Revenue Minister David Parker during his speech on the high-wealth Individuals research from Victoria University of Wellington. Photo / Mark Mitchell
Revenue Minister David Parker during his speech on the high-wealth Individuals research from Victoria University of Wellington. Photo / Mark Mitchell
Editorial
EDITORIAL
With the dust settling after a mini whirlwind debate over tax, rents, and class, the question remains: what did it all achieve?
While Act and the Greens have clearer identities and wider differences, Labour and National are scuffing up the same turf, but from opposite ends. The personalities ofthe leaders are also taking on more significance with the tighter party vote.
Last week gave the Government a chance to send out an intelligence-gathering probe in controlled conditions. Data on New Zealand’s tax system was released showing the extent of inequality in the country.
How did the information about the tax wealthier individuals pay compared to middle New Zealand land? Have public attitudes towards tax reform changed?
Unlike American elections, for instance, ours are not awash with daily data on how voters are thinking about specific topics of interest. Occasional public polls have put economic concerns at the top.
The only certain answers that followed were about ruling out wealth and capital gains taxes and a cyclone levy in the Budget. That allowed Prime Minister Chris Hipkins to come across the way people appear to like him: calm, reassuring, drama-free, having a plan, sending out a message of restraint.
However, policy researcher Max Rashbrooke of Victoria University noted: “Either they do something about the issue and then have a big fight about tax, or they don’t do anything, and they have to say, ‘We’ve identified this huge problem and we’re going to do nothing about it’.”
He also pointed out that: “If we taxed at the rates of Germany or the Netherlands, our Government would have another $20 billion to $30b to fund public services better”.
There was a vagueness about what Labour’s tax policy would be going into the election, but there was also no clear “gotcha” opportunity offered to Opposition parties.
Given Labour’s history with tax policy, National and Act talked up the possibility of the Government looking at a “tax grab” and a “tall poppies” attitude. National said the need was to control spending rather than tax reform.
Tax is an interesting area, where there are probably quite different attitudes between generations. Views appear to come down to where one sits on the line between chaos and organisation.
For some people with an aspirational mindset, individualism is key and it’s easy to consider taxes focused on extreme wealth as a case of envy. But younger people in particular are more used to seeing problems and solutions in systemic ways - it’s simply a way of righting an imbalance and paying for necessary services. Capital gains taxes are standard in most Western countries. It’s New Zealand that’s out of sync.
The tax reform debate brought both main parties on to difficult territory. Labour has been having this argument for over a decade with nothing to show for it.
National sees it as a chance to spook voters, but it’s uncomfortable in the position of actively defending New Zealand’s 1 per cent with most people battling.
It’s the party with the biggest donors, with a not-that-popular wealthy former businessman leader, wanting the status quo on tax. And it has just released a housing policy allowing landlords to evict tenants without any cause.
