paper over the cracks but sounds unconvincing (see James Shaw on “do we deserve to be re-elected if we don’t?”)

No Right Turn…

…is now calling for a leftwing boycott of the Labour Party: “If you want change, don’t vote Labour, don’t donate to Labour, don’t volunteer for Labour. Give your vote, your money, your time and effort to another party, any other party that promises change, than the one who betrayed you. Because if you don’t, Labour will continue to treat you like a fool, and continue to promise change while delivering none” – see: Don’t get fooled again.

They also argue the decision means the Government won’t have the money to afford many of their future policy goals: “Effective policy costs money, and this government has just robbed itself of that vital tool. Remember this next time they plead “poverty” as an excuse for not doing something: they chose to be poor. They chose to have a government which could not afford things. They chose to not be able to do the things they promised” – see: The cost of cowardice.

Inequality researcher Max Rashbrooke…

…argues that many other Government priorities will now be hamstrung by the lack of future revenue: “building more state homes, eliminating introduced predators, and repairing mental health services, among others – also require significant funds, again well above what will be generated under existing tax settings” – see: Capital gains tax shutdown threatens govt’s other plans.

In particular, “Consider the Prime Minister’s pledge to halve child poverty within a decade, possibly the political priority closest to her heart. It is very difficult to see how that can be achieved without the $3.4 billion a year that the capital gains tax was, according to the most recent estimate, going to raise.”

Some loyal Labourites had tried to put some spin on the backdown, like at The Standard (currently down so can’t link).

And former Labour Party President Mike Williams…

…suggests that although there are “elements of, particularly the unions and the extreme left of the Labour Party, which would be annoyed”, he “did not think the wider Labour Party base would be too worried about the CGT rejection”.

But Newshub’s Anna Bracewell-Worrall reports that…

…”Labour is facing a massive backlash from its base for ditching any hope of a capital gains tax (CGT) – even Young Labour and the ever-loyal unions are fuming” – see: Young Labour furious at capital gains tax backdown, leak reveals.

“Newshub’s been leaked a discussion from a secret Young Labour Facebook group revealing they’re frustrated with the decision. The Labour Party faithful say they’re ‘mighty disappointed’ and ‘exponentially angry at New Zealand First’s role’, and complaining of ‘unfulfilled promises’.”

And media are asking questions too.

Thomas Coughlan asked the very pointed question of Ardern: “Are you worried you now lead the party of capital, rather than labour?” And now he’s followed this up with an article suggesting that rather than Ardern and her Government implementing transformation, it’s actually them who are transforming – into a cautious and weak government not willing to make the hard and necessary decisions – see: Capital gains tax: Let’s not do this.

The Dominion Post asked if the decision came out of “cowardice or pragmatism”, but suggested the two are indistinguishable anyway. The editorial suggested more debate and leadership had been required for the CGT proposals to get off the ground: “Labour voters were evenly split on the pros and cons of a capital gains tax. It is a situation where brave political leadership and persuasion were required but for whatever reasons, a deep and thorough debate about fair and unfair tax failed to eventuate” – see: Capital gains tax: Political capital but for what gain?.

The newspaper says that Ardern had a “a failure of nerve”, and laments that an opportunity has been missed: “If there was ever a moment when significant change to the tax system could have happened, as the fairness and transformation her Government promised, that moment was now.” And there’s the question of “if the Tax Working Group was merely an expensive waste of time with a predetermined outcome.”

Likewise, according to the New Zealand Herald, “The decision has the hallmarks of pragmatism rather than strong leadership”, leaving “little evidence so far that Ardern will make tough but unpopular decisions to deliver on her convictions” – see: Capital Gains Tax surprise raises doubts on coalition.

It is going to be a challenge for Ardern and Labour to recover from this. They may survive in Government, but they have lost a lot of credibility from the left.

Ardern’s ‘pragmatic realism’ doesn’t sit well with political activists and idealists who thought that with Labour and Greens in  Government there would be substantial changes.

25 Comments

  1. Pink David

     /  April 20, 2019

    “It wasn’t just a capitulation to Winston Peters. Ardern back down from a policy she said she supported. She ruled out going to the next election with any sort of CGT proposal as she had previously promised, presuming she is still leader then.”

    World class leadership.

    • Blazer

       /  April 20, 2019

      the Tax working group had more scope than just CGT.

      Expect some readjustments in taxing wealthy parasites.

      • Pink David

         /  April 20, 2019

        “Expect some readjustments in taxing wealthy parasites.”

        Just out of interest, how much of my money is your fair share?

        • Corky

           /  April 20, 2019

          All of it. These pricks expect a free ride through life on the back of others sweat.

          • Duker

             /  April 20, 2019

            Capital gains isn’t sweat….sweetie

            • Corky

               /  April 20, 2019

              No shit Sherlock. In fact you wouldn’t even make a Watson.

              Capital gains:

              a profit from the sale of property or an investment.

              “a tax is imposed when individuals part with an asset and make capital
              gains on it”

              Get the picture.. or do you need me to spell-it-out-for-you?

            • Kitty Catkin

               /  April 20, 2019

              That doesn’t actually make it ‘sweat’.

  2. Blazer

     /  April 20, 2019

    ‘World class leadership.’

    now lets see….May,Morrison,Trump,Macron,….hardly an illustrious…lot.

    not forgetting Erdogan,Netanyahu,Putin,Kim,Duterte,Saudi Crown Prince,and so on..

    • Pink David

       /  April 20, 2019

      Ah, your measure of world class leadership is what exactly? A bit better than May, who is going to be recorded as the worst UK PM in history?

      Instead of picking a list of dictators, and people you don’t like, why not compare to Michelle Bachelet? She should be right up your street, and has achieved vastly more than Ardern.

      • Blazer

         /  April 20, 2019

        NO ONE HAS HEARD OF ..HER.

        • Pink David

           /  April 20, 2019

          That is demonstrability untrue, as have the vast majority of people in Chile, and in South America, as have hundreds of millions world wide.

          What your shouty response means is just that you have not heard of her. Which just shows your ignorance.

          Given your requirement that you have ‘heard of her’, kim kardashian is more of a leader than Ardern.

          • Kitty Catkin

             /  April 20, 2019

            So are Kanye West, Mickey Mouse, Batman and the girl with trout lips on MAFS.

  3. Zedd

     /  April 20, 2019

    Its called MMP.. not ‘the tail(s) wagging the Dog’

    Post 2020 election.. the political landscape may well Change ? :/

    btw; I think this current Lab/NZF/Grn MMP Govt. is the best thing that has happened, in about a decade.. CENTRE-Left, as opposed to the constant cries of ‘Loony Left’ from the ‘Alt-Right’ 😀

  4. Corky

     /  April 20, 2019

    The Left are stuck is this endless loop of believing the financial pie is a limited resource, therefore they must take their fair share(?) of that pie. They don’t seem to be able to grasp that the golden goose can’t lay golden eggs if it’s dead.

    Dare I say it? OK, I will…these diehard Lefties are crying out for a resolute leader like Trumpy. 😂

    Jacindas only hope..the upcoming budget. I’m rooting for her while some of her supporters aren’t..strange world.

    • Blazer

       /  April 20, 2019

      which Golden Goose would that be then?

      • Kitty Catkin

         /  April 20, 2019

        There is no golden goose, it’s the eggs that are gold. The goose is just a goose.

        • Kitty Catkin

           /  April 20, 2019

          It’s one of Aesop’s fables. The whole point is that the goose is an ordinary goose who sometimes lays gold eggs, but the owner kills and eats it, as I remember.

  5. duperez

     /  April 20, 2019

    Some political activists and idealists who thought that with Labour and Greens in Government there would be substantial changes are now disenchanted? Ardern’s ‘pragmatic realism’ doesn’t sit well with them?

    What wheeling and dealing would have got the coalition agreeing to introducing some form of Capital Gains Tax? What sort of leadership? And when introduced how long would the tsunami of resentment and attendant attacks gone on about a CGT? And after the inevitable electoral defeat the activists and idealists with resigned smiles would be celebrating the bravery and the eschewing of pragmatism?

    The Dominion Post has to come up with an angle. It was either suggesting that cowardice and pragmatism are indistinguishable now or a little bit down the track kicking over the carcass on the ground saying, “Well that didn’t work, but it was brave.”

    One good thing to come out of the reactions is the lead for all the places where bullying is addressed in the country. The mantra can be put large on the wall, “In all situations pragmatism is cowardice.”

    • Kitty Catkin

       /  April 20, 2019

      I think that pragmatism can be just being realistic.

      I’d love to live in one of the old houses that I see on Choice, but I know that I almost certainly never will so don’t waste time whinging because I don’t.

  6. Alan Wilkinson

     /  April 20, 2019

    Saint Jacinda impeached by Left. Nobel Prize nomination rescinded. Anticipated Pike River resurection in doubt.

    • Duker

       /  April 20, 2019

      Pike River ?
      I see national has flip flopped again…the 3rd time…from Key promising to bring the bodies out no matter watt …then to it’s not possible and we want to concrete the minr shut to make sure…now to want to jump on the reopening bandwagon when they do go in..
      How they dare show their faces on the West coast after everything….letting a substandard mine go into operation

      • Alan Wilkinson

         /  April 20, 2019

        The mine went into operation in November 2008. Obviously consents came during the Clark Labour Government.

        • Duker

           /  April 21, 2019

          The coal mining part started around 2010, before that they were just tunneling in solid rock ( the coal seam is relatively narrow).
          And the Royal Commission report found certain safety features in the consents that were supposed to be completed before coal mining began didnt happen.
          As well the main problem was the mine operation once coal removal started wasnt reviewed closely by mines inspectorate considering the risk factors., they effectively had no staff to deal with any high risk deep mining. PR Coal was under performing so the push was on to put the coal out no matter what, yet their management turnover meant they were in turmoil and I forget the details but didnt have anyone qualified as safety manager.
          A proper inspection system should have picked all these issues up.
          We have seen the repeat in a different way with NZTA with trucking issues and driver testing and with the census and things like the Police budget freeze over many years.
          While a minister isnt telling them ‘ Do things this way’ , the overriding budget rules say save something like 2% of administration costs every year , this is compounded over time ( English was very hard on this in his 8 years as Finance minister.) And being the public service they just do less rather than using automation properly.
          Im dreading to think how the Tax department automation will go , I can see their goals make sense but they will use contractors who like Novapay will make their profit from fixing things up.

      • Gerrit

         /  April 20, 2019

        A substandard mine that the workers union boss (Andrew Little) and local MP Damian O’Connor said was safe.

        “Cowan quotes Labour MPs Damien O’Connor and Andrew Little defending the Pike River Company. O’Connor is quoted from 2010 saying that the disaster was ‘just one of these things that the West Coast unfortunately has had to get used to over the years’ and suggesting that the company wasn’t necessarily to blame. According to Cowan, the then the head of the EPMU, Andrew Little, went into bat for the company saying there was ‘nothing unusual about Pike River or this mine that we’ve been particularly concerned about’.”

        https://www.nbr.co.nz/article/nz-politics-daily-pike-river-labour-has-blood-its-hands-ck-132112

        Note that National are being smart here. They support reentry into the drift, not the mine. Big difference and a massive rock fall separation between the two. Mine entry is something even Labour is not guarantying.

        • Duker

           /  April 21, 2019

          Support re entry into drift- hell they wanted the whole mine entrance concreted and they set up Solid Energy , ( who were bankrupted by English when he took all their financial reserves as dividends) to buy a ‘dead’ mine so they could do this .