"...we backtracked on our election pledge to remove the surtax on superannuation. Because morally I couldn't justify to myself that we would give a tax concession to the wealthy retirees - which removing the surtax would do - while we were taking some off those who were in much poorer circumstances."
#JimBolger, 2017
https://www.rnz.co.nz/programmes/the-9th-floor/story/201840999/the-negotiator-jim-bolger
This quote from Bolger epitomises the way everyone is the hero of their own story. He could morally justify cutting social welfare benefits to the bone in Richardson's infamous 1990 budget, throwing thousands of kiwis into avoidable poverty, but not cutting a tax on retirees.
Elsewhere in the interview he decries the total failure of neoliberal policy. But they cut benefits to bail out a bank, instead of raising taxes. Eg targeting those engaged in dodgy financial game . Classic neoliberalism.
"[Mike Moore] would eventually rise to lead the WTO - the highest international position ever held by a NZer - and a respected champion of globalisation."
#GuyonEspiner, 2017
https://www.rnz.co.nz/programmes/the-9th-floor/story/201840181/the-trader-mike-moore
Even in 2017, "respected champion of globalisation" was an oxymoron. I'd argue that even then, Helen Clark's tenure as head of the United Nations Development Programme was a more respectable position.
Arguably, the neoliberal era in NZ electoral politics began with the Wall St crash of 1987, and ended 2 decades later, with the property crash of 2008. Key's govt reacted out of habit, with bailouts for the owning classes, and austerity for the working classes. But the 2017 Labour govt won on the promise of "transformational" change, and in the context of Ardern and Hipkins condemning neoliberalism. Although policy didn't always reflect this;
I believe the 2023 NZ election outcome was a result of Labour's failure to escape the gravity of a collapsing neoliberal policy paradigm, due to a rump of panicking senior MPs and apparatchiks trying desperately to pull the party back to the centre-right. Evidence? The increase in Greens and TPM seats, and in the non-vote.
The Luxon govt only won because Labour lost. If there was mass support for its austerity policies, it wouldn't have needed the anti-neoliberal Winston First for a majority.
Elsewhere in the interview Moore claims Labour was founded on free market economics, and that the Marxist economic policy that Rogernomics chucked out was an abberation. This is ahistorical to the point of being delusional.
Was Moore lying to retrospectively justify his lurch to the right, or did he actually believe this nonsense?
"Labour's 'Usehold' policy on land was, in essence, the replacement of freehold tenure by a system of perpetual lease from the state, with all land-transfer conducted through the state (the full nationalisation of farmland). This policy proved unpopular with voters, and Labour dropped it, along with other more radical policies, in the course of the 1920s."
@CarolynStirling
> How quickly could they implement Neo Liberal economics. It was brutal
Alister Barry made a series of documentaries about this period. Someone Else's Country covers the Rogernomics Labour government and In a Land of Plenty covers the Ruthenasia Nat government that followed it.
Both are essential viewing for anyone under 50 who wants to understand how #neoliberalism changed Aotearoa. Folks over 50 may remember pre-1984 NZ, but might still find these docos insightful.
@tim
> they’re on YouTube, for what it’s worth.
Some of Alister Barry's docos can also be viewed on NZ On Screen;
https://www.nzonscreen.com/profile/alister-barry/screenography
@strypey
Things I never understood:
1) Why are we still taxing superannuation payments or benefits? It means people are not actually getting what it says on the tin, despite allocating all this budget to it.
2) Why do small businesses / sole traders have to pay "provisional" tax - especially in first 1-2 years?! It's a pretty big deterrent to anyone starting up a side venture where they will have unsteady income
@aligorith
The sur tax on the pension was more akin to benefit abatements than tax. It applied to people who had other income as well. Just like people earning a lot aren't eligible for student allowances. Now it's gone again superannuation ("guaranteed retirement income") is the closest we have to a Universal Basic Income. But only for old people.
If we still had the surtax Winston would not be getting a full GRI on top of his other income (inc dep PM salary
@aligorith
> Why are we still taxing superannuation payments or benefits?
In 2023 the Greens advocated taking tax off the first $10,000 per year, and I believe TOP and TPM had similar policies. I support this.
I don't think it's fair or wise to take tax off benefits (including super) while leaving minimum wage workers paying tax on all their income. It's likely to be exploited by right-wing beneficiary-bashers to drive a wedge between employed and unemployed workers.
@aligorith
> Why do small businesses / sole traders have to pay "provisional" tax
(edit: I was thinking of Secondary Tax here, not Provisional Tax)
It's a hangover from the pre-Rogernomics days. The logic was that employers could avoid creating one secure, fulltime job for every 3-5 people they could convince to take a side hustle. Taxing secondary incomes discouraged this, making it easier to achieve full employment, which was the policy at the time.
@CarolynStirling
> They’re actually not paying extra tax
Maybe we're talking about different things, but people on benefits pay extra tax on any income we earn, and I've never seen any of it come back.
@strypey @CarolynStirling @aligorith Yes, different things. Provisional tax is pre-paying tax for a sole trader or small business based on estimated income and applies whether or not you have another source of income.
Secondary tax is the rate that's applied for extra sources of income, so that the total tax paid over a year is the same as if it had all come from one source over that year, and there are different rates you can use based on your estimated total income.
@scattermutant
> Yes, different things
Ah, OK. My mistake, sorry @CarolynStirling, and sorry @aligorith for confusing matters. However I stand by my comments in regard to secondary tax and I'll edit my post accordingly.
@scattermutant
> Secondary tax is the rate that's applied for extra sources of income, so that the total tax paid over a year is the same as if it had all come from one source over that year
I'm confused. Why is it necessary to tax secondary income at a higher rate to achieve this?
@strypey @CarolynStirling @aligorith Because of the progressive taxation system.
If you earn $50k from one income source you pay some of that at the lowest tax rate and some at higher rates. If you then have another income source you don't get to pay some of that at the lowest tax rate as well. The progressive tax system is based on your total income for all sources.
@scattermutant
> If you then have another income source you don't get to pay some of that at the lowest tax rate as well
That makes sense, sort of. But it doesn't explain why people on benefits have to declare casual or part-time income under a Secondary Tax code. There's a hard limit to what we can earn before our benefit get rebated or cut. If tax thresholds are set sensibly, surely benefit rebates would keep our total income under the second tax threshold?
I agree it's long past time to abolish Secondary Tax. Funny, that's one bit of "tax relief" the NatACTs never champion.
Strypey
Ngati Pakeha Kuia
Tim Nicholas
Joshua Leung
Robyn
scattermutant