The lack of transparency in this campaign is galling, but it's not just around tax and water. Under MMP we're voting for a coalition government and it's time politicians started acting like it

Tax, tax and more tax. Jacinda Ardern has been fending off questions about tax nearly every day since she became Labour leader. Depsite all the questions, her position is anything but transparent. But she's not alone. New Zealanders are heading into a knife-edge election blindfolded by almost all the parties.

This election campaign we've heard plenty of party promises. As Wyatt Creech wrote last night, it's been a lolly scramble like no other election he can recall. I said on Caucus a couple of weeks back, this has become a bidding election. The two main parties' positions and plans have been spelled out pretty darned clearly. 

Except for the exceptions. Case in point: Labour's tax plan. The party has promised what could be profound changes to New Zealand's tax system in the next term, saying it wants tax reforms that a) address housing affordabilty and b) tax fairness. It will form a working group to consider and advise.

That in itself is hardly remarkable. For all the wailing and gnashing of teeth on the right, promising reviews and working groups is common. Heck, Labour's got a couple more planned, including on serious issues such as mental health and climate change. The phrase "kicking the can down the road" became synomynous with John Key. 

To read and hear a member of the fourth Labour government like of Richard Prebble howling about transparency is like an Australian cricketer railing against under-arm bowling. Labour's manifesto in 1984 was as artful a collection of vagueries as has ever been put to the public and after winning a second term in 1987 he and his fellow Rogernomes embarked on a series of reforms - arguably the most radical tax reform ever considered by a New Zealand government, including a flat tax - without campaigning on them.

Equally, National has kicked the question of water exports into the next term, asking the Ministry for the Environment's water allocation technical advisory group to consider whether to charge bottlers. Conveniently, the group is due to report back after the election. 

So far, so similar. Parties know these issues could cost them votes and they want to deal with them outside the heat of an election campaign. Good enough? No. But hardly unusual. 

So it is right and proper for journalists to be pushing Ardern on tax. That pushing has seen Ardern rule out changes to the top rate of income tax, a land tax on the family home and an inheritance tax. So the line that she doesn't want to constrain her working group sounds increasingly hollow. I'd say it's 95 percent certain Labour will introduce a Capital Gains Tax next term, so they should be committed enough to transparency to say so.

Equally, English should be expected to be more transparent on water royalties and bottling.

But in focusing debate on those issues, we're missing the elephant in the room. While parties are pushing their own agendas, none are addressing the reality that coalitions mean compromise. None - except perhaps the Greens - are willing to tell us just what they might compromise on and what their coalition government might look like. That certainly is not good enough. Not under MMP.

Back in the early MMP elections, there was much more of a focus on bottomlines and how coalitions would work. This campaign, party leaders have been saying that they won't know what they can't comment on coalitions and negotiations until they know how much sway voters have given them. "It depends on the numbers, so vote for us," they all say. Winston Peters likes to bang on about not being able to play his hand until the cards are dealt.

That's bunkum. This is no game and policitians don't have the right to keep their cards hidden from voters. In essence, they're saying 'we'll negotiate the government in secret without any indication of what might result. Trust us'.

To be fair, we know a little. We know Labour will call the Greens first to discuss a colaition and the Greens will only go with Labour (not National). We know New Zealand First won't go with ACT or "a race-based party", which means the Maori Party. We know the Maori Party wouldn't consider a deal with a government wanting to axe Whanau Ora or hold a referendum on the Maori seats. 

I went on The Project to discuss all this last night, because it's crucial people understand, and failed miserably. We really only got out the most obvious coalition possibilities on current polling: National/NZF, Labour/NZF, Labour/Greens/Maori Party, and, if trends continue, Labour/Greens.

I also should note by way of calrification that, when asked if you should vote Green to support Labour or ACT to support National, I didn't answer clearly. I said you could spread your vote to Labour or the Greens in the hope of reaching 50 percent, but it was hard to do the same for National and ACT. I said both would need to grow their vote significantly to get there together. But as David Seymour has pointed out to me, I wasn't clear. I said National would have to get back to 45 percent and, for ACT to be relevant it would need to reach five percent. I was trying to give an example of how they might get to 50 percent and what a big jump that would be for both of them. Seymour, not unreasonably, thought it sounded like I was saying ACT had to reach the 5 percent threshold to be relevant. That of course is not true and not what I meant. To be honest, it's hard to see ACT being relevant in any coalition negotiations, but with Epsom likely to stay in his hands, ACT's relevance doesn't depend on the threshold. 

The key point is, though, that we don't know what concessions National and Labour will entertain if New Zealand First is 'the decider'. We don't need firm commitments in stone, but deserve more transparency than we're getting. How might they negotiate on, say, rail from Auckland to Whangarei, the Reserve Bank Act or 1800 more police?

Equally, we don't know which of New Zealand First's many bottomlines are 'bottom bottomlines'. Are they all negotiable or are some deal-breakers? Let's not forget, if ?New Zealand First decides, we could end up with very differernt governents. Time to talk about that.

 With 11 days to go, voters have plenty of party policy to ingest, but they need feeding up on just what a future government might look like.

Comments (7)

by Stephen on September 12, 2017
Stephen

It is the transparency issue, or lack of it from NZ First that is the fly in the ointment.All other parties are reasonably clear with whom they will/won't go into coalition with.

by barry on September 12, 2017
barry

But I think they all (even NZ First) have been clear about what a coalition would mean.  They are right that they can only play the hand that they are dealt by the voters.

We know their policies and they will only implement what is achievable.  Some will get more done than others.  They could give bottom lines, but often the differences are shades of grey.

by Rich on September 13, 2017
Rich

Theresa May in the UK just paid a billion pounds ($1.8bln) for 10 votes (about 1% of parliament).

That kind of sets a benchmark for the level of bribery required - maybe five or six billion over the lifetime of a parliament for the votes of NZF. Obviously, taxes will rise or services will be cut in order to pay for platoons of cops and new bridges in Northland.

by Katharine Moody on September 14, 2017
Katharine Moody

This thought: I'd say it's 95 percent certain Labour will introduce a Capital Gains Tax next term, so they should be committed enough to transparency to say so.

I think there are other options that are better possibilities and not off the table (yet). If you want to achieve those two objectives, you could possibly make inroads on both with a narrowly defined land value tax on "unimproved" land (i.e., vacant titles), where that land is within an existing residential zone, and where that land is within a region that has an affordability problem based on a set median multiple criteria.

This would mean that land owners sitting on undeveloped land would be incentivised to sell (if unable to raise the capital to develop) or build, if wanting to avoid the tax. If not wanting to avoid the tax for speculative reasons relating to potential future capital gains, then the (land/wealth) tax is paid - and of course the additional revenue is desperately needed in these areas to accommodate the under-funded existing infrastructure pressures, let alone plan for future growth.

Think of it as a land tax specifically targeted at land bankers in areas where residential zoned land for new development is at a premium.

It's a lot less complicated than a CGT and payable whether there is a gain or a loss in value.  It would likely bring vacant urban land prices down, and hence all urban land values down.

by Kat on September 14, 2017
Kat

National to stop telling lies would be a good start.

by Ross on September 14, 2017
Ross

I'd say it's 95 percent certain Labour will introduce a Capital Gains Tax next term, so they should be committed enough to transparency to say so

I'd say it's 100% certain they won't. Shall we have a wager, Tim?

by Kat on September 14, 2017
Kat

And the media are getting more than a little frustrated in appearing to not have the ability to remove those blindfolds.

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