So… Almost all the tax experts rounded up by the mainstream media have damned the proposal to remove GST from healthy food. Some have called it “stupid” or “populist” – which is a bad word used to condemn anything that is at odds with the elite consensus.
If we have entered a phase where the worth of socio-economic policy is to be determined by a panel of tax experts (many of whom have skin in the game) then at least those experts should try a bit harder to be consistent. Meaning: Tax experts around the world, including those at the OECD say New Zealand suffers from not having a general capital gains tax, if only because that omission encourages property speculation and house price inflation. The “populist” sentiment agrees. Yet that gap in the tax system has become invisible at this election. Where’s the rumpus from the tax experts?
Most economists and tax experts – from Thomas Pikettty and Emmanuel Saez on down – also think that when society has big gaps in income inequality this is bad for people, and bad for the economy. The subsequent lack of opportunity is also a breeding ground for crime. Yet where is the outcry from the tax experts and economists over National’s promise to bring in yet another round of socially regressive tax cuts?
Off hand, I can’t recall a single mainstream media article this year querying National’s tax proposal on social equity grounds. Here we are, less than two months out from the election, and National still has not released either the details of its tax cut carrot, let alone how it proposes to fund it. But GST off fruit and vegetables? Earlier this week, you could barely hear yourself think amid the clamour of the experts railing against it.
The great crime non-debate
Law and order, so we’re told, is a hot button issue at this election. Yet the “debate” about the extent of crime, its causes and solutions, continues to have a curiously narrow focus. Shouldn’t the election discourse be querying the economic orthodoxy pursued by successive governments for the past 40 years, now that recent research has confirmed that this orthodoxy has left the majority of the New Zealand population struggling to make ends meet? By ordinary standards, that would be an epic fail. Yet onwards we go.
To the point where there has been a complete disconnect between economic policy and the law and order issue in the run-up to Election 2023. It is as if the free market orthodoxy that has ravaged the available employment opportunities for entire communities has had nothing at all to do with the inroads now being made by crime, robberies, burglaries and drugs.
In classic neo-liberal fashion, crime is being treated purely as a matter of individual choice. The only “solutions” on offer – longer sentences, building more prisons – would incarcerate even more low income, brown-skinned New Zealanders, at vast expense and opportunity cost. Here’s where that had left New Zealand, after nine years of the last National government:
Prior to Labour coming into government in 2017 the prison population had been steadily increasing, becoming among the highest rates of incarceration per capita in the OECD – with Māori imprisoned at a rate six times higher than non-Māori.
Shouldn’t there be more visible pushback in the media against National promising to resume those socially and financially ruinous trends? Instead, one gets the feeling that ACT and National would be at ease with New Zealand building new maxi-prisons and becoming a carceral state along American lines. Libertarians, after all, tend to regard the defence of private property as one of the few valid roles that the state should perform. In fact, “More tax cuts, more prisons” is a fairly accurate summary of the ACT Party’s social vision.
Dfferent treatment
Nothing wrong with experts per se. For a good example: To their credit, some tax experts have drawn attention to the relatively light punishments routinely meted out to white collar tax evaders caught cheating the state of large sums of revenue. The same academics have compared this light-handed treatment to the harsh punishments commonly meted out to beneficiaries caught cheating the welfare system of only relatively small amounts of money. This double standard illustrates how the response to crime – the ways in which it is policed, judged, covered in the media and perceived by the community – is strongly dictated by factors like class, and race.
Not that you’d know it from the election discourse, which is largely a conversation between people who belong to the same social class, and the same race. This year, the campaign coverage of crime consists almost entirely of calls for tougher sentences, boot camps for young offenders and allegations that the government is soft on crime. Basically, we’re churning around in the same failed response cycle to crime that we’ve been trapped in for the past 50 years, over successive elections. The “soft on crime” accusation is a way of whipping up fear, and shutting minds to the hard tasks of reform and rehabilitation. No clickbait potential in that.
Meanwhile, as white collar tax avoidance and evasion bleeds the community of tax revenue and resources, such offences are rating barely a mention compared to the torrents of attention being paid to the actions of the brown underclass, aka gangs.
Areas of convergence
I’m not suggesting public sentiment is always right, and should always prevail. If that was the case, New Zealand would almost certainly still have the death penalty. To repeat though: At this election, there is a striking convergence of opinion between leading politicians and the bulk of the commentariat.
As the GST of healthy food coverage has shown, there is a tacit consensus against using the tax system to help raise revenue to address social inequality and/or meet community needs. If pittances of welfare assistance are to be offered, the received wisdom is that these should be targeted only to the deserving poor – regardless of the evidence that the compliance rules are a costly-to-administer way of failing to get help to those most in need. These 19th century attitudes aren’t unique to the centre right. When it comes to access to Working for Families support, Labour continues to enforce a damaging distinction between the poor in paid employment, and the beneficiary poor.
Among other things, the consensus on such matters seems to be notably out of whack with public sentiment. A majority of the public, the polls have told us for years, support tax increases – not tax cuts – if those increases are used to deliver better social services.
Similarly, a capital gains tax, a wealth tax, and a windfall tax on bank and supermarket profits all enjoy wide social support that is barely being mentioned within the political and media discourse around Election 2023. The fact the public seems so enthusiastic about the lifting of GST from only a narrow range of healthy food, shows just how rare any expressions of political compassion seem to be in the current political climate.
We have a Reserve Bank for instance that thinks the ideal solution to the cost of living crisis is to use interest rate hikes to (a) create a recession (b) further impoverish households and (c) throw large numbers of New Zealanders out of work. Not much critical commentary about the wisdom of that approach, either.
Finally….whenever the public does express its resentment about the harms being systematically done to them, this tends to be written off as the politics of envy. To all intents, the range of policy options considered feasible operates as almost a closed system.
Footnote One: Unfortunately, Chris Hipkins made a “captain’s call” earlier this year ruling out a capital gains tax and a wealth tax, even if Labour gets re-elected in October.
“I’m confirming today that under a government I lead there will be no wealth or capital gains tax after the election.”
That decree is problematic. Hipkin is a leader appointed by his caucus colleagues. He lacks a mandate from the party (let alone the wider public) to unilaterally rule policy in or out over the next term of government. Some of the Labour faithful, one imagines, might have wanted to put forward remits on a wealth tax, even if only to test the waters. These are the same party activists that Labour needs, in order to get out its vote on Election Day. It was hardly an inspiring, motivating stance for the leader of a centre-left government to take.
That particular captain’s call also makes Hipkins an unlikely champion of the strugglers. Most of them, I’d wager, would be right behind a wealth tax as a way of raising revenue to help bridge the inequality gaps and cater to their needs. The Greens of course, support a wealth tax. Too bad that – even if the centre-left wins in October – the Greens would have to mount a coup against Hipkins to get a wealth tax onto the books.
Climate change, airplanes
Most of the climate change discussion around flying has to do with emissions, and the morality of moving people and freight by air. Well, here’s something extra to worry about. As the planet heats up the molecules of air, this makes the air less dense, which in turn creates problems in (a) getting aeroplanes off the ground, and (b) keeping them aloft. In all likelihood, those difficulties will demand stricter controls in the future on weight – i.e. planes will have fewer passengers, and there will be stricter enforcement of weight restrictions.
In turn, those rising temperatures will make life more difficult for towns and cities with airports that have short runways – hello, Queenstown, and Wellington. In future, there will be pressure to build longer runways, repaved and strengthened with concrete.
Also… Before reading this article in Bloomberg, I had no idea that overly hot conditions at ultra-busy hubs like Chicago’s O’Hare airport are already resulting in twice as many flight delays during summer, as those that are caused by the combo of ice- encrusted wings, snow and fog during winter.
There’s an interesting academic article here on how hot weather affects aeroplane performance. Reportedly, the rising temperatures are already making wind strength at altitude and in-flight turbulence more intense. As Bloomberg gloomily concludes, most of the gains have already been made in making planes lighter, and more fuel efficient.
Barring revolutionary new materials, any further gains will be incremental at best. So until we figure out how to make airplanes out of gossamer, we’ll have to rely on old-fashioned solutions to heat: moving flights to cooler times, lengthening and strengthening runways and ditching weight… As with every other effect of rising heat, the most effective solution would be to stop burning the fossil fuels that contribute to warming — including the fuels burned by airplanes.
Adieu, Robbie Robertson
As with Talking Heads, it was internal dissent over whether the leader had been hogging the writer’s credits (and thus, the royalties) for what had often been a group creation, that led to the breakup of The Band in 1976. Levon Helm in particular came to be at loggerheads with Robbie Robertson over this issue.
Robertson’s recent death however, has turned attention back onto the group’s remarkable back catalogue, and its founding of the Americana genre. “Acadian Driftwood” is a later work reminiscent of “The Night They Drove Old Dixie Down” in its historical sweep, and in its lament for a displaced culture, and people.
And from earlier days, on “King Harvest Has Surely Come” the busy and anguished interplay between the musicians and the vocals stands in brilliant contrast here to the underlying beauty and indifference of nature, which moves to its own rhythms: