It's a big day of transitioning for Labour, as it clears the decks for it's 'small targets' strategy. But one particular new policy caught my eye

After many months of silence or evasion brought on by the need to regroup, lick wounds and do some policy work, Labour's had a busy old policy day today. It's been out with the old and in with some new.

It's been well sign-posted that Labour would take a capital gains tax and raising the super age out of its manifesto, but I didn't expect such a clear and concise position on CGT. Andrew Little told The Nation:

Well, we won't introduce it in our first term, and we won't introduce any change that significant to the tax system, any material change to the tax system, without going to the people first and getting a mandate to do so.

So Andrew Little's conviction that the policy is unpopular (despite polls to the contrary) and costing votes has seen the policy shelved. Though to be fair, as one commentator told me today, pollsters have found that about 2/3 of people support a CGT, but that drops to a third when they're told it's Labour's policy. I've no proof that's correct, but it rings true.

The sad thing is, I'd bet the conviction of most Labour MPs is in favour of a CGT; this is just a tactic to wipe away anything National can whack them with. All the party is doing is taking it out of the shop window and hiding it behind the counter. It looks to be part of a 'small target' strategy, whereby Labour will head to 2017 focused on a very few key policies that it thinks are winning ones.

Key did the same thing prior to 2008; except in some cases (WFF opposition, nuclear-free) he jettisoned the policies altogether. Little is, as I say, just taking them out of the shop window; although there's always a chance they could tinkered with so as to be sold in some other form. (EG National's opposition to student loans was ditched, but they've chipped away at the policy by tightening here and there).

It's sensible, probably inevitable, political strategy to try to make the change as an incumbent rather than from Opposition. Why make the hill even harder to climb, right? Yet for all that, it's also cowardly. New Zealand needs a capital gains tax (or something very similar) if it wants to get serious about wealth inequality,

As Max Rashbrooke writes in his new book 'Wealth and New Zealand', overseas data suggests the wealthiest 10 percent in New Zealand (who own 53% of NZ's wealth) do very well from no CGT:

"In the US, millionaires take home more than 60% of all capital gains. In Australia, people earning over A$150,000 get nearly half of all capital gains..."

It's one of the most redistributive taxes around and if Labour isn't proudly for redistribution, what it is for?

In the same dumping today, David Parker's NZ Power policy and his "one big tool" (a variable savings rate to influence monetary policy) have both effectively been shown the door. So it's a decent clean out.

Coming in, Labour has picked up on growing public fears about sugar and have said it will give industry a timetable to reduce the sugar content in certain foods, or it will intervene. So no sugar tax, but action all the same.

Grant Robertson has also repeated his interest in "flexicurity", and extending the curriculum to teaching coding, citizenship and driving in schools.

But it was one other, seemingly firmer policy announcement, that almost slipped me by, but stood out as more definitive than the rest. Check out this:

We want to see careers advice professionalised. We want to see students, teachers, parents and employers involved in getting a plan for every single student at secondary school about what they will do after school.

That's quite something. Professionalising careers advice would be significant, but more dramatically, he wants (NB not "is looking at" but "wants") a careers plan for every secondary student about to leave school. That'd be something of an undertaking.

Tomorrow, it's Little's turn on jobs. If it wasn't for its torturous position on the TPP, you'd say Labour was having a good weekend.

Comments (18)

by Ian MacKay on November 07, 2015
Ian MacKay

"We want to see students, teachers, parents and employers involved in getting a plan for every single student at secondary school about what they will do after school."
Crikey! I'm in my 70s and I still don't know!

by Kyle Matthews on November 07, 2015
Kyle Matthews

CGT and raising the retirement age were two fantastic policies that the country needed. Creating so much financial space for addressing health, education etc issues over the next two decades. Boo.

by Murray Grimwood on November 08, 2015
Murray Grimwood

Any political party which reacts to polls, is a follower not a leader.

The only way society can change, in that weak-leadership scenario, is for the public to be well-informed.

That would need a logical, dispassionate, investigative press. 

The field is wide open - the Greens have abandoned the high ground and gone socialist. We are overendowed with Chamberlains; who will be the Churchill?

 

by Fentex on November 08, 2015
Fentex

It's one of the most redistributive taxes around and if Labour isn't proudly for redistribution, what it is for?

I think that's the nub right there. You're articulating your opinion that Labour should be redistributive - not a champion for labour in the eternal conflict between it and capital, not about fairness or non-corrupt governance, not about human rights or equality of opportunity but flat out 'socialist' redistribution of wealth.

I imagine Little doesn't agree that's the raison d'être of Labour and would like to dissuade people from believing it is - on evidence that the majority of electors are not currently convinced their government ought be dedicated to such ends and, at least, keep that argument for a time when it doesn't provide fuel to the dominant narrative they struggle against.

by Alan Johnstone on November 08, 2015
Alan Johnstone

"It's one of the most redistributive taxes around and if Labour isn't proudly for redistribution, what it is for?"

Labour should be for equality of opportunity, not of outcome; for removing barriers to people getting ahead.

It wins when people think it's about growing wealth rather than redistribution of what's already there.

by mikesh on November 08, 2015
mikesh

The wealthy are already subsidized. We should probably get rid of income tax altogether and instead tax wealth and unearned income.

 

 

 

by Cushla McKinney on November 08, 2015
Cushla McKinney

Alan, there is a growing body of evidence pointing to the fact that equality of opportunity requires a levelling of the playing field first. Even if you ignore the fact that those struggling (and failing) to stay afloat financially on a minimum wage (or welfare) are not in a position to wait for that perfect job, network, find time or money for retraining or upskilling etc etc etc, people under stress are less able to make good decisions. IMHO, greater redistribution of passively-earned wealth (e.g. CGT) and valuing low paid jobs (e.g. a living wage) would go at least some way to doing this.

by mikesh on November 08, 2015
mikesh

Interesting that Americans take home 60% of capital gains, and Australians 50%. This makes our proposed 85% look rather ineffectual.

by Katharine Moody on November 08, 2015
Katharine Moody

Yep, agree, so far sound, sensible stuff. I particularly like driver's ed. and civics as part of the secondary curriculum. I so hope they also get rid of the three-staged D/L regime. It is the most youth discriminatory (for disadvantaged youth, that is), inequality generating, ridiculous cost of compliance for the most vulnerable policy I've ever seen.

I got free driver's ed via secondary school in the US - only had to pay for the physical test, passed it the first time and received a full licence at the age of 16. Everyone did. I used to do voluntary work in youth advocacy and I could fill a book with the punitive and devastating effects of that D/L, WOF and rego regime. It's like we designed it to ensure the cycle of poverty cannot be broken.

by Katharine Moody on November 08, 2015
Katharine Moody

I used to do voluntary work in youth advocacy and I could fill a book with the punitive and devastating effects of that D/L, WOF and rego regime. It's like we designed it to ensure the cycle of poverty cannot be broken.

That part of the para relates to work here in NZ and the regime here in NZ - not the US.

by Ross on November 09, 2015
Ross

CGT and raising the retirement age were two fantastic policies that the country needed. Creating so much financial space for addressing health, education etc issues over the next two decades

To paraphrase Rachel Hunter, they will happen but they won't happen overnight.

by Rich on November 09, 2015
Rich

@Katherine - you don't think improving public transport is a better way to address youth mobility than making it easier to learn to drive? The number of people who drive in Wellington is declining as people decide not to bother with a car. (And in overseas cities like London, car owners are very much in the minority).

 

by Alan Johnstone on November 09, 2015
Alan Johnstone

The problem with delaying the changes to the retirement age is the impact will be more sudden and brutal when it does happen.

Labour had a coherent and sensible policy and still clearly desires to do it; it's a repeat of the first term Key administration ruling out SOE sales.

by Lee Churchman on November 09, 2015
Lee Churchman

A whole lot of meh. I can honestly say that I don't expect any democratically electable party in New Zealand to be able to accomplish anything worthwhile. It's just reality TV for old, ugly people. 

by Katharine Moody on November 09, 2015
Katharine Moody

@Rich - indeed better public transport would be great too, but many young people are shift workers (needing to get from or to work inside the 10pm to 5am restricted period) - making public transport not an option for these workers. 

by Tim Watkin on November 10, 2015
Tim Watkin

Fentex, you may have a point there. I'm not sure if this is what you're arguing, but I don't think the electorate cares are jot for some supposed battle between capital and labour either. But while redistribution may be the wrong word, I do think people still respond to ideas of people having to give something back and poor kids getting the same opportunities as rich kids... and so on. And that call requires redistribution.

So while 'Redistribution!!!' is hardly a rallying call, it's still supposed to be what Labour's all about and hiding these policies away seems a bit lilly-livered. I get why, but you've got a choose a couple of tricky ones to fight for, or it's all just vanilla.

by Tim Watkin on November 10, 2015
Tim Watkin

Alan, this is worth another blog one day. But I'm deeply suspicious of the 'equality of opportunity not equality of outcome' line. Of course you can't guarantee outcomes and only give people a fair go, so it's fine as far as it goes.

But equality of opportunity can still leads to huge inequality, so there's still going to be a place for governments to flatten societies out somewhat in the interests of moderation, cohesion etc... and indeed maintaining equality of opportunity!

by Tim Watkin on November 10, 2015
Tim Watkin

Alan, good comparison re SOE sales. Exactly that. And as with that policy, Labour will find some way round it in its second term. The problem is it's, well, bullshit. As I said, taking it out of the shop window and hiding it behind the counter when they still actually want it and believe in it.

Lee, cheer up! You need to get your nose out from behind that book, it's making you cynical!

Post new comment

You must be logged in to post a comment.