Monday 9 April 2018

Should We Mourn Our Cancelled Tax Cuts?

Political Currency: Though they’ll never admit it, the logical consequence of the Taxpayers’ Union’s policies is indistinguishable from that of every other “taxation is theft” outfit: expanding the domain of public pain by deliberately reducing the opportunities for its concerted public amelioration. Like the far-Right American lobbyist, Grover Norquist, they are determined to get the state down to “the size where we can drown it in the bathtub”.

“THIS IS THE WEEK tax cuts introduced in 2017 would have come into effect.”

In reminding us of this fact, Taxpayers’ Union spokesperson, Lois Houlbrooke, laments the Labour-NZF-Green government’s decision to spend money that would otherwise have been returned to “working New Zealanders” on undeserving students and superannuitants.

“It’s as though the New Zealanders doing the most to keep the Government afloat are held in its lowest esteem.”

These “working New Zealanders” (the stock right-wing description of taxpayers as “hard-working” appears to have been discarded) are invited by Mr Houlbrooke to “mourn” the loss of their well-deserved windfalls.

A few years ago, Mr Houlbrooke’s words would have fallen on a host of receptive ears. Today, I’m not so sure. In the months since their new centre-left government was sworn-in New Zealanders have begun to realise what happens when insufficient revenue is collected and insufficient public resources expended on the things that make for a civilised society.

The scandalous condition of the Counties Manukau District Health Board’s facilities, shocking enough in themselves, have raised questions in the minds of citizens throughout New Zealand about their own DHBs. How much urgent remedial work to local health infrastructure has been deferred out of fear of ministerial rebuke? Are Middlemore Hospital’s walls the only ones filled with toxic mould? How many other DHB’s are hiding leaking sewerage pipes?

These “bricks and mortar” problems pale into insignificance, however, when we are confronted with the ongoing crisis in New Zealand’s mental health services. With roughly one in every five Kiwis afflicted with mental illness at some stage of their lives, there are close to a million people out there in need of help which, assuming it can be accessed at all, will (in all but the most acute cases) be intermittent and inadequate. The pain and suffering, not only of the mentally ill, but also of their families and friends, is immense and unending.

The British political philosopher, Maurice Glassman, in his book, Unnecessary Suffering, observes: “The distinction between necessary and unnecessary suffering defines the limits of political rationality. In delineating a domain of pain which is amenable to concerted public amelioration from a sphere of grief that is immutable, it defines the power of society to respond to the miseries of life.”

Though they’ll never admit it, the logical consequence of the Taxpayers’ Union’s policies is indistinguishable from that of every other “taxation is theft” outfit: expanding the domain of public pain by deliberately reducing the opportunities for its concerted public amelioration. Like the far-Right American lobbyist, Grover Norquist, they are determined to get the state down to “the size where we can drown it in the bathtub”.

It’s hard to avoid the conclusion that many in these groups would happily see 99 percent of humanity drowning in there with it, providing the heads of the dominant 1 percent could be kept safely above water.

Seldom has the Labour Party and its ideological allies been presented with a better opportunity to expose the National Party’s propensity to short-change the electorate. Under the rubric of “responsible economic management” (whose discredited mantras Simon Bridges has reiterated all week without shame) money that should have been spent on keeping New Zealand’s social infrastructure fit-for-purpose, was instead presented to the electorate as a financial “surplus” – fit only to be returned to the pockets of “working New Zealanders”.

As one commentator observed: “That’s like putting your household accounts into a healthy surplus by refusing to feed your kids!”

If ever there was a time for Jacinda Ardern and her Finance Minister to walk away from the “responsible economic management” falsehood – it is right now. What New Zealand has been subjected to for the past nine years does not merit the word management; had precious little to do with rational economics; and most certainly wasn’t responsible.

In its place, the Labour-NZF-Green government should pledge to govern New Zealand justly and fairly by raising the taxes required to reduce – swiftly and substantially – the unnecessary pain and suffering of its citizens.

If it didn’t sound so Orwellian, I’d favour the “Tax Heroes” meme contributed to The Spinoff by IRD: “Tax is Love”. Because, in essence, that’s what progressive taxation is all about. Healing our sick. Teaching our young. Helping our poor. Sharing our wealth.

The alternative? The procurement of private advantage through public squalor.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 6 April 2018.

9 comments:

Geoff Fischer said...

How is it that the claims of outfits like the Taxpayer Union gain traction with ordinary New Zealanders? For an answer look to the fourth Labour government. Remember how Richard Prebble, Roger Douglas, Ken Shirley and others denigrated the state as an institution? And how many working New Zealanders, fed up with the state and state servants, were persuaded by their arguments? The dilemma of the left is that the state is no longer seen as the disinterested servant of the people. Senior state servants are paid exorbitant salaries - and quite a few individuals choose to top that up with money embezzled from their employer. Then there are the host of handsomely rewarded state "contractors", both civil and military. Not to mention the millions poured into the SIS, GCSB and NZDF which benefit only those (mainly foreigners) who wish to see the Realm of New Zealand remain subject to its imperial masters. So while there is an unassailable argument for using taxation to create social justice and progress, there are many, not just among the 1%, who wish a plague upon the New Zealand state, and would rather not pay for its support, whatever good works it may claim to its credit. An unreformed state will only receive the grudging support of millions of working New Zealanders, and the Taxpayer Union will receive a hearing for its duplicitous claims. Finally, there is some truth in the argument that too many either consciously choose to be beneficiaries of the state, or become so through their own misguided, negligent, reckless or amoral behaviour. We are well past the point where we can say "Give more money to the state and all will be well". We have to arrest and reverse the moral degeneration which afflicts the New Zealand state and, in different ways, all social classes.

pat said...


"If ever there was a time for Jacinda Ardern and her Finance Minister to walk away from the “responsible economic management” falsehood – it is right now. What New Zealand has been subjected to for the past nine years does not merit the word management; had precious little to do with rational economics; and most certainly wasn’t responsible."

While agreeing wholeheartedly how would the about face on a firm pre election promise play out?....personally I think the risk worth it, but am I part of the silent majority?I suspect not...decades of dogma is difficult to shift,especially when actively persued by the powerful.

greywarbler said...

You will get a good response to this one I think Chris. I thought, as I read your quote from the Brit Maurice Glassman that his description of the response of society to difficulties in life needed a tweak. Pain that can be ameliorated, and grief that is immutable and indelible, are matters of personal feeling, hard to measure scientifically and in reality.

The misuse of the word 'unnecessary' is heard commonly, when it would be correct to say 'avoidable'. In the news of a death or injury a spokesperson will sadly say that it was 'unnecessary', which implies that 'necessary' tragedies occur in that sphere of life. So I question the use of those words used in his observation. Surely a thoughtful and compassionate society acts to assist in some way whether there is pain or unending grief. That there is a limit on those virtues in rational society driving 'political rationality', is indicated by a lack of willingness to expend the public purse by government so as to thoughtfully extend 'concerted public amelioration' to those suffering 'the miseries of life'.

Rationality and pragmatism without concern for 'the miseries' soon become an excuse to prohibit spending money, time or true concern and respect when others are in need. Making judgments about what pain can be borne by another without concern to help with some relief is the sphere of those on the battlefield without medical supplies having to practise triage. In ordinary life it shows who are callous and have lost their souls. Their humanity has been brutalised by a cult of competitive, aggressive behaviours and largely authoritarian concepts aimed simply at individual advancement and capital accretion.

Progressive taxation builds a strong society, growing in a sustainable way that leads to everyone having a place, a standing, housing, a living with some work that enhances the society, also the services of a modern society of integrity and practicality. There would be means to offer second chances and places and ways to enable malingerers to contribute to society that would not be mean and punitive. There would be far less crime and fewer laws; which would be practical, of value to everybody. And hopefully people's wishes and ideas would be respected and open to discussion, and if non-controversial, implemented even on a trial basis.

The idea of progressive taxation and responsible citizenship should go hand in hand. Paying back into the country's financial system a sliding, progressive proportion of what the citizen is receiving, to keep the engine going should be axiomatic; the idea of axing taxes is actually theft from the country, the polity; not the other way round. Only bent, duplicitous, and fundamentally ignorant minds can think otherwise.

Guerilla Surgeon said...

Labour must be thanking their lucky stars that these various underspending and other scandals are coming out now, considering the pressure they are under for – admittedly minor – mistakes. And luckily the New Zealand Parliamentary term is so short that you can continue to blame the last government for the state of the country for almost its entirety. But everyone including Labour seems to worship surpluses these days. Which might be of some minor use in a recession, but as you say should really be put to use during these times for upgrading infrastructure. Providing jobs, making sure the economy is more efficient. And hopefully cutting traffic congestion in Auckland – not that I really give a shit about that not living there anymore – and reducing accidents. Anyone who has been overseas and use the various public transport systems in Europe and Asia, and even in some parts of the US – although not many – must come back with stars in their eyes until they hit the motorway at rush hour. And surely by now Auckland is big enough to sustain some sort of decent underground or aboveground rail system, with trains every few minutes during peak times? We live in hope.

Pinger said...

Low taxes are the mantra of the extreme right wing who want to privatise everything and live in some kind of bunker compound with the starving poor outside.

Go the the USA and see it for yourself.

Patricia said...

The silly thing about the current reading of the ‘responsible economic management’ statement is that New Zealand is a sovereign country and can create money to build anything it wants. That in my view is responsible economic management. It doesn’t need any increase in taxes to do that. And don’t talk of inflation because that bogeyman has been very much put to rest with QE. No matter what current Governments do inflation does not rise. It requires very particular circumstances for high inflation to occur. The real problem here is lack of manpower.

Victor said...

"Healing our sick. Teaching our young. Helping our poor. Sharing our wealth."

Add to those: repairing and improving our infrastucture, building homes and providing fuel efficient, safe public transport.

Charles E said...

Sorry, that is not going to convince many at all ----- this idea they have to tax and spend to heal the people... so the people (who?) will understand...Hogwash.

There are choices, for people and governments, followed by consequences. What to spend money in hand on and how much, then the result. Not a left or right thing, a fact of life thing.
So if Labour spend it on my well off child starting varisty next year they cannot spend it on the low paid or xyz. But they will not get my vote nor the bloke's on a low wage with toddlers from that.
If they give it to that idiot Jones to feather his local nests then it cannot go into a new hospital building. And so on.
And if they have a dozen other pet projects on top of these discretionary spends then they will have to take it from new or increased taxes or borrow it. At the end of the day people will be fine with it only if it does not hurt them but directly benefits...

And even more telling, which the voters know too, if they stuff up this goose which they tax, there will be less tax collected full stop, even at higher rates.

So the virtue National had was it did not need to raise taxes because it was getting the economy generating a higher gross at the same rate.
So that is why Labour will be desperate to do the same and grab more quietly too. Hard act..

greywarbler said...

Just a connection between GS and extremely moderate Bryan Gould about spending on infrastructure being more important than surpluses.
http://www.bryangould.com/mr-micawber-ifs-not-a-good-guide-when-it-comes-to-public-finances/

And I note the concern from Chris T about the likelihood of G Robertson Finance Minister not being able to spell his title beyond 'fin'; adopting similar successful methods as the grate M Cullen in practising mantleshelf teapot saving so as to keep the children's sticky fingers off the growing cash reserves.