John Roughan is an editorial writer and columnist for the New Zealand Herald.

John Roughan: They all should be paying a fair share

43 comments
Tax avoidance is an issue this Government is leaving for Labour.
If I were the Labour Party, looking at five more years without power, I would be doing some serious work on the tax issues coming to light lately. Photo / Mark Mitchell
If I were the Labour Party, looking at five more years without power, I would be doing some serious work on the tax issues coming to light lately. Photo / Mark Mitchell

If I were the Labour Party, looking at five more years without power, I would be doing some serious work on the tax issues coming to light lately. Admittedly it's tedious and the technicalities don't make riveting politics, but nothing infuriates mainstream voters more than rich people not paying their whack. It infuriates me and I'm on the right, they say.

Certainly I have not the slightest envy of wealth. I think those who succeed in a competitive enterprise, face personal financial risks, provide employees with reliable incomes and have the precious qualities required to lead a big organisation, deserve a lot more money than I do.

I also believe the wealth they generate trickles down, and not only through taxation. The rich may get richer but the poor, self-evidently, do not get poorer. Those who use the word poverty in this country are talking about inequality, which is not the same thing.

I don't begrudge the rich their boats, beach houses, Gulf views, koru lounges or even those new angled seats on international flights (except a little, when we've landed and we're held back in the aisles so they can get out first). But I deeply resent their tax avoidance. And I mean avoidance, which is lawful evasion. It might have been forgivable when top rates were taking 66c in the dollar but there is no excuse now.

Admittedly, it is easy to be a righteous taxpayer when you never see the money. Not long ago I earned a tidy little sum outside Paye and giving a third of it to the government really hurt at a sub-sensible level. But when you consider what you get....

Not only an educated, healthy, stable and safe society, wealthy enough to pay for what you do, but the whole infrastructure of a prosperous market economy, from enforceable laws and contracts to the roads and telecommunications networks.

Above all there is good public policy. Good government - in the broadest sense of consistent impartial advice and two competent political parties who compete to lead a government. Both are so well aware of the right way to run an open, competitive, non-inflationary economy that it can be hard for the party out of power to find a constructive issue.

I don't begrudge the rich their boats, beach houses, Gulf views, koru lounges or even those new angled seats on international flights. But I deeply resent their tax avoidance.

Labour is clearly struggling for one. It started this year with a proposal for a universal entitlement to three years' tertiary education, which had political commentators gasping with admiration and calling it a "game-changer". It wasn't. TVNZ's next Colmar Brunton poll found the position of both parties much as it has been for the past seven years.

Since then, Labour has looked at a universal basic income, which would be a benefit for the rich whether they are paying tax or not. The party seems to have sensibly backed away from that one.

More recently, it has become obsessed with banks. Andrew Little seems mortally aggrieved at their profits and their failure to lower lending rates in line with the Reserve Bank's unexpected OCR reduction last month.

That's New Zealand First territory, Labour is normally more sophisticated. Little would do much better to seize on the palpable public concern this week at the discovery that a Panama-based international law firm for wealth managers regards this country as a tax haven because we do not tax foreign trusts.

Labour ought to question our tax treatment of all trusts. Why do we have them?

The one good purpose they serve is to enable people in positions of public power to put their wealth in a blind trust for as long as they are in that position. Beyond that, there are only two reasons I ever hear for putting assets in a trust: to protect them from someone who may have a legitimate claim on them, or for a tax advantage.

We should not need to wait for a Labour Government for something to be done about this, and the taxation of trans-nationals trading here. National is at least interested in the latter problem, as are governments throughout the developed world. But back when this Government was new, its finance minister was loudly concerned to learn only half of us liable for the top rate of income tax were paying it.

National did next to nothing about it for seven years and wasn't much concerned this week about the "Panama Papers". But it is handing Labour an issue close to that party's heart and giving the country a reason to change horses.

I doubt that many of the wealthy really want to avoid paying their due. They are not oblivious to the public services they receive.

They like to think of themselves as taxpayers, not bludgers. Individually they probably would be happy to pay personal tax if everybody else did. All it might take is careful thinking and leadership.

Debate on this article is now closed.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW
John Roughan is an editorial writer and columnist for the New Zealand Herald.

John Roughan is an editorial writer and columnist for the New Zealand Herald. A graduate of Canterbury University with a degree in history and a diploma in journalism, he started his career on the Auckland Star, travelled and worked on newspapers in Japan and Britain before returning to New Zealand where he joined the Herald in 1981. He was posted to the Parliamentary Press Gallery in 1983, took a keen interest in the economic reform programme and has been a full time commentator for the Herald since 1986. He became the paper's senior editorial writer in 1988 and has been writing a weekly column under his own name since 1996. His interests range from the economy, public policy and politics to the more serious issues of life.

Read more by John Roughan

Sort by
  • Oldest

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production apcf05 at 01 Oct 2016 00:47:31 Processing Time: 580ms