Loose cannon Shane Jones fires more shots, Ardern missing in action

I’m not sure if Shane Jones is deliberately trying to make things difficult for Jacinda Ardern, or is trying to establish himself as New Zealand’s version of Donald Trump (an arsehole popular enough to get elected), or is just getting out of control.

On Tuesday Jones made threats against a journalist who had criticised his conflict of interest as minister in charge of the Provincial Growth Fund – Hamish Rutherford “Minister of Regional Economic Development Shane Jones delights in announcing funding cash from the Provincial Growth Fund, but when he or his office face questions about the probity or merits of the fund, the response has bordered on hostile.” Shane Jones makes ‘chilling’ threats against journalist.

Yesterday in General Debate in Parliament he fired another shot at the journalist, threatened that the Government would ensure the SFO investigation of the National party over a donation was thorough, and also blasted the Spark CEO who made a disclosure as required by NZX rules.

This is a message to corporate New Zealand: do not arrogantly take upon yourselves the ability to influence foreign policy and make these unwise statements as Mr Simon Moutter did to the sharemarket, thus providing an opportunity for anxiety and stress for all of our exporters. Show judiciousness; do not go beyond your corporate writ. Wanderlust, you may be.

Jones has attacked CEOs and companies in the past, notably Air New Zealand.

How the bar has been set for the provincial champion to declare a conflict of interest. Has the Leader of the Opposition yet been interviewed by the Serious Fraud Office? Was the Leader of the Opposition interviewed by the police; more to the point, will he declare to the New Zealand public that he has been; and if that is the case, will he stand down? No. Where is this self-styled crusader of civic responsibility from Fairfax pummelling and pounding the other side of the House? Conspicuous silence from the media.

Another swipe at Rutherford. The media has not been silent on the announcement that the Police handed over the donation case to the Serious Fraud Office – but the SFO has not even said they will investigate yet, so obviously they won’t have interviewed Simon Bridges.

This is a very dangerous development in the integrity of our electoral system.

Ministers attacking journalists doing their job is not new, but Jones is threatening the integrity of the media, which is an essential component of our electoral system.

But, if he could actually do what he next threatens, that would be a particularly dangerous development on the integrity of both our democratic system and our judicial system.

Now, we’ve watched a pattern of this. We’ve watched a proud police officer be lampooned and suffer scurrilous allegations; he had done nothing wrong, yet he was pilloried, tainted, and stigmatised.

That’s talking about Wally Haumaha, who has been linked with NZ First. The State Services Commission found that Justice and Corrections had failed two complainants, and “A report by the Independent Police Conduct Authority (IPCA) has found two instances where the high-ranking cop aggressively asserted authority and belittled staff from Ministry of Justice and Corrections…The report said Haumaha’s behaviour met the common understanding of bullying…The IPCA received a third complaint in August, and found Haumaha pressured officers to provide information that would help him defend allegations after taking advice from lawyers.” – High-ranking cop Wally Haumaha belittled and humiliated staff, police watchdog says

May all of that wrongdoing rest upon the head of the Leader of the Opposition, because he says he’s the Leader of the National Party but it’s just not his responsibility in terms of what the Serious Fraud Office is looking at.

I make a prediction: the Serious Fraud Office, once unwisely sicked by that side of the House on to our Leader, knows we will study every single step that they take, to ensure—to ensure, because it’s the National Party—it’s not whitewashed. We will ensure that happens, this incredibly serious and people may very well go to jail, because they won’t have offended the Cabinet Manual; they will have broken the law.

Paul Goldsmith (National) followed Jones in the General Debate:

Well, here I am, coming after Shane Jones, and I’m not quite sure what he actually said, but he seemed to say that they will ensure—presumably, “they” being the Government of the day—that the Serious Fraud Office (SFO) does a thorough job on our leader. That would be an extraordinary statement to make. Is he now saying that he is going to guide the SFO, which is an independent statutory body on the police doing their work? He’s going to stand and guide the SFO as they do their work? What an extraordinary thing for a Cabinet Minister to say. I can’t believe he said they will ensure that the SFO does it well.

Newshub: Shane Jones makes outrageous claims about National Party donations probe in Parliament

New Zealand First Minister Shane Jones has outrageously weighed in on the investigation into National Party donations.

The extraordinary scenes in Parliament on Wednesday afternoon added to a string of New Zealand First ministerial mishaps in recent times.

Jones’ incredible comment about the Serious Fraud Office (SFO) probe into the Simon Bridges-led party was made under parliamentary privilege and therefore protected from threats of prosecution.

But the SFO is protected by a fundamental of New Zealand’s democracy known as ‘constabulary independence’, meaning politicians can’t get involved in how it chooses to uphold the law – it’s sacred.

Prime Minister Jacinda Ardern has already mildly rebuked Jones after his attack on Rutherford. Will she do anything about this latest outburst from Jones? Probably not much – she seems largely impotent when it comes to NZ First loose cannon MPs bringing the Government into disrepute.

Jones seems to be able to get away with whatever he likes, and he seems to be getting out of control – but Winston Peters is also not doing anything about Jones, publicly at least at by the way Jones continues to spray dirty bullets around it appears that Peters approves of this.

And Ron Mark is also joining the attacks, so it appears that it may be a deliberate NZ First strategy to improve their flagging support.

They may manage to get another percent or two, but at risk of dragging Labour down, especially if Ardern continues to appear to have no control over them.

Ardern has successfully become a champion of progressive celebrity style politics, but if she can’t manage the tough stuff and show some leadership over her much smaller coalition partner party she may find some of her support is not sustainable.

Shane Jones makes ‘chilling’ threats against journalist

Minister of Self Promotion Shane Jones has made disturbing threats against Stuff journalist Hamish Rutherford.

Rutherford:  Bunny boiler jokes aside, Shane Jones’ threats could be chilling

On Monday, in an interview with Morning Report, Shane Jones, possibly the most forceful personality currently in New Zealand’s Parliament, described me as a “bunny boiler”.

Whatever he means by that, I would have happily let that pass.

But Jones also described me as “unethical”, a more serious claim which he has not clarified, despite implying that he might use parliamentary privilege to say more – an ancient right MPs have to say literally whatever they want without legal repercussions, so long as they say it in the House.

It is an ancient and important right. But I understood, at its core, was the need to promote free speech, not to stifle it.

This has led to a difficult couple of days. I have not been able to defend myself as I have not known what the accusations might be.

Jones (or any MP) could say anything at all about me, or you, with no legal comeback.

It is extraordinary for Jones to make ‘unethical’ accusations and threaten to use parliamentary privilege to say more.

This all came after I published a story on Sunday, which revealed that Jones sat in a meeting and provided reassurances to his ministerial colleagues about a project he had declared a conflict of interest in.

That project, Manea, Footprints of Kupe, a proposed cultural centre in Opononi, is in line to get up to $4.6 million in taxpayer funding.

The story also highlighted what I believe were inconsistencies about his statements about what exactly his interest was and whether his statements to Parliament were, with the benefit of hindsight, accurate.

Jones’ office tried to shut down questions on the project in 2018 and Jones has equivocated about whether he knew that the project’s supporters were using his name as they tried to apply for taxpayer funding in 2015.

Jones has drawn more attention to all of this rather than shut it down by trying to scare Rutherford off.

The fact that no-one from the Government has properly shot down Jones’ threat to malign me in Parliament will not deter me.

But it should be a chilling warning of the potential consequences for anyone planning to question this Government’s integrity.

Where does Jacinda Ardern stand on this?

RNZ:  Jacinda Ardern says Shane Jones’ remark on journalist is not appropriate

The prime minister says attacking a journalist in the House using parliamentary privilege is “ill-advised”.

Jacinda Ardern told Morning Report it would not be appropriate for Mr Jones to launch an attack on Rutherford.

“Ultimately I have, when asked, said that I did not believe that would be appropriate, and that’s my advice to Mr Jones.”

That really put Jones in his place – a place where he seems to be able to do and say as he pleases.

Labour, Capital Gains Tax, ‘fairness’, 2020 election

Labour have promoted a more comprehensive Capital Gains tax for years, and set up the Tax Working Group 14 months ago with a CGT as a major focus. However they have ruled out some capital gains from being taxed, particularly ‘family homes’.

Labour seem to be caught between two forces – a stated desire to reform the fax system and make it ‘fairer’ (which in reality means taxing some people less and some people more), but also an obvious wish to get re-elected next year. They have said they will campaign on whatever tax changes they come up with in the 2020 election to get a mandate to implement them.

Labour’s tax policy: https://www.labour.org.nz/tax

Hamish Rutherford (Stuff):  Is capital gains tax a hill that Labour is willing to die on?

National wants Labour to go into the next election proposing a capital gains tax because the Opposition believes such a move will be something close to political suicide.

After close to a decade in the wilderness, during which Labour continuously preached about the inherent unfairness of New Zealand’s tax system, the largest Government party must ask itself: is this a hill worth dying on?

Although supporters tend to oversimplify the case, there is a strong, possibly compelling, argument for capital gains to be taxed.

If a person is taxed for what they earn from their work, it seems only reasonable that they also be taxed for what they receive from their assets.

Equality writer Max Rashbrooke went so far as to suggest capital gains tax should be called a “fairness tax”.

But the problem is, no-one is proposing the type of tax which this implies.

Labour has already ruled out a capital gains tax on the family home, and  an inheritance tax. Both exemptions have massive implications for how much the tax would raise and the extent to which the wealthy can manage to avoid it.

Both are also political promises which have implications for whether the tax is, indeed, fair.

Whatever is promised by the Tax Working Group report will leave Labour in an invidious position.

Capital gains taxes are inherently complicated and New Zealand’s existing tax system is designed around not having one in place.

During the election campaign in 2017, Labour was constantly on the back foot amid an intense campaign by National’s “let’s tax this” attack advertising.

Jacinda Ardern was eventually forced to rule out major changes before the 2020 election, but, according to pollsters, the damage was done.

Unless Ardern and Finance Minister Grant Robertson are ready to continually make the case for whatever changes are proposed, the Government’s proposed capital gains tax will be whatever National says it is.

So far NZ First has remained silent on its policy on capital gains tax, but if Winston Peters can be convinced to support it at all, he is certainly unlikely to do so without extracting some tangible win for the party to promote to his supporters.

All of this comes amid high uncertainty about what a capital gains tax would raise in the coming decade, in an environment where low interest rates have pushed asset valuations to levels which may not be sustainable, especially if the economy slows.

For all of its belief that there is a major problem in the tax system which could be fixed through a change in mindset, the reality is likely to be dawning that the tax will be politically challenging unless major changes are made, which will undermine how much is raised as well as how much “fairer” the tax system will become.

It will also be so easy for its opponents to demonise that the Government must wonder whether it’s worth the risk of trying.

But if Labour decide that progressive tax reform is ‘not a priority’ they will be demonised as well, for talking up tax reform and a CGT and then backing down. They have to come up with something substantive on tax reform.

John Cuthbertson (Stuff) – Capital gains tax: What’s fair for one person may hurt another

In the 14 months since the Tax Working Group terms of reference were published, there has been a lot of talk about fairness, particularly the fairness of a capital gains tax (CGT), but not much talk about balance.

Fairness means different things to different people. It can mean a different thing to an individual at different times depending on their situation.

To keep as many people as possible happy, and tax revenue flowing, over millennia, tax authorities have come up with a number of, often competing, tests of a “good” tax system, including fairness, efficiency, certainty, minimising avoidance and compliance costs, coherence and last, but not least, raising enough cash to meet the Government’s needs.

At the same time, taxpayers have developed one simple principle – not in my backyard. If the tax collector is to reach into my backyard, then the pain and the gains should be equally shared relative to ability to pay.

That expectation gap – as old as tax itself – is one the working group is hoping to balance with its proposal to tax capital gains on assets not already caught by the tax net, what some are calling a new capital gains tax.

Its interim report warns that inconsistent taxes on gains from sales of capital assets, which favour the wealthiest, make our tax system less fair and risks undermining public acceptance of the system.

So consistently taxing capital gains will make our tax system fairer, right?

Well, it might not be that clear cut.

A truly fair approach would be to tax all asset classes, however, as the Government has told the working group that the family home must be exempt, this broad approach is hamstrung from the get-go.

Chartered Accountants ANZ’s view is that if introduced, a CGT should include land, residential investment, commercial property and farms, shares and business assets.

The Government has told the working group to have specific regard to housing affordability. If this is the case, we question the outright exemption of the family home given the strong prevalence (65 per cent) of owner-occupied housing in the overall housing market.

An alternative approach would be to include a dollar-value exclusion threshold and only tax gains above this threshold – targeting overcapitalisation. This approach has been used successfully overseas and would minimise distortions.

The working group’s key question is whether “the fairness, integrity, revenue and efficiency benefits outweigh the administrative complexity, compliance costs and efficiency costs” of introducing a CGT.

A CGT is a particularly complex issue and CA ANZ’s recommendation to ministers and to the Tax Working Group is to ensure policy designers have enough time to strike the right balance between what assets are included and what roll over relief is available when the asset changes hands and, at the same time, fully integrating changes with existing income tax legislation and stakeholder systems.

Our tax system has got to be perceived by taxpayers as broadly fair to achieve their buy-in.

It must be easy for people to comply with and difficult to avoid. It also must ensure the tax base is sustained and broad enough to support our health system, national infrastructure, schools and social assistance.

Labour has to try and balance the tax system so that taxpayers see it as broadly fair. But taxpayers are also voters, and next election may come down to how fair they see Labour’s tax proposals, versus National’s.

Budget lockup, grumpy journalists

I don’t think I’ve seen journalists in Twitter so grumpy for so long, especially at some of their own.

A number of them were very annoyed with the news that someone from Mediaworks who were in a Reserve Bank lock up leaked details of an OCR announcement an hour early, and someone else from MediaWorks passed on the information to a blogger.

There was also annoyance with the MediaWorks response, with a distinct lack of contrition and an absence of obvious repercussions.

In the weekend long time ourno Rob Hosking slams MediaWorks over leak.

The grumping was still going on today, with Hamish Rutherforsd writing at Stuff MediaWorks must explain RBNZ leak

According to those who visited, Mark Weldon virtually celebrated the fact that there was no television in the Wellington apartment he lived in while he headed the NZX.

But heading the NZX, at a very minimum, would leave him well qualified to understand one area of modern media better than most: the integrity of market sensitive information.

Yet the company he now heads, Newshub owners MediaWorks, has not only committed a serious breach of trust, it is still to give any real account of what went wrong. It owes a better explanation of what exactly it gets up to.

No sign of an adequate explanation or action yet,

The lock-ups are extremely useful for the media organisations, especially when the interest rate decisions are accompanied with the quarterly monetary policy statements. These are essentially a novella of the Reserve Bank’s outlook for the economy, which generally contain complex messages. The Reserve Bank has admitted that misinterpretation of its intended message will increase without the lock-ups.

As a result of the leak, the Reserve Bank called an immediate end to the lock ups, not just for MediaWorks, but for the dozen or so organisations which attended every six weeks

That in particular annoyed journalists who value the lock ups. And they feelings continued today when the Treasury Secretary said the budget lock up next would be allowed but couldn’t be guaranteed to continue, subject to journalist responsibilities being met.

Hamish Rutherford@oneforthedr
Treasury secretary Gabriel Makhlouf decides “on balance” to hold up embargoed lock-up for Budget

Fuuuuuuuu, problems with Reserve Bank embargo breaches has led to a “review” of the embargoed Budget briefing.

For now, Budget 2016 goes ahead. (THANK GOD.) But future Budgets, and which news orgs can attend, will “continue to be reviewed”.

Chris Bramwell@ChrisBramwell
@FrancesCook I had a minor panic when I saw the email arrive … PHEW
Frances Cook@FrancesCook

In other words, no more messing up. Hard stare at those involved in Reserve Bank mess.

So there is obviously still ill feeling in the ranks of journalists, left festering because MediaWorks failed to address the issue adequately.

They obviously value getting privileged information in advance.