Godon Campbell on climate discounts, and corporates as children

0c3f645545c676e4fc16Back when kids weren’t being taken to and from school in two tonne trucks, almost everyone was in climate change denial. Now, even the ACT Party pays it lip service. Yet given a chance to backslide, the centre-right will take it.

Prime example: After the Greens started to share power with Labour, they introduced a Clean Car Discount to encourage people to buy EVs rather than purchase another giant, gas-guzzling SUV. This week, the Clean Car Discount has been attacked by National’s transport spokesperson Simeon Brown who – not for the first time – mocked it as a way of helping rich people to buy Teslas.

Huh? Only last week, wasn’t National posing as the champion of the squeezed middle class? Talking of whom, the Greens subsidy would help the squeezed middle class to afford an EV the next time the family car needed to be replaced. Evidently, the centre-right still cannot connect the dots between the extreme weather events that have ravaged its rural heartland and the reliance on fossil fuel modes of transport.

Yes, the Greens discount would motivate rich people as well to choose to buy an EV next time around, rather than forking out for another petrol-fuelled SUV behemoth. That would seem like a good thing. Alas, Simeon Brown appears to think that a government policy intervention that breaks the cycle of dependence on fossil fuels is a very bad thing, according to the gospel of market principles.

Hardly anyone else, anywhere else shares that same prejudice. Rather than rely on the market to deliver large numbers of EVs at a reasonable price, European countries have offered incentives to stimulate consumer demand and to get the EV production lines moving. As a consequence in many parts of Europe. EVs are available, affordable, and increasingly the vehicle of choice. Theoretically, markets might have (eventually) got there by themselves, but on climate change issues we don’t have the luxury of waiting to see.

Julie-Anne Genter did her best, but National needs to realise why it would be folly to cancel the Clean Car Discount. In its place, National is proposing to build EV charging stations all over the country in rural areas as well, reaching 10,000 such stations by 2030. Great. But this really shouldn’t be an either/or.

Without the Clean Car Discount and with a correspondingly slower uptake of EVs, National has succeeded in getting the policy exactly the wrong way around. We should be building the EVs fleet ASAP, and the charging stations in tandem. We should not be building the charging stations, largely on faith that the EVs will eventually come.

To repeat: National seems willing to leave the squeezed middle class – and those on low incomes – behind as prey to the oil producers currently trying to reduce production, raise petrol prices and extract the last drops of profit out of fossil fuels. Meanwhile, National will have built lots and lots of charging stations all over the country so that the relatively wealthy New Zealalnders – farmers and corporate high flyers alike – who are able to afford Teslas without government assistance, will be able to travel long distances in comfort. Somehow, National has found a way to make even its climate change policy serve only the top five per cent.

Tycoons, throwing tantrums

Earlier this week, National Party leader Christopher Luxon used a gathering of corporate chieftains to accuse the government of treating business leaders like children. It was music to their ears. The very nerve of Labour to impose compliance rules and costs on the captains of commerce! Luxon promised to conduct an adult-to-adult dialogue with the business sector in future.

Frankly, if business leaders want to be treated as adults perhaps they need to stop behaving like children and become responsible not only to their workers, but to the community at large.

That won’t happen any time soon… Instead, business leaders have been clapping their hands in delight over the centre-right’s promises to scrap Fair Pay Agreements, and to freeze minimum wage increases. Both those measures recognised the need for a fairer balance of power in the workplace, and for a more mature relationship between the mutually dependent adults in the boardroom and on the shop floor.

That’s not how it works in this country. Unlike Europe, our boardroom ideologues have demonised every form of collective bargaining. As a result, the business sector has had to be dragged kicking and screaming to the bargaining table. Routinely, business wants more privileges, and demands certainties from government that it just as routinely denies to its employees. National is happy to oblige. Fort example: it is promising to restore 90 day trials and thereby empower employers to exploit workers and then fire them at will – at the very 90 day point when firms would have needed to begin to treat their workers as something other than disposable units of labour.

Like a bunch of surly teenagers, business moans about the extent of government red tape – even though for the past decade New Zealand has always topped the global rankings as the easiest place in the world to start and conduct a business. Routinely, business leaders also complain about the tax burden, when New Zealand is patently not a highly taxed country. Let me spell that out:

New Zealand’s top income tax rate of 39 per cent – ie. before Nicola Willis cuts it even further – put us in a tie for 39th on a table of the highest taxed countries in the world. It isn’t only the Scandinavian countries that have higher income tax rates. So do Germany, the United Kingdom, Ireland, France and South Africa, among others.

The same goes if we’re talking about having a globally competitive income tax system:

…. On income tax, we are already well below Australia’s 47 cents in the dollar for top earners. . In Oz, there is a 45 per cent headline top rate plus a compulsory 2% Medicare levy. Furthermore, Australia also has an effective 37 cents in the dollar rate (plus that 2% Medicare levy) on income above $120,000!

It’s the same story with sales tax.

Our 15% GST rate doesn’t even get us into the top 50 countries, and is just below the global sales tax average of 15.78%. On corporate tax, we are in a tie for 40th place.

So stop whining, business people, and get out there and compete. You say you love the challenge. Well, thanks to our plummeting currency our exporters currently enjoy a 40% advantage against the greenback, and nearly 10% against the Aussie dollar. If our exporters still can’t compete when the deal is stacked this heavily in their favour they should maybe look in the mirror, and stop blaming all their problems on the Labour government.

Fat chance. When competition in the global schoolyard causes our business leaders to lose their confidence – and waning confidence seems to be their default setting – then a centre-left government is held to be the source of their problems. A government that “listens” and “understands” is expected to remedy this loss of business confidence with lots of policy sweets, treats and outings.

But here’s the thing. The really annoying aspect of the apparent inability of our boardroom barons to behave like adults has been their lack of responsibility for the part they played in the cost of living crisis. I’m not just talking about how the predatory pricing by business monopolies and neo-cartels has fed into the inflationary spiral.

More to the point, the inflationary spiral was a byproduct of the monetary policy launched in mid 2020 to keep businesses afloat, and to help them avoid the worst of the economic damage being wrought by Covid – especially during the period before vaccines became available.

From mid 2020 through into 2021, that Reserve Bank monetary easing was spent on providing direct supports for firms, on wage subsidies and on huge support packages offered to – for example – the tourism and hospitality sectors. At the time, did business virtuously oppose those support schemes and warn about their inflationary risk? Hell no. Almost unanimously, employers and sector leaders lobbied for more government funds, and wanted the schemes kept in place for longer.

Yet this year, has the business sector shown the slightest hint of gratitude to the Labour government and to taxpayers for keeping them afloat, and/or offered the slightest hint of apology that the money poured into the economy on their behalf has helped to cause the inflation for which ordinary taxpayers are now paying the price in higher interest rates? Not a chance. Not from the people in our corporate playpen.

The only adults in the room (i.e the government) have faced a quandary. Government can either indulge business in its every whim, – as National is now promising to do. To a serious fault, the Arden/Hipkins governments tried to cajole and to convince corporate New Zealand (and agri-business) to co-operate and to compromise for the greater good. No such luck. Finally, when business throws a tantrum, a responsible government sometimes has to take away the car keys. This hasn’t gone down well. And on current form, Daddy National would never do such a thing.

Angry, Chilled

The new Rolling Stones track ”Angry” sounds like Chat GPTs idea of a Stones single circa “ Start Me Up” which, 40 years ago, had already sounded like a facsimile of past glories. Not that this is a contest, but among the tracks released in the past fortnight, these two seem more rewarding. Angry? This sounds more like the real thing:

And to chill… Here’s the Peruvian DJ Sofia Kourtesis again, with another thoughtful, emotive dance floor outing to match “By Your Side,” “La Perla” and “Estaction Esperanza”… The wonderful ”La Perla” was inspired by her late father. This new track is her tribute to Peter Vajkoczy, the doctor who had treated her dad during his final illness: