This week, leavened by the eerie dawn services of ANZAC Day and world-war histories redolent with high ideals for a fairer world, we have been waiting for revenue minister David Parker to release the findings of the report, due out yesterday, on tax and the economic income of high-wealth individuals in New Zealand.
Simultaneously, and among a scurry of commentary, there was also to be a mammoth new report commissioned by tax consultancy Oliver Shaw that claims, somewhat improbably, that New Zealand’s tax system is actually operating fairly, and that the more wealthy you are, the higher the effective tax rate you pay – even on capital gains.
“This is, to put it mildly, a controversial statement,” according to the Spinoff’s Duncan Greive. “The OECD is a club of wealthy nations with 38 members. New Zealand is the only one in which capital gains – profit on the sale of investments – is not a significant part of our tax system,” says Grieve. Since income of the very wealthy is far more likely to come from investments than wages, such income will generate little tax revenue.
When the government report was mooted a year ago, the minister – rated one of our most far-sighted politicians – said the country had no idea what rate of tax was paid by an “ever smaller” cohort at the very top.
In the familiar scurry of competing ideologies, middle New Zealanders have also had to absorb NZ Herald predictions that the bleak, Reserve Bank-made recession will be worse than predicted, and coming sooner.
No matter that huge, late model vehicles, high-end travel cruises on European rivers and extravagant building projects remind us daily that the pain is not equally shared.
Yet news feeds seem quite comfortable that the accidentally-on-purpose imposition of a bank-made recession will hit homeowners and renting households “disproportionately”.
This is the under-50 generation that grew up in family homes, albeit with two parents working to make ends meet.
Before they left high school, Muldoon, Rogernomic Thatcherism and an unprecedented, unthinkable inequality landed on them, courtesy of a crudely extractive ideology, mostly out of Washington, that is all they have experienced.
Anger, dismay and three decades of stagnant wages left most of them resigned to never owning their own home. Not just some, but most were going to be insecure all their lives, putting down roots and making do when they had to pull them up again.
It’s a weekly event on Waiheke, where the fabric is fraying as mansions replace modest homes and the median household income is $20,000 below that of the rest of the country. And house prices the highest.
The fabric of a sound society is made up of myriads of communities. Looking after each other, husbanding common needs and aspirations, big enough to fix their own problems.
New Zealanders, surrounded by plenty and growing enough food for a population of 40 million, should be appalled at the almost complete failure to provide a quantum of solace for our young.
GST should have been off fruit and vegetables basics long ago. The banks should be surrendering a windfall tax; not piously piling on the mortgage agony.
What happened to the monopoly supermarket enquiry here? Fruit and vegetables are up 22 percent. What’s with $430m a year in excess profits, and returns of 12.9 percent to an Australian corporation that should be content with 5.5 percent?
The nearest explanations I can find say we were rather too good at getting through Covid and are paying a price now. Or that elected government cannot tinker with the Reserve Bank (a key institution from the Rogernomic years).
Yet you cannot just hang whole, tax-paying generations out to dry and facing not ever having a roof over their heads. Our worst-in-OECD divorce rates of 42 percent might have something to do with the sheer impossibility of making ends meet on less than two incomes.
In the face of multiple environmental and social crises, the long-term solution to achieving fairer and healthier societies on a liveable planet would be a fundamental change to the way communities work, says University of Wellington public health and policy academic Anna Matheson.
As it stands, it’s a process that empowers a whole system of resource extraction.
The United States, these days, is a grim warning of what happens when a society dispenses with the idea of truth. As Observer columnist Will Hutton said recently in a Guardian article, the strategy of truth denial was never accidental and democracy wilts in the face of fragmentation, paranoia, division and myths fuelled by wealth and its access to mass media. It’s still painfully familiar here.
While war should never be glorified, ANZAC Day remains an icon for what was won for us. Selflessly. It behoves us to be grateful and in action to correct the glaring injustices.
• Liz Waters
