Michael Cullen will remain the Chair of the Tax Working Group (TWG) for longer than he was initially contracted to be in the role.
Finance Minister Grant Robertson said the Government extended Cullen’s appointment to June 30, because it was “aware there would be extended public discussion on the report”.
He acknowledged this public discussion “has played out”.
Cullen was originally supposed to be in the role until the TWG delivered its final report in February. This was when the other 10 members’ contracts ended.
However, the Government on January 30 – two days before it announced it had received the TWG’s final report – offered to extend Cullen’s contract.
Robertson told interest.co.nz of the extension when it asked him whether he was aware beforehand of an interview Cullen did on Radio NZ on Wednesday morning.
Cullen’s commentary
Cullen in the interview debunked National’s claim that under the TWG’s recommendations the average person’s KiwiSaver would be worse off.
He did so further to sending a statement to media on Monday night explaining how National hadn’t accounted for recommendations that would reduce tax in its calculations.
Up until late Wednesday afternoon, this was the only official statement Cullen had sent to all media further to the TWG's final report being released to the public on February 21.
Cullen in the interview went further in saying: “I’d be much more likely to believe Sam Stubbs [of Simplicity] and the people he’d be using to do costings on a KiwiSaver scheme than Mr Bridges, because this is all part of this rather hysterical ‘destroy New Zealand way of life’ reaction to the report.” (See Simplicity's workings here).
He also provided a fair bit of commentary, saying he believed the Government wouldn’t reform the tax system in such a way that would leave KiwiSaver members worse off.
He commented on the difficulties the TWG faced figuring out how to tax capital gains on Australasian shares, when currently these receive concessionary tax treatment compared to foreign shares.
“It would not at all surprise me if there were some changes to those proposals around Australasian shares," he said.
Cullen also said history would suggest that the Opposition, if elected into government, wouldn’t overturn changes it previously spoke out against.
This evoked a response from National Leader Simon Bridges, who tweeted: "No ifs, no buts, no caveats, I will repeal this CGT as Prime Minister of New Zealand."
Policy, not politics
Challenged by interest.co.nz on whether he was going beyond his remit and wading into politics, in such a way that it appeared he was going in to bat for the Government, Cullen said no.
“It’s certainly my job to wade into policy. It’s not the same thing as politics."
Cullen said there was “nothing particularly unusual” about him responding to National’s KiwiSaver commentary.
He acknowledged he couldn't respond every time someone said something "a bit daft”, but said: “When there’s egregious mischief-making by plucking numbers out of the air, I think it’s important that people understand firstly that those numbers are almost certainly wrong, and secondly, that there are various ways in which any difficulties can be resolved…
“It’s a bit silly to be scaring people too much at this point.”
Asked whether it was his job to be debunking myths or allaying fears, Cullen said yes.
“My job is to defend the work of the Tax Working Group… It’s not the job of the Government to defend an independent report given to it.”
He said he was defending both the report and the process.
He acknowledged the need to do so in the case of National's KiwiSaver comments, noting these would receive more media coverage than other arguably misleading responses to the report.
Cullen likened interest.co.nz’s observation that some of his comments in the RNZ interview mirrored the Government's caution, to a “conspiracy theory”.
The Government has refrained in recent weeks from really marketing the need for tax reform. It's instead underlined its focus on "consensus-building" ahead of announcing its response to the report in April.
Cullen said: “I’ve always been aware that this is an extended process, of which the report is only one stage. Therefore it’s very important for people to understand that there is a long way to go before decisions are made."
He expressed his frustration over the other 10 members of the TWG being “treated like a pack of dummies” by those who implied they had nothing to do with the outcome of the report.
He said the Group’s members are experts in their fields, and while they are now off the job, his role is to "defend the integrity of the report”.
49 Comments
Why exactly he is being kept on for 4 months?... the government come out next month with their view on whats workable... what role does he have beyond that... mentoring Robertson on how tax works? advising Jacinda on how to sell a policy he never had the stones to put up when he was in parliament?
If the proposals are fairer it would sell itself.
If anything the government could be asking for his consultancy fee back as he has failed to produce any realistic or workable proposals which fail at the first test of being 'fair'. Its a tax grab, pure and simple.
Ardern said the government would spend the next couple of months pondering the TWG report and then open dialogue with the public. This was either intentionally misleading or she is not in control of the process, as Peters begins putting stakes in the ground with various public statements. The notion that Cullen is acting independently of the government by publicly engaging in debate on the CGT is implausible. There is no chance Cullen would be vigorously wading in without Ardern and Robertson's endorsement. Cullen is Iran's Hezbollah, fighting a plausibly deniable proxy battle on behalf of backers who have ducked from sight on this issue.
Oh yes the public purse is at their disposal alright. Puppeteers, the past Labour demigods. We know, we say, you do. You cannot avoid the thought that what Clark/Cullen had to shelve from their untimely, unfair and unappreciative 2009 defeat, is being dusted off thick and fast. Close behind the curtain as well, Helen Clark is available, one might reasonably suppose, in the gravitas agony aunt role, and folks here comes “The Foundation, “ drum roll and then money please! Us peasants don’t know how lucky we are to have them.
Boatman,
And here's me thinking that the GFC had something to do with it. While you're at it,why don't you blame the last Labour government for a few more things;climate change,drought,plagues of locusts(they arrive soon)Queensland fruit flies etc.
I do enjoy your posts-they are so biased that they're funny.Keep it up.
That is a bit unfair on both scholar and college. The latter has had many scholarships over many years for boys of his ilk. The former was a model pupil who took the opportunity productively and with gratitude. Yes there were a lot of North Canterbury and other “farmer types” attending as well. As far as I can recall he got on well with them and vice versa. Not confident that that, would apply today though.
Gratitude for his scholarship?? I think not. "I'm proud of the fact that my secondary education was not paid for by the taxpayers of New Zealand but by the farmers of Canterbury and Hawke's Bay," the rooky MP roared. "I ripped them off for five years then, and I shall get stuck into them again in the next few years."
Well now, there you go, the attitude set in early then. Thanks. That shakes out a bit of bad dust indeed. Always thought that Dr Cullen calling for instance Winston Peters a blowfly or Merv Wellington a lobotomised Jerry Lewis was curious if not baleful. I mean why would such an acknowledged intellectual need to stoop so low to dredge up gutter sniping like that?
I await, not holding my increasingly valuable breath, Sir MC's public takedown of whatever 'hysterics' issue from Labour, or the Greens.
He could start by examining the 'tax neutral' claim, because it is clear from the report that no-one has the foggiest idea of what New Tax Revenue is on offer, in order to be able to offer cashbacks on the other side. First rule of budgeting: nail down the Revenue side......
I'm saying his rate is fair for the complexity of the work involved. I charge $250ph for consulting at a much lower level of responsibility - in the financial services area. But the hourly rate is not really material compared with the outrageous ongoing funding of him after he has finished his report. He's completed his assignment and should now bugger off. Instead he is paid by taxpayers to do the governments job - front the public. I can understand Ardern's reluctance given she has struggled in interviews to articulate key details of the TWG report and was clearly ill at ease under examination on CGT issues in parliament yesterday, but why is is the usually articulate and well informed Robertson also hiding behind Cullens skirts?
I charge $250ph for consulting at a much lower level of responsibility - in the financial services area
That's a very impressive rate for NZ, well done. As far as I can tell that's about the ceiling for what I could expect as a contract software dev in Sydney.
Wish I'd paid more attention to finance in my uni days - fintech is huge.
Does it mean they intend to carry out all the recommendations and they fear if they let him go someone may pay him to change his opinion? Or are they going to gut the thing and this veteran politician will change his opinion to suit whatever they come up with by saying this is what the report said all along?
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