Greens – wealth tax, top priorities versus bottom lines

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

But Shaw seems optimistic. 

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

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

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

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

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

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

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

That is what you call wriggle room. 

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

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

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

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

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

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

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

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

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

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

But they will be pushing for it.

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

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

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

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

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

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

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

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

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

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

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

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

This morning I woke truly refreshed brothers and sisters.

I finally knew who I was going to vote for.

The beautiful Greens.

It had happened at the most unexpected moment.

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

It was extraordinary!

FINALLY there was a reason to vote Green!

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

………and then this…

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

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

…ARE YOU FUCKING KIDDING!!!!

WHAT ARE YOU DOING?

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

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

They need to go. Just go now.

These people are fucking muppets.

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

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

Shaw sort of talks tough on tax and other coalition demands

Following a ‘pledge’ by Grant Robertson that tax-wise Labour “we will only implement the changes that Labour is campaigning on” next term – see Labour’s underwhelming tax policy – Green leader James Shaw sort of talked tough, saying Greens would consider not forming a coalition if they didn’t get what they wanted.

Shaw said that a wealth tax would be ‘a top priority’ when asked if it would be a bottom line.

Stuff: Labour rules out Green Party’s wealth tax in any Government it forms

The Labour Party has ruled out implementing the Green Party’s wealth tax.

Finance Minister Grant Robertson said no new taxes or other changes to income tax would be introduced in the term.

He was asked if that included proposals from possible coalition partners, such as the Green Party who are campaigning on a substantial wealth tax on millionaires.

“This is Labour’s tax policy. We are committing to not implementing anything other than this if we are in Government,” Robertson said.

He was asked again if this meant he was ruling out giving some ground to the Green Party in possible coalition talks.

“What I’m saying is that this is the policy that Labour is campaigning on, and we will only implement the changes that Labour is campaigning on,” Robertson said.

Polling consistently over 50% Labour can probably afford to talk as if they will be in a position to do what they like next term, which is nowhere near enough on tax, certainly not transformational or reforming.

But Greens are desperate for votes to get them over the threshold to keep them in Parliament, and need to move support from Labour to do that, so are trying something they have done little of before, talking tough.

ODT/NZH: Greens prepared to play hard ball on forming next Government

The Greens are prepared to forego a coalition or confidence and supply arrangement and sit on the crossbenches if post-election talks do not go their way.

Co-leader James Shaw made the comments on Thursday, saying the only post-election deal that was off the table completely was one which would give National power.

However, he said if the Greens held the balance of power it was “always a possibility” that it would walk away from negotiations with Labour if they could not get the gains they wanted.

If there was no coalition or confidence and supply agreement, that would force a minority Labour government to seek the Greens’ support for legislation on a case-by-case basis.

He wouldn’t say what the Greens’ bottom lines in those talks were, but said a wealth tax was a “top priority”.

First the Greens have to get enough votes to get back into Parliament. They also need to hope that Labour don’t get enough votes to have a one party majority (which would enable them to do as they please).

And they also have to learn to do tough negotiations, something they seem unfamiliar with. Within the Green Party they make decisions by consensus, which is quite a different skill to doing inter-party coalition negotiations.

Time will tell whether they get enough votes, and if the do whether they can walk the tough talk.

Shaw also made other indications of demands.

He would also be pushing for co-leader Marama Davidson to be a minister and suggested a Green MP hold the agriculture portfolio.

If Greens are in coalition then Davidson should be one of their ministers, bu this is a different approach to this term when they chose for Davidson to lead from outside Government.

I’d be very surprised if Labour gave Greens the agriculture portfolio.

Shaw said a new Labour-led government would need to be in partnership with the Greens for it to be truly transformational.

“I think, in the next Parliament if Labour and the Greens are able to form a government together, then you will see a truly progressive government for New Zealand.”

The Greens need to push this line to take votes from Labour, but it provides ammunition to opponents, who will say that their are risks with a Labour+Green government getting radical, but there’s been no sign of Labour going anywhere near radical. Instead they look very centrist conservative.

If the Greens were in a position to negotiate a post-election deal, Shaw said it would be up to the party’s members to give any deal the nod.

It makes tough negotiations difficult if the negotiators have to refer to party members to confirm and deals.

Shaw:

“If you look at the policies we have released so far … those give you an indication of where we want to be able to play a role in government.”

He went on to specifically name-check its wealth tax policy as well as its minimum income scheme, clean energy and its upcoming agriculture policy.

Asked if the Greens wealth tax plan was a “bottom line,” Shaw said that it was a “top priority”.

Labour have made it clear it is not an option at all for them.

Greens have some tough times ahead. First they have to make it back into Parliament. Then if they do they have to hope Labour don’t have a majority. They will also hope NZ First are out of the reckoning in coalition negotiations.

If they are in a position to negotiate they then have to see if tough talk can become tough negotiations.

One risk for the Greens with Shaw’s stance – if Labour get enough votes to give them a majority on their own they can do what they like with tax policy, and can hardly roll over on it for the Greens.

If this happens the Greens have virtually ruled themselves out of being included in Government if Labour offers that option.

Detail on the Green Party ‘wealth tax’

A key part of the Green Party ‘Poverty Action Plan’ announced yesterday was a wealth tax that would partly fund major benefit increases. The Green website soliciting support and petition signatures has very sparse information:

A 1% wealth tax for those with a net-worth over $1 million.

Media gradually provided details.

Newsroom:  Greens unveil plans to overhaul welfare and tax systems

In its first election policy announcement, the Green Party has called for a guaranteed minimum income (GMI) of at least $325 a week for anyone not in full-time employment, including students.

The policy, costing a total of $6.6 billion in year one and around $12 billion a year from full implementation by 2023, would be funded by a wealth tax – where people with assets of more than $1 million will pay a 1 percent levy per year – and two new tax brackets for high income earners. The Greens expect to raise $8 billion from the wealth tax in the first full year, rising to $9 billion by 2023/24.

To pay for the Poverty Action Plan, two new tax brackets would be created to tax income above $100,000 and $150,000 at a higher rate of 37 percent and 42 percent, respectively. This would affect the top 7 percent of income earners, the Greens say, and generate $1.3 billion a year.

This suggests the wealth tax and tax bracket changes will not fully fund the benefit increases – $9b + $1.3b is less than $12b.

This must just be based on estimates, as valuations would have to be done on wealth/assets-liabilities.

It will be calculated on an individual basis, meaning a couple would have to own at least $2 million in assets for both of them to begin paying the wealth tax.

The tax will also exclude certain assets from consideration, including individual household assets – furniture, electronics and vehicles – worth less than $50,000 and Māori land under the Te Ture Whenua Māori Act. Charity organisations with assets held by individual members would not be counted either.

The wealth tax would affect just 6 percent of New Zealanders, according to the Greens’ figures.

For most people property will be their only assets considered as wealth – as well as businesses, which could be quite hard to value annually.

Some examples:

Image

I had to search for details and eventually found them via Scoop. The Summary document is also very sparse in details. For that you have to go to their policy document. The Summary of this is again very sparse, so here are some key details on the wealth tax:

Those who receive more money from the Government will think it fair.  Those being “asked to pay a small annual contribution” may think differently.

I presume that most of those applauding this wealth tax will not be in the 6% of people who would have to pay more tax.

But this is all subject to:

  • The Greens being re-elected back into Parliament
  • Coalition negotiations with Labour (Grant Robertson said they would have their own welfare/tax policy)
  • Veto of NZ First if they are also part of the next government
  • A “detailed policy development process”
  • A decision by Cabinet to proceed with whatever comes out of the process.
  • Legislation being passed in Parliament.

That could take a year or two at least if it is able to proceed.

Full policy document:

Click to access Poverty_Action_Plan_policy_document_EMBARGOED_2.pdf