‘Surprise card’ (really?) could help sell CGT

An obvious possible aim with Michael Cullen’s Capital Gains Tax proposals, especially the very high tax rate, was that the Government could adopt a watered down version and sell that as a good thing – this is an old political trick, lead with something terrible and then claim that a half as terrible policy was somehow great.

There are hints that this is indeed a deliberate approach taken, with a more moderate CGT being quietly circulated.

Tom Pullar-Strecker (Stuff): Surprise card could help Labour sell a capital gains tax ‘light’

The Government has a trump card that could make a capital gains tax less unpopular and far harder for any future National government to reverse.

Tax Working Group chairman Sir Michael Cullen has proposed making a tax on capital gains “tax neutral” by handing back the $8.3 billion in revenue it is expected to generate over five years, mostly through income tax cuts and improved KiwiSaver incentives.

But a well-placed source believes the Government is likely to propose slashing the rate of a capital gains tax (CGT) and introducing significant exemptions to get the tax in place, while still offering all the major “carrots” and keeping the change tax-neutral.

That could be achieved simply by declaring that the CGT should be “tax neutral” over a longer period than five years, say 10 years.

A ‘well-placed source’ sounds suspiciously lie a leak strategy is being used.

The Government asked the Tax Working Group (TWG) to come up with tax packages that were tax neutral.

But Finance Minister Grant Robertson confirmed it was the working group that determined that should be over five years, with “no ministerial direction” on the timeframe.

Robertson would not rule out changing the time period, saying only that the Government was “carefully considering the report and all of its recommendations”.

The source suggested that if the Government did shift the goal posts set by the working group it could halve the maximum tax on capital gains from the currently proposed top income tax rate of 33 per cent, to 16 or 17 per cent.

It could also decide “not to touch KiwiSaver” by exempting KiwiSaver funds from paying tax on Australian and New Zealand shares, exclude more “lifestyle blocks” from a CGT, and introduce a threshold under which small business owners would not pay tax on their capital gains.

Together that would address the “four main concerns” with a CGT, including one “which is gaining traction” that it would be unfair to tax capital gains at 33 per cent while not adjusting them for inflation, the source said.

This makes it sound like Robertson may be the ‘well-placed source’. Which wouldn’t be surprising.

It also wouldn’t be surprising if Cullen and Robertson had either planned a strategy of proposing a heavy handed CGT and then switching to a CGT-lite from the start, or have sugested the lite version in response to the widespread negative reaction to the version proposed by the Tax Working Group.

Lengthening the period over which a CGT would be tax neutral could also make it less appealing for any future National government to quickly reverse the tax changes, since many of the benefits from the overall changes would then be more heavily “front loaded”, the source observed.

Chris Wales, a former leader of PwC’s global tax team who has advised prime ministers and finance ministers in several countries, including Britain’s Tony Blair, said the approach could be “wise, sensible and democratic”.

“At a simplistic level, people will, of course, be relieved that the potential breadth of a CGT has been reduced and that the rate is nowhere near the 33 per cent that the TWG has put forward,” Wales said, speaking from Kiev.

The Government could argue it had respected the outcome of the group’s deliberations but listened to the people as well, he said.

It sounds like ‘the people’ are being played here.

There’s not much of a surprise in that.

Cullen to be paid $1k a day for ongoing media work on tax recommendations

I think it’s unusual for the chairman of a Government working group to continue promoting recommendations and defending the Government’s position via media after delivery of their report. I hope it’s more unusual to be paid $1000 a day to do it.

Stuff: Sir Michael Cullen debates impact of tax reform on farmers, without the politics

Sir Michael Cullen has continued his public statements on the impact of capital gains tax, although his tone has softened considerably.

On Wednesday the Tax Working Group chairman released a lengthy statement on the impact the proposals of the Tax Working Group would have on farms.

It came two days after the former Labour MP and minister of finance questioned statements made by the National Party about the possible impact on KiwiSaver.

Cullen did not say why he issued the latest statement, instead claiming he had “responded to a request to comment on recent claims about the effect on farmers”.

This week it emerged that while the Tax Working Group has disbanded, Cullen has had his contract extended by the Government.

Cabinet papers show Cullen was to be paid $1062 a day in his role as chairman of the TWG.

“We extended his appointment as the chair of the TWG to 30 June because we were aware there would be extended public discussion on the report, and this has played out,” Finance Minister Grant Robertson said in a statement.

That will be close to $100,000 over three months.  Where is Ardern’s so-called fairness in this?

If Ardern and Robertson aren’t capable of explaining and defending the working group recommendations then perhaps they should be paying Cullen out of their salaries.

Where are all the young progressives?

Jacinda Ardern’s sudden rise to leadership of the country was lauded (in part by herself) as the start of new generation progressive change.

Jacinda Ardern, 2018.jpg

But where are all the young progressives?

Deputy Prime Minister Winston Peters has a lot of influence in the government. He is nearly seventy four years old and first made it into Parliament in 1979, forty years ago and before the so-called neo-liberal changes in the 1980s.

Winston Peters, 2018.jpg

One of the first things the incoming did was do a u-turn to support and implement the Trans-Pacific Partnership Agreement. ‘Progressive ‘ was tacked onto the from of the name, but it is much the same as past trade agreements. Responsible for managing this was Labour’s most experienced minister, and one of their oldest – David Parker is nearing 60.

David Parker NZ.jpg

Tax reform has been a major policy of Labour’s. They appointed Michael Cullen to lead their Tax Working Group. He is the same age as Peters (he turns 74 in two days),  and entered Parliament two years after Peters, in 1981.

Image result for michael cullen

Labour has a close relationship with unions, and want to reform labour laws. The appointed ex Prime Minister Jim Bolger to lead that working group. He entered parliament in 1972, before most current ministers were born. He is ten years older than Peters and Cullen. And his group’s recommendations have been described as a return to old school industry wage agreements.

Jim Bolger 2018 (cropped).jpg

Experience is essential in government. So are new ideas, understanding changing times and youthful enthusiasm.

Ardern is fronting a new progressive way of doing politics, but where is the team and the drive behind this? There are no obvious new generation stars beyond Ardern’s accomplished grasp of PR.

Where are all the young progressives? And where is the female input beyond the figurehead of Ardern?

Tax reform and capital gains tax still unresolved

According to media claims the Cabinet has received copies of the Tax Working Group recommendations, but it could take some time to find out what they are going to decide to run with. – or what the are allowed to run with by Winston Peters.

Group chairman Michael Cullen has suggested that tax changes could be decided in Parliament this term ready to come into effect in April 2021 providing Labour gets a mandate in next year’s election. But Grant Robertson has warned that it could take some time to work through the recommendations with Labour’s partner parties in Government.

Audrey Young (in Major challenges for ‘exasperated’ Ardern):

Robertson played Robin to her Batman at the post-Cabinet presser, initially fronting on the Government response to the insurance industry inquiry.

The subject quickly changed to the final report of the Tax Working Group and its promised capital gains tax which is due to be handed to the Government this week.

Robertson patiently continued his mission to change the language over the tax by calling it a “capital income tax” rather than a “capital gains tax” — an attempt to equate it to all other income.

Ardern became impatient when questions turned to the undisputed veto that NZ First will have on any capital gains tax — the Greens have been unequivocal supporters and NZ First longstanding opponents.

Apparently a capital gains tax is just like every other issue the Government debates, and requires the agreement of all three parties.

Not just apparently. Tax reform is far from a done deal. It is a Labour only promise, but with no public agreement with either NZ First or the Greens.

Stuff:  Decision on capital gains tax will take a wee while, Grant Robertson warns

There will be no quick decision from the Government on whether to implement a capital gains tax, Finance Minister Grant Robertson has signalled – noting Labour would have to work that through with its coalition partners.

The Tax Working Group (TWG) chaired by Sir Michael Cullen is understood to have completed its report for the Government, with a “clear majority” favouring subjecting capital gains from the sale of property, shares and businesses to income tax.

But Robertson told RNZ the Government would need to take its time to read the TWG’s report “work through the details of it and work out what package we can agree to as a coalition government”.

Remarkably the Labour-NZ First coalition agreement did not mention the Tax Working Group, nor CGT, and neither did Labour-Green Confidence & Supply Agreement, so the recommendations of the TWG and what Labour would like to do will all need to be negotiated with Winston Peters and NZ First, as well as with the Greens. This alone is likely to take time.

Inland Revenue said on Tuesday morning that the report had not yet been delivered to the Government, and no date has been set for it to be made public, but sources said the report was being read in the Beehive.

Robertson said he expected to get the report by the end of the week but he and Prime Minister Jacinda Ardern did not rule out a coalition partner vetoing any legislation.

“There is a wee ways to go before the final decisions about this report will be made,” Robertson said.

“As we do with all these reports, we will take a look at it and put it out with a few interim comments from us,” he said.

So it could be some time even before the report is made public. Labour want to work out how to try to sell it before they advertise it.

Cullen said in December that he believed Parliament would have time to pass legislation paving the way for any proposed tax changes before the election, so those changes could take effect from April 2021.

Theoretically Parliament may have time, but Labour won’t want to take any tax changes to Parliament without agreement from NZ First, and the Greens.

Politik: And now the hard part; getting Winston to agree to a capital gains tax

Prime Minister Jacinda Ardern confirmed yesterday that iot was still the government’s intention to bring forward legislation for any tax changes before the end of its current twerm though those changes would not come into effect until after the enxt election.

But whether it will propose a capital gains tax will now depend on whether it can persuade NZ First to agree.

Ardern and Finance Minister Grant Robertson were coy yesterday on whether they thought they could win that derbate.

Meanwhile NZ First Leader, Winston Peters, is not saying much beyond repeating his 2017 assertion that we already had a capital gains tax.

“What i tried to point out then was that we had a cpaital ghaimn tax and that we had had one for a long time,” he told POLITIK last night.

“Now the question is are you talking about broadening it.

“The position of New Zealand First is that we will wait for the report, we will evaluate it and then we will give our view.”

Tax reform has already limited by Labour in their terms of reference for the TWG. They will presumably also want any changes to fit within their wellbeing agenda.

It will only happen if it also fits with the electoral wellbeing of Winston Peters and NZ First

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.

Q+A – Michael Cullen on the Capital Gains Tax and TWG

Chairman of the Tax Working group, Michael Cullen, was interviewed on Q+A last night on Capital Gains Tax and water.

He was also interviewed on the Nation on Saturday.

Scoop: On Newshub Nation: Simon Shepherd interviews Tax Working Group Chair Michael Cullen

  • Sir Michael Cullen says there’s currently under-taxation at the top end of the income and wealth scale, and under his working group’s recommendations “people who have substantial capital assets in one form or another” would end up paying more.
  • Sir Michael disputes the effect Labour’s capital gains tax policy had on the party’s 2011 and 2014 election losses: “There was no real sign, actually, that that had any great impact in shifting votes around.”
  • He says some charities getting tax breaks might not be using their income for charitable purposes: “Some of those charities – at least on first examination – appear to not be passing on much of their income out to the supposed intended beneficiaries.”
  • Sir Michael says proposed environmental taxes on things like waste dumping would be aimed at changing behaviour, not increasing revenue: “Hopefully behaviour changes, so that the amount of money that you collect at the end of the day may not be much more… there’s just a lot less waste going to landfill.”
  • He says tax cuts for lower income earners would be an effective way to offset increased user-pays charges: “Actually reducing the bottom tax rate, or having even a tax-free area at the bottom, is more effective in compensation.”

Full transcript (Scoop)

The Q+A panel on Cullens interview and tax.

 

For and against a CGT and Michael Cullen interview on the Nation

Michael Cullen, ex finance minister and now chairman of the Tax Working Group, will be interviewed on Newshub Nation this morning at 9:30m am (repeated Sunday morning 10 am).

Following the release of the Tax Working Group’s interim report, Simon Shepherd sits down with its chairman Sir Michael Cullen to look at how tax changes could increase income equality and help the environment.

Future of Tax: Interim Report (PDF)

The contentious hobbled CGT should be a talking point.

Stuff:  Ministers issue fresh request to Tax Working Group to ‘consider inequality’

The Government has given the Tax Working Group a prod along after it stopped short of reaching a recommendation on the merits of a broad-based capital gains tax in its interim report.

It set out two models for what a broad-based tax on capital gains could look like in its interim report published on Thursday.

Chairman Sir Michael Cullen said “the key issue” it had looked at was tax on capital income, but said it was not a “no brainer”.

Finance Minister Grant Robertson and Revenue Minister Stuart Nash immediately released a letter they had sent to the TWG.

The letter asked the TWG to “consider a package or packages of measures which reduces inequality, so that New Zealand better reflects the OECD average whilst increasing both fairness across the tax system and housing affordability”.

The ministers also asked the TWG to examine which of two models for taxing capital gains that the TWG considered “would be best to ensure the tax system was … fair and balanced”.

A source close to the TWG said the letter sent “a strong signal” about the Government’s desire for a broader capital gains tax.

Max Rushbrooke for a CGT and pro-equality tax changes: Tax report highlights NZ’s inequality issues

Though it may not have settled on an answer yet, yesterday’s interim report by the Tax Working Group was crystal clear about the problem: we have a tax system that does very little to enhance fairness and reduce inequality.

The need to restore fairness runs like a silver thread throughout the working group’s analysis. Hence one of its preferred options is to tax nearly all the gains that people make from selling assets.

…it would also help reduce inequality, because these so-called capital gains will be largely the preserve of the very well-off. Indeed, many of these people have become adept at disguising their income as capital gains in order to avoid paying tax.

There are, of course, some downsides to introducing a thorough tax on capital gains. It creates more reporting requirements, and could encourage people to hold on to assets for longer. But these seem like minor problems when set against its major benefits.

Peter Dunne is against it: It’s time to bury the capital gains tax

The spectre of a capital gains tax on residential property sales and other substantial assets has loomed large over the New Zealand tax scene for about fifty years now.

Government is a little different, but the outcome seems likely to be the same. While this time the Government has left open the possibility of a capital gains tax, it is the Tax Working Party that looks likely to rule it out, saying the issue is ultimately a political one. And, given the Government’s commitment not to introduce such a tax before it gets a specific renewed electoral mandate, the prospects look as distant as ever. Very few governments win elections promising to introduce more taxes.

All of which raises the question as to why the capital gains issue keeps getting raised, especially since the arguments in favour from both a revenue gathering and efficiency perspective are not that strong.

Advice I received when Minister of Revenue was that it could be over a decade from the time of introducing a broader based capital gains tax until it produced any significant revenue gain for the Government.

Also, it has been long accepted that the family home would have to be exempted from any such regime, further diminishing its likely impact. Even in the rental sector, the impact would likely be negative for tenants, with landlords boosting rents to offset any negative tax impact when those properties are sold.

… the application of a capital gains tax to other substantial items would be just as fraught, as items will appreciate over time at different rates, while some will depreciate. The administration of such a tax will impose additional strains and complexities on an already struggling tax system for not much revenue gain.

When tax policy moves too far into the area of engineering income redistribution or social equity complicated issues invariably arise at the margins, which the tax system, by virtue of its blanket approach, is not well designed to cope with.

All of which means that the Government would do far better to focus its ongoing attention on ensuring that the greatest amount possible of all taxes currently levied is collected before embarking on the imposition of new or additional taxes.

For all these reasons it is time to bury the capital gains tax argument for good, and focus afresh on tax policy that works, rather than just feels good.

 

UPDATE:


Audrey Young: Capital gains tax defining issue for Labour, NZ First

Tax could make or break Government at the next election. Illustration / Guy Body

One thing is clear after this week’s tax report – tax could make or break the Government at the next election, and a capital gains tax (CGT) will be a defining issue for the relationship between Labour and New Zealand First.

The tax blunder last time taught Jacinda Ardern and then finance spokesman Grant Robertson that the “how” of progressing a policy is as important as the “what”.

Capital gains tax has been an integral part of the post-Clark Labour story. In a sense, Robertson owes his job as Finance Minister to it.

It may be that New Zealand First sees CGT as such a defining issue for Labour that it is obliged to support it as an article of good faith.

Both parties will also be mindful of the integrating effect of the policy on the Coalition.

Because the capital gains tax would not take effect until after the election, it would bind the Coalition partners, Labour and New Zealand First, closer together and require Peters and Ardern to campaign jointly under their tax policy.

That will fundamentally change the dynamics of the next election, whatever the merits and disadvantages of a capital gains tax itself.

 

 

Tax Working Group throwing CGT football back at Labour?

It is reported that the Tax Working Group may throw the Capital Gains Tax football back at Labour, deeming a decision on it being too political for them. Perhaps it is more of a hot potato.

While the CGT was a prominent part of Labour policy the WTG was limited in what they could recommend. For example they were instructed to exclude family homes from any CGT recommendations, which complicates things substantially.

And it appears that, again, the Government is asking for (forcing?) amendments to media articles after they are first posted.

Tom Pullar-Strecker (Stuff): Capital gains tax debate not over, Grant Robertson suggests

The Tax Working Group is understood to have stopped short of recommending a broad-based capital gains tax, in an interim report due out within days.

The working group chaired by Sir Michael Cullen was tasked with designing a capital gains tax for consideration by the Government, but is expected to push back any firm recommendation to its final report which is due to be published in February.

It had been widely expected that the Tax Working Group (TWG) would recommend a broad-based capital gains tax on the likes of sharemarket and property investments as the centrepiece of tax reforms on which Labour would fight the next election.

However, doubts began creep in earlier this year that the Government would ultimately back the plan, amid concerns the new tax would be unpopular and would cause rents to rise without delivering much in the way of extra revenue for at least a decade.

Paul Drum, chief executive of accounting body CPA Australia, said in a newspaper column that “a close reading of the tea leaves” suggested the “highly important and politicised” issue of the capital gains tax “is probably to be parked for further consultation and input”.

Sir Michael Cullen hinted that was on the money, saying he had “not reacted strongly to that comment”.

Interestingly, the headline was changed some time after that article was posted online. The original article name:

CGT in doubt as bid to outsource political decision hits snags

Now:

Capital gains tax debate not over, Grant Robertson suggests

Some content was also changed. Earlier:

The Tax Working Group is understood to have stopped short of recommending a broad-based capital gains tax, in an interim report due out within days.

Now:

The Tax Working Group is understood to have stopped short of recommending a broad-based capital gains tax in an interim report, but Finance Minister Grant Robertson has played down the report’s significance.

I think this has been added:

Robertson confirmed the Government had received the interim report which he said would be released soon.

But he said the work was “always supposed to be a two-stage process” and commentators were “getting a bit ahead of themselves”.

And some content has been edited out.

It looks like Labour is a bit sensitive about the Tax Working Group in relation to the Capital Gains Tax.

Considering their obvious influence over media coverage (the Prime Minister’s office jumped into media coverage of Jacinda Ardern’s misleading over the Clare Curran resignation last Friday), I wonder how much Robertson and Labour may be trying to influence Cullen and/or the Tax Working Group?


Also, from Newsroom:  Capital Gains Tax looks less likely

Prime Minister Jacinda Ardern said on Monday that she had not “set expectations” about what the working group currently considering tax reform would recommend to the Government.

Ardern and Finance Minister Grant Robertson established the working group in March with terms of reference including, “whether a system of taxing capital gains or land (not applying to the family home or the land under it), or other housing tax measures, would improve the tax system”.

But Labour’s plan to de-politicise the CGT appears to have failed, with reports now circulating the working group intends to push a recommendation on a CGT back to the Government.

Ardern said she would allow the group to do its work and would not prefigure what it would produce — outside of the parameters established in its terms of reference.

But Robertson is actively trying to influence the reporting.

Newsroom understands the interim report has recently been handed to Robertson and Revenue Minister Stuart Nash. Officials will then digest the report before releasing it to the public.

So the ‘leaking’ of the CGT information could have come from a number of places, for a number of reasons.

The group’s final report is due in February. Labour will then choose tax proposals from the report to take to the electorate in the 2020 election. Should they win, the proposals would be implemented in April 2021.

So the Tax Working Group looks like a policy development exercise for Labour in Preparation for the 2020 election..

Communism by stealth, or ‘Corporate-Capitalist Welfare by design’?

PartisanZ saved me the trouble of stating this topic:


Matthew Hooton: ‘Communism by stealth’ is here – NZHerald

“Infamously, Key then entrenched Working for Families as Prime Minister, and Ardern and Robertson have further locked in middle-class dependency with their December 2017 Families Package.

In fact in 2004, the left-wing critique of Working for Families was stronger than Key’s, that it would operate as a subsidy of low-paying employers.

That is, using Key’s original numbers, if there was a job to do worth $60,000 a year, an employer could hire someone with two kids, pay them just $38,000 a year, and they’d end up with almost the same pay in the hand.”

It’s an interesting and convoluted argument, demonstrating, IMHO, that we are no longer involved in a Left-vs-Right contest but merely exist on a neoliberalism continuum where the challenge is how to make the failed economic paradigm ‘appear’ to be working …

It’s not really about an actual economic paradigm. It’s about the ‘semblance’ of an economic paradigm. About trying to prove the mirage is the reality. I believe we need to find a coherent, comprehensible name for this phenomenon because it affects us all, whether we want a UBI or vehemently oppose it.

‘Simuliberalism’* perhaps? The similitude or simulation of neoliberalism?

“And don’t expect National to be able to do anything about it. With the financial status of so many working families now as locked in to welfare as any other beneficiary, abolishing Working for Families is becoming ever-more politically impossible.

It has transferred the primary economic relationship that determines family income from being that with the employer to that with the state. It is indeed communism by stealth. Clark and Cullen knew exactly what they doing when they set it up.”

Whatever it is, it certainly IS NOT communism … since the means of production aren’t owned by the State on behalf of its citizens … they remain largely in private hands pushing wealth upwards towards the very few … and this means it CANNOT BE communism by stealth.

Corporate-Capitalist Welfare by design more likely … Simuliberalism?

 

Internal polling shock

A surprise result from an internal political poll: “Do Bomber’s attempts at talking up a Green-Labour bloc perception have any credibility?”

  • No 100%
  • Yes 0%

Margin of error: 0.00
Sample size: 1

As predicted here Martyn Bradbury has followed up claims that ‘internal poll rumours’ would support his rants with Latest Internal Polling – National in trouble.

The impact of the Memorandum of Understanding has triggered something deep in the electorate if the latest internal polling is anything to go by.

Obliging the mainstream media to change the way they report politics from a first by the post perspective to an MMP one changes the way voters see the Opposition.

That change seems to be happening at an alarming pace.

The mainstream media aren’t obliged to report things the way Bradbury insists and they haven’t changed how they report polls, which is poorly.

Bradbury claims to have “the latest internal polling” without disclosing:

  • Who has done the polling?
  • What was the question asked?
  • What was the sample size?
  • When was the polling done?
  • What was the margin of error?
  • Is Bradbury making things up?

So what result is Bradbury claiming?

The latest internal polling has National free falling to 44%, Labour at 31% and Greens at 12%.

That means the Labour-Green bloc is at 43% and National is on 44% – that’s a mere 1 percent lead and the speed of the turn around suggests something has snapped in terms of voter apathy.

Even if those are actual results from a credible poll they aren’t particularly surprising or much out of the ordinary. All three party results are within the ranges they have been getting over the past year.

Bradbury has been making unsubstantiated claims and has been trying to talk up a political revolution for several days, ignoring more realistic assessments of polling by the likes of Phil Goff and Michael Cullen.

Bradbury actually had both Goff and Cullen talking about polls on Thursday night on Waatea 5th Estate.

Bradbury:

Sir Michael isn’t the biggest change here the perception, we report polls like sports results, National 48, Labour 30, that’s an FPP view, and we are in an MMP environment. The combined bloc of Labour Green shows voters the election is a lot closer doesn’t it?

Cullen:

Well yes but not significantly different. I mean the poll out today, there was another poll from Roy Morgan which showed Labour up just one, Greens two, and they seem to be taking the votes off New Zealand First if you believe, ignoring the fact that it never works like that and polls bounce around.

Basically we’ve still got this gap between Labour Greens on one side and National on the other of about five to eight percent. 

And it still comes down to they key issue which I think the Greens privately recognise…but it’s Labour’s got to win votes off National for there to be a secure change of government, and so far we’re not seeing that.

I mean for Labour to go up and the Greens and new Zealand First to go down it just means that the sort of the same not large enough plate of beans is being passed around between three eaters.

And it’s a fact that National keeps sticking around  forty seven forty eight which is the thing that’s still got to be concerning for Labour and the Greens in particular because you can’t say that Winston’s locked into a change of government.

Anybody who thinks that doesn’t understand how Winston operates in any particular situation.

National has dropped into the low forties occasionally but also sometimes goes up into the fifties but as shown by the RNZ poll of polls “National’s average through this year has been between 44% and 48%, remarkably high for the midyear of a third term in government”.

Bradbury:

Phil there are lots of rumours about the new internal party polling…

Substantive polling usually takes longer than two days to do (this was two days after the MoU announcement). And Labour or the Greens woukld hand their internal poll results over to blabbermouth Bradbury? (Possibly if they thought he would do a job for them)

…that would suggest the blocs are even closer. If you gain momentum could we see level pegging before the end of the year?

Roy Morgan:

During September (2015) support for National fell 6% to 44.5% now just behind a potential Labour/Greens alliance 46% (up 8%).

During April (2016) support for National fell 3.5% to 42.5% – the lowest for two years since April – May 2014, now only 2% ahead of a potential Labour/Greens alliance 40.5% (down 1.5%).

Labour+Greens have fluctuated in and out of level pegging so it’s already an unsurprising poll outcome.

Goff:

Well I think that’s certainly what Labour wants to see. At the moment, ah,  you know National has been reasonably consistent in the public polls, around forty seven, forty eight.

On public poll of poll averages, yes they have been consistently in the high forties but not in individual polls as shown by the above Roy Morgan results.

Ah in our own polling they have from time to time dropped as low as forty three percent and Labour on thirty six. Ah then you can see that a Labour Green coalition could easily become government at the next election.

If Greens poll high when Labour do, but as Labour goes up Greens tend to go down (they have been as low as 8% in public polls).

And ah in the midst of all of that of course you’ve got Winston Peters who has that balance of power. I doubt that he’d want to come in with, ah, let the left if the left was still polling well behind National.

What Labour has to do as Mike Cullen has said, it’s gotta win some of those light blue votes off National. That’s what changes an election.

And ah I think there are a lot of things in that environment out there, I’m thinking of housing, and I’m thinking of transport problems in Auckland. There are a lot of things out there that people are really unhappy about in a way that they haven’t been over the last two terms of the National Government.

So the environment is there.

If Labour and the Greens look like a stable coalition force, and not like the, you know the Kim Dotcom Mana Internet mix that was at the last election, then I think there’s a prospect that Labour and the Greens can win the next election.

That’s probably an unintentional dig at Bradbury who promoted the Kim Dotcom Mana Internet mix as the supposed game changer last election.

Neither Cullen nor Goff mentioned the Memorandum of Understanding.

Some interesting and probably widely shared measured views on polls and election chances by Cullen and Goff, but since then Bradbury has ignored most of that (what would they know?) and continued on his perception building exercise that ignores basic facts about past polls.

The only shock would be if Bradbury’s claims and promotions were taken seriously.