NZ First on the Capital Gains Tax capitulation

NZ First have prevented the Government from proceeding with any changes to capital gains taxes, despite a CGT being a core policy of Labour, backed by Jacinda Ardern, and despite it being something Greens have wanted for a long time (and James Shaw stated earlier this year that the Government didn’t deserve to be elected if they didn’t introduce a CGT).

New Zealand First Leader media release:

Tax Working Group Report

New Zealand First Leader Winston Peters has welcomed Cabinet’s decision not to implement an extension of capital gains taxation, following the Prime Minister’s statement in response to the Tax Working Group Report.

“This decision provides certainty to taxpayers and businesses. We in New Zealand First wanted first and foremost for New Zealanders to have time to discuss and debate the contents of the report,” stated Mr Peters.

“During that time we have listened very carefully to the public.

“There is already an effective capital gains tax through the Bright Line test brought in by the last National Government and New Zealand First’s view is that there is neither a compelling rationale nor mandate to institute a comprehensive capital gains tax regime,” said Mr Peters.

“We also welcome the announcement that the coalition government will be urgently exploring options with the Inland Revenue Commissioner, in concert with central and local government, for taxing vacant land held by land bankers and reviewing the current rules for taxing land speculators. Tightening these rules was a priority for New Zealand First.

“Current tax policy, rigorously enforced by an Inland Revenue Department properly resourced will by itself 1) improve the administration of existing tax policy, and 2) target those multi-nationals not paying their fair share of tax,” Mr Peters said.

There was nothing about a CGT in the Labour-NZ First coalition agreement. This was the only reference to tax:

  • Increase penalties for corporate fraud and tax evasion.

Peters via Twitter yesterday:

Despite the claimed hearing and listening, Peters has done what he has said he would do for a long time.

During the 2017 election campaign (Politik): Peters ready to throw spanner in Labour’s capital gains tax plans

Peters says he is not ready to support any moves labour might want to make to extend capital gains taxes.

Finance spokesperson Grant Robertson has arrived at a neat compromise. Labour would set up a Taxation review once it got into Government.

Phil Twyford (on The Nation): “In the first three years we’re going to do a taax working group that will redesign the entire tax system”.

Robertson (on NZ Q&A): “We will have a working group that will have a look at getting a better balance into our tax system between how we tax assets and how we tax income”.

Peters though is adamant.

“I am not for an extension of the capital gains tax” he told POLITIK.

Peters is critical of the review and Labour’s plan to provide details on it’s water levy policy after the election.

“How many times can you get away with this sort of nonsense” he said.

So why did Labour insist on going ahead with the Tax Working Group that had an aim of recommending a capital gains tax?

It seems to have been a wasted exercise, unless the intention was to provide Peters with an opportunity to say NO CAPITAL GAINS TAX.

Shane Jones interview on Nation

Shane Jones on Newshub Nation:

Have you offered your resignation to the Prime Minister at any point?

Oh, no. Absolutely not.

Newshub:  Shane Jones drops capital gains tax clue (includes video of the interview):

Shane Jones has hinted the upcoming capital gains tax announcement could include relief for the regions.

The Regional Development Minister declined to comment on what exactly the Government has come up with, following the Tax Working Group’s recommendations, which were made public in February.

The Regional Development Minister told Newshub Nation on Saturday revealing its contents was off-limits.

“There’s various ways that I could be sacked,” he told interviewer Tova O’Brien.

“One of them that will definitely get me sacked by the end of this programme is if I offer any view whatsoever in terms of what lies exclusively in the realm of my leader and Prime Minister.”

Asked if he could give assurances that “farmers and regional businesses” wouldn’t be hit hard, Jones gave one of his typically cryptic replies.

“Well, in the near future, all I would say is that to the folk who have dirty boots and hard-working calloused hands, watch this space.”

Transcript:


Tova O’Brien: He’s the self-styled champion for the north – as he so often likes to remind us – the first citizen of the provinces, but does Shane Jones’ bluster and bravado mean he gets away with far more than most other ministers? Once again he’s in hot water, once again he’s been reprimanded by the Prime Minister and once again it’s over allegations of a conflict of interest and interfering in a judicial process. Regional Economic Development Minister Shane Jones joins me now. Kia ora, Matua. Thank you for joining us. Minister Jones, you directly spoke to the Chief Executive of the NZ Transport Agency about its case against Stan Semenoff Logging failing to meet safety standards. A High Court case, you’re a minister, you’re not allowed to interfere. Why did you?

Shane Jones: No, well, the facts are being distorted by the National Party. Not once have I ever had anything to do with the prosecution decision that you refer to. Those decisions, I imagine, are made in windowless rooms by lawyers and an independent body. I have no delegations for those matters.

The brief discussion I had with the acting CEO of NZTA, I’m glad to see, has been taken up now by the industry leadership. I accept, however, the cautionary words that the Prime Minister expressed with me. It is a distraction.

It is very difficult to maintain the entirety of the Cabinet Manual if perceptions start to grow that a minister’s interfering with a High Court case. But I’ve probably seen more High Court cases and, in the Maori Fisheries, funded more High Court cases than any other MP. I know exactly where the boundary line is.

But you’re related to the managing director of this Northland company. You once received a donation from him. What made you think it was appropriate to get involved and make that call to the NZTA CE?

You see, I have not made any call to the NZTA CEO. I have raised, in Parliament, with him issues that are now actually being agreed to by the broad leadership of the industry, and people misapprehend what my role is. My role is to isolate those issues that time to time thwart and undermine regional development.

Now, try as much as the Tories might to brand me as someone breaking High Court rules, the reality is I am a feisty, earthy, industrial-grade politician. That’s what the people expect of me, and when I’ve been around the motu, the country, over the last two weeks, not one single garden-variety Kiwi has raised this with me as being a problem.

That’s not necessarily on them, though, and being feisty and industrial-grade doesn’t preclude you from the Cabinet Manual and interfering in judicial processes is against the Cabinet Manual. The NZTA had taken a case against Semenoff Logging.

And that case is, I presume, going to continue in the High Court, and I have nothing to do with that case. I’ve never had anything to do with that case. They are a body that exercises statutory power, and our democracy works on the basis that when we who hold power, i.e. the officials, they’re capable of looking after themselves and having their decision tested in any court. Just because I raise an issue about the essential importance of logistics, supply-chain, doesn’t mean that I’m involved in a High Court case. I absolutely reject-

The reason the ministers need to keep an arm’s length is because of ministerial influence, so even having that conversation can be perceived as influence.

So this is where, Tova, I think that you run the risk of repeating non-credible memes being driven by the National Party. I utterly reject their assertions, and the reality is that I will remain the champion of the regions. The industry love my contributions. From a party that is pro-industry, you should not expect me to shut up. Just because I say things that make the windy bureaucrats feel a bit nervous, in actual fact that makes me more popular amongst the people who back me.

Yeah, there’s windy bureaucrats and then there’s ministerial interference. But anyway, this isn’t the first time you’ve been accused of this. You were also accused of interfering in legal proceedings against fishing company, Talleys, the PM hauled you over the coals for overstepping with the Serious Fraud Office investigation. You have form here.

Well, I don’t recall saying anything untoward about the SFO. I remember giving a general debate speech.

It was enough for the Prime Minister to give you a call and to tell you not to.

Yeah, I mean, the reality is that there’s the role that I have as a minister and then there’s the role that I have as a politician. Look, I wouldn’t read too much in it. I think that people from time to time in the media misapprehend the role that I have. In terms of any other court cases — well, I’ve got nothing to say about them. The people that are embroiled in litigation, they can look after themselves.

So was the Prime Minister wrong to reprimand you?

No, she is totally within her rights to do what she does. I thoroughly understand the Westminster system of democracy. I’ve just got a very robust— and as I’ve said, I’m a retail politician, I’m industrial-grade and I don’t care if it sounds as if I’m always leading with my chin. That is what the people who support me expect me to do.

Yeah, perhaps there needs to be more of a demarcation between those two hats because former National minister, Maurice Williamson, he interfered in a police case, made a call, also said he wasn’t trying to influence an active police case, but he was forced to offer his resignation to the then Prime Minister and resigned. Have you offered your resignation to the Prime Minister at any point?

The difference between Maurice Williamson and me is that I was an ambassador, then I became a politician. Maurice was a politician, now he’s an ambassador in America. He’s done it the other way round.

Have you offered your resignation to the Prime Minister at any point?

Oh, no. Absolutely not.

OK, what about — because it looks a bit like the Prime Minister, she kind of hauls you into the office, says, ‘Don’t do this, Shane.’ You say, ‘Sure, sure, sure.’ Then you walk out and perhaps do it again. Does she have any control over you?

No, I take very seriously what the Prime Minister says, but the Prime Minister also realises that there has never been a consistently loud, focused voice from the regions and the provinces. She, I believe, realises that from time to time there might be a bit of bump and grind, and she’s well within her rights to caution me to ensure that I don’t represent an unwelcome distraction to the overarching narrative of the government. I don’t believe I do. In fact, where I go, I’m met with popular acclamation.

What about Winston Peters? Has he ever chastised you or cautioned you?

What happens in our caucus is tapu. That’s where it stays.

Okay, on the Provincial Growth Fund, how many full-time jobs is your PGF, Provincial Growth Fund, created so far?

Yeah, so the most recent announcement was well over 500. The challenge that I’ve got is that although we’ve allocated $1.6 billion the pace at which the bureaucrats and officials can roll out the approval process, I can’t interfere with that. I can encourage them to go quicker. I do, every week. But at the end of the day, there are strictures that they have to observe in terms of the allocation of public money.

You say over 500, but the list provided by your office says that only 272 full-time jobs have been created so far. That’s a long way off the 10,000 promised.

Yeah, well, look, can we just deal with the 10,000? That 10,000 figure is an extraordinarily important and ambitious figure associated with the full import of the programmes, once they’re up and running. And as I said to you, the Provincial Growth Fund, whilst we are allocating putea, there are other things happening in the provinces. I’m a great supporter of those other things because I’m pro-industry. I’m pro-fishing, I’m pro-dairy, and I’m pro-mining. The fact that oil and gas is actually going to get a boost down in the South Island, then they’re going to find in me a great champion.

Let’s talk about oil and gas. Let’s talk about a region that is crying out for more funding and jobs, Taranaki, thanks in large parts to your government’s oil and gas ban. What responsibility does the Government — and you, as champion of the regions — what responsibility do you have to ensure economic stability there.

Well, I don’t want to go into too much detail, but in the near future there’s going to be a transitional, large meeting up there. But I would say that Taranaki stakeholders, they have various proposals that they’re promoting. There is a proposal doing the rounds called 8 Rivers. That’s associated with storing gas in the ground, using gas for hydrogen energy.

But I want to remind everyone, Tova, that when the Prime Minister made her announcement, which I supported, but we secured the on-going existence of entitlements that are already in place, which is why I’m an enthusiast for the various mining entities, oil and gas mining in the South Island, who are rolling out through the process that they’re entitled to do.

OK, so, 8 Rivers, you raise that now, you also raised that last time you were on this programme, last year. But we haven’t heard much more about it, so what’s happening with that? It wants $20 million from the PGF, is that right? Is it going to get that money?

Yeah, well, it’s just going through the process. I mean, obviously these things take a bit of time, because it is an enormously large project. I’m not the only Minister that would make that decision. And, look, I accept that when I associate myself with the oil and gas industry it does lead to criticism.

And you mentioned Greenpeace, well, you mentioned the accusations that Greenpeace made against me about a fishing court case. I’ve got no time for their lime-coloured righteousness. And if people in the South Island are allowed to use their rights to explore and develop oil and gas, I know the South Island people want that to happen. And before Greenpeace lecture me about that, they can explain to New Zealand why their boat has been under investigation for polluting the Bluff harbour.

Greenpeace aside, what about Labour and the Greens. What do they think about what you’re saying today?

No, they know, the Prime Minister knows that when we made our announcement, no more fresh mining applications offshore. We did, however, retain the ability of International and Domestic firms to use their current entitlements.

Which means 8 Rivers could go ahead, cause they—

Well, they would need to go through a statutory consent process, but the point I’m making—

With the help of your $20 million dollars from the PGF?

Well, we don’t know what the amount of putea is.

But there is going to be some?

Well let’s not taint the process, allow them to go through the process. Ministers will make a decision, yea or nay. But the point that I’m making — I can’t fund, and we don’t fund everything that happens in provinces. We make decisions that have impacts. An impact that was made from our oil and gas decision is people are legally allowed to continue to explore and invest hundreds of millions of dollars in the South Island.

So, 8 Rivers, for those who don’t know, is a development project – it would create hydrogen, urea, and electricity using natural gasses. So, that’s controversial within your Government. How much biffo is going on behind the scenes between you and David Parker, say?

Oh, no, David Parker is a very good friend of mine. Although as Attorney General, he has been known from time to time to warn me to be very conscious of the blurry lines between my writ as the champion of the provinces and other legal obligations.

OK, let’s move on to Westland Milk. Chinese Company Yili is buying Westland Milk for nearly $600 million dollars, $588 million dollars. Are you comfortable with China buying such a significant New Zealand dairy asset?

Well, in phase two of the overseas investment rules that David Parker is leading, he is going out to consult whether there should be criteria dealing with a test of national significance, not necessarily for land, but for strategic industries.

Is that a ‘no’?

No, what I’m saying is that I don’t want to say anything that taints the ability of the Mongolian milk company to acquire whatever consents that they might have.

Well, one of your colleagues, Mark Patterson, has said that it’s an erosion of New Zealand control in our significant dairying assets. Do you agree with him?

Well, you’re talking to me as a Minister of the Crown. And I feel like I have an obligation—

Sometimes it’s hard to differentiate.

Yeah, fair point. But please listen with your taringas. I don’t want to taint whatever process the Mongolian milk company is going through. Mark is a dearly loved colleague of mine and I thoroughly understand his anxieties, but people are playing by the rules. And the rules at the moment allow them to proceed. I’m disappointed with the ineptitude and how absolutely useless the directors of New Zealand’s second-largest dairy co-op are, but that’s not the problem of the Mongolians. That’s the problem of how useless those directors are.

The $10 million that the Provincial Growth Fund loaned Westland Milk, was that an attempt to stave off an offshore purchase like this?

Well, I must be very honest, I had no idea that the directors had only one plan in mind, and they never ever shared that with me that they were preparing the company for sale via Macquaries, I think those are their advisors. So we put a caveat on that $10 million dollars in the event that there was a change of ownership, then the deal would vaporise.

Now it’s been suspended. And it’s not the only time you’ve offered a loan through the PGF. You also gave Oceania Marine in Whangarei a $4.8 million dollar loan. Is the Government becoming a lender of last resort?

Well, look, the policy underlying the Provincial Growth Fund is imaginative. It is bold. And, look, I accept that it inverts what used to happen. And I realise there are risks in doing that. But if there is a genuine case of market failure, then we have the criteria, endorsed by Cabinet, for the four ministers to proceed in that direction. Now, I know I’m attacked by the National Party for doing this, but I’m reminded of that great saying which I’ll adapt from my Grandmother, which is that if the Epsom cat wants to eat fine fish, then he’s got to get his feet wet.

OK, let’s move on to the capital gains tax, an announcement is going to be made very soon by your Government. Are you happy with where the Government has settled?

So, there’s various ways that I could be sacked. One of them that will definitely get me sacked by the end of this programme is if I offer any view whatsoever in terms of what lies exclusively in the province of my leader and Prime Minister.

Yes, but as the much-lauded, by your good self, champion of the regions, that includes farmers and regional businesses, can you give them assurance that they’re not going to be stung by a capital gains tax?

Well, in the near future, all I would say is that to the folk who have dirty boots and hard-working calloused hands, watch this space.

Sounds like New Zealand First got a win, and perhaps the tail is indeed wagging the dog. It was Winston Peter’s birthday this week, 74-years-old, what did you get him?

Every time I go overseas I bring a gift back for my rangatira, and that gift is the subject of great privacy between him and I. But we shared a day yesterday in Whangarei, and although the announcements were relatively modest, it’s always a pleasure to be with, yeah, the rangatira of New Zealand First.

What about the gift of succession? Who would win in a leadership fight between Shane Jones, Ron Mark and Fletcher Tabuteau, say?

Right, well, I don’t think we should contemplate a future at all without our leader, Winston Peters. And when I had the opportunity, Tova, to come back into politics, I wanted to demonstrate that the provinces would have a champion, and that champion doesn’t need to hanker after anything else.

Yeah, that’s not a no. Thank you very much for joining us, kia ora, Matua Shane.

Transcript provided by Able. www.able.co.nz

Reid Research party support poll

A Business New Zealand Reid Research poll on party support slipped under the radar this week. It was taken from 15-23 March, the day of and just after the Christchurch mosque attacks, so it should be treated with more caution than normal.

  • Labour 49.6%
  • National 41.3%
  • Green Party 3.9%
  • NZ First 2.3%

Labour are up from 47.5% in the RR February poll (which was up 4.5% from the previous poll). It isn’t surprising to see an (small) increase in support for Labour at the  time of a major adverse event. Jacinda Ardern’s adept handling of the attack aftermath has been rewarded in the poll.

National have hardly moved, down just 0.3% from the February poll, but had dipped 3.5% to a record low in the previous poll. They may struggle to hold even at that after Simon Bridge’s performance since.

Labour’s gain has been Green’s loss.

Greens have dropped from 5.1% to 3.9%, which must be a concern to them. James Shaw was largely unseen after the Christchurch killings, with Marama Davidson and Golriz Ghahraman being more prominent, and they tend to be polarising – popular in part but also annoying many.

NZ first have slipped 0.5% to 2.3%, after dropping by the same amount in February. Winston Peters and NZ First fully backing the Arms Amendment Bill happened after the poll period so they could easily slip further. They have disappointed a lot of their 2017 supporters.

The Business NZ Reid Research poll of 1,000 voters was taken from March 15-23 and has a margin of error of +/- 3.1 per cent. 750 were interviewed by phone and 250 online.

Source NZ Herald – Claire Trevett: Poll puts Labour support up after mosque attacks but tax is back in debate

 

Mark Patterson (NZ First MP) supporting the Arms Amendment Bill

It is significant that Mark Patterson, a farmer, spoke on behalf of NZ First in the third reading of the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Bill.

I would also like to talk too on behalf of farmers. For farmers, this stuff’s not “nice to have”; it’s actually a tool of the trade in some cases, and they will be feeling a little bit as if they have been restricted unfairly in the sense of the need that they have: things like wallabies, geese, goats, tahr, deer—of course, which not only damage pasture and crops but carry TB—and pigs that can do so much harm.

There is some need for cullers to have access to these semi-automatic weapons over and above the criteria that we have set and we have carved out an exemption for cullers on private land. It wasn’t in the first draft of the bill but we have added that within the select committee process. But we will have to look at that in the second tranche because there are 5 million hectares of private land—hill country—out there under some pressure from these pests and wild animals, and we will have to assess that.

But New Zealand First fully supports in the first tranche being tight, because the tighter we make it at the start it’s easier to make exemptions as required rather than try to do it in an ad hoc manner at the start.


MARK PATTERSON (NZ First): It is an honour for me to stand and add New Zealand First’s support for this significant piece of legislation. In doing so, we stand behind and beside our Prime Minister and I would like to acknowledge her in the leadership she has shown and it has been comforting to us all. Her response has been noted not only nationally of course but internationally.

In a dark time of international politics she has stood out and New Zealand First, right from the get-go, had absolutely no trouble falling behind what was, in one word, “leadership” in this time of national crisis. In fact, our own leader, the Rt Hon Winston Peters, his initial reaction was that at 1.30 on 15 March our world changed forever. And so will our gun laws.

I will acknowledge too the National Party. I know that the politics for them, as Chris Bishop alluded to earlier, is not easy either as it is not for us, but their response and their leader, Simon Bridges, falling in behind and getting alongside—this effort has been incredibly important. I acknowledge you on that side of the House—well, the National Party in particular on that side of the House—for taking the principled stand and you have done that for the same reason that New Zealand First and the rest of the House has: because it is the right thing to do.

The gunman, it has been referenced, was operating legally on an A category licence—the garden variety licence that any one of us with a reasonably limited background can qualify for. He had a legal firearm purchased over the counter at a retail outlet. He did modify that firearm but he did expose the gaping holes in our firearms law.

These changes are long overdue and the genesis of this is actually not Christchurch. The genesis was Aramoana, and, as has been referenced earlier, we did fail to act there. John Banks has admitted recently it’s his greatest regret. Mayor Dalziel in the select committee process, in her presentation to us she referenced the fact that she sat where we sat in 1992. She heard the same arguments that we heard and they were unable to get it across the line, and today we have the ability to right that wrong.

The Thorp report of 1995—it came out and recommended restricting handguns, banning these military-style semi-automatic rifles, limiting magazine capacity, having a full firearm registry. We had Port Arthur and we saw the exemplar of John Howard. We had Matt Robson’s attempts to get bills before the House and one successfully in 1999 and then again in 2005. The 2017 select committee recommended 20 changes off the back of a full investigation; only seven were implemented. This is not the time to point fingers but certainly, for anyone that questions the process, how much process do you need? We have been too timid. We have paid the price.

It is important though, as Ian McKelvie referenced in his previous speech, to acknowledge the lawful firearms owners of this country. New Zealand is amongst those with the lowest rate of firearms-related incidents in the world. There are 250,000 or thereabouts firearms licence holders and there are estimated between 1.5 million and 2 million guns. There is a lot of firepower out there and the vast majority of these New Zealanders use their weapons, as described, legally and safely and comply.

For those New Zealanders, some of whom are hurting and feeling somewhat victimised, we do understand that hurt but we hope that you will see the greater good in what we are doing. There is no alternative for us. We cannot and will not suffer a repeat of this tragedy.

In terms of the exemptions, I would commend the Minister actually in his pragmatic approach to this with the collectors’ items, vintage firearms. These are history and, as one of these collectors said to me, they touched history—they lived and touched history. And to be able to keep these with very strict controls and having this amendment where you have to have a vital part stored at another address, we are making sure that that is a safe provision but an important provision nonetheless.

I would also like to talk too on behalf of farmers. For farmers, this stuff’s not “nice to have”; it’s actually a tool of the trade in some cases, and they will be feeling a little bit as if they have been restricted unfairly in the sense of the need that they have: things like wallabies, geese, goats, tahr, deer—of course, which not only damage pasture and crops but carry TB—and pigs that can do so much harm.

There is some need for cullers to have access to these semi-automatic weapons over and above the criteria that we have set and we have carved out an exemption for cullers on private land. It wasn’t in the first draft of the bill but we have added that within the select committee process. But we will have to look at that in the second tranche because there are 5 million hectares of private land—hill country—out there under some pressure from these pests and wild animals, and we will have to assess that.

But New Zealand First fully supports in the first tranche being tight, because the tighter we make it at the start it’s easier to make exemptions as required rather than try to do it in an ad hoc manner at the start.

So this is just the first tranche of legislation and we note the royal commission that’s coming—Sir William Young, a wise head to lead that effort. We will look at things like the licencing regime. We will look at things like registry. We will look at sentencing. Just looking at the bill as it is, I think there is room for toughening some of the sentencing. Prohibition orders have been mentioned by the Opposition, once again, where those exemptions may be able to be increased for our farmers, if indeed they are demonstrated to really need these weapons.

Of course, there will be these wider social issues such as hate speech that will be looked at, and the wider social context of how this tragedy has been able to come about. But these are questions for another day. This is a very, actually, narrow bill around hardware—where the line is drawn in terms of what weapons New Zealanders will be able to have access to and those that we won’t.

Could I commend the Minister Stuart Nash on the way that he has shepherded this through the select committee. I’ve previously acknowledged the chair, Michael Wood, who did an outstanding job in this, and all members of the select committee contributed constructively. Our public service: I understand that there were members from 10 departments seconded on to this bill. There were 13,000 submissions in 48 hours.

We, of course, did not get to read them all individually ourselves, but I’m sure—with other members of the select committee—we did all read a select few, and it has also been referenced that we did get a very broad selection, and wisely picked selection of oral contributors that contributed so much to the drafting of this bill.

To the Police Assistant Commissioner Penny, who I see here, and your team, Mike McIlraith, I might reference, who found out he’s a long lost cousin of mine through this process, but everyone who contributed through that select committee.

Could I quote, finally, from Lianne Dalziel, who quoted a contributor to the ’99 select committee: “If the Aramoana experience has failed to teach our legislators that these and similar weapons must be banned, regardless of the power of the lobby opposing such action, one can only speculate at the extent of the tragedy needed to spur our politicians into position action to protect our lives.” Today we know the answer to that question.


See Arms Amendment Bill passes third reading

UMR and other polls – Labour and National even

Note – at best polls are just an approximate indicator of a snapshot of political support, especially individual polls.

Here is some anecdotal and it appears actual poll information.

Matthew Hooton in Capital Gains Tax debate shows Jacinda Ardern’s weakness

National insiders say their polling has NZ First consistently below the 5 per cent threshold, the Greens dicing with death by bouncing around it, and Labour and National locked in a tight battle, both above 40 per cent and within the margin of error of each other.

Care has to be taken with ‘insiders say’ anecdotes, but this is much the same as the last two published polls:

  • Reid Research 24 January-2 February: Labour 47.5%, National 41.6%, Greens 5.1%, NZ First 2.9%
  • Colmar Brunton 9-13 February: Labour 45%, National 42%, Greens 6%, NZ First 3%

The Reid Research poll was very early in the year, before politics cranked up, so favouring Labour is not surprising.

James Last yesterday on Twitter – The latest UMR poll for its corporate clients:

  • National up 5 to 45%
  • Labour down 1 to 44%
  • Greens down 2 to 5%
  • NZ First no change on 4%

While unpublished and verified this looks quite believable, with National back virtually level pegging with Labour.

National haven’t been particularly impressive but Labour have handled the Tax Working Group and CGT poorly so may have eased a bit because of that – but it could be too son to take much from it. If we get polls in the next month they may add too the picture, unless other major issues or events take over influence.

What this means is that hal way through the term (18 months before the next election) there is little in it between Labour and National. I think we can expect ebbs and flows in their support somewhere in the forties depending on timing of polls and margins of error.

Perhaps of more significance is NZ First remaining stuck under the threshold. When NZ First was last in government from 2005-2008 they polled mostly under the threshold and ended up getting 4.07 in the 2008 election, getting them dumped from Parliament.

https://en.wikipedia.org/wiki/Opinion_polling_for_the_2008_New_Zealand_general_election

Greens look a bit safer staying just above the threshold, but are still at risk. They will be keen to be seen to be achieving significant gains on climate, environmental and social issues. They have time for that, but need to start delivering.

 

 

Tax Working Group, CGT – PR and promises

Through the week there has been a lot written about the released tax Working Group report, in particular about to CGT or not to CGT.

It looks very Labour. The scope of Michael Cuilen’s report was limited by Labour, but includes significant Labour terminology, like fairness and wellbeing.

But I get the impression  that Labour is backing off  introducing a CGT, either because they know they can’t get NZ First support, or they know it is too electorally toxic. Perhaps both.

Or else we are being played.  It proposes a high rate of tax, and includes farms and businesses. This could be an old trick of threatening something more harsh than is intended so the real aim looks acceptable in comparison. There is plenty of scope for  Labour and NZ First to come out with lower tax and a farm and small business exemption and claim they have listened to concerns.

NZ Herald Editorial: Pity if capital gains tax too hot for Labour to handle

If the Labour Party had any illusions about the fight it will face to bring in a capital gains tax, it knows now. Within 24 hours of the public receiving the recommendations of Sir Michael Cullen’s tax working group the hostility was almost drowning out support for the proposal.

The governing parties had the report weeks ago — plenty of time to time to form a response for announcement with the report’s release as often happens. But only the Greens greeted it enthusiastically.

The week before the report was released Green co-leader made a statement (in parliament) – he said that if the Government didn’t introduce a CGT they didn’t deserve to be re-elected. Labour didn’t seem to prepare, and didn’t seem to have a response organised – unless they deliberately left it open to National to attack the proposals.

Heather du Plessis-Allan: Big tax shake-up or big PR job?

It’s been dubbed the biggest tax shake-up in a generation. But it’s all talk. There’s no chance it’s going to happen. At least not to the full extent the Tax Working Group is recommending.

Some of the shake-up will happen. Maybe enough to qualify as a low-level tremor. Maybe it will include capital gains taxes, maybe it won’t. Yup, maybe none at all.

It’s all too early to say. And that’s for three reasons: Winston Peters, us and Labour’s own self-interest.

A CGT was a Labour election promise. It’s all about making the tax system fairer. It’s a Government looking after the poorest Kiwis. Robertson and Ardern have both spent too much time repeating that message to now walk away from their one chance to fix the system.

This is where Peters comes in. If he continues to oppose a capital gains tax, he might be their get-out-of-jail card. They might be able to happily drop a CGT and blame it on him. They could trot out the old you-win-some-you-lose-some argument. They’ve used it before.

It’s of course true that coalition governments require compromise.

But will the Peters excuse be good enough? Ardern and Robertson will have to use all their charm and communications skills to sell that message.

Either this will be the biggest tax shake-up of a generation, or the most convincing PR campaign to explain why it never happened.

We will have to wait a couple of months for the Labour-NZ First decision making and the PR to reveal which way this is going to go.

It’s hard to see how NZ First would support the introduction of a CGT. Winston Peters has condemned it in the past, notably during the last election campaign. The future of his party is at stake, and u-turning on a CGT could be a big nail in NZ Firt’s coffin.

I think Labour have created a dilemma for themselves here.

If they manage to get CGT legislation passed in time for the election they are at major risk of being thrashed by voters.

If they backtrack and pull the plug on CGT they will annoy core left wing support who have bought the promise.

 

Greens versus NZ First and Labour conservatism

Does Labour use NZ First as an excuse to be conservative on economic and other policies to avoid being linked to Green radicalism? They do use the Budget Responsibility Rules to be conservative. They are an agreement with the Green Party to allay fears of a swing too far left in the last election campaign, but there is disagreement over having the Rules within the Green Party.

I have seen dismay expressed from the the left that the Government is nowwhere near progressive enough,.

Henry Cooke (Stuff):  The Greens are looking forward to 2020 already, and the possibility of a world without Winston

At their annual conference last year, a prominent Green Party member gave a speech which called for the party to tear up a central tenet of their partnership with Labour.

He received a standing ovation. Most of the Green MPs present, who had signed off the policy, were in the room. Several agreed with him.

The policy was the Budget Responsibility Rules a set of tight government spending guidelines Labour and the Greens agreed to ahead of the 2017 election. They have gone on to play a huge role in how the parties have governed.

The idea was to blunt the attacks from the right that a Labour-Green government would blow up the surplus and destroy the economy.

Ever since Green supporters and some MPs have been agitating for the party to get rid of the rules. In the last week this began. A “review” of those budgetary constraints has been launched, but this is just a procedural step on the way to either scrapping them or modifying them before the 2020 election.

There always seemed a likelihood that Labour and the Greens would need NZ First to give them any chance of getting into Government last election, and so it turned out.

It’s a long way from the election but there appears to be a greater chance that NZ First won’t make the threshold next year. This would give the Greens more influence over Labour, depending on how many seats they get. If Greens recovered back up to ten to fifteen seats, and were in Cabinet with Labour, they should get significantly more say and sway.

In the same week, co-leader James Shaw made the most forceful argument for a capital gains tax anyone has in years, saying the Government wouldn’t deserve to be re-elected if they didn’t implement one.

That was a big play from Shaw, mostly to his party wanting more reform from Government.

​The election is next year, and the Greens are getting ready by staking out positions on the left. At the same time, some in the party are daring to look forward to a world without Winston Peters.

Fixing this requires not just talking up wins in Government but very clearly pushing left on tax – an issue likely to dominate through this year and into the next thanks to the tax working group – as well as balancing the books. These might seem like small bore issues but they are very important to that core of committed supporters.

NZ First are likely to try to distance themselves from relying on Labour next year to try to fool voters and Labour negotiators into thinking they could go either way.

So Labour+Green will be an important consideration for voters.

Many Greens see Peters and NZ First as the reactionary laggard keeping this Government from truly transforming the country. But it has long been useful for centrist Labour MPs to blame NZ First for their own conservatism. Labour will be extremely conscious of how scared the wider public might feel about a radical Labour-Green government in 2020.

Keeping the budget deal in place might well be Ardern’s plan to placate those fears.

For Labour, yes. And possibly for Shaw. But what about green supporters disappointed with the lack of progress leftwards this term, and impatient for more radical reforms?

Possibly one of the most significant decisions for the next election will be what the Green party decides to do about the Rules, that some see as a brick wall in front of progress and real progressivism.

One thing that may make it easier for Greens pulling Labour left is the conservatism of Simon Bridges pulling National further right.

Unless the Sustainability Party gets some support in the centre.

James Shaw slams tax timidity, calls on Labour, NZ First to be bold with CGT

In his opening speech for the year in parliament yesterday Green co-leader James Shaw slammed timid tinkering with tax, and, confronting pontification about whether the current Government can “politically afford to do what no other Government before it has done” and introduce a Capital Gains Tax asks “Can we afford not to?”

That must be aimed at Labour and NZ First, who have to agree with Greens on any tax changes following the Tax Working Group process.

First Shaw illustrated the tax disparity issue wit no tax on the capital gains of property.

Karen is a renter. She’s got a career, and she earns roughly the median wage. Over the last 10 years, she’s earned about $450,000 and she’s paid, roughly, $70,000 in tax. She budgets well, she can manage the rent, and she can manage the other expenses, but she can’t quite have enough left over to save.

And then there’s Paul. Paul also earns the median wage. He’s a bit older than Karen, and Paul got lucky and managed to buy some rental property before house prices really started rocketing—about the time that Karen came into the workforce, about the time that John Key became Prime Minister. On the day that Paul sells that rental property, he makes as much as Karen has in the last 10 years, and he pays zero tax on that income

Now, what does Paul do? He uses that as a deposit to buy two more houses. That is the rational thing to do. And what does Karen do? Well, Karen keeps renting because there is no way on God’s green earth that she’s going to be able to scrape together a deposit on $45,000 a year.

And that, in a nutshell, is why we have a large and growing wealth gap in this country, and it is undermining our ability to pay for the public services that we all rely on, including Karen—including Paul.

There is something missing from this illustration.The implication here is that ‘Paul’ paid no tax, but ‘Paul’ must be earning something to live on for the ten years before scoring a capital gain, and after reinvesting capital gains on more property, so could have been paying some tax.

Now, the Green Party has long been calling for that fundamental imbalance to be addressed, and every single expert working group in living memory has agreed with us, but no Government—no Government—has been bold enough to actually do it. But if we are to be the Government of change that New Zealanders wanted and elected, we must be bold.

The crises that we face on multiple fronts—the wealth gap, climate change, the housing crisis—we cannot solve without fundamental reform. These crises have been allowed to metastasise because generations of politicians have timidly tinkered rather than actually cut to the core of the problem.

And the consequences of that timidity—the consequences of that timidity—are being felt by Karen and by hundreds of thousands of New Zealanders just like her, trapped in “Generation Rent”. So when the commentators pontificate about whether this Government can politically afford to do what no other Government before it has done, I ask “Can we afford not to?”

Can we afford not to?

We were elected on the promise of change. If we want to reduce the wealth gap, if we want to fix the housing crisis and to build a productive high-wage economy, we need to tax income from capital the same way that we tax income from work.

The very last question that we should be asking ourselves is: can we be re-elected if we do this? The only question we really ought to be asking ourselves is: do we deserve to be re-elected if we don’t?

Shaw is effectively throwing down the tax gauntlet to Labour and NZ First, suggesting they don’t deserve to be re-elected unless they introduce a CGT.

I have to say, boldness is needed everywhere, everywhere.

That is a challenge to the other parties in Government with the Greens. The re-election comment is particularly pertinent for NZ First, who were well under the threshold in the latest poll.

Small minority to make crucual decisions on ‘fair pay’ agreements

Fair Pay Agreements “would set minimum standards to lift wages and conditions across an industry or occupation”, but could be initiated by a small minority of workers – just 10%, or less (1,000 workers). Is that fair? A minority in, say Auckland, could effectively end up imposing ‘fair pay’ across an industry across the country.

This is what the Fair Pay Agreement Working Group has recommended. The Government will now consider what they do – this may not be straight forward, with Labour and Greens requiring the support of another minority, NZ First.

Heather du Plessis Allan: Time to fast-forward to the past

Business is collectively losing its mind over the working group’s recommendations. It’s calling it a return to the national awards of the 1970s.

Business hates that the negotiations can be triggered by as little 10 per cent of the industry’s workforce. Business hates that the contract agreements would be compulsory for all employers in that industry. Business hates paying employees more than it has to.

Business has a few fair points. We can’t expect the cafe owner in Balclutha to pay staff exactly the same wage as the Auckland cafe owner making a killing thanks to the money and foot traffic a city delivers. There should be concessions to regional variance.

These recommendations probably won’t all be accepted by the Government. Labour’s coalition partner New Zealand First might challenge many of them, if not all. Winston Peters’ party has already temporarily pulled its support on Labour’s employment law once before.

So it is far from a done deal at this stage.

But, the motivation behind these recommendations is on the money. Kiwis are underpaid.

That’s debatable. In the private sector we are generally paid what companies can afford to pay and stay in business.

Audrey Young:  Coalition Government lining up smorgasbord of targets for National

The same goes for the fair pay agreements outlined in the Jim Bolger report delivered to the Government this week.

But given New Zealand First’s track record in diluting union-backed legislation, it is hard to imagine the party agreeing to a trigger as low as 10 per cent for workers to force employers to the table for compulsory sector-wide bargaining.

The trouble is that the higher the trigger goes, the less happy the unions will be. A true compromise may result in deeply unhappy unions and employers.

Dominion Post editorial: Why back to the future on pay might not work

Many of this country’s lowest paid and most vulnerable workers have every right to look back in anger at the steady, inexorable fall in the value of their wages, the undermining of working conditions and the perceived out-of-proportion rewards for their employers and many others in the business community.

Bolger’s group was assembled to address such inequities, and its report released this week suggests we go back to the future.

It recommends the creation of fair-pay agreements, a new version of the old collective bargaining that critics have labelled as “compulsory unionism by stealth”.

There is some sympathy for that argument because the proposal, if adopted, would mean that an entire industry would have to negotiate new minimum pay and working conditions if just 10 per cent or 1000 workers in that industry, whichever is fewer, asked for it.

That creates the potential for major upheaval in businesses that have long moved on from the days of compulsory unionism and the environment that went with it.

The reforms are targeted at the country’s low-paid and most exploited workers.

But there is still the potential for major uncertainty, confusion and disruption for everyone within the complicated ecosystem that is our national economy.

For many, the amount they are paid remains the main measure of their perceived value, from the employer and within society. Work conditions are important, but pay is so often the principal point of anger and agitation.

If employers followed a number of local bodies and now Westpac bank in taking on a living wage for their employees, it would go a long way towards quelling that anger, and possibly even lift productivity.

But local bodies can just put up rates to pay for bigger wage bills. Ratepayers have to pay. If companies put up prices customers can choose not to pay.

This too, of course, is a blunt tool, and would not come without cost. But in conjunction with sensible legislation to protect workers’ rights and conditions, as happened when zero-hour contracts were deemed illegal, it could address many concerns without creating widespread disruption and a threat to the economy.

This working group is right to address inequities on behalf of the country’s workers, but it should be careful not to throw out the businesses with the bathwater.

A minority in Government, NZ First, look to be the deciding factor in whether a minority of workers could enable (or force) ‘fair pay’ on a whole industry, which could put a larger number of workers and their jobs at risk.

Another point  – Labour may think it was a master stroke recruiting ex-National MP Jim Bolger to head the Working Group, but why an ageing retired politician? One who is a long way from knowing what ordinary workers feel and experience. Surely there are younger people around who may have a better appreciation of work in the modern world.

Government blurb on the Working Group report:

Greenpeace versus Shane Jones on fishing prosecution and NZ First donors

Shane Jones has always seemed to be an embarrassment waiting to happen for the Government.  He has already ventured into iffy territory for a minister, for example his public attacks on Air New Zealand.

Now he has dived into a dispute with Greenpeace over party donations, which involves a prosecution of a subsidiary  of Talleys, a company that Jones has financial and social links to (Winston Peters also).

NZ Herald: NZ First MP Shane Jones accuses Greenpeace of deliberately tarnishing NZ’s reputation for donations

Quite a confusing headline.

NZ First MP Shane Jones has fired a shot across Greenpeace’s bow, accusing the organisation of deliberately tarnishing New Zealand’s international fishing reputation just to fundraise.

But Greenpeace’s New Zealand Executive Director Russel Norman fired back, saying Jones was trying to distract the public from the fact he has accepted donations from fishing company Talley’s.

Norman said this should preclude him from contributing to fisheries policies.

The war of words erupted after a Greenpeace press release implied Jones should be withdrawn from any debate around fisheries because of donations he had received from Talley’s.

Financial links between Talleys and NZ First have been known for a long time, as has Winston Peters support for commercial fishing.

“Incidentally, Talley’s is the same company that donated heavily to the campaign of Shane Jones, who has emerged as the de facto Minister of Fisheries in the current Government.”

Norman said it would appear from the outside that Jones was having “quite a big influence on fisheries policies”.

Jones said he had received donations from the company but they were in compliance with Parliament’s rules on donations.

He said Norman was using “politically lurid language,” which was “all part of their [Greenpeace’s] process to fundraise.

“Incidentally, Talley’s is the same company that donated heavily to the campaign of Shane Jones, who has emerged as the de facto Minister of Fisheries in the current Government.”

Speaking to the Herald, Norman said it would appear from the outside that Jones was having “quite a big influence on fisheries policies”.

Jones said he had received donations from the company but they were in compliance with Parliament’s rules on donations.

He said Norman was using “politically lurid language,” which was “all part of their [Greenpeace’s] process to fundraise”.

“Greenpeace has a track record of misinformation and exaggeration.

“It’s extraordinary that the Greenpeace’s Australian spokesman Russel Norman is ranting in such a way to damage the good name of New Zealand. Greenpeace has a track record of misinformation and exaggeration.

“It’s extraordinary that the Greenpeace’s Australian spokesman Russel Norman is ranting in such a way to damage the good name of New Zealand.”

One could suggest similar about Jones ranting.

Norman said this “obviously was not” his intention and said it was just a distraction from the fact an Amaltal fishing vessel was caught doing bottom trawls in a protected area of the Tasman Sea.

Amaltal is a subsidiary of fishing company Talley’s.

In a statement, a spokeswoman for the Ministry for Primary Industries (MPI) said MPI had initiated a prosecution against Amaltal, as well as the person who was the master of the vessel at the time of the incident.

Both are facing charges under the Fisheries Act, the spokeswoman said.

In its own statement, Amaltal confirmed one of its fishing vessels had inadvertently fished in an unauthorised area of the Tasman Sea in May last year.

But Jones has defended Amaltal.

Jones said this was a “mere technical issue which would be ironed out when common sense prevails”.

A follow up from Newshub: Shane Jones in hot water over support for Talley’s accused of illegal fishing

Regional Development Minister Shane Jones is being accused of breaching parliamentary rules by appearing to support a fishing company that’s facing prosecution for illegal fishing.

New Zealand First MP Mr Jones described the Ministry for Primary Industries (MPI)’s case against agribusiness company Talley’s as a “technical issue” – when the Cabinet rules warn ministers against commenting on active cases.

But Mr Jones is now facing criticism for getting too close to the Talley’s case, calling it a “mere technical issue which would be ironed out when common sense prevails”.

On Friday he changed tact: “They are highly technical matters… and no doubt the court will be possessed of all the information.”

Greenpeace executive director Russel Norman said it’s “completely unacceptable for a Cabinet minister to intervene in an active court case where the Crown is taking Talley’s to court for environmental damage”.

The Amaltal Apollo, a vessel owned by a subsidiary of Talley’s, is facing 14 charges for fishing in protected waters in the Tasman Sea.

And Cabinet rules clearly state: “Ministers do not comment on or involve themselves in the investigation of offences or the decision as to whether a person should be prosecuted.”

“I think there’s no question that Jones has breached the Cabinet Manual, which is the rules that govern the behaviour of Ministers,” Mr Norman said.

It does look like quite questionable comment on a current investigation by Jones.

Talley’s donated $10,000 to Mr Jones’ 2017 campaign. And while Mr Jones accepts that, and that he’s mates with Talley’s boss, Sir Peter Talley, he says it doesn’t mean anything.

Instead, he’s blaming Greenpeace for spreading what he calls “misinformation”.

There seems to be some fairly solid information here that suggests that Jones is again an embarrassment to the Government.

Mr Jones has previously been chair of Sealords and held top positions within Māori and Pacific fishery organisations.

He makes no secret of his continued close relationships with the big commercial fishing companies.

It’ll be up to the Prime Minister to decide whether Mr Jones has overstepped the mark and breached the rules in this case.

Due to Labour’s reliance on NZ First for support will Jacinda Ardern do anything about it? Probably not in public at least, or nothing more than a slap over the wrist with a wet bait fish.