The National Party has renewed its attacks on the Government, saying it is more divided than ever.
And a political analyst says the Government might not be in disarray, but "there is an awful lot of scrambling going on."
The latest wrangle, following the departure of several Ministers, involves public disagreement on tax policy within the cabinet. Veteran Labour MP David Parker has refused to serve any longer as Revenue Minister.
Parker took the opportunity to step aside from that role when cabinet was reshuffled in the wake of Kiri Allan's arrest. He later told reporters that holding the revenue position was untenable.
Parker has been in parliament for more than 20 years and is one of the few current leaders to serve as a cabinet minister within two separate Labour administrations. More significantly, he has pushed his role as Revenue Minister by working hard on tax reform.
Parker commissioned a report by the IRD on taxes paid by the rich, and he was in favour of a so-called tax switch. This would have provided a tax-free rate for very low incomes, which would have been paid for with a special tax on people with high net wealth.
But this idea and a capital gains tax were blocked by Prime Minister Chris Hipkins earlier this month, because he said economic conditions were hard for many people and now was not the right time.
Parker is understood to have felt undercut by this announcement, in part because it undermined months of hard work on this subject, and in part because he disagreed with the policy anyway.
It is that which led to his "untenable" comment, though he was at pains to stress his loyalty to the party all the same.
Speaking to reporters, Hipkins also played down the significance of the rift with Parker, who in turn told reporters he had not broken any cabinet rules by speaking about his feelings in public.
The National Party leader Christopher Luxon then climbed into this row, saying Parker clearly had no confidence in his own leader, and this was yet another sign of a chaotic Government.
Luxon agreed, however, that abandonment of a capital gains tax was a good thing.
Meanwhile the political commentator Ben Thomas says the Government is clearly not looking good, with "this constant game of musical chairs.
"But is it in disarray? There is certainly a lot of scrambling going on, just to cover the normal business of Government.
"There are two separate things, right? There is the presentational aspect in terms of public perception, which is obviously quite untidy.
"Then there is the business of Government. There is a big slab of legislation that they want to pass before parliament lifts, and that requires a lot of ministerial intensity."
"There would be a lot scrambling, a lot of late-night briefing going on right now, and not on minor things."
"David Parker has had an enormous load of responsibility within this Government and there will be a lot of work needed to get on top of these portfolios," says Thomas.
55 Comments
Come on! It was a political hit job from a tax and spend party that has been spending large and running up large deficits that it needs to cover with more taxes.
The IRD report wasn't worth the paper it was printed on because it was arguing a section of the community was dodging their tax obligations based on unrealised capital gains. We now know that it was a trojan horse for a wealth tax which is a softer version of what the Greens want to bring in.
Labour are a house divided full stop. Parker assured the public that his “passive” enquiry that targeted a selection of certain wealthy identities was no more than that. There was no intention to introduce new taxation. Except there was and it was being plotted virtually simultaneously. At least Hipkins has the integrity to respect that assurance. Not so Parker and Robertson.
I wonder how the people who complied with it (it wasn't a 'if you feel like it' request, either, apparently) feel about being mislead as to the true purpose of the thing they incurred time and cost to provide details on.
Terry B hinted there was already some angst about it and that lines up with what I've heard from others in that area. One can only wonder what else that data will be used for. No wonder the big donations have dropped off for Labour. Of course this will be seen as an excuse to implement public funding of parties.
Worse still. This student and lover of law sneaked through legislation at the eleventh hour, prior the Xmas break, that enabled the IRD to go fishing. That is demand disclosure of the status of assets of individual New Zealand citizens. Yonks ago the Magna Carta was drawn up precisely to prevent the Crown intervening in the legitimately own property of any citizen. That has been fundamental, a cornerstone to our law for centuries. But in his vendetta against the perceived rich pricks Parker, just jettisons that. That sucks.
Both parties have continued work on congestion and road tolling in the background. See: Penlink etc. National supported road pricing as part of the work programme before they were turfed in 2017 and the new Labour Government walked away from most roading commitments, only to revive some of them with a now-baked-in delay because they couldn't get any traction with their own policies.
for the record, I do think a CGT is a good idea, more specifically using a CGT to replace other minor taxes such as bright line tax, rent tax etc, and allowing compensate on capital losses. We do need to fund our services and infrastructure. I don't support Labour's CGT or Green's Wealth Tax simply because they cannot explain how they can use the money properly. Their plans just tax to punish which is never going to end up well.
as for the wealth tax, the key is not wealth, the key is income, and how we must re-define 'income' and enforce the 'income'. wealth is not wealth is it does not generate income.
Luxon made the headlines today claiming that his tax cuts are designed to ease cost of living pressures on NZ households. It will send NZ's CPI to the moon and leave a big fiscal hole behind, costing the Crown $8.2b over 4 years in lost revenue.
He has also promised more roads and increased funding for frontline services across the board. So, expect targeted increases in levies or latent cuts to frontline services.
Ah yes, me spending my own money is inflationary but the government tipping it into a hole and lighting it on fire isn't, for some reason. An election year classic.
PS: $9B is about what RBNZ's Covid response (not reviewed independently) has cost us, with no demotions, dismissals or even being part of the Covid response enquiry. Given the current Finance Minister's response (reappointing the Governor) I can only assume that $9B the Crown doesn't get to play with anymore isn't actually that much of a big deal.
"Hardly a current government issue" - it is when your government is presiding over 6%+ p.a. inflation and clipping the ticket on people's pay rises as they try to cope with exploding living costs.
I would actually just prefer they spent the money they were collecting on Auckland transport projects and didn't sit by while the rail network crumbled and AT ran out of cash. Or if they made the CRL 60/40 like they managed to find to fund LGWM. Or fulfilled any of the election promises around rapid transit they made to get elected and then either walked away from or stuffed up totally.
So no, not so easily dismissed, but thank you for demonstrating the government's issue for taking ownership of anything so succinctly.
AT are constrained by their own beauracracy and our ridiculous H and S law that effectively halts any meaningful work ever been done and is a gigantic resource sink.
I wasnt dismissing it, merely pointing out that bracket creep has been happening for decades, the current bunch are as gutless as their predecessors.
It has been, but the current finance minister has not only spent the last 12 months decrying indexing as a 'tax cut' - but it turns out he's been planning on a 'tax switch' after years of gaslighting the general public. He is also the one who decided to reappoint the RBNZ Governor while inflation screamed out of control.
And bracket creep at 1% a year is a much different proposition to bracket creep at 7% per annum, especially given the revenue boost the government then also gets from GST paid on the basics as the costs of them increase as well.
So yea, this is next-level and verging on predatory. It needs to be called for what it is.
i am looking forward to my $ 2 per week not sure what i would blow it on
i can not understand why no party (without a massive tradeoff) wont introduce a tax free threshould, is it all about IRD wanting to keep tabs on everyone rather than make simpler for a lot of people from causal / part time workers to small business to fruit growers
Because if you offer a tax-free threshold, you are offering it to everyone. And if everyone qualifies, then the people who probably need it get less than if it was targeted and the people who don't need it get the same even if they don't need it. It's not an effective method of intervention.
The fact you're dumping on National's tax cuts as being so small to be ineffective and then even asking this question is somewhat ironic.
Not necessarily. For PAYE it would be relatively simple for IRD as at each 31 March to apply and pay a rebate for income earners of say less than say $50k or whatever. In days past it was a simple mechanism for instance to get a rebate/ deduction for life insurance premiums paid. Bit of an advantage too perhaps for the recipient in that there is an inbuilt savings going on there resulting in a lump sum that might come in handy.
its not about intervention its about making it simpler for business and those that only want to earn a little bit
ie fruit pickers both sides benefit, the grower not having to do all the paperwork and deduct to pay IRD and the picker not having to pay (then getting it all back at the end of the year )
i know many that have come here on a holiday working permit surprised at getting their tax back at the end and confused as to why we do it this way
I do wish they'd get on with explaining what they intend;
https://www.newshub.co.nz/home/politics/2023/07/election-2023-national-…
If not fully funded in some way, we could find ourselves in a UK/Liz Truss sort of scenario.
That strategic voting has never been actually quantified but nonetheless there was a very real sense of that attitude in the electorate. Especially those that are considered rural which most definitely will not repeat. Contributing to that was the complete disarray that National had imploded with. Two important things now apply. Firstly Labour is in even more disarray. Secondly if those voters were so disturbed by the prospect of the Greens in government in cabinet, then they will be even more disturbed about a government consisting of Labour breaking ranks with a fractious faction therein, the Greens all pent up ready to roar out left field and TPM selective racism a party plank.
Parker has been sniping at Hipkins for weeks. After coming out and voicing his disappointment at Labour's / (Hipkins) tax policy position and, then, being outed by Hipkins that he wanted to be relieved of his Revenue portfolio, he claimed he was staying on as an Associate Revenue Minister. Hipkins said no to that.
Why would Parker make so much noise about wanting to be removed from the Revenue portfolio? Well, from a practical pov, he wanted to hang on to being an associate finance minister and from a political pov, he was still continuing his sniping at Hipkins and making himself a news item.
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