Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Dunne Speaks: Flushing out NZ First on Capital Gains Tax

Once, Greens co-leader James Shaw's comment when Parliament resumed this week that the current government does not deserve to be re-elected if it fails to introduce a capital gains tax would have been regarded as yet another reason why the Greens kept themselves from being invited into government for almost twenty years. But now they are inside the tent, the comment takes on a more significant perspective. Not because there was ever any doubt the Greens would back a capital gains tax - after all, they have never yet met a new tax they do not like - but because of the acid it puts on the government's formal coalition partner to state where it stands.

At the moment, it holds all the cards. With the Greens having now declared their hand, the future of the capital gains tax rests not on the tax working group's recommendations, nor even the Labour Party, but on the nine New Zealand First MPs, or, to be more specific, their quixotic leader. To date, they have maintained their typical silence.

With recent polls showing that New Zealand First will struggle to be in the next Parliament, an issue like capital gains tax is potentially a heaven sent opportunity for the Party to reassert its independence and act as a handbrake on government to stop the implementation of an unpopular policy. Indeed, James Shaw's statement could almost be seen as inviting New Zealand First to do just that, perhaps in the hope of restoring itself in Labour's eyes as the preferred partner it was before the last election. But it is not as simple as that.

For a start, on this occasion, New Zealand First is not just any other party. It is the government's formal coalition partner, and its leader is the Deputy Prime Minister. And the capital gains tax is not just any other policy. It is a key plank of Labour's tax policy, and, as such, comes into the category of a confidence and supply issue. Failure to gain support to introduce such a policy, let alone a formal vote against it in the House, would raise serious questions of confidence, and could potentially bring down the government. And an election brought about in such circumstances would almost certainly see the end of New Zealand First. So, there are strong reasons for New Zealand First supporting the introduction of a capital gains tax, albeit after a few tweaks.

However, a capital gains tax is unlikely to be popular with a chunk of New Zealand First's provincial and rural support base. Not that many of them are likely to be affected by it, but, as both Labour and National found out during the superannuation debates of the 1980s and 1990s that spawned New Zealand First, it was not the reality of the impact of the superannuation surcharge - which never affected more than a quarter of superannuitants - but the perception that every one of them was hit, and the fear amongst those under 65 at the time that it would hit them too, that did the political damage. A similar reaction is likely if a capital gains tax is introduced, which is why New Zealand First is likely to face pressure from its support base to resist the proposal.
So the decision to support or oppose the capital gains tax is likely to be a finely balanced one for New Zealand First, which is where James Shaw's statement assumes its real significance. It is far less a statement of the Greens' position, (which no-one would have been at all surprised to hear anyway) and much more an attempt, to flush out where New Zealand First stands. It also gives more than a passing hint to the tensions within the coalition government on the subject.

In that respect, one has to feel a little sorry for the Greens. They spent most of the last Parliament preening themselves as Labour’s coalition partner in waiting, only to be gazumped at the altar by New Zealand First, because Labour was not astute, strong, or brave enough to say to New Zealand First they wanted to form a Labour/Greens coalition that they were welcome to join, or else they could keep the National Party in office. In the event, the Greens were jilted and relegated to the position of confidence and supply partner. Ever since, they have been struggling to reinsert themselves into the major policy loop, and this is but the latest example.

It could yet prove their most effective if they can force New Zealand First’s hand. But a more likely outcome is that New Zealand First will fudge and delay a decision as long as possible, quite possibly beyond the current Budget cycle, to make it difficult for Labour to legislate in advance for the post 2020 capital gains tax, as it wishes, while all the time keeping its own powder dry.

Although James Shaw deserves acknowledgement for doing his best to try to keep New Zealand First honest, he has in reality shown once more that when it comes to realpolitik New Zealand First will continue to run strategic rings around the hapless Greens.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

There Is A Field: Reimagining Biodiversity In Aotearoa

We are in a moment of existential peril, with interconnected climate and biodiversity crises converging on a global scale to drive most life on Earth to the brink of extinction. However, our current worldview and political paradigm renders us incapable of responding adequately due to its disconnected and divisive default settings.

These massive challenges can, however, be reframed as a once in a lifetime opportunity to fundamentally change how humanity relates to nature and to each other. Read on The Dig>>

The Dig: Scoop’s Engaged Journalism Platform Launches
The Scoop Ecosystem has grown bigger with the launch of The Dig - a new public interest, in-depth, Engaged Journalism platform. More>>

 

Unscoped Or Missed Damage: Resolution For Canterbury Owners Of On-Sold Homes

People with over-cap on-sold* properties in Canterbury can now apply for a Government payment so they can get on and repair their homes. More>>

ALSO:

Hamilton-Auckland: First Urban Growth Partnership Signed

New Zealand’s first urban growth partnership between the Government, local councils and mana whenua was signed at a meeting of mayors, chairs and ministers in Hampton Downs today. More>>

ALSO:

Vote On Action Next Week: Secondary Principals Walk From Negotiations

“Unfortunately we consider there is no further value in continuing negotiations at this point. The government has not been able to table an offer that will be acceptable to our members.” More>>

Patrol Car Stolen, Glocks Taken: Manhunt In Gore

The driver rammed the patrol car before fleeing on foot with Police chasing, also on foot. The man has then circled back around, stolen the patrol vehicle, which had the keys left in it, and rammed another Police car... Two Police-issued Glock pistols were stolen. More>>

ALSO:

"Shocking And Dangerous": Accused Mosque Shooter's Prison Letter Posted Online

The man accused of the Christchurch mosque attacks has sent seven letters from prison and had two others withheld, Corrections Minister Kelvin Davis says. Corrections has now blocked the accused gunman from sending or receiving mail... More>>

ALSO:

Standing On List Only: Paula Bennett To Run National’s Election Campaign

The National Party is pleased to announce the appointment of Paula Bennett as our Campaign Chair for the 2020 General Election, President Peter Goodfellow says. More>>

Waiver For State Care Inquiry: Historic Abuse Survivors 'Can Speak Freely'

Abuse in state care survivors can take part in the forthcoming Royal Commission proceedings without being bound by any confidentiality obligations to Crown agencies under their historic claim settlements, Minister of State Services Chris Hipkins said. More>>

ALSO:

Trail Trial: Sexual Violence Court Reduces Lead-Up Times And Trauma

An evaluation of New Zealand’s first sexual violence court has confirmed that the approach taken in the judge-led pilot considerably reduces the time that cases take to reach trial. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels