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.