Friday, 31 January 2014

Hoping For A Flame

What Can I Say? David Cunliffe, like all modern politicians, is required to address and impress multiple audiences simultaneously. It makes for conventional speech-making and overly cautious policy. Cunliffe's 'State of the Nation' address of 27 January is a case in point. Transformative social democratic campaigns are made of stronger stuff.

IT STARTED WELL. The Kelston Girl’s College hall was full-to-bursting – an achievement in itself on a sunny public holiday in Auckland. Political meetings are no longer the draw cards they used to be, back in the days when thousands would turn out to hear a party leader speak, so I imagine Labour was delighted with the 700-800 people who had ventured forth to hear David Cunliffe’s “State of the Nation” speech.
It can’t be easy, pulling one of these things together. The modern political speechwriter is tasked with addressing (but not upsetting) a multitude of audiences simultaneously. Ranged along the right-hand side of the hall were the conduits to these “demographics”. Running my eye down the media bench, I counted off a slew of the Parliamentary Press Gallery’s finest. In the centre of the hall the television networks’ cameras were lined-up in front of the speaker’s podium like a firing squad.
How much easier it must have been when the only people you had to please were those in the room. In the years before live broadcasts and journalistic “balance”, when editors instructed their reporters under no circumstances to report anything the Labour Party said or did. Back then politicians could speak freely to the party faithful in the lingua franca of shared convictions and common dreams.
Cunliffe did a little of that: rationing his manse-bred emotion through his cat-who-got-the-cream grin; careful not to give his enemies the ammunition needed to shoot him; appealing to his audience’s dwindling sense of what Labour stands for by appending a mischievous “if you know what I mean” to his deliberately unfinished policy promises.
I’m not sure the audience understood their hero’s emotional reticence or much appreciated the modern political leader’s need to engage in communicative multi-tasking. There were moments when their need to hear their own anger and frustration thrown back at them raw and red was palpable. But they were out of luck. For better or worse, David Cunliffe doesn’t do demagogue.
Not yet anyway.
For the moment he’s listening to his advisers and seeking the opinions of his colleagues. They were all in the hall on Monday, beaming up at him from their front row seats in a gut-churning display of amity and unity. As if the men and women on the media bench had forgotten the secret briefings, the strategic leaks. As if the party rank-and-file had forgiven the bitterness and bile, the cruel rumour-mongering, the ruthless character assassination.
Actors assembled, the play continued.
The “Best Start” policy of state-rewarded fecundity is the work of many months of flailing and threshing in Labour’s policy mill. A little grist from years of selfless advocacy by Labour’s Policy Council, and a lot of chaff from the uneasy trio of Annette King, Sue Moroney and Jacinda Ardern.
I listened and sighed. Not because helping the new-born baby’s parents with a weekly payment of $60 is a bad thing to do, but because there was a time when supplying the wherewithal for the labour force’s reproduction was the employers’ responsibility – not the state’s. Will Labour never tire of subsidising the bosses’ parsimony with money taken from the pocket of one worker and slipped into the hand of another?
And why, oh why, this reluctance to embrace universality? If it makes sense to woo those with a combined household income of $150,000, then why not seek the affections of those earning $175,000 – or $200,000? There is something noble in saying: “This is yours because you are a citizen: a co-participant in this thing we call New Zealand.” It should be beneath a socialist’s dignity to say “You – but not them!”
The place for drawing up lists and making tables is the Inland Revenue Department. The best “targeting” device ever constructed is called a Progressive Taxation System.
It started well, but David Cunliffe’s “State of the Nation” did not progress very far. He damped his tinder down and planted seeds.
I was hoping for a flame.
This essay was originally published in The Dominion Post, The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 31 January 2014.


Brendan McNeill said...

"Will Labour never tire of subsidising the bosses’ parsimony with money taken from the pocket of one worker and slipped into the hand of another?"

So just to get this straight, it's wrong to redistribute the income from one worker to another in our socialist paradise. However, it is right to have the State force redistribution of income from an employer to a worker, even though the employer is a worker too?

And, how progressive does taxation have to become before justice is seen to be done? Is the present situation where 10% of taxpayers deliver 70% of the tax revenue progressive enough for you?

At what progressive tax rate does economic justice become injustice in your world?

Jan said...

I do agree that universality would be so much better - the Family Benefit hasn't been gone that long really - why not resurrect some form of that?
Targeting, apart from seriously annoying sectors of the community, is an administrative nightmare both for the state and the recipient and inevitably results in both rorts and injustices.

jenny kirk said...

Chris - you've forgotten about the times when the State did help supply the "wherewithal for the labour force's reproduction".
It was called Family Benefit, and along with it came a raft of other helping hands to young parents - capitalisation of FB so they could buy a house, low state housing rentals, milk in schools, free dental care for kids up to age 16, etc etc.
This Best Start package is more than just "hoo-hum" - its the start to a change in thinking about how New Zealand can rid itself of the rightwing monetary idealogy.

Rain333 said...

The emergence of David Cunliffe as the preferred leader has admittedly been a disappointment.

I was wary of Cunliffe, and my worst fears are being realised. The man just does not appear authentic, worst of all, it's obvious. People therefore xpect him to be 'tricky' and every time he opens his mouth people are looking for the hook they can trip him up with, and it is not hard to find. This is not the first time Cunliffe has given an 'impression' only to find that upon closer inspection they exacting truth is somewhat different.

This does not bode well in a technology driven world, where your every utterance, no matter how old, is only the click of a button away.

'Honest John' also plays fast and lose with the truth at times, but he has already mastered the likeability factor. Cunliffe? not so much.

It's going to be a long 11 months, especially for Cunliffe.

Guerilla Surgeon said...

I sort of get sick of this bullshit about the top 10% paying 70% of the income tax, largely because it seems to come from the United States – so nice screen grab Brendan. It is in fact not true. Particularly so in the United States, where even if you agree that the top 10% pay 70% of of federal income taxes, which is bullshit, federal income tax is are but one of the taxes paid by U.S. citizens. But as it is bullshit anyway this doesn't matter :-).

Davo Stevens said...

Agreed Surgeon. There ain't enough of them in that top 10% to cover all the tax needs. The greatest tax burden falls on the "Middle" classes.

"Trickle down" simply can't work because there is only so much expenditure that one person can make. An example is a wealthy person builds a palace and employs the Architect, Builder and all the subbies. 6 months later it's finished and unless there is a similar palace being built every 6 months, there is no "Trickle Down". It stops.

The "Trickle Down" theory was a 30 second soundbite to make it sound good to ordinary people.

The wealthy, who pay very little tax, need to be taxed more, after all they make most of their money from the work of many within the economy.

Jan said...

Brendan, it's more than just a 'redistribution', although I do think that businesses have a moral obligation to pay a living wage and not rely on the state to effectively subsidise them.
This proposal is about dealing with the situation as it stands and getting the nation's children, no matter who they are, through their childhood in such a way that they are able to take their place in society, making a positive contribution and, in return, living a life of dignity.
They are the nation's children and we do have responsibilities to each other despite the 'it's all about me' claptrap that has dominated thinking for the last three or four decades.

Rain333 said...

(Not for publishing) Oh my word! Do you think you could add an 'edit' option? Typing and posting in a hurry is never ideal, and having read my previous comment I am not entirely sure which is worse, the spelling or grammar. An edit option would be 'luvely'.

Davo Stevens said...

Well said Jan. There too much farm fertiliser of the male bovine kind coming from conservatives.

I have no problem with my tax money going toward supporting others who through no fault of their own, are in a difficult position. I DO have a problem with my tax money going on corporate welfare.

If you're going to employ some-one then pay them properly for the work they do. If you don't want to do that, then do the bloody work yourself -- simple!!

I still stand by my belief that in times like this the Govt. should be creating work for those who are un-employed. Yes, it will cost more and taxes will increase but all that money will spread out into the economy, not spent on holidays in Fiji! By spreading the money out into the economy, we all benefit not just a select few.

As the economy gets better those workers can be moved over to private companies.

There are many jobs that would benefit society as a whole that the un-employed could do. But pay them a reasonable wage for doing them.

Brendan McNeill said...

First up, some facts for my detractors:

Hon BILL ENGLISH: Our tax and transfer system is highly redistributive, and the number of people paying income tax is surprisingly small. The lowest-income 43 percent of households currently receive more in income support than they pay in income tax. The 1.3 million households with incomes under $110,000 a year collectively pay no net tax—that is, their total income support payments match their combined income tax. The top 10 percent of households contribute over 70 percent of income tax, net of transfers—over 70 percent of income tax, net of transfers. This system is highly redistributive and we believe it is fair.—fairness

To Jan (thank you for your questions)

For the record, many years ago I started and own a 'high tech' business, and we pay our staff well above the average wage. However, those who earn over $100K per annum still qualify for welfare, and with Cunliffe's proposal, even more welfare!

In your mind, do those who earn over $100K per annum really need to be supported by other taxpayers? what do you think?

Let me ask you another question. We have had almost 80 years of the welfare state here in NZ, we are spending more on welfare than we ever have in the past, but we appear to have even more children living in realitive poverty than ever before.

Why is that?

If welfare could fix poverty, don't you think we might have accompmlished this goal after 80 years of serious attempts by Governments of all flavours including both Labour and National?

Is it time to admit that welfare is not working, and to ask 'why'? and then 'what are the alternatives'?

Jigsaw said...

I had been wondering just how you would report this Chris and I have to say I agree with most of what you say even if you are incredibly kind to Cunliffe. He simply blew it as he did in the house as well where the government must have left as though they had been mauled by a marshmellow.
As for these others -don't they realise that taxing the rich more and more doesn't actually work-might make them feel better but doesn't work? Their class hatred dims their reason. Human nature being what it is, the rich simply make even greater efforts to avoid taxes in quite legitimate ways. Another case of being mauled by reality!

Guerilla Surgeon said...

Brendan, did you not think that perhaps it was a wee bit suspicious that with completely different tax systems the top 10% should pay exactly 70% of the taxes in both New Zealand and the USA? Did you not perhaps think that some figures have been massaged here? This figure has been comprehensively debunked in both New Zealand and the U.S.
in fact since 1984 wealth has been transferred from the lower and middle classes to the rich. Income tax is, by now a much lower proportion of the tax take that it ever was, largely because of the regressive consumption tax imposed by Labour and increased by national. Not only that of course but there is no tax on capital gains yet. Much of the wealth of the rich comes from that. Not to mention that in the U.S. particularly, tax on dividends is very low compared to income tax. Time you read something by economists rather than politicians Brendan. Not to mention the family trust situation in New Zealand. Got help us even bloody Gareth Morgan recognises it's bullshit.

Guerilla Surgeon said...

As to your other point about poverty. You also forget to mention that benefits have been cupped proportionally over the years. There was a chance to solve some of the poverty problem by giving people the benefit that would enable them to take full part in society, but labour renege on that years ago. And to be honest, I can't think of anywhere where poverty has been solved by private enterprise. I mean for God's sake the English began a system of governmental support for the poor about 4 or 500 years ago simply because private charity didn't work. Never has never will. I suppose you want to withdraw all support for the unemployed and force them into jobs that don't exist? This is bullshit refined to its purest essence.

Davo Stevens said...

@ Brendan: I am still playing a wait and see.

Of course Bill English is the absolute bastion of the truth, he can't even lie straight in bed.

I'm not supporting Cunliffe either, see my first paragraph.

Yes, we are spending more on welfare now, that is patently obvious, but you can't extrapolate to today without allowing for the cost of living increases. We are paying more in dollar terms but in fact, are paying less when all other points are factored in.

We are still going through a financial depression the like of the 1930's with huge un-employment, you apparently have missed that. So there is your answer to why welfare is costing more.

There are good employers out there, in fact many are but there are some nasty ratbags too. In good times anyone working for the latter could simply move to a better job but not today, if they want to work they must stay where they are or go on the Dole with all the soul-destroying crap they have to go through to do that.

The 10% that you talk about are getting in excess of $140,000P.A. They pay very little tax, I know that from my own experience, Brendan.

Is it right that my tax and yours goes to subsidising a full-time worker, in the form of accomodation allowances, living grants etc.? Because their pay is not sufficient for any decent person to live? By doing that it distorts the economy and hides the real costs of the financial meltdown.

Jan said...

Brendan, giving people just enough to prevent them actually starving in the streets is not 'fixing poverty'; it's hiding it from 'nice people'. Since Rogernomics and Ruthenasia threw a whole generation of at risk citizens on the scrap heap, no really serious attempt has been made to 'fix poverty', and definitely not by this current bunch of punitive ignoramuses.

Guerilla Surgeon said...

Damned auto correct. I'm not sure what the original words were but benefits have been significantly lowered over the last 30 odd years. Cupped? Who the fuck knows? :-)

Brendan McNeill said...

Hi Guerilla Surgeon and Davo (and Jan)

Regarding the 10% paying 70% tax, first up you effectively denied it was true; then when I provided evidence from Hansard's record of Bill English’s statement, you suggest he is being economical with the truth!

For Bill English to mislead the house would be a serious matter, and one that no doubt the opposition would call him to task over – which they haven’t. He would have obtained his figures from Treasury, so you can be sure they are impartial and accurate.

Yes, there is revenue collected from GST, yes there is revenue collected from tax on businesses, (don’t forget that line item), yes investors make money from capital gains, but most of it is because of inflation, just like your house price is going up, but in a market that is also rising.

Capital gains obtained through static property investment are largely illusory. Such investment works only where tenants help to pay the interest and the principal on the debt.

But do go ahead and initiate a capital gains tax by all means. No doubt you are aware that Australia has one and it has resulted in the elimination of poverty and an affordable housing market in all the main centres.

To Jan: You haven’t answered my questions about the need for other taxpayers to provide welfare payments to people earning over $100K, and why it is that NZ has not eliminated poverty after 80 years of the welfare state?

Did any of you see John Bank’s speech on how to eliminate child poverty? It’s worth 10 minutes of your time. Probably the best speech he has made in parliament. It’s very moving as he speaks from his own impoverished experience as a child. He also suggests a remedy.

Kat said...

A fair days work for a fair days pay.

Simple really. Jobs with dignity.

Nothing to do with govt though, if you know what I mean.

Davo Stevens said...

Yep Surgeon and Jan. Jenny "Slasher" Shipley chopped the benefits in 1992 I think.

She said that the country couldn't afford to pay them at the origin rate. She lied - we could. She took $20.00/wk from the poorest people in the land and gave it to the richest. The idea behind that was to make the gap between the benefit and the lowest paid job greater, didn't happen but. It dragged down the pay of the lowest paid workers. The Gnats panicked and put the minimum wage legislation through to stop it going down further.

Helen Clark had the opportunity to fix many of those things in the 9 yrs she reigned, yet did nothing of note. Yes, she did bring the 'Working for Families' but made sure that it wasn't paid the beneficiaries and to date they still don't get it.

Will Cunliffe make any similar changes? It remains to be seen.

Guerilla Surgeon said...

I'm sorry Brendan, but do you really expect me to believe a statement from a politician is "evidence". Politicians know exactly how far to go in their statements without falling foul of misleading the house. They shade the truth all the time, God help us man you are SO naïve.:-) And you're being a bit disingenuous by insinuating that property is the only way to make money from capital gains. Sale of shares owned for the "long-term" are pretty much tax-free from memory. Anyway Brendan, here are some figures. Go figure.

Guerilla Surgeon said...

This is interesting and germane.

Davo Stevens said...

@ Brendan; isn't your Billy the one who got $1000.00 a week of tax money to live in his own house? Until he got caught with his sticky fingers in the biscuit tin! Really honest is he?

Another good point from Pundit:

Jan said...

To Brendan, in answer to your questions:
1. I actually think that my answer about paying people with over $100k per annum is covered in my first reply to you where I made, I thought, a case for universal rather than targeted payments. The income of the family is, thus, irrelevant.
2. If you read my last post you will see that I do not agree with your statement that the welfare system has an intention to lift people out of poverty in the last thirty or so years in any case. Would you like to explain in what way you think the welfare state as it stands is designed to achieve this? And what exactly your (sensible!) alternative would be.

Nic the NZer said...

@Brendan. Oh dear, you seem to have gotten your knickers into a twist over a failure to understand
basic arithmetic here Brendan.

The following sentence is factually incorrect.

"Is the present situation where 10% of taxpayers deliver 70% of the tax revenue progressive enough for you?"

The same figures which show this 70% of net-tax also show that the same 10% of households deliver 37% of the tax paid to the govt. They probably pay for around 20% of annual govt expenditure (including transfer payments).

Sorry, David Farrar managed to confuse and enrage you by using fancy terms like net-tax, which simply went over your head.

Nic the NZer said...

@Brendan, a second point which is worth keeping in mind is that if the following IRD research is correct, and indicative of the wealthiest NZers, then the richest NZers do not register in that 10% bracket with incomes over 150K p.a (per household).

Nic the NZer said...

@Gurilla Surgeon, Nice piece of analysis there. I hadn't realised that the premise of the English/Farrar numbers was an intellectual fraud, though their conclusions are clearly incongruous.

@Brendan, to explain it in simple terms for you.

If we accept the English/Farrar numbers then the top 10% contribute not a cent to WFF, the DPB or unemployment benefits. So if we accept those numbers they don't contribute to re-distribution of income from one worker to another at all, that's clearly not a fair conclusion to make. English/Farrar analysis also failed to include GST turning any conclusions relating to the entire tax base into an outright lie.

They appear to be manipulating the ignorant for political gain here, do they not?

Brendan McNeill said...

To Nic the NZer

The David Farr article to which you refer actually confirms that the top 10% of taxpayers contribute 70% of NET taxation. You may need to read the table again.

Regarding your assertion that the most wealthy Kiwis are not paying the top tax rate, which is supported by the Herald article (interesting how you appear willing to trust the Herald but not the Finance Ministers statement to Parliament) there is nothing unusual or necessarily illegal or immoral about that.

There is no asset tax in New Zealand, so why should someone’s assets be taken into consideration when it comes to taxation? As former Labour Finance Trevor De Cleen Minster was reported to have once said: “You tax the fruit, or the tree but not both.”

As the IRD pointed out in the article some of those in question may well have paid the top tax rate through income received by their trusts. (Who would have thought?)

Some individuals have investments offshore that do not fall under our tax jurisdiction – no crime in that. People do have offshore businesses and they have to meet the tax obligations of those jurisdictions.

As to your assertion that ‘the top 10% contribute not a cent to WFF, the DPB or unemployment benefits.’ I’ll simply leave to other readers to decide the merits of that claim.

Nic, if those on the Left put as much energy into wealth creation as they do opining about the injustice of a tax system that gives them so little of other people’s money, then New Zealand would be a net lender rather than a borrower.

Davo Stevens said...

@Brendan; Do keep on posting here. Whilst I and apparently others disagree with your comments you still have a valuable contribution to make to the discussion.

David said...

How about paying people money not to have babies for change?

Davo Stevens said...

@ Brendan: You keep going on about "Legal" methods of avoiding tax. Just because something is Legal doesn't mean it's right. I know from my own experience how easy it is to dodge tax legally. I did it.

That doesn't alter the fact that what Slippery Billy said was inaccurate. He was massaging the figures. It is done to make it sound that the poorer members on our society should be oh so grateful. Anyone with a few more grey cells knows that what he is saying just doesn't ring true.

It doesn't alter the fact that he ripped off the taxpayers claiming $1000.00/wk for a house that he fully owns in Wellington. That may have been legal then too but it didn't make it right or fair.

Nic the NZer said...

@Brendan, Excellent, you understand there is a difference between net-tax paid and tax paid (and in this case the analysis is ignoring GST). So how you then claim that 10% of tax payers deliver 70% of the tax revenue is beyond me, because that's clearly a net-figure and an inflated one because it ignores GST. As those figures show about 37% of the tax revenue is delivered by the top 10% (still sans GST).

The implication that the top 10% pay no WFF, DPB or benefits however is not mine but the English/Farrar conclusion. You can't have it both ways, so if the top 10% pay 70% net-tax then they also don't pay a cent for WFF, DPB or benefits. Paying for these things would reduce the net-tax that is paid by the top 10%. The non-ideological figure appears to be 43% paid by the top 10%.

I already called both an intellectual fraud, but some dupes seem to be happy to endorse this nonsense. Obviously when you can see how the number are constructed its no longer a matter of trust.

Guerilla Surgeon said...

Anon 6.16 websites. Translated them - seem to be spam of some sort.

Guerilla Surgeon said...

I find it fascinating that this figure – ie the top 10% pay 70% of the tax – turns up in both the U.S. and New Zealand. The U.S. first. Of course in the U.S. they only talk about federal taxes, which is only part of the tax take. Just as in New Zealand they only talk about income tax. I think what happened was somebody in the National party saw this and thought they'd massage few figures to make it appear as if we are the same. Interesting though, they don't give you the percentage of the national INCOME that the top 10% get.

CarbonGuilty said...

Brendan is the only one of you making any sense. Rest of you are probably living off his taxes.
Anyway I agree with Chris: Cunliff is a disappointment, but this pleases me as it increases the chance I can bask in the warm fuzzy feeling of living under the best government and leader in my near 60 years. Not brilliant but best, or better than the alternatives. The lesser of two evils if you like. The other being a Green infected Labour bunch of fakes who speak in cliches. Tricky to the last, always twisting and squirming, like those above failing to defeat Brendan. No thanks. The thing you cannot dispute about the current regime is that they are themselves. What you get is what you see. I like it that way. And finally something very superficial but again a telling fact: They are better looking. Cunliff for example has not just an ugly character, is not just a spewer of ugly phrases but his bile pours forth from a face only his Ma would like to spend much time gazing at.
I expect 70% of voters, even most of those non net tax payers will not vote for it.

CarbonGuilty said...

Brendan is the only one of you making any sense. Except for that man who says we should pay people not to have more babies. No chance of that from the left as it needs vote fodder so it farms poverty, just like pig hunters farm wild pigs. Can't blame them, as who else is there, apart from the envious and spiteful to vote for a fake like Cunliff. What a motor mouth worth of cliches that pretender is. But I am glad the unions chose him as it surely increases the chance I will live another four years under the best government and PM in my near 60 years. Not perfect, governments are pretty dumb by nature but surely the lesser of two or three evils and definitely blessed with one key attribute: they are themselves, warts and all. Cunliff and Norman are such performers but we see through them to their underlying rotteness. If Winston chooses them he will regret it. He is a phoney too so three of them at the same table will be a disaster, for them. Hopefully they would be so short lived a junta we will not suffer too much.

CarbonGuilty said...

Sorry to inflict two versions of my raving on you, I thought the site lost the first. It was better eh.

Guerilla Surgeon said...

"Brendan is the only one of you making any sense."

I think it far more likely that Brendan is the only one who is talking the sort of bullshit that fits in with your prejudices. :-).

Unknown said...

Get people motivated to support Labour and david Cunliffe. If Labour loses this election they will be finished as a party, likewise the Greens.

Requiem for a red dawn again...