(Article reprinted from Socialist Appeal newspaper Autumn 2019. To buy a copy send us an email for further details)
With the Labour Party riding high in the polls at approximately 45%, and the National Party leadership in meltdown and beginning to fall in the polls, Labour voters have (quite rightly) high expectations of the Labour Party to deliver. Jacinda Ardern has said that the second year of the Labour-led coalition government will be about delivery and made vague platitudes about this in the media.
To date we have seen the Labour-led government carry out minor reforms that have benefited the working class and this is welcome. However, when it comes to tackling big business and the capitalist system, that entrenches poverty and is widening inequalities, in New Zealand we see the Labour-led government lack politic backbone to tackle the bosses on a number of fronts.
The recent Tax Working Group is a prime example of this timidity. Chaired by the former right-wing Labour Finance Minister Sir Michael Cullen, the committee was stacked in favour of big business by 8 to 2. Plus, the terms of reference were fiscally narrow and ruled out wealth taxes such as inheritance tax.
Although a Capital Gains Tax has been mooted. This new tax is not likely to succeed as it will affect the majority of the MPs in parliament who also own rental properties, and if it did succeed it will be watered down to be ineffectual. As the saying goes turkeys do not vote for Christmas and MPs, many of who are landlords, do not vote for Capital Gains Taxes!
The reality is that the tax system is not about fairness but about the transferring wealth from the bottom to the top, and the Tax Working Group was never about achieving fairness either but appeasing the bosses by calling for a Capital Gains Tax policy if Labour is re-elected. A Capital Gains Tax is already Labour Party policy, but the Parliamentary Labour Party did not have the courage to enact legislation immediately on gaining the govern- ment benches in 2017. The PLP was more afraid of the backlash from big business than delivering reforms to workers. According to Statistics New Zealand in March 2017 workers received 48.7% of the national income, in 1981 (before Rogernomics) it was 58.7%. This equates to $11,500 (in today’s dollars) taken from every worker in New Zealand and transferred to the rich. The Tax Working Group will not change this position for the better, despite the rhetoric, but will support growing inequalities in New Zealand as the wealthy are the real beneficiaries of their work. Jacinda Ardern is no doubt sincere in her wish to tackle inequalities and growing poverty in New Zealand. However, her sincerity will not change things very much if she is not serious in challenging big business in New Zealand.
To achieve this the Labour-led coalition government must break with big business and adopt bold socialist policies that will tackle the root cause of poverty in New Zealand, the capitalist system itself.