Greens – wealth tax, top priorities versus bottom lines

This may be little more than semantics given how malleable election promises and committed bottom lines are – Winston Peters in particular has a record of asserting bottom lines during an election campaign that disappear from coalition arrangements.

MP Julie Anne Genter said at a small business panel discussion the a wealth was a “bottom line” for the Greens if they were to join into a second Coalition government with Labour.

But co-leader James Shaw has followed up saying it would only be a top priority, and Greens don’t do bottom lines.

Newstalk ZB – Wealth tax ‘a bottom line’ for a Greens-Labour government: Genter

The Greens election policies include a plan to make Kiwis with a net-worth greater than $1 million, pay 1 per cent of their wealth to the government as a tax.

Those worth more than $2m would pay out 2 per cent of their wealth as tax.

Greens MP Julie Anne Genter today told a Newstalk ZB small business panel discussion the tax policy was a “bottom line” condition that must be met for her party to join into a second Coalition government with Labour.

However, Labour MP Stuart Nash quickly rejected the idea, saying Labour would not be introducing a wealth tax.

“[A wealth tax was] off the table,” he said.

Genter defended the wealth tax, saying it would only affect the wealthiest 6 per cent of Kiwis.

“Any sensible economist knows that we cannot carry on with the status quo. There is a tiny percentage of New Zealanders that would be affected by this tax – they are the top 6 per cent wealthiest New Zealanders,” Genter said.

“It’s not an individual who owns a $2m house and has a $1.5m mortgage.

“Tax reform has to be a bottom line, this county is not going to be better off if we continue to allow the wealthiest people and the wealthiest New Zealanders to accumulate more and more wealth.”

However, Labour’s Nash said Treasurer Grant Robertson had ruled out imposing any wealth tax.

“As the Revenue Minister, I have had a look at a wealth tax and I think it is very, very difficult to implement,” he said.

“It’s on unrealised gains, which make it very difficult for people to pay who are asset rich, cashflow poor.”

Robertson has already emphatically ruled out the Green tax policy – tow weeks ago Grant Robertson categorically rules out adopting Greens’ tax policy if Labour is re-elected

Grant Robertson has categorically ruled out adopting the Greens’ tax policy if Labour is re-elected, but James Shaw says he’s prepared to walk away from forming a Government with them if a wealth tax isn’t adopted. 

“Reforming the tax system and ensuring that people have their basic living costs met is one of the highest priorities that we are taking into this election campaign,” Shaw told Newshub. 

National Party leader Judith Collins says that’s the Trojan horse that will storm through Labour’s “no more new taxes” if elected policy. 

“The Labour Party having released its tax plan has not ruled out doing deals with the Greens on more asset tax or anything else,” Collins said on Thursday. 

Except Labour’s finance spokesperson Grant Robertson did when Newshub asked him if he could categorically rule adopting the Greens’ tax plan. 

“Yes. This is Labour’s tax plan that we announced yesterday and I said very clearly yesterday that is what we will implement in Government,” Robertson said. 

His message is don’t even bother bringing it to the negotiating table. The only tax Robertson will add is Labour’s higher tax rate of 39 percent on income over $180,000.

“I can’t be clearer than what I’ve been,” he said. 

But Shaw seems optimistic. 

“There is the small matter of an election to go,” he said. 

And if voters send the Greens back to Parliament, Shaw says they won’t accept a raw deal. 

Newshub asked Shaw if he would walk away from negotiations if the Greens don’t get their tax plan and if he will sit on the cross benches outside Government. 

“It’s always a possibility,” he said. 

Robertson said he heard Shaw say yesterday that it was a top priority and not a bottom line. 

Though it appears he didn’t run his hard line by the boss. 

When Labour leader Jacinda Ardern was asked if she would flex to the Greens, she said, “In the aftermath of the election we deal with what the voters give us.”

That is what you call wriggle room. 

So Labour seems to have a position of a wealth tax of definitely no, maybe.

In reaction to Genter’s assertion it would be ‘a bottom line’ in any coalition negotiations Shaw has pulled Greens back to maybe.

RNZ: Wealth tax not a bottom line for Green Party but they will push for it – Shaw

Green Party co-leader James Shaw says one of his senior MPs misspoke under pressure when she said a wealth tax was one of the party’s bottom lines.

Shaw told Morning Report: “It’s a heat of the moment thing and that happens during these debates” and said the extended election campaign was taking its toll.

“People are getting tired and I think she was just pressed on the point.”

She did not accidentally “tell the truth”, he said.

Earlier this month Shaw and party co-leader Marama Davidson told RNZ they had absolutely no bottom lines.

Shaw put it like this today: “At every election we lay out a series of priorities and say ‘how many MPs do we have and are we in a position to negotiate?’

Shaw says the Greens aren’t making the tax a bottom line because “when we get into negotiations we have got to see what the result of the election is. And it’s as simple as that”.

But they will be pushing for it.

“[Tax] a top priority and we have said that. We want to make sure people have enough to live on. We know that Covid-19 has exposed those pre-existing inequalities in our society. Actually the stimulus is making those things worse because the capital is flowing through wage earners and towards asset owners, so it’s driving up house prices, and we’ve had a record close on the NZX even while the median wage has fallen.

Whether or not it becomes a bottom line depends on how many people vote for the Greens, Shaw says.

“That is ultimately the situation we are in. We want to ensure that the next government is led by Jacinda Ardern again, that the Greens are part of that government and that we are able to ensure that it is as transformational a government as possible…

“We are pushing for [tax], we are pushing to significantly expand the state home building programme… we are pushing for significant action on climate change, for sustainable farmers… and so on.

“We will be putting all those things on the table with Labour after the election and saying ‘What can we do together?’.

Obviously first Greens have to get back into Parliament. If they do it their negotiating position will depend a lot on whether Labour have a majority on their own, in which case they will be able to do what they like, or if they need the Greens to form a government, which will give the Greens a stronger hand in coalition negotiations.

But even then any agreement would have to be approved by the Green Party membership.

So top priorities and bottom lines should be taken with a grain of salt.

The top priority for all parties is to get as many votes as they can, which means saying whatever they think will attract support.

After the election policy horse trading and power position negotiations will override specific policies.

I’ve seen some interesting reactions on social media – first applause for Genter appearing to show some strength in having a bottom line on a wealth tax, and then anger that Shaw had watered the Green position down.

One example was Martyn Bradbury who posted Oh sweet Jesus – why BOTHER with the bloody Greens!

This morning I woke truly refreshed brothers and sisters.

I finally knew who I was going to vote for.

The beautiful Greens.

It had happened at the most unexpected moment.

Yesterday, the mighty Julie Anne Genter told a small business panel discussion that a bottom line for the Greens to go into Government with Labour would be their wealth tax!

It was extraordinary!

FINALLY there was a reason to vote Green!

They had brilliantly, for the first time in 3 years, realised that to play politics, you gotta throw a fucking punch!

………and then this…

Wealth tax not a bottom line for Green Party but they will push for it – Shaw

Green Party co-leader James Shaw says one of his senior MPs misspoke under pressure when she said a wealth tax was one of the party’s bottom lines.

…ARE YOU FUCKING KIDDING!!!!

WHAT ARE YOU DOING?

THIS IS THE REASON TO VOTE FOR YOU YOU FUCKING CLOWN!!!

WHY ARE YOU NOW WALKING AWAY FROM IT?????

They need to go. Just go now.

These people are fucking muppets.

Bradbury has been a political yoyo lately and this response is more emotive than most but similar sentiments have been expressed elsewhere.

While Ardern seemed to leave the door slightly ajar to Green tax policy the equivocation from Shaw pretty much guarantees that it can’t be a Green bottom line, so it will have to be a top priority, apart from the higher priority of getting back into Parliament of course.

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17 Comments

  1. Alan Wilkinson

     /  25th September 2020

    Shame. Green wealth tax would take votes from Labour and give them to National.

    Reply
  2. John J Harrison

     /  25th September 2020

    Genter is nothing more than a very dangerous joke – which we all pay dearly for.
    With Labour down 5% in the latest poll the trend is clearly going against them and the election will be closer than many predict.
    Thus the Greens will be needed to support Labour against an ACT / National team.
    They will put a high price on their support and Labour will acquiesce in a New York minute.
    Neither party understands that you cannot tax the country out of a recession.
    You can only grow the economy, something that the Greens and Labour know nothing about.

    Reply
  3. Gerrit

     /  25th September 2020

    And like all new taxation, it start by only targetting the top 6% of wealth holders. That naturally will bring in SFA in revenue after the significant set up costs and ongoing overheads have been tallied.

    So down will come the limit, 1% on $500K. to gather up those who cannot afford a decent accountant or move their assets value overseas.

    Equally as bad a taxation suggestion as the TOP proposed tax on potential, but unrealised returns on wealth.

    Expected better from the communist.

    Reply
    • Blazer

       /  25th September 2020

      ‘to gather up those who cannot afford a decent accountant or move their assets value overseas’.-they should join their assets..overseas.

      Dual citizenship should not be allowed either…you’re either 100% in…or you’re…OUT.

      Reply
      • Duker

         /  25th September 2020

        Asetts oversea ?
        Capital gains taxes in Australia, US , UK etc

        Some people are in a bubble , overseas residents love NZ assets because there are NO capital gains, Aussies especially

        Reply
        • Gerrit

           /  25th September 2020

          You have a problem differentiating between a CGT and a wealth tax.

          CGT is paid on the difference between the buy and sell price AT TIME OF SETTLEMENT.

          Wealth tax is AN ONGOING YEARLY tax payable on the value of the asset.

          I would have my assets overseas even with a CGT rather than a wealth tax that is payable on some whimsy of a state set valuation and pue yearly.

          Reply
  4. Sunny

     /  25th September 2020

    The highest paid people in NZ make their money by leveraging assets like their academic degrees, and their celebrity brand, their family name. (eg. TV Stars. Highly paid academics. CEO’s of public companies) Will those be valued and taxed.
    Those people who don’t put there own personal assets at risk nor employee anyone.

    Some people however need machinery or land to run a business and earn a living. (Plumber, Farmer, truck company) Those people will be subject to wealth tax. It’s another tax on the working classes and the rural sector. It’s a tax on family business owners who put their own houses and take personal financial risk.

    Second: It’s not capital gains so it’s not a tax on how the market values your business when it is sold. So how will they value your business. If you’re in a tech business it will be very hard to value and it may not have the same value in 10 years as they though it would. and if the price drops and you go bankrupt and it has no resale value do they return the wealth tax they took.

    Third it’s a double tax. Because we already pay a wealth tax on the value of property assets through rates. Will rates move to a services used costing instead – where a household pays for the number of people in the house (who use footpaths and libraries) or will we continue to pay based on the asset value. And yet only some will have to pay the double property tax.

    Fourth it penalises behaviour we do want – start businesses , put it in kiwisaver, build houses, pay off mortgages.

    And instead rewards people who get a job with the government or another employer so you don’t own an asset. And rewards consumption spending (which also has a high environmental cost). Rent an expensive house, or buy a house but with an interest only loan, and take luxury holidays, buy lots of clothes, blow it on restaurant meals, pay for a maid, go to concerts, buy expensive iphones.

    Fifth What about expats and dual citizens who have investments and property overseas.

    Reply
    • Duker

       /  25th September 2020

      Since when are self employed tradies the only ones who ‘own an asset’
      I have a relative who worked at desk jobs often overseas all his life , and he is probably in the $2 mill wealth tax category with real estate investments
      Another relative a tradie but who worked for others all his life is not far behind as he put all his savings in shares and just the family home.

      I dont see how a wealth tax 1% PER YEAR on capital value of real estate ( minus any mortgages, often 60-70% of value anyway) is going to change any of that .

      Appreciation of assets doesnt come from how many jobs or hours you work, yet the mistaken belief is that it does.
      Banks requiring security over non business assests and personal property doesnt change a thing. The business costs of the lending are deductable.
      Its delusional that because a bank has security over personal assets to provide a small business lending that it changes anything .
      Its only 1 or 2% . Its hardly even the lease cost of an Audi or Range rover per year

      Reply
      • Alan Wilkinson

         /  25th September 2020

        Go for it, Duker. The Greens will take Lefty voters from Labour and lose Remuera ladies back to National. A swag of small business, tradies and retirees will abandon Jacinda and vote National.

        It’s a winner all the way.

        Reply
        • Gerrit

           /  25th September 2020

          Yep, those luvies understand the difference between a CGT and a wealth tax.

          Something Duker just cant seem to get his head around.

          Reply
      • Sunny

         /  25th September 2020

        1 I didn’t say tradies are the “only ones” who own an asset but that they will be taxed for the assets they use to ply their trade which is more likely to push them over the threshold.
        2. You say, ” I dont see how a wealth tax 1% PER YEAR on capital value of real estate” My understanding is it’s not just real estate. It’s all assets. So also your business assets.
        3. “Appreciation of assets doesnt come from how many jobs or hours you work, yet the mistaken belief is that it does.” Not all assets appreciate. Tools, machinery, and vehicles will be subject to wealth tax. They depreciate. Businesses might appreciate. But they may fail. Many are very hard to value. there is no guarantee that it’s an asset you can sell.

        Reply
        • Alan Wilkinson

           /  25th September 2020

          In fact intellectual property and business value does come from how hard and intelligently you work. Value is all about timing and opportunity. Trying to tax it unrealised is farcical and taxing it realised is fraught with unintended consequences.

          Reply
        • Duker

           /  25th September 2020

          Too hard to value ‘assets every year ‘?
          tell that to accountants who calculate depreciation every year
          Businesses are happy to claim depreciation on ‘value’ but have amnesia when they have to pay 2%
          Anyway isnt for ‘individual wealth’ not companyies ?

          The same arguments were made 70 yrs when PAYE was bought in – TOO HARD they screamed
          Same noises made last year when small business HAD to pay IRD the tax deducted from employees as they were paid rather than letting it accumulate . ( and using it working capital)

          Reply
          • Gerrit

             /  25th September 2020

            Duker,

            value of a business is not just assets, there is IP rights, goodwill, customer base, top line income, current and ongoing public liabilities, projected cash flow from upcoming work, stock (Raws, WIP and Finished) etc, etc,.

            The “value” in plant and equipment (especially if buildings and vehicles are leased) is to a large extend minimal even before depreciation.

            That “value” can fluctuate markedly, especially if the state demand business closes due to a pandemic.

            The state is going to have to employ a screed of cardigan wearing bean counters to value every business on an ongoing basis.

            Bob Jones will be happy to lease even more office space to an already burgeoning non tax paying (except for GST) civil servant workforce.

            Reply
  5. Corky

     /  25th September 2020

    ”Genter defended the wealth tax, saying it would only affect the wealthiest 6 per cent of Kiwis.”

    Oh, that makes it all right? A few rich bastards… they won’t miss it. They have enough. People shouldn’t have that much money. It’s unnatural. What about the poor man at home who’s high on P, and with no food in the cupboard. That’s the problem with these rich pricks, they never think about the poor.

    As Bomber says about the Greens:

    ”These people are fucking muppets.”

    Reply
    • Duker

       /  25th September 2020

      Who listens to Bradbury anyway ?
      The real issue is that the Greens are trying to turn MMP on its head and the minor party with 10% of the bare majority wants to tell the whole country to change to suit them.
      If they get 45% and labour is the 5% coalition partner thats a different story.
      Its eaxctly Rogernomics when a faction of the Labour government used the 43% of the vote( but 59% of the seats) to rapidly overturn the existing economic situation

      Reply

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