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Home / New Zealand

Election 2020: Mike Hosking - Could MMP actually result in tax increases?

Mike Hosking
By Mike Hosking
Mike Hosking is a breakfast host on Newstalk ZB.·NewstalkZB·
8 Oct, 2020 08:41 PM3 mins to read

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Mike's Minute: MMP shows further weakness
Mike Hosking
Opinion by Mike Hosking
Mike Hosking has hosted his number one Breakfast show on Newstalk ZB since 2008. Listen live each weekday from 6am on Newstalk ZB.
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OPINION:

One of the more remarkable revelations that came from James Shaw yesterday in our Leaders Breakfast was the wealth tax. He sold it as a way to get past capital gains tax.

This, in a way, may well be why MMP is in such trouble. Why didn't we get a capital gains tax? Because of MMP.

If you voted for Labour because you favoured the tax, you would have been disappointed. If you voted for New Zealand First because you thought Winston Peters would go with National, you would have been disappointed.

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So just what is it you're voting for? The trouble with MMP is you literally don't know what you're going to get. All you get is a number, more or less than 5 per cent.

So here, I think, was what James Shaw was driving at. The Greens get 5 per cent, Labour don't get to govern alone, so in essence the Greens hold the balance of power. Not in a New Zealand First kind of way as they're not going with National, they're wedded to Labour.

But, and history shows us this, they don't have to go into government.

What if they insist on a wealth tax? What if the difference between Labour being in government or not is a wealth tax? Would Jacinda Ardern have any real trouble explaining to the country that she had no choice? That, once again, this is MMP? Would she have trouble saying she needed the Greens' support, and the only way they could get it was with a wealth tax?

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It wasn't their policy, the same way the Provincial Growth Fund wasn't their policy, but it's the price you pay under MMP. Even if you want Labour as a government, do you want Labour and a wealth tax?

Up until this last government, minor parties really didn't demand overtly large influence. They were smaller ideas, smaller portfolios, by and large the whole arrangement was proportionate.

Winston Peters changed all that. The tail started to wag the dog. Another MMP weakness.

Let's be honest, Labour are only going for the tax changes in the way they are because they know middle New Zealand, even Labour-supporting middle New Zealand, wouldn't stand for anymore.

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But that doesn't mean on the quiet, Grant Robertson and co, who have dug the most enormous debt hole, they could give the Greens what they want.

And actually, get what they want too, have their fiscal cake and eat it once again, all the while blaming MMP.

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