No. They’re not right wing either. People are trying to fit them into L/R boxes, but they don’t fit. They’re progressive centrists of the like we haven’t seen before, orthogonal1 to the traditional Left/Right spectrum. This is not the centrism of Peters or Dunne.
Some might ask why people on the left are against OP’s land value tax. Isn’t taking money from the rich and giving to the poor a good thing?
Whole system design policy
First let’s understand that like the Greens, OP presents policy within whole system design. We can’t understand the LVT policy without understanding the UBI policy and OP’s kaupapa on how to create a good New Zealand. But equally we should apply our own whole systems thinking. We can’t understand OP’s version of a UBI without looking at its genesis, all the way from Gareth Morgan’s anti-beneficiary, anti-welfare original design. For historical context and philosophical underpinnings, I’ve written critiques of TOP UBI policies in the past.
The main selling point of the package is that the Citizen’s Income UBI version would free up beneficiaries and low wage earners from the punitive, demeaning aspects of our current social security system, while giving people who can work and find jobs better standing in the precariat. The UBI would be tax-free, and beneficiaries would no long be penalised for being in a relationship, for taking on casual or part time work, or for having assets.
Wealthier people would pay more tax so not benefit financially from the CI in the same way, and middle income workers would have something to tide them over if they lose their jobs or are transitioning.
That’s assuming OP in a centre left government. But once those bad things are abolished, we also lose the good, including our current legislation that gives beneficiaries entitlements. When the right are in power again, they can change the conditions of a UBI. Any UBI that isn’t tory-proofed is a huge risk.
But even with the left, the policy is a problem. It doesn’t substantially increase the income of people who cannot work for whatever reason. It still blows my mind that beneficiaries who cannot work get the UBI to replace their existing income, whereas people who can work, get the UBI on top of other earnings.
Disabled people and young mums on benefits are particularly badly served here, but so are people who cannot find work.
Opportunity’s response to criticism is to say no-one will be worse off. That’s another way of saying we’re not going to raise people out of poverty if they cannot work. People who can work, and can find work, theoretically would do well out of the CI, and this is a big reason to consider a UBI.
But designing a policy that leaves a large number of people in poverty is both ideologically and economically unsound.
The Land Value Tax is regressive
Looking at the LVT aspect of the policy, a tax which is designed to pay for the above, we can see the same ideological underpinnings. While OP has improved their policy over the years from Morgan’s anti-beneficary position, it’s still wholly inadequate, and they’re not good at explaining it or the detail.
OP’s land value tax of 1.75% to be paid yearly is unaffordable for beneficiaries. Of note is that they would defer payments for elders, but not disabled people. The tax would be offset by the UBI for some people, but beneficiaries need the UBI to get out of poverty.
This screams of either not understanding how welfare works, or not particularly caring. Better to tax actual excess wealth, or capital gains at sale. See the Greens’ 2023 and 2026 tax policies.
The LVT policy further commodifies whenua instead of moving us to kaitiaki guardianship models, a kind of cementing in of neoliberal values rather than liberating us from neoliberalism.
The policy financially coerces low wealth people to move (if you can’t afford the LVT sell your house and buy something cheaper!). Often away from family, friends, support, schools, thus breaking down community and increasing travel/carbon miles.
Some argue we already have rates, and people are already highly mobile. Those are neoliberal arguments not leftist ones. Do we want strong communities who take care of the land or not? Do we want to remove welfare poverty or not?
The dilemma for the left
Lots to critique. Here’s the dilemma for the left. OP are consistently polling above 5%. The closer we get to the election and this is sustained, the more likely it is they will be in parliament, and hold the balance of power. In other words, the left will probably need OP to form government.
I rate Quilae Wong. She is smart, interviews well, has a calm presence and is socially intelligent. Parliament would be improved by her presence. I say that knowing she is not leftist, and much of OP’s policy is progressive neoliberal.
I know little about the rest of the party candidates, but while their policy is often flawed their kaupapa is often a good complement to that of parties to the left of them. I’m not saying vote for them (I’m not going to), but we do need to think strategically about the situation and how it might play out. The ideal outcome at this point is a Labour/Green government with OP on the cross benches to give them time to learn the ropes before being part of a government arrangement. But it may be that the voters’ choice is L/G with OP providing Confidence and Supply.
- thanks to Lprent for this concept, he used it to explain the Green Party. ↩︎
Green Party and OP policies for comparison. The Greens design from a social welfare pov, OP design from an economics pov.
https://www.greens.org.nz/policy
https://www.opportunity.org.nz/policy
IMO….they maybe try to present as such? And there has obviously been much market research on how that presentation should be targetted.
IMO anyway, they seem very much…Teal. And there aint nothing Left about any of previous NZ Teal iterations I have seen. Also an indepth look at who, and what, is behind it all, informed me that is still the case here.
Wong is unapologetic about being teal and centrist.
So the question is answered : )
lol, I answered the question in this first word of the post.
The point isn't that they are left or right, it's that we need to understand what they actually are. We really should stop making out they are right wing. What if we need them to form a centre left govt?
We? I've personally never made that connection (my Teal comment is IMO suffice reason for me personally to vote Green, that, and the funder/backers) …
Anyway, who has made a right wing comment? I don't recall seeing such on the Standard?
I have seen those who see them as a
neonouveau lib.Sadly I can see them taking votes off both Labour and Green…I sincerely hope not leading to a bad result. Which will be your right wing govt.
it's not about who to vote for, it's about the narrative being built. There's a whole dynamic of the lefties calling OP right wing, and righties calling OP left wing. The lefties need to get a grip because the left may need OP to form government. Will those lefties be slagging off OP in the week or two leading up to the election? What's the strategy?
Personally I cant be arsed either slagging off, or what ifs about OP ? I know enough about them to have made up my own mind quite a while ago. IMO the strategy I am personally applying and engaging with people is : If you want change…for a Fairer Future,Vote Labour and Green. Particularly our young .
Sounds sense PLA. Quite clear, time to clear the shed of all the slightly-dented policies. Decide if they can be utilised if cleaned up or thrown to their proper burial. Just go for the simple and obvious towards being a good citizen; Labour electorate vote and Green for party, if it fits your area.
Totally agree Weka, beneficiaries and retired folk with their own home but not much else in the bank should be deeply dubious about TOP
So what's the alternative, Alan? That the rest of the tax base continues subsidising the accumulation and retention of increasingly valuable land, at enormous cost?
I agree that the land-rich but cash-poor problem is real, and it needs to be addressed.
But at some point we have to confront the other side of the equation too. If we want to tax productive activity less and accumulated wealth more, somebody who owns a valuable asset but has little income is inevitably going to be one of the difficult cases.
Qui bono?
The intent of the policy is to tax all property owners – in order to benefit working class non homeowners.
The effect is to overwhelmingly penalize the 65+ age bracket (increased tax, no increased income) with over 80% homeownership.
To benefit the under 40 age bracket (who are not homeowners).
Millennials against Boomers.
And they still haven't addressed the elephant in the room. What is to stop landlords just hiking the rent to cover the new tax?
Hi. Millennial with two mortgages here.
I don't think framing this as an intergenerational war gets us very far. Of course, a tax on land will fall disproportionately on the age groups that disproportionately own land.
That's an incidence of the policy, not necessarily its purpose.
And I'm hardly arguing this from a position of having nothing to lose. A serious attempt to shift taxation away from productive income and towards land is quite capable of costing me money too.
The landlord question is much more interesting, and I agree it's something the policy needs to answer properly. But even there, the question isn't simply whether a landlord tries to increase the rent. It's how much the rental market actually allows them to pass through, and how much of the tax instead gets capitalised into the value of the land.
Because if “someone might try to pass the cost on” were sufficient reason not to impose a tax, taken to its logical conclusion we'd struggle to tax anything at all.
The interesting question is who ultimately bears the cost after everyone has adjusted their behaviour. That's an argument about incidence and policy design, not really Millennials versus Boomers.
However the practical effect will be that the Boomers will bear the costs – to a far greater extent than any other sector.
And that won't change. As each new generation reaches retirement, they'll find that they have an outgoing land tax (or rent) without an increased UBI. TOP apparently believe that Kiwisaver will cover the gap – but a very significant number of people will be retiring over the next 50 years with minimal KS balances.
And that doesn't seem to worry TOP at all. It's pretty clear to see that they see their power base as generational, rather than right or left (pretty much where Peters started from – although at the other end of the age spectrum).
But surely that's an argument for transitional arrangements, rather than against changing the tax base?
I'm 38. I'm perfectly happy for the tax system to make sure my grandparents can afford to remain in the home they've spent their lives in. They made their retirement decisions under the system we gave them, and I don't think it's reasonable to suddenly pull the rug out from under them.
But I don't want to be relying on the same subsidy myself when I'm 75.
I've got decades to adjust. I can save through KiwiSaver, make different decisions about housing and retirement, and plan around whatever tax system we decide should replace the current one.
So grandfather people. Allow deferral. Phase the change in over 20 or 30 years. There are plenty of ways to protect people caught by the transition without making that protection permanent.
Because otherwise, how do we ever change the tax system?
Every generation eventually gets old. If becoming old automatically entitles each new generation to the same treatment as people who retired under the old system, then the transition never actually happens.
Protect my grandparents, absolutely.
But give me enough warning and make me plan for myself.
And how about the people in your age bracket who don't wind up at retirement age with a nice KS nest egg?
Planning only goes so far. People can have disaster strike, permanently impacting their ability to save. Women, in particular, are disproportionately affected by salary gaps and time out of the workforce for caregiving responsibilities.
TOP's policy sounds like a move towards asset and means tested pensions.
And they haven't thought through the implications, at all.
No, it's a move towards a UBI. Which everyone gets irrespective of their means and situation.
And there's nothing to stop a hypothetical Lab/Green/TOP coalition layering additional support on top of that.
If sounds as though you're agreeing that TOP UBI policy is profoundly detrimental to beneficiaries and superannuitants.
Since it would require Labour/Greens to layer additional support over the top.
Of course, then you have to wonder where all the extra money to layer the additional support will come from.
I'm finding it really strange to hear arguments for equal UBI regardless of need – coming from the Left. Who are usually all over the difference between equity and equality. This is an ACT argument – and an example of where TOP policies also fit within a right coalition.
It is likely that provision will be made to allow them to defer tax, which will then represent a claim on their estate when they die. This is likely to diminish the wealth being passed from generation to generation – a desirable outcome.
It's unlikely that any of this will happen.
So no point debating it, unless they've actually included this in their policy.
However, if this option were implemented, it makes a total nonsense of an annual land tax, with all the associated costs of setting and collecting it. Just put a stamp duty percentage in place.
So no point debating it, unless they've actually included this in their policy.
Even if it's not in their policy it would be a consequence of their policy, so it's worth debating.
The point is that the worst affected group is the 65+; and the group profiting most is the under 40s.
It's not landowners, per se. Its landowners who have no other source of income.
If your main policy plank is so starkly differentiated- it becomes pretty clear that this is a party primarily designed to appeal to younger people.
It's also clear in their marketing and promotion – absolutely directed at the younger voters.
So, not right or left, but age stratified.
They're not the first party to do this.
Quelle horreur! A political party trying to represent the interests of a section of the electorate.
If your argument is simply that TOP's policies disproportionately appeal to younger voters, then sure. That doesn't strike me as particularly remarkable. Political parties have constituencies
I'm hardly horrified. Just pointing out that TOP (like NZF) is neither left nor right, it's generational.
TOP’s tax policy is irrelevant. At 5 to 10% they will never get to implement it.
Focus on the things that TOP can actually get in a coalition, not the fanciful.
If you want to take the value out of land, you do it when it's being sold- and people have the money to pay the tax. Stamp duty, etc.
Mind you, that's no guarantee to keep property prices under control.
The only thing that has ever been reliably shown to work is supply and demand. Increase supply, or decrease demand, and prices stabilize or fall.
Come on RP. The Greens did a decade of work on wealth taxation, including costed policy development, that doesn't rely on universal annual LVT.
Tax super wealth, tax CGs at the point they become income. It's not hard to find ideas that aren't regressive.
I'm not sure I accept the premise that an LVT is inherently regressive.
Regressive for whom, and measured against what?
I agree that an annual LVT creates a genuine problem for some people who are income-poor but land-rich. I've already said that needs to be addressed through things like deferral.
But there are entire classes of New Zealanders for whom owning any land at all is a fantasy.
If we're going to talk about whether a tax on land ownership is regressive, surely they have to be part of the distributional analysis too. We can't define regressivity solely by looking at the subset of people who own the asset being taxed and finding the least wealthy among them.
I think that you are equating "land rich" with owning any land at all.
A retiree who owns a modest house in a modest suburb, and lives off Super, isn't usually considered 'rich' in any other policy context.
Under TOP's land tax, they have an annual outgoing of thousands – with no compensatory income (unlike the Millennial DINKs, who will be doing very nicely, thanks).
Deferral simply means that they lose value in their only asset- which is often sold to finance rest home care.
Selling achieves nothing so far as the housing market is concerned – after all the old people still have to live somewhere.
That's the problem though. If you own your own home outright, you have wealth.
That's materially different from the roughly one-third of NZ households that don't own the home they live in at all. A low-income renter with no assets and a low-income retiree with a mortgage-free house may have the same income, but they aren't in the same wealth position.
And I'm not sure about the “Millennial DINKs” framing either. I'm a Millennial with two kids and two mortgages.
I'm quite happy to protect existing retirees who planned under the old system. What I don't want is to reach 75 myself and still need the tax system to protect my land wealth because we spent the intervening decades refusing to change it.
Protect people through the transition, absolutely.
But eventually the transition has to happen.
And how is that different to the entirety of our history. Even at the height of home ownership, in the 80s and 90s there were 25% of people who were not homeowners.
*Not* owning a home is the default state for people in their 20s (Yes, yes, there have always been exceptions)
Do I agree that the housing market has been out of control over the last 10 years? Of course I do.
Do I think that this policy is the answer? – No, I don't think it has a hope of constraining the housing market in any way. And is simply going to create a new class of poor people. Luckily, its all theoretical because both National and Labour have ruled it out.
Under the TOP UBI you and your partner will gain enough to offset the land tax (unless you own a mansion, in which case I'm not worried about you). You are also clearly wealthy enough to be able to pay into Kiwisaver – and will have a nice nest egg to retire on (and still be able to pay your land tax).
Newsflash. Not everyone is you.
Many, many people arrive at retirement with only their home as an asset – and an increasing number still have a mortgage on that.
But that's rather my point.
Even at the historic peak of NZ home ownership, around a quarter of households didn't own their home. Today it's about a third.
Those people count too.
A retiree living on Super with a mortgage-free house and a retiree living on Super with no house may have exactly the same income. They do not have the same wealth.
So the answer is to pull the standard of living for the 80% down to that of the 20%?
No, it's to tax the wealth that land represents.
that takes us to the values issue. LVT taxes part of the economic value of property. OP have quite a few exemptions, based on their values. But they also treat this as a stock unit issue, rather than land/whenua being the ground upon which we all depend, and that housing should primarily be for homes not investment.
Which is why it’s acceptable to them to economically coerce someone to sell their home and move somewhere cheaper (assuming this is possible).
That land is worth $100 today but was worth $20 in the past, is an artifice, but one that we allow to cause all sorts of problems. A home is still needed irrespective of the paper value. That paper value only becomes real in two situations: when the land is sold, and where the owner can use the land to borrow money.
That land is worth $100 today but was worth $20 in the past,
A good reason for having a land tax. i.e. to discourage that sort of increase.
If your tax system results in people losing their homes (which would absolutely happen under TOP's policy, as written), then it's not a good solution.
If, if, if. When will you ever learn. Hypotheticals are not facts.
The ideal would be for the state to own all land, and lease it to those who needed it. But that's no longer possible probably: nationalising all land would be too big a task.
Responding here – since we've lost the reply chain above.
If you are only interested in debating facts – then we should stop talking about the TOP policy at all. Since it's not been implemented, and has no chance of being implemented (ruled out by both National and Labour)
This smacks of 'I can't effectively debate the issues you've raised – so I'm going to pretend they don't exist'.
I don't initiate "talks" about TOP. I just respond to the comments of others.
Land tax is very simple and very unavoidable
And very easy to apply at the point of sale.
Well it can be offset against the future sale , and if the land increases in value as fast 2% per annum it would actually not be a cost in the long run ,
afaik OP's policy for paying later only applies to people on Super (or maybe all older people)
Probably but basic housing inflation will most likely out strip the land tax, so while the kids won't get as much they'll still get most of it
Deferral accrues interest.
You might to go Google that and prove it, as my quick Google says you're wrong
AFAICS, the TOP policy doesn't say. Another example of where their policy is light on detail (probably because its consciousness-raising, and the know they have no chance of getting it into a coalition agreement)
But all other deferral schemes (e.g. local rates) incur interest on the amount deferred until it is paid (presumably when the property is sold). There are also set up, administrative fees and sometimes insurance fees included. It isn't a 'cheap' option. Which is why more people haven't taken it up.
Cost-included is the default government treatment of debt. If TOP intended the land tax to be different, then they should have specifically said so.
And if it never gets sold it doesn't get taxed. Why should government have to wait for their taxes. The same things apply to CGT. What you are saying, in effect, means that we can never tax anything but income, even if we wished to move the burden from income to capital.
why not tax super wealth instead? Plus GC and inheritance
People shouldn't be penalised for owning land they live on or intend to live on. That is counter productive to ending the housing crisis.
Property value only becomes cash on sale, or via a mortgage.
Consider a disabled beneficiary who can't earn enough extra to live on. They have a mortgage free property with land value at $500,000. That's $8,500 per year LVT, around half the UBI rate. But the beneficiary's only income is the UBI and top ups, and those together before the LVT still aren't a living wage rate. Once the LVT is charged, their income drops well below what they would get currently. They want to live in this house for decades, because their support networks, family and friends are close by.
What is that person supposed to do?
What is that person supposed to do?
If I was MoF I would, as an alternative, offer to buy the land, less the land portion of any outstanding mortgage, and have the government take over that part of the mortgage themselves. They could then rent back the land to the beneficiary at a very modest rental.
I dreamed this up as a solution to the "asset rich-cash poor" problem, but it could apply just as much to beneficiaries who find themselves in dire straits as a result of a land tax. "Sale and lease back" is a fairly common financing practice in the commercial world.
As far as I know no party is offering this as policy, but I believe it is worth thinking about.
See also my comment at 8.1.
Like it mikesh – we need to think new lines.
I think I should own up to a bias when it comes to land ownership. I believe that the state should own all land and simply lease it to persons and businesses that need it. (See my comment at 3.1.3.1.2). Therefor, I can see no inconsistency in a government purchasing land from a property owner to alleviate distress.
I think that, if both Lanour and National hadn't ruled TOP's land tax out – we'd be seeing massive swings to NZF from retirees scared to lose their homes.
It's a shame people are so thick. Top isn't going to take homes.
Well, their policy, if it were enacted, would result in many people feeling as though they've been forced to sell, or forced to accrue debt
They're not wrong.
Fear is used by the right as a tool. Buy I get the feeling you know that
Fear is used by all political parties, of all stripes. It's an electioneering and propaganda tool.
On e of the benefits of a land tax might that it would teach people not to sit on land which they cannot reasonably afford.
A right wing argument, if I've ever heard one.
The poor don't deserve somewhere to live.
agree. I know many people who have built a house by sitting on land until they could afford the build, then living on the land during the build in a caravan, sometimes for years. These are not wealthy people and this is the only way they can afford to build.
The ubi would make it tax neutral most likely for them then , I'm picking they aent caravanin in queenstown or waiheki island
yes tax neutral, and you could argue that those people will make capital gains on that property over time, but isn't the point to break the housing as capital gains scheme? Or maybe not, maybe it's to help middle income earners onto the ladder.
You would be surprised about those two places.
A lot of tiny house on wheels and caravans/housebuses likewise are on bare land with low income, permanently. OP really haven't thought this through, or don't care.
My understanding is they want , to get rid of land banking,get land being used for its most productive use, growth. Get rid of speculation and slow inflation. Big change will always hurt a bit, and if you have a section with a caravan in queenstown, you could probably sell and get a house somewhere else, I'm all for trying to fix the world but people still have to face the reality of there situation and make good choices, .
yes. The problem is they don’t differentiate between land that has people living on it (often low income) and land that is empty and held by wealthy people for capital gains (land banking).
where did you have in mind? what if you have a child with share custody and can’t move away? Queenstown has a housing crisis and it’s nothing to do with low income people, or people trying to build a house while living on that land.
A right wing argument, if I've ever heard one.
Not at all. Just a common sense argument. If a land tax was already in place people would be taking that sort of thing into account in their planning for the future. Land tax, if it is a problem at all, is only a transitional problem.
There seems to be no doubt that it is a problem. And there is no evidence that it will be a transitional problem.
And, TOP appear not to have worked through any of these issues in their policy development. Which, given that it is their main policy plank, is concerning.
It may be a problem for you, but intelligent people would be able to make sensible plans for the future, while knowing that they would be paying land taxes if that future involved the purchase of a property.
Really. So the people who can't afford to make substantial Kiwisaver savings over their working life are neither sensible nor intelligent?
I'm astonished that you can't see what a right wing argument this is. And how it would play very nicely with ACT attitudes towards self-sufficiency.
Really. So the people who can't afford to make substantial Kiwisaver savings over their working life are neither sensible nor intelligent?
The question of being able, or not being able, to afford is a different issue. Never did I say that people who cannot afford a house were unintelligent, just people who, like you, thought that there was a problem.
That is not, in fact, what you said
You made no carve out for people who are unable to save.
Presumably, in your eyes they are either not intelligent, or not sensible.
If you want to walk back your statement, and admit that TOP haven't adequately addressed this issue in their policy, I'm happy to engage further.
But, until then, there is little point in engaging with someone who sounds like the head of the TOP publicity channel.
You made no carve out for people who are unable to save.
My argument did not require me to do so. The above is a red herring imposed by you to divert the discussion to something more palatable to yourself.
TOP's policy holes are neither a red herring, nor a diversion.
It's interesting that you refuse to engage over them.
It's interesting that you refuse to engage over them.
A transitional problem requires a temporary solution; but we should still put in place a mechanism suitable to a longer term when there unlikely to be a problem while, at the same time, taking steps to alleviate the transitional problem.
You have still not established why you (or TOP for that matter) consider this will be a transitional or temporary problem.
I profoundly disagree that it will be.
Even if the land tax and UBI were implemented, there would still be people arriving at retirement age, who had a home (requiring land tax to be paid in perpetuity), but little in the way of savings (poor health, substantual periods of unemployment, time out of the workforce for caring, messy divorce, scams, unlucky investments, etc).
The TOP policy penalizes them even further.
It's interesting that you refuse to engage over them.
OH, the calumnies you come up with. It's hard to believe sometimes.
Still waiting for a response.
Attacking the poster, rather than addressing the question, is a longstanding rhetorical trick which fails to convince.
Specifically, why do you and TOP believe that asset rich/cash poor people are a transitional problem?
[Attacking the poster, rather than addressing the question, is a longstanding rhetorical trick which fails to convince.]
Diverting to an issue different from the one under discussion is not a legitimate debating tactic; and the, to slander your opponent because he refuses to answer your irrelevant question is beyond the pale.
You can wait till doomsday for an answer; you won't be gettin’ one.
I agree with Weka that TOP doesn't really fit neatly into the traditional left/right spectrum. I'm just not sure that it has to.
It seems a little strange to complain that the existing political settlement isn't up to the task, while simultaneously judging attempts to do something different through the categories that settlement gave us.
If we want something different, presumably we have to allow for politics that doesn't fit neatly into the old boxes.
But I agree with the conclusion. Whether TOP is neoliberal, left, right, progressive or regressive matters less to me than the fact that it represents a break from old-style politics and a willingness to reconsider parts of our economic and social architecture.
They don't come at that from the same place as the Greens, and they're going to reach different conclusions as a result. That's fine. Close enough is often good enough when it comes to coalition building.
As for the LVT, I agree there are real distributional problems to work through. But the fact that it may force some adjustment in patterns of land ownership is also precisely the point. I don't think we can simultaneously have an economy buoyed by land speculation and ever-rising property values, while also shifting the tax burden away from productive activity and towards accumulated wealth.
The genuinely difficult case is the land-rich but cash-poor owner, because that category exists at both ends of the dynamic. It includes people who happen to have lived for decades on land that has become enormously valuable, as well as people whose wealth is substantially the product of land ownership. That's an argument for carefully designed deferrals and protections, not necessarily for preserving the underlying system.
Ditto for a UBI. I agree that whether it's enough matters enormously, particularly for people who can't work, and I'd be quite happy to see more generous supplementary support for those who need it.
But the underlying idea is still interesting: decoupling someone's basic ability to live from their ability to work. That's a fairly fundamental reconsideration of the architecture of the welfare state.
So I think there's plenty to argue about in TOP's particular settings, and Weka raises some good criticisms of them. I'm just less interested in whether the resulting package qualifies as properly left-wing. If we're serious about reconsidering the existing settlement, some of the answers are presumably going to come from outside the political categories that produced it.
I'm wondering how many people are aware (including yourself) that when someone on a benefit sells the house they are living in, and doesn't buy another house, thy have a cash asset that will be counted against their benefit. WINZ gives them a grace period (used to be 12 months, no idea what it is now). That means they can't receive some of the supplementary benefits while the money is in the bank. The idea is that they live off that money and then reapply when it is gone.
A beneficiary who couldn't afford the LVT as a stand alone policy and had to sell their house to pay it and couldn't afford to buy elsewhere cheaper, or couldn't leave their area to access cheaper housing because of say shared child care or disability services, then loses that money.
It's actually alarming how bad OP are at this stuff. They treat dependency and need as an add on to think about later, and they just don't get it right as a result.
That's a good point, and one I hadn't considered.
If selling the house converts an exempt asset into cash which then affects access to supplementary assistance, that's a potentially nasty interaction between the LVT and the existing welfare system.
But I'd still describe that as a policy design problem rather than an argument against the underlying reform.
You'd need to design the transition so that someone forced to sell isn't subsequently penalised because their housing equity has changed form. Maybe that's an exemption, a deferral, grandfathering, or something else.
That's exactly why we ask “what if?”
You've found a hole in the policy. Good. Fix the hole.
I don't think the existence of a fixable hole necessarily tells us the underlying architecture is wrong.
Policy holes.
1. it's unaffordable for some
2. some would have to sell, and wouldn't be able to afford to buy cheaper where they live
3. some of those would be beneficiaries and would lose their supplementary benefits and/or live off the sale money for a while
4. forcing people sell disrupts lives, breaks up community, treats people and families as stock units. Of all the problems with this policy this is the worst one. It's anti-community and makes a mockery of many other policies (OP and leftist). It's neoliberal af
5. it further entrenches land as a commodity and widens the gap between humans and nature. Tax capital gains instead.
Once you have that many holes, it's a sieve and better to start from scratch, this time designing from principles and values rather than economics.
I'll keep a running list
deferral over years is a hefty burden. I haven't done the calculations, but say someone lives in a house for 30 years and has to defer all that time. How does that work? Does it work against lowering house prices?
With elderly people, it becomes a kind of perpetual inheritance tax. This idea that land is real wealth and we should tax it even if it means subsequent generations live in poverty as a result is regressive too.
The only reason we even think like this is because of the property boom, but it means we are promoting the property boom as a way of mitigating poverty. Except oh look OP won't actually give the poorest people in the country an income lift.
The land value tax would be set at 1.7% of the bare unimproved land value. Land values in Auckland as an example over the last 20 years have increased on average by 4.5% per year. If this continues as a long term average then the increase in land value will more than cover the cost of the deferred land taxes when the asset is eventually sold.
Nobody is forced to sell their home, they can defer infinitely if they want to. For pensioners who own their home but have no income other than the pension, nothing will change.
can you please point to where OP say the LVT can be deferred by anyone until sale? I know they had a clause for pensioners.
Their policy document (linked, but I'm sure you've read it) is not very specific in its language. It refers to asset rich, cash poor 'like' retirees and farmers. But then goes on to address only the retirees situation. The implication is that other beneficiaries might be covered by the same provisions (or they might not).
https://www.opportunity.org.nz/tax-reset
I commented further below. If they're so sloppy they can't actually write proper policy, there's no good reason to trust them on this. It's a significant issue but apparently they haven't decided who can defer and who can't. How can they budget? This is what I mean about the policy having been designed by economists, rather than people that understand social security. Too many people are after thoughts and add ons.
'like' does a lot of heavy lifting.
If they're so sloppy they can't actually write proper policy, there's no good reason to trust them on this.
I think you are clutching at straws there. Legislation has to go through select committees before it's accepted. It's unfair to call the policy "sloppy" on such a minor point.
I’m sure fish hooks will be found in the Green Party’s supermarket gambit, even though they may not be included in the policy at present.
In regards to 1. How is it unaffordable? A pensioner for example who owns a house but has no income except the pension doesn't have to sell they can defer payments.
In regards to 2. Why would they have to sell? They can continue exactly the same as they currently do and just defer payments.
In regards to 3. There are no 'beneficiaries' under a UBI scheme. Everybody gets it. Plus the Opp party policy makes additional allowances for superannuitants.
In regards to 5. The proposed land tax would have the effect of lowering or removing capital gains. This is a good thing for lowering wealth inequality.
Also, there is no interest or penalty applied to deferred payments so equity is protected. At 1.75%, the land tax will be less than the annual increase in land value. Yes, the capital gain over the long term will be less, but that would help to discourage property investment which again is a good thing.
Nobody will be forced to sell their house. I don't know where you got that idea from?
from their policy document
Looks like deferrals for farmers and pensioners, not everyone.
https://www.opportunity.org.nz/tax-reset
OP say incentivised to move, I say economically coerced.
They also slide over the fact that the retirees selling and then renting will also be taking up another rental property. It doesn't 'free up' property at all.
People currently on Supported Living Payment, a benefit that is available to people too disabled to work, would have SLP replaced by teh CI and topups. I don't think OP have released detail of how the topups would work, but they appear to be set amounts, not needs based. Which means some people will be better off and others will be worse off.
They have said hardship assistance would still be available but haven't said how it would be administered.
Their CI policy does some very good things: removes the abatement rate on earnings, removes the current punitive aspects. But they don't have a good grasp of social security for everyone, and disabled people in particular are an after thought.
Also, working people get the CI on top of other income, beneficiaries don't. Beneficiaries remain beneficiaries, consigned to live in poverty, hence OP’s line about ‘no-one is worse off’.
Land tax, under their transitional policy is only 0.5%, not 1.75%, but subject to gradual increase. According to circumstance it may never reach 1.75%., but settle at a figure that seems to work.
what rate is the calculator using?
Using that argument, it might end up being higher, if they aren't gaining enough income (too many people deferring)
This of course is true of all types of tax, but it doesn't worry most people when it comes to paying most of the taxes they are lumbered with. Your argument is a"clutching at straws" argument.
A beneficiary who couldn't afford the LVT as a stand alone policy and had to sell their house to pay it and couldn't afford to buy elsewhere cheaper, or couldn't leave their area to access cheaper housing because of say shared child care or disability services, then loses that money.
This one of things that is wrong with our welfare system, but I don't it can be laid at TOP's door.
At the moment, they don't have to pay an extra land tax, so they can stay where they are. Which we can lay at TOP's door.
NO. It''s a bad situation regardless. Beneficiaries should have to use their capital as a replacement for benefits, whatever the circumstances. It would be a pity if that sort of thing tied society's hands and prevented us from moving to a better economic system, and I am not just referring to TOP's proposals.
I agree. The point is that OP don't seem to have taken these things into account. Critiquing policy doesn't stop progress on policy, it improves policy if the party is paying attention.
We don't know that they are not taking it into account. Parties shouldn’t have to think of every small detail and put it into their manifesto. I’m sure the Green party’s supermarket gambit will confront them with fish hooks that they hadn’t thought of.
it's not every small detail. It's the livelihood of hundreds of thousands of New Zealanders.
Big in terms of the numbers of people, but small with reference to the overall policy.
Can you actually hear what you're saying?
Your argument appears to be that it's OK to sacrifice "big numbers of people" because it only has a "small impact on the policy".
In particular, the people you're agree will be negatively impacted, are those who already live precariously (beneficiaries, superannuitants).
This is in no way a left position.
It's not every small detail, it's the crux of OP's political pitch.
It most certainly is not. It’s something that will need to looked at if the policy goes ahead, but should not be a reason for not adopting the policy.
I apologise for a typo. The third word in the third sentence should have been "not".
I'm fine with OP making it into parliament. We desperately need to break the Peters Supremacy bollocks. My concern is if that will cost the left the election, which would be very bad.
Were they to form part of a Labour+Green government, there's some easy policy items all 3 can agree on:
– Compulsory superannuation, with contribution rates rising to 6% from each.
– Their renewable energy policies, both in the Capacity Investment scheme modelled on the Australian Federal one, and incentivising industrial process generation change, are pretty similar to the previous Labour-Greens government,
– Regulating lobbying including stopping the revolving door for a year between elected office and companies trying to change legislation, and a searcahble register of who's doing the lobbying and to whom.
– The Oceans policy. Not a huge vote winner, but they are seeking 30% of the NZ ocean as Marine Reserve, and shifting from single-species quotas to ecosystem-based approaches, raising the baseline measure for sustainable fish stocks, installing cameras on commercial fishing boats and phasing out bottom trawling.
I don't mean to quibble about where they fit on any spectrum as a whole, but those three areas are fully aligned with Labour and Greens and I'm pretty clear rule them out of fitting with Act, NZFirst, or National.
I'd really like to see Kiwisaver employer contributions being on top of salary, rather than part of the remuneration package.
If NACTF needed OP to form government, I have zero doubt they would try.
The OP has been strategic by focussing on things everyone can relate to like cleaning up politics, being open to work with either side, bridging the left/right divide, getting on with things. They're well aware that pushing the detail of their policies to the front of their campaign will prod our red-neck underbelly into revolt against the spread of communism. The reality is (1) the left bloc will need the OP and it will likely save its bacon; and (2) despite OP's rhetoric there's no other place for the OP but with the left bloc.
There is ample scope in their policies – such as they are – to generate a coalition agreement with Greens and Labour; with far greater likelihood than a coalition agreement with National because:
There is no version of a National-led coalition that Opportunities could go to.
Another point which I don't think has been raised is the effect on beneficiaries who rent (i.e. most of them).
If this policy goes ahead, and landlords have a new tax to pay it is absolutely inevitable that rents will rise to cover it. Now, this isn't likely to be too much of an issue for young workers flatting together – they've just received the UBI, which can be used to cover the rent increase (with a bit left over).
But that's not the case for beneficiaries. They won't be getting the UBI on top of their benefit – so no extra money coming in. How will they pay rent increases? I would argue that they can't, and will be excluded from housing (more than they are already).
“Landlords are too economically powerful to tax because they'll just make poor people pay it” is certainly an argument.
If only we had some sort of mechanism to control the rate of increase in rents…
It's the unintended consequences of policy which looks good on the surface.
If people don't ask 'what if' then society gets ambushed.
What do you think would stop landlords increasing rents?
When there is an entirely valid cost increase to their business. And when their tenants also have a bonus payment which can be used to cover the costs.
The only thing the tenancy tribunal considers is the market rate – and they'll all be going up together.
Is TOP also proposing a rent cap?
Not at the moment, as far as I know.
But Labour could. Or the Greens could. That's rather the point of coalition politics.
If TOP brings an LVT and Citizen's Income to the table and another party thinks the distributional consequences for renters need additional protections, then that's something they can negotiate over.
I'm not suggesting we shouldn't ask “what if?” We absolutely should.
But sometimes the answer to “what if?” is simply to fix the hole in the policy.
holes, not hole.
We had a rent freeze during the pandemic. Maybe Christchurch did post-quake?
Current GP policy
https://www.greens.org.nz/greens_announce_plan_to_end_homelessness_fix_housing_crisis
That's a great policy!
I really like their strategy atm of developing policy that it will be easier for Labour to say yes to and the MSM not to freak out over.
However, its rather concerning that the major policy plank of TOP, apparently has so many policy holes. How much thinking have they actually done?
Is TOP also proposing a rent cap?
Not that I know of. However, they do want to abolish rent subsidies. But if those are necessary it means that the property market is not working properly anyway.
A government could legislate to make all proposed rent increases subject to Housing Dept. approval.
Well, that's one way to re-employ the civil servants that TOP's policy will theoretically remove.
Guess what, LVT will be tax-deductible for invrestment properties.
is that from the policy doc?
Can't see it specifically addressed (yet another hole) in the TOP policy.
But rates (a different form of land tax) are currently fully tax deductible on rental properties.
https://www.ird.govt.nz/property/renting-out-residential-property/residential-rental-income-and-paying-tax-on-it/rental-expense-deductions
I think tax deductibility of land tax would accord with normal tax practice, so it would not have to be included as policy. The Income Tax act gives a list of expenses which are tax deductible; we would need to check whether it includes land tax.
Deductibility would be a matter of tax law. The IRD would have to make a recommendation if the matter not on the statute books already.
IRD specifically allows rates (the current form of land tax) to be deducted from the tax on rental properties.
If land tax were not to be treated the same way, then there would need to be legislation to direct the IRD.
Not covered in TOP policy. Yet another hole.
I don't think we should evaluate them on whether they are inherently left or right. IMHO, think about this:
A) All parties want to be part of a government.
B) In NZ, to form a government means forming a coalition.
C) Is it easier to form a coalition of:
C1) National+ACT+NZ1+TOP
or
C2) Labour+Green+TOP+TPM
I say, without calling them a leftist party, C2 is most likely.
Logical and true.
I'd agree, because they're not left or right 😉
But if we want to consider a centre left coalition I do think it's useful and necessary to understand their positioning.
Parties can say they are "neither left nor right" or "centrist", until they are "Blue in the face".
In reality, every policy position is one of those things.
We had a lot of discussion on UBI here a few years ago. I'm one who supported the general principle. However we found there are a lot of fish hooks which need to be addressed to make it workable. I wrote a series on it myself. Of course we already have a functioning and successful UBI, the pension, underpinning the economy of much of NZ.
A UBI from income redistribution is inherently, left! That does not mean there are not right wing arguments for propping up an economy with a UBI. If employers keep dropping workers share of the economy, there has to be some way of ensuring that enough money is available spent to buy things. Noting that a Government doesn't have to tax or borrow to put money into the economy. The constraint is real production, not, money.
How a UBI could be implemented, without UBI simply becoming a subsidy for rentiers such as landlords, power company shareholders, underpaying employers, and the like, is one of the issues we identified.
TOP's UBI/LVT sounds like something a Universty student comes up with when they are full of newly minted ideas, before they get tested against reality. Something to get TOP votes from those who are not deep thinkers. Of course there are other parties who develop outwardly attractive, but daft, policies by kneejerk.
Transferring wealth from lower to middle class modest homeowners, to pay a UBI sounds like yet another attempt to tax everyone but the wealthy. Continuing "trickle up". Sure, tax capital gains on land, to reduce land scalping and more unequal wealth accumulation. But at the same marginal tax rates as other income, and on realisation. Progressive, not regressive, taxation.
Full disclosure. Boomer who had a lot of ups and downs in my life, like many people. I consider myself luckier than many, because I have enough marketable skills to recover from the downs. But, I have a mortgage free house, because I forwent well over half our income over the last 15 years, to ensure a mortgage free house on retirement. I think I can say that an LVT on unrealised gains, will just ensure that my children will never own their own houses. TOP's LVT will have dire consequences for many families who are far from rich. Currently one child and their family are living with us, as even rents are unaffordable for them. As things are at present, I can leave them a house deposit when I kick the bucket. If. I manage to avoid a care home. Which is a whole nother discussion on fairness.
this is a great comment thanks. Agree LVT will make it harder for subsequent generations. Parts of the left have a blind spot on this, thinking anyone who can leave an inheritance much be very wealthy, and fail to appreciate that their offspring might be dropping a class. But we all know everything is getting harder for most people now.
Interested in writing another series on UBI? We need solid left wing models.
Your last paragraph 100%. An estate duty, yes, is fair across all property owners, as it's one-off and forseeable. The LVT will bleed off not only between-generation wealth, but reduce the possibility of a roof over one's head for poorer people, no matter how ramshackle.
Housing security, which underpins so many social factors, like mental well-being, reduced stress on aging, family stability and building longterm communities, is left completely out of OP's equation. Their proposal of LVT/UBI is purely an economic one.
Housing security was identified, along with education and health, as part of the social contract between State and citizens by Labour's government 90 years ago. It can only be achieved the State supporting home ownership + enough secure tenancy, lifelong if needed, in social housing. Land speculation has occurred because both Clarke and Key, used land speculation to prop up GDP figures, by incentivising land speculation and the rental proprty boom through tax structure.
Now we’re Winnie-the-Pooh stuck in a rabbithole. LVT is not the solution. It’s worth remembering that in the Fanny Mae 2008 mortgage bubble collapse, in the US there were mortgage reductions taken by banks, not just home owners. The banks have pumped up tjis market to the max, and should carry the can. LVT pushes all the speculative loss onto owners.
If OPP had any fresh ideas that would promote a good economy and distributed one to all, they could put forward the idea of a debut 'debt jubilee'. But I feel they are just regurgitating ideas as policies in a different form from an original presentation.
This is an idea: https://www.rnz.co.nz/programmes/two-cents-worth/story/2018751387/the-case-for-a-modern-debt-jubilee
I have often thought that the government should purchase the land component of all outstanding mortgages, reimbursing the owners for any payments they had made on the land: i.e. the land component of the original deposit plus the land component of any mortgage payments they had made, but excluding interest and capital gain. In return the government would take over the land component of any outstanding mortgages debt, and this they could pay off with fiat money. The payment to the bank would not increase the money supply, since all it would do would be to reduce the bank's loan account. This might be considered the modern equivalent of a “jubilee”.
The government could then charge a modest rental for the land, perhaps instead of land tax if one is in place.
The banks are the winners there, not the owners. Get the banks to cough up.
I don't think so. Banks would be able to lend money for the house only, not for the land. Less income for the banks would be the result.
Yeah, Nah. Most people don't want leasehold land. Especially when any government could change their mind over the lease – for political reasons. Kiwis don't trust the government that much.
If a government legislated to give itself the right to purchase land from distressed property owners, that "most people don't want leasehold land" wouldn't matter.
Well, yes, if we lived in your communist utopia of government ownership of land (and probably everything else).
Newsflash. We don't. And there is little chance of such a radical change.
In the world we live in, people can choose whether or not to live on leasehold land, and most choose not to.
[Well, yes, if we lived in your communist utopia of government ownership of land (and probably everything else).]
It would be better if householders owned their own houses but the state owned the land on which those houses stood, householders would be able to:
1 … Householders would be free to renovate and redecorate their house any way they wished.
2 … They would not have to take on so much debt in order to own a home.
3 … Government would have better control over property values, and could tailor land rents according to circumstances.
All of this would be better than in the current neoliberal dystopia, where property values (by general consent) are three or four times their real value, and renters are paying half or more of their income in rent, would be home owners often find themselves priced out of the market, and all the time the inequality gap grows wider and wider.
PS: If that's "communism" then I would have to say that communism sounds like a damn good system. Regrettably it's not communism.
2. Given that the house owner would be paying ongoing lease as well as mortgage payments – its unlikely there will be any significant saving. Especially as a future government can decide that this revenue stream could fund (for example) social housing – and therefore bump up the lease payments. Governments *love* passive income streams.
3. Government is notoriously bad at tailoring benefits to suit individual circumstances (or do you somehow think that the current benefit regime is a shining positive example).
You do realize that property prices have fallen 30+% from the 2021 peak (in Auckland and Wellington) and around 15+% across the whole of NZ. Yes they are still too high, but crashing the property market (which is apparently your desire) isn't a good economic solution either.
IMO, the best outcome would be a decade or more of stable or slightly falling house prices – which would allow incomes to catch up.
The absolute best thing any government can do in helping to solve the problem, is to remove as many constraints on building new homes as possible. The more supply there is in the market, the lower the house price, and the lower the rent.
'Investing' billions in acquiring land leased to homeowners is not an effective use of money (personally, I'd rather it went into health).
And, no, I don't believe the fairy tale that governments can just print more money.
Houseowners are free to decorate any way they please (within the city council ordinances), right now.
Not if they are renting, which is what many would otherwise be doing.
Given that the house owner would be paying ongoing lease as well as mortgage payments – its unlikely there will be any significant saving.
That's only true if the rental rate is greater than or equal to the interest rate. That's something the government can control.
Government is notoriously bad at tailoring benefits to suit individual circumstances (or do you somehow think that the current benefit regime is a shining positive example)
Governments for many decades ran successful social housing programs, until neoliberalism arrived and stuffed things up.
crashing the property market isn't a good economic solution either.
Why?
The absolute best thing any government can do in helping to solve the problem, is to remove as many constraints on building new homes as possible. The more supply there is in the market, the lower the house price, and the lower the rent.
Building houses would be less expensive if builders didn't have to pay for the land; which means they could build better quality, or swankier, houses.
'Investing' billions in acquiring land leased to homeowners is not an effective use of money (personally, I'd rather it went into health).
True, perhaps, but it doesn't alter the principle. Perhaps it could be achieved over many years. We could still invest in health anyway.
Banks pumping money into land is not an effective use of money either.
House owners by definition are not renting. LOL.
The rest of your argument is that you want this to be true, therefore you will ignore any evidence against it.
Nor does any political party espouse your radical agenda. For good reason. It's electoral suicide.
House owners by definition are not renting. LOL.
Well spotted. For once I applaud your perceptiveness.
The rest of your argument is that you want this to be true, therefore you will ignore any evidence against it.
To what argument are you referring.
Nor does any political party espouse your radical agenda. For good reason. It's electoral suicide.
I never intended this particular sub-thread to be part of this election's policy debate. All I was doing was engaging in a bit of political philosophy. Your perceptiveness obviously has limits.
In practical terms, what matters is the potential agreement with Opportunity after the election. (Premise: they get 5+%).
Ignore Luxon's "rule out", his MPs would never let him concede without talking to Opp first. Almost anything is better than opposition, when you've been in government. So we can expect dead rats to be on the menu, and swallowed by National, however reluctantly.
For the Lab/Green/TPM alternative, one way forward might be a beefed-up Cullen "working group" on tax. That failed last time because Winston had a veto, but if Hipkins is bold enough (very big "if") then Opp could be a pathway to tax reform.
The current coalition has broken more promises than a philandering spouse, so they've given Labour permission to do likewise (of course it won't be expressed in such cynical terms, but that's the reality). Sell it as "Greens wanted more, Opp and TPM wanted more, we've agreed a compromise, even if we didn't specifically campaign on it". National have done much, much worse.
And in realpolitik, while the tax reform is being discussed, get everything else done, under urgency. Repeal, replace, reverse, on everything from Treaty to climate change while the Right have a civil war – and they will have a vicious one if they've lost.
Negotiations will be a challenge whatever happens. But also, an opportunity. No pun intended.
From what I can tell from listening to Wong interviews, OP are very open to the idea of something like a tax working group rather than insisting they get their policies now. It's one of the things I like about them. Proof is in the pudding of course, but the centrist position is as much about being willing work with other parties as anything. That is good.
Hipkins, if by some miracle he forms a coalition, will rule out anything more than the narrow and ringfenced Capital Gains tax that they have campaigned on.
Hipkins rolling back fuel tax increases gives you ample direction of what he's prepared to sacrifice to achieve the smallest policy wedge for achieving Capital Gains. National are full bore with attack on tax as predicted and so far it's working.
Hipkins was lock-step with Ardern ruling out major tax change, even with all the force that Cullen, Parker and Robertson could muster. Hipkins is just a small-c conservative with small-bore tax proposals designed to survive any future change of government, and that's about where it will end.
That may be what is needed then right now to avoid The Terminators of the right.
Hipkins, and Labours, capitulation to the right wing framing on tax, is one of the more depressing aspects of this election.
We should be loudly shouting, taxes are essential, if we want decent Healthcare and other services without excessive borrowing.
Rebalancing taxes to more progressive taxes, and more taxes on the rich, and more spending on health and other State services, is, in reality, a popular position. The "left" could change the dialogue totally with the Greens tax policy, which will result in less taxes for most.
"the right wing framing on tax, is one of the more depressing aspects of this election."
Absolutely.
There are a few angles of attack on this. Including the 'opposite' of taxes- rebates. Such as that that landlords enjoy. Tax rebate, interest claiming without going into the $1B+ subsidy they receive through accomadation supplement.
Note the tories have no problem with PAYE or GST. It's taxes that effect their class. Brightline test, CGT.
It really sticks in my craw, those that enjoy the benefits of private health deliberately underfunding public health.
Add to that the old 30–30 rule which puts the brakes on spending and borrowing also limiting their ability to turn the economy around.
For those that are interested in hearing more about that (the 30-30 rule) Bernard Hickey explains it and its impact in the link below
Ah, at last, something to look forward to!
OPP has policies. At present, more of them would fit with a Left(ish) coalition than they would with a Right coalition. (See Ad at no.5 above). Some of them have oversights, holes, inconsistencies and perversities (see Weka at 4.1.1.1) which reflect the fact that they've not had an encounter with political reality or with a well-informed senior Public Service. Some of these defects probably reflect 'founder bias' (see Weka's original post), which is a problem with every entrepreneurial project including business.
Tactically. if LabGrn can only govern with OPP they should try. This likely means running with a somewhat modified version of one of their key policies, initiating reviews on a couple of others and parking the rest.
But if they're your coalition partner, you need some sense of what animates them so you can predict how they'll react – what things do you want to achieve that they'll oppose? This makes the Left-Right placement more than an abstract exercise. I see them primarily as Market Liberals. They believe markets can deliver general prosperity for everyone – and the reason why markets haven't done that is not because they contain structural inequalities of power that mean wealth inevitably accumulates with a class of owners. Rather it is because markets have become corrupted by perverse incentives, weak competition, monopolistic behaviour, etc. Get those things cleaned up and the market will behave as it is meant to. This is both touchingly innocent and really quite bonkers at the same time. Meanwhile, the UBI is proposed as a way to make the social problems that markets produce (inequality, poverty) just go away and not have to be talked about, while the 'real' work of fine-tuning the market machine can carry on. So although a short-term coalition might be necessary, in the long term they are borderline pernicious and you don't want to be dependent on them.
Currently an estimate of wealth inequality is that around 20% of the population in NZ own 60% of all the wealth. Anyone can look at the way the current economic, taxation and financial system works and can see the inevitable conclusion should nothing be done to address the problem.
AI gave me a prediction / estimate that if nothing changes and we carry on as we are then at around 2075, one person or a very small number of people will own all the wealth. (yes, everything…). That's only 50 years away, well within the lifetimes of those under 30 and all those children and grandchildren being born today.
That point won't be reached however, because there will be a tipping point before that. At the tipping point there are literally (look at history), only 3 things that can happen.
1) A violent revolution (think guillotine in the town square, etc, etc)
2) A crackdown and martial law implemented by the wealthy with the majority of the population reduced to lives of slavery to the elites.
3) A massive and radical change to the entire economic and monetary system with all of the financial meltdown, turmoil, etc that comes with that.
All 3 are extremely negative.
It would be interesting to see when the tipping point would occur. For example would it be when 20% own 80%, or when 10% own 90%, or earlier or later…
So if we carry on as we are, we will reach a tipping point which will not be good. So wealth inequality needs to be addressed now rather than not addressed or left until a later date…
The only good thing here is that eventually even the rich will be affected and lose their wealth so it is an issue that pretty much everyone will recognise at some point. Hopefully that point is soon…
An example of just how useless AI predictions are. Even you realize that it’s producing a nonsense result.
And I find your corollary equally unlikely.
Haven't you considered that individuals (even asset rich individuals) are going to die within this period, and their assets be distributed- usually amongst multiple inheritors. Resulting in the wealth and the assets being more widely distributed. The population bulge of Boomers has a natural end.
Yes, well the French Revolution is interesting.
A very self centred, bloated, out of touch King and Queen, who ruled absolutely.
Their representative assembly (Estates general) hadn't met since 1614
Massive national debt from supporting the American war of Independence.
The clergy and nobility didn't pay tax.
There was drought, and the price of bread shot up.
Sound familiar?
Feijoa one of my favourite fruits. Sweet with a bite.
It's going to be rough when we start sending UBI payments to Peter Thiel.
he would pay it back via increased taxation. But he's apparently fucked off out of NZ now anyway thankfully.
Right, that's the obvious justification for it. I just don't know if the average voter will understand that. Presumably you do limit the UBI to citizens living and paying taxes in New Zealand to avoid literally paying Thiel, but even Graeme Hart is going to be controversial.
I guess there would be rules around how long you can be out of the country before it stops.
It is a comms challenge for UBI generally, how to explain that it goes to everyone, but then some people pay higher tax so they return it.
The main post asks a very good question about OP.
By way of background, as I get older I have become almost a "one issue" voter – that one issue being the corrosive effect of extreme inequality in wealth and power.
I like that OP has stimulated debate on UBI and taxation. But it seems to me OP are going out of their way to avoid any real redistribution of wealth. And their LVT seems arbitrary and inconsistent.
1) UBI. The big positive is the universal eligibility, without questions. But there is a real risk of further impoverishing those at the bottom with an inadequate UBI, which the OP version will be (if not initially, then eventually via inflation and austerity). I much prefer a Guaranteed Minimum Income (GMI). It has the desirable universal eligibility (only test is your current income) but is far more progressive and for a given total funding, can be set much higher. UBI is slightly progressive by pushing people into higher income tax brackets, but GMI much more so because it is entirely delivered to people with low income.
2) The OP LVT is arbitrary and strongly regressive (people with less wealth can pay a much higher percentage of their wealth). By my reading, it takes no account of equity – so someone with land worth $1m and a $950k mortgage ($50k of land wealth) pays exactly the same as someone with the same land and no mortgage ($1m of land wealth). In this example the poorer person pays an effective 35% tax rate on their land wealth while the richer pays an effective 1.75% tax rate on their land wealth.
3) The OP LVT reduced rate (70% less) on rural land is arbitrary and is likely also regressive. I live in a rural area with lots of dairy farms – some owned by large investment companies with multiple farms. They ain't poor (although when it comes to wage rates, you would think they were). Multi-billion dollar companies have massive forestry holdings in NZ. And the billionaire with a high-country station will pay a far lower rate than a householder in Auckland.
4) Most billionaires don't have much of their wealth in land, so no redistribution there.
I think the left / centre-left make a mistake when they focus on differences between people with $1m and those with -$5k. More debate should be about (for example) the 26 NZ citizens who hold $129 billion – amounts that wreck our social cohesion and the redistribution of which could massively change the well-being of the majority.
None of the rightwing parties (NACT, NZ1st) or Labour or OP want to address this, I feel.
Daniel Vernon, 22 June 2026 – https://yeehawtheboys.substack.com/p/economic-lunacy
https://www.greens.org.nz/tax_system_for_all
Great cartoon!
Yes, I'll be voting Green myself. Both Green and TPM have wealth and redistribution policies that are in the direction I support, but I rate Green as having much more chance of making an actual difference, this election.
I disagree weka, any party which open supports capitalism and indeed full blown liberalism as their core value = right wing.
Just because it's Tory with the scum at the top, does not make it fit for working people or the poor.
And you kinda miss the point, there are many left wing alternatives. Two who make sense the Alliance, and Te Tai Tokerau, both of which are pro worker, women, children and represent the best left wing ideals have to offer. Both are close to getting to parliament than what most think.
Don't be fooled because the corporate media, and liberals have supported a less rabid right wing party. Top are a wolf in sheep clothing, hell bent on undermining working people in this country.
That's cool and all, but neither of those parties currently has an obvious path into Parliament.
I'm quite happy to accept that they represent a more conventionally left-wing politics. But what evidence are you basing "closer to getting to Parliament than most think" on? Because they don't even register on most of the publicly available polling.
At the end of the day, forming a government sometimes involves working with parties that don't share your ideological position. You don't have to think TOP is left-wing to recognise that they might still be part of the parliamentary arithmetic.
Staying on topic.
The topic is that TOP is presenting itself as some sort of middle party – when clearly they are not.
The author then went on to say thew left should not be critical of them, nor point out that the base ideology does not fit with socialist (what ever version you embrace) values. I personally think that is woolie thinking. Those who understand economics and ideology have a duty to explain to people what is in fact the reality of a political parties position.
So if you consider yourself left wing or socialist or social democratic or democratic socialist it's pretty damn hard to vote for TOP – or even endorse them. Unless the propaganda has messed with your brain. Which seems to be the NZ norm, as we have moved so far to the right. With the "move on" legislation a classic example of radical right ideology in practice and legislation. Let alone the economics so many think is normal, but is nothing more than the Chicago school ideological wet dream of destructive stupidity.
As for working with parties of different ideological position – the labour party are a good example. For a center right party pretending to be left – those of us who understand the need for fundamental economic change – it's going to be a hard slog. Why add another another hard blocker?
We have seen in our political history the role a Tory party plays as a hand break on any change – via NZ1st. The TOP party are not going to play any different role. They are to tethered to liberalism and the interests of the billionaire class to be anything but.
I hate to break it to you, but telling voters that they're stupid, wrong, gullible, or have had their brains messed with by propaganda isn't a particularly productive electoral strategy.
At some point, if people aren't persuaded by your politics, you have to ask why your argument isn't persuading them rather than simply concluding that they don't understand economics and ideology.
TOP exists. If it enters Parliament, it will be because enough of our fellow citizens and voters believe in its message and policies. We can argue endlessly about whether they're correct, but we can't argue those voters out of existence.
At that point, the practical question for the left is whether to try to make TOP part of a Labour-led governing arrangement, and what compromises and trade-offs the parties involved might be prepared to make to achieve that.
Politics is, after all, the art of the possible.
With all the nitpicking of TOP policy going on in the comments to this post it seems apparent that the left is intent upon cutting its own throat. It's obvious that TOP getting into parliament and supporting the left is a sine qua non to left success on 7/11. We can fight like alley cats over policy matters once the coalition is defeated and the left is safely in power.
It's great that we're having this debate, but remarkably little of it has actually touched on what I think is the interesting question raised by the post: how TOP can and cannot fit within a Labour-led government.
Instead, there's been an awful lot of hand-wringing about whether TOP is sufficiently left-wing or complaining because they aren't advancing someone's preferred policy set.
But that's not really how coalition politics works. Parties don't need to agree on everything before they can work together. The interesting questions are where TOP's policies overlap with Labour, the Greens and Te Pāti Māori; where compromises could plausibly be reached; what TOP might actually prioritise in negotiations; and where the genuine deal-breakers lie.
TOP's entire manifesto isn't going to become the next government's policy programme. Neither is Labour's, the Greens', or Te Pāti Māori's.
So rather than another 150 comments establishing that TOP isn't sufficiently left-wing for various commenters, I'd be much more interested in discussing what a workable governing arrangement involving them might actually look like.
And that question cuts both ways. What are we willing to give up to form the next government?
Because arguing endlessly over what TOP should or shouldn't believe isn't going to solve that problem. If their votes are required to form a government, somebody is going to have to compromise.
The interesting political question is what those compromises could actually be.
We need fundamental economic change, and what makes you think TOP or indeed NZ1st will let that happen?
It's not a case of being left enough, it's an understanding that the economic road we have been on has wreaked our society.
Anyone who thinks more of the same or working with more of the same is going to be healthy for our democracy is deluding themselves.
Democratic renewal will only happen if we embrace those parties and leaders who actually embrace democracy. Not some tin pot out fit who thinks bashing cats and tinkering around the edges is going to help in any way. They and their ilk will only make it harder for ordinary people in the long term.
And lets face it after 40 odd years it's time to grow up and face reality head on. The super rich are a plague, our economy is working only for them and not the majority. And our leaders are sick individuals and we need a change which is one which will protect the future not only for those alive today, but future generations.
That is an utterly unelectable manifesto. Any political party espousing this isn't going to break the 5% threshold.
And, sadly it appears for you, we do have a democracy.
I argued for democratic renewal. WOW how undemocratic of me.
If you can't see our democracy is in trouble – then sorry for you.
Mind you – your piss ass weakness to call out a government who has removing the right to vote for some, and then making it harder to enroll – is what democracy? What next only men and land owners have the right to vote – is that your perfect democracy?
Democratic renewal is needed, and that is built from the bottom up. Thank goodness we don't have to rely on the likes of you.
Well, actually you do have to rely on the "likes of me".
That's what democracy is.
Democracy in name only.
With political donations, feral unregulated lobbying and 'party' politics we are LONG way from one person one vote democracy.
Whoa there, fella!
You may believe all of that. There may even be a veritable mountain of evidence suggesting you're right.
But we live in a society with free and fair elections. Other people are allowed to disagree with you. They're allowed to vote for parties you think are economically illiterate, ideologically bankrupt or actively harmful.
That's democracy.
And that leaves you with a fairly simple political problem: persuade enough of them to agree with you.
If you can't, the alternatives are either abandoning democracy or embracing electoral oblivion so that you can put your hand on your heart and say that, while you achieved absolutely nothing, at least you remained faithful.
I'd rather persuade people and get something done with the flawed systems and partners we have than complain that we don't have the perfect ones.
The old chestnut of "perfect".
Bugger me it's 2012 they want their argument back…
What next, lesser evil? Incrementalism?
For the love of God, socialism is not electoral death. Having to get into bed with the Tory scum is not the answer. Look at the failures of all the western nations when they have – even here for the last 40 years.
Grow a spine.
Have so principles.
Or at the very least a moral center.
Ah, so we're back to the German Realo–Fundi debates of the 1980s. Danke schön.
If you want to accuse me of moral cowardice, you're welcome to try. But I'm just as firmly committed to social democracy as anyone else here.
I simply accept the constraints of the world we're actually living in: MMP, a plural electorate, competing interests, limited political capital, and the irritating fact that other people get a vote too.
Principles tell me where I want to go. Pragmatism is how I try to get there.
You can call that incrementalism if you like. I call it politics.
Because at the end of the day, the only way any of us gets our policies implemented is by winning elections and forming a government.
And doing that in the face of the right's structural advantages and the hand-wringing of ideologues takes spine. Being willing to compromise to achieve something rather than remaining pure and achieving nothing takes spine. Staying focused on the purpose of politics — actually improving people's lives — takes spine.
Principles are easy when they never have to survive contact with power.
Not all principles are easy, contact with power or no – just the ones I don't like.
https://www.facebook.com/photo/?fbid=1390955386500157&set=a.359929072936132
So, setting aside the TOP flagship policies of land tax and UBI, which Labour have categorically ruled out – what's next in the TOP manifesto?
What could they gain at a bargaining table? And are they equally as palatable (or unpalatable) to Labour and National?
There's quite a lot around long-term, cross-party approaches to things like education and infrastructure that I think Labour could pretty easily get behind.
Beyond that, there seems to be plenty of potential common ground around land-use reform, environmental and conservation policy, and aspects of Te Tiriti policy with Labour and the Greens.
Which is really my point. A coalition agreement doesn't require Labour to adopt TOP's entire manifesto, or TOP to suddenly become a left-wing party. It requires them to identify the things they can agree on, negotiate over the things they can't, and find enough common ground to govern together.
The interesting question is what TOP would actually prioritise at the bargaining table once its flagship tax and UBI policies were off it.
From TOP's website:
We'll bring lobbying into the daylight, so everyone can see who's shaping decisions. We'll get big money out of politics, so parties win on their ideas. And we'll build an independent anti-corruption body to defend the integrity New Zealanders are proud of.
This is probably something the parties of the left would support, and it would also strike a chord with voters.
This is something often talked about, but no one ever seems to do anything about it.
It seems as though it's one of the things which parties call for in opposition, but don't do anything about when they are in power.
I agree with TOP, and would like to see.
I'm not sure about:
I'm not keen on:
Donation caps. I see this as being likely to be widely evaded, by funding ginger groups. Who don't lobby directly, but campaign for the same results (think Taxpayer's Union). I'd rather see, openly, who is funding the political parties.
I would like to see a governor general with the power to sack a PM, and perhaps even a government, caught evading. Even if, in the interests of maintaining stability, he/she decided to hold back, the ability to to point out that it was a sackable offence would be quite effective.
Could we just stick to policies which have a chance of being put in place.
Empowering a governor general to sack a government because of some perception that there might have been campaigning – is a bridge much too far.
Think of the left wing organizations which might be affected. Forest and Bird, Greenpeace, NZCTU.
Such a policy would need teeth, and the GG is the only one, I think, who could provide that.
If agreement cannot be reached on taxation, Susan St John's and Terry Baucher's idea of a "fair rate of return" tax may be worth thinking about. It seems to be an adaptation of Gareth Morgan's "Comprehensive Capital Tax" but restricted to residential assets, both owner occupied and rental, and also incorporating a million dollar per person exemption so would not affect lower income brackets.
https://cdn.auckland.ac.nz/assets/auckland/business/our-research/docs/economic-policy-centre/pensions-and-intergenerational-equity/PIE%20Policy%20Report%202022-2.pdf
Labour have been very specific on ruling out any other new taxes (apart from the limited and ringfenced CGT).
You'd have to postulate that they are prepared to walk this back.
I don't see any evidence of this being a reality.
I sense that there are two or three other parties who are likely to play "hardball" in the coalition agreement negotiations. I don’t think that CGT only will satisfy them. TOP may just decide to not support either party if a CGT is all that is on the table.
However, it would leave Labour forever after on the back foot in election campaigns.
Their weak spot – successfully attacked by National (fairly or otherwise) is taxes. Which is why Hipkins is so sensitive.
Given that he's campaigned on no new taxes (apart from CGT) it's going to take a lot to get him to walk this back.
Labour has to think of not just this election, but future ones.
Really TOP is the only party with leverage here (the Greens and TPM aren't going to cross the floor).
TOP could. But National aren't going to agree to their new taxes, either.
I don't think that any of the more taxes parties have the leverage for hardball negotiation, here.
If TOP walk away from both parties we have two options:
A grand alliance (Labour and National) – no, I don’t think that’s likely, either.
Or a new election- with TOP blamed. My prediction is that this would sink them below 5%.
In reality, Wong wants to be in parliament and in government. She’ll take what she can negotiate. But she won’t walk away.
It also gives Hipkins a kind of out, if he can thread the needle of negotiating hard enough to avoid the impression that has dogged Luxon of being taken for a ride by his junior coalition partners.
Labour can quite truthfully say: this wasn't our policy, we didn't campaign on it, and we wouldn't have introduced it governing alone. But the electorate returned a Parliament in which forming a government required compromise, and this was the price of securing agreement.
That doesn't make the political risk disappear. National would obviously still hammer them for breaking their tax commitment. But "Hipkins secretly wanted to introduce another tax all along" is a rather different political problem from "Hipkins made a concession to TOP/Greens/TPM in order to form a government."
In some ways, Labour having been so explicit about its own tax policy might actually make that distinction easier to draw.
Because I think voters generally understand how this works under MMP. When you vote Labour, Green, TOP or TPM, you're not voting for one manifesto that will subsequently be implemented verbatim. You're voting for a distribution of parliamentary power from which a government programme will be negotiated.
So voters can reasonably expect a Labour-led government to contain policies Labour itself didn't campaign on, particularly where those policies were very publicly campaigned on by its prospective support partners.
We can see the same political logic in the current government, where National has at times sought to distinguish its own preferences from policies or positions associated more strongly with ACT or NZ First. Whether voters actually let the senior governing party launder responsibility that way is another question.
And that's the trick Hipkins would have to pull off: make it clear that Labour conceded something in a genuine negotiation, without simultaneously creating the impression that its junior partners got to dictate the terms.
I think there is a difference in negotiating on policies that were actively campaigned on by other parties, where Labour is neutral, or has a complimentary policy. However, the GP and TOP position on tax is directly opposed to the Labour policy. I don't see how Labour could adopt it in negotiations without either looking weak and steamrollered by the minor parties, or the accusation that they wanted it all along and were just lying to the electorate.
FWIW, I think that Labour genuinely are opposed to the TOP and GP tax policies.
That's fair, and I agree there's a distinction between compromising on something you're merely neutral about and conceding something you've explicitly opposed.
Where I differ is that I don't think the latter necessarily makes Labour look weak or dishonest. That depends on the overall bargain.
If Labour gets 35% and TOP gets 5%, and TOP somehow gets its entire tax programme while giving Labour very little in return, then yes: Hipkins has a serious problem. He looks like he got steamrollered.
But if TOP makes tax reform a genuine bottom line, has enough seats that Labour cannot form a government without them, and the eventual agreement contains a substantially negotiated version of it alongside significant concessions from TOP, that's just coalition bargaining.
In fact, I also think Labour genuinely opposes TOP's tax policy. That's partly why I think the distinction could work. Hipkins can credibly say "we didn't want this, they did, neither of us had the numbers to govern alone, and this is where we ended up."
The political question is where that Goldilocks zone lies: how much can Labour concede while voters still perceive the resulting agreement as a reasonable compromise rather than capitulation?
And I suspect that's going to be one of the more interesting parts of the campaign in light of the last three years, because the parties are effectively negotiating that boundary with the electorate before the formal coalition negotiations even begin.
there are none so blind as those who will not see.
Where I differ is that I don't think the latter necessarily makes Labour look weak or dishonest. That depends on the overall bargain.
That sounds about right. However, TOP claims to be a promoter of "evidence based" policy, and, with property prices apparently on a downturn, would perhaps be reluctant to support a CGT at this time. Would Labour then look at a wealth tax. As you say, they could always claim that the Green party pushed them into it.
It is possible that Hipkins also is not keen on a CGT, and included it in policy because he felt pressured to do so.
PS: this comment should have been a second reply
to Belladonna's comment at 8.47am; and my comment at 9.16am was a reply Belladonna's at 9.13am
With all the noise Labour have made about only having 1 new tax, the loss of credibility would be extremely damaging.
Thus, (like National) they are limited to increasing current taxes if they want to stay true to their promise. Like GST for example.
Wonder if they will promise not to do that (increase current taxes)?
[With all the noise Labour have made about only having 1 new tax, the loss of credibility would be extremely damaging.]
That would depend. It may not lead to loss of credibility. And even if it did, then, depending on whom it hit and whom it hurt, it may not be "damaging".