Tuesday 22 August 2023

Not In It For Them.

In It For Your Votes: Political momentum comes from announcing policies (like removing GST from fruit and veges) that you already know “your people” want. Call that cynical if you want to, but it’s a helluva lot better than announcing policies your supporters don’t want (like pushing up the price of petrol).

OH DEAR, OH DEAR, OH DEAR, the political class is extremely displeased with the Labour Government. Against all responsible advice, the Prime Minister has announced the removal of GST from fresh and frozen fruit and vegetables. Who knew there were so many economists and tax lawyers in our unhappy little nation? Or that they could all become so very cross on cue? We shouldn’t be surprised, though. Not really. A state so bereft of sensible tax policy did not get that way by accident. How many economists and tax lawyers does it take to prevent a meaningful redistribution of wealth? Now we know.

And oh, what a giveaway. All these middle-class objections. All these silly, cavilling, nit-picking political journalists. None of them able to see what’s happening right in front of their upturned noses. All of them arrogantly unaware of their starring role in Chris Hipkins’ shrewd political drama. If they realised that what they are doing is exactly what Labour’s strategists want them to do, I wonder, would they go on doing it? Probably. These newshounds have heard Pavlov’s bell ring one too many times.

So, what is Chippy’s cunning plan? Why is the sound of the whole Press Gallery criticising his GST policy music to the Prime Minister’s ears? Simple really. When Labour’s electoral base hears the media pack howling down a policy aimed at helping the sort of people political journalists wouldn’t be seen dead with, then they are even more disposed to give “their” party the big thumbs up.

The same principle is at work in relation to the condemnatory commentary of the economists and tax lawyers. They’re experts, remember, extravagantly rewarded shills who think they know best. And who, these days, trusts extravagantly rewarded shills who claim to know more about your world than you do? The more the “experts” criticise Labour’s policies, the more credibility those policies acquire. To paraphrase the old pro-MMP poster: “If you want to know why you should back Labour’s GST policy, then just take a look at the people telling you not to.”

A cynical and manipulative misuse of the post-Covid zeitgeist by politicians who have lost even the memory of their moral compass? Well, duh! How else would Labour’s critics suggest it recovers the political momentum it has so clearly lost? (Thanks Stuart. Thanks Michael. Thanks Kiri.) And, no, the answer has nothing to do with releasing the sort of policy that makes old lefties like me jump to their feet and cheer. We are a wasting electoral asset – fewer of us to cheer with every passing year. No, political momentum comes from announcing policies that you already know “your people” want. Call that cynical if you want to, but it’s a helluva lot better than announcing policies your supporters don’t want.

And, sorry, but if the word from Labour’s strategists is to be trusted (a big “if” I’ll grant you!) then a wealth tax and a capital gains tax both fall into the category of policies the average Labour voter doesn’t want. Chippy and his inner circle, ably assisted no doubt by Talbot Mills, “focus-grouped” the “tax switch” put together by Grant Robertson and David Parker, and the assembled “ordinary voters” are said to have given it the big thumbs down. God knows why. But, God’s not answering his cellphone.

So, what’s a government to do? It gets sneaky, that’s what it does.

When Nicola Willis told the world that Labour was planning to take GST off fruit and vegetables, my first thought was that someone in Treasury or the IRD had leaked it. Some dyed-in-the-wool neoliberal for whom the very idea of messing with New Zealand’s “pure” goods and services tax was an abomination. Some bureaucrat who thought that by allowing National to release the information early, the Government would be warned-off the idea by the vociferously negative response. But, now, I’m not so sure. Now, I’m coming round to the idea that it was actually Labour’s campaign-team that leaked the GST policy to National.

Think about it. Robertson’s and Parker’s tax package allegedly tested badly with the punters, so Chippy issued his “Captain’s Call” and pulled the plug. But, the polling agencies reported solid support for the idea – raising the possibility that Captain Chippy had made the wrong call. With Labour still needing to make some announcement on tax, someone needed to come up with a cunning plan – and soon.

In retrospect, the plan was better than cunning – it was brilliant.

Labour leaks its GST policy to National. National denounces it. The media follows suit. The Old Left decries the initiative as too little, too late. The economists and tax lawyers join the debate. They are not impressed. It looks as if Labour is on a hiding to nothing with its GST policy.

Except, while all this is going on, Labour’s pollsters are hard at work measuring the reaction of Labour’s working-class supporters to the GST off fresh fruit and vegetables policy. No focus-groups this time, but honest-to-goodness scientific opinion sampling. And, guess what? The poll data showed Labour’s electoral base loving the policy. They were all for it. Chippy and his team were on to a winner.

More to the point, all that negativity from the Nats, Act, the news media and, of course, the “experts”, hadn’t dimmed the party’s enthusiasm. Labour voters weren’t responding with their heads, but with their hearts. As far as they were concerned, Labour was doing something to help people like themselves: people without fancy degrees and six-figure salaries; people without mortgage-free houses and tons of money in the bank; people with no reason to like or trust the pointy-heads putting the boot into Labour’s plans.

Chippy’s and Robertson’s speechwriters got it. From now on, like Donald Trump, they would “love the poorly-educated”. Now there was no need to justify Labour’s policies to the economists and the tax lawyers, no need to fear the woke media pack. So long as the Prime Minister and his Finance Minister kept reiterating that they weren’t introducing the policy to win the approval of the “purists”. So long as they insisted that they were changing the rules for the benefit of “all those people out there who are doing it hard”.

Cynical? You bet! Socialist? Don’t be silly! But, you know what? It works. The louder the political class howls its disapproval, the tighter Labour’s voters close ranks around “their” party.

Who would have thought it was so easy?

POSTSCRIPT: Easy it might have been, but, true to form, this Government refused to be guided by its own political insights. Any good that might have been done for Labour's election chances by removing GST from fruit and veges was undone completely by Hipkins' decision to add 12 cents to the price of a litre of petrol over the next three years. The consequences of this insane announcement were promptly captured by the 1News/Verian Poll released on Monday, 21 August 2023. Labour's popularity had fallen by 4 percentage points to 29 percent. That's pretty much "Game Over" for Chippy and his mates. Didn't have to be, but, as one of those Ancient Greeks put it: "Those whom the Gods seek to destroy they first make mad." And, right now, Labour is barking.  – C.T.

This essay (except for the postscript) was originally posted on The Daily Blog of Wednesday, 16 August 2023.


Tom Hunter said...

The Old Left decries the initiative as too little, too late.

Don't know who you're referring to their specifically but Susan St John, as spokeswoman for the Child Poverty Action Group
said this:

"It's probably one of the least cost effective ways for helping people who are struggling to feed their families.

"The benefits can be shown to be appropriated largely by the higher income people because they spend more on fresh fruit and vegetables, and it doesn't necessarily change behaviour at the lower end just by making those things cheaper when people don't have enough money. If they were to have a few extra dollars in their pockets, they may not necessarily want to spend it on fresh fruit and vegetables. So it just doesn't stack up from an economics point of view.

"If what you're trying to do is to get lower income families feeding their children nutritious food, this is not the way to do it ... this is just tinkering."

She does acknowledge that it's a "populist" move, which I expect you would agree with, although I thought populism had become unfashionable with the Left in the wake of Trump and Winston Peters?

Ah well, election wins remain the essential thing because of that old, and true, adage that being in Government is real power vs being in Opposition.

Only problem is that this seems to have landed like a damp squib given the need to cause voters excitement and reason for voting Labour, rather than just Labour’s voters closing ranks around “their” party.

BTW, closing ranks is what happens when a military unit goes on the defensive, which they never choose to be and which often precedes a catastrophic defeat. ;)

Graeme F said...

I have noticed when a news story comes out - generally on the first release the commentators are supportive. Then in order to stretch the story to a second day - they round up some contrary opinions.

In this case it was Nicola Willis who released the policy - and indeed there was quite a positive story - the fact that people on the street seemed to support the idea.

But when Chris Hipkins announced it - there was only the negative story left to run. And the idea got absolutely hammered.

Guerilla Surgeon said...

I don't usually take much notice of articles that have experts in inverted commas, but economists from the left are few and far between. Economics these days is largely political. According to some gst effects the middle class more because reasons.
It's regressive ... it's all in the name. Get rid of it all and reform the tax system. Make economists pay more for a start. 😇

The Barron said...

The NZ political right have a strangely twisted idea of tax. They cry 'tax cuts', but if a government defers a regressive petrol tax, it is apparently irresponsible. If the surcharge (another word for tax) is removed from prescriptions, they scream no, then err maybe if targeted. To take tax off fruit and veges...

I must say, I have never been in favour on the dependence on GST, a regressive tax, and the way it has allowed the right to continue to offer cuts to the progressive income tax, and to completely reject the idea of wealth tax, CGT and high-end inheritance tax. Robin Hood in reverse.

I will note that the Labour promise of removal of tax on fruit and vegetables does seem more populous than principled. If they were looking at the needs of the working class, then mensural products, nappies, toilet paper, school uniforms, children's clothes etc. would be part of the discussion. I would like to think it is at least a start, but I am pretty sure the Labour policy makers had little thought of expansion.

Not that it is better across the aisles. National deciding that targeted cancer spend can only be policy if prescription charges return. Nothing needs based, simply the use of populism to maintain an uneven tax take.