Politics

Simon Wilson: Rapture or reform? Jacinda Ardern and the wealth tax

Opinion

Last Saturday Jacinda Ardern arrived at the Mangere Mall. There was a pese fa’afeiloai, a welcome song by some very excited local kids, and then Ardern made her way inside. A thousand selfies later, by now smothered in lei, she reached the stage.

The Rev Thomas Kauie gave a reading from the Gospel of St John: the story of Jesus, in the middle of the Last Supper, stopping to wash the feet of the disciples.

This is not a parable about the master humbling himself before his followers. It’s the reverse. The reverend quoted John quoting Jesus: “No servant is greater than his master, nor is a messenger greater than the one who sent him.”

It’s about humility in the face of God. That Mangere rally is a tradition for Labour leaders on the last Saturday of a campaign; a pointed reading for the lapsed-Mormon party leader has become part of the tradition.

Still, there’s a ton of love for their Jacinda in South Auckland: she got a rapturous response. At Otara earlier that day they had a song: “Labour in the morning, Labour in the evening, Labour in the summertime! Labour, Labour, Labour, Labour all the time.”

That’s been the main story of this campaign.

A few days later, in Manukau Institute of Technology’s lovely big building above the railway station, they held a voter enrolment event. Music, free food, all the trappings. I asked Natalie Moetu, who’s standing in the student council elections they’re also having, why Ardern is so popular.

She said people are grateful. They live in communities vulnerable to infectious disease and they know the Government’s Covid strategy has kept them safe.

They know they have opportunities, too. The MIT campus above the railway station is five years old now; course offerings have expanded into nursing and other areas; over the road, a new TechPark is home to engineering and trades.

There are 12,000 students at MIT and the average age is 29. Mostly, they don’t go straight from school. Instead, students pick up the training when their family circumstances allow, or when they lose their job and have to retrain. There’s a lot of that happening right now.

This is not an area of fundamental difference between Labour and National, though. Both have been pushing trades training and the value of tech learning hard this campaign, and they share responsibility for the progress already made.

But education is one thing. In South Auckland, they also believe a Labour-led Government will increase their chances, or the chances of their sons and daughters – all the Natalie Moetus – of buying a house.

Will that really happen? National’s doing it’s best to stop it, with an extraordinary focus on the Greens’ wealth tax. But why are they banging on so much about a policy Labour has promised, over and over, it will not adopt?

A policy, what’s more, that will tax property-related wealth at a far lesser rate than the property grows in value just by sitting there. I wrote about this yesterday.

It’s not just because they can scare voters with it. National wants the Greens out of Parliament. That way, Labour will have no support partner to call on in 2023 and therefore no road back to power.

National’s attack on the Greens is an attempt to lay the groundwork for locking itself into Government after the next election.

And there’s more. National is declaring a fundamental economic purpose: it is the party that, come what may, no matter the morality, will protect property values.

The message is clear. We can build back better all we like, tackling poverty, confronting the climate crisis, making our cities work well and our countryside more productive and fully sustainable, creating jobs and whole new ways of working, but National will fight every attempt to do it by with any kind of tax on property wealth.

Is Labour saying the same? Is there any room to move in Ardern’s point-blank rejection of both the Greens’ wealth tax and a capital gains tax?

Kate Raworth, the British economist who invented “doughnut economics”, spoke via Zoom to a candidates debate in Freemans Bay last week.

Raworth’s doughnut is a ring that describes the relationship between our standards of living and our use of the world’s resources. Inside the ring – in the doughnut hole – it is not possible to live well; outside the ring, we squander resources and ruin the planet.

We prosper and are in balance with the world when we live within the inner and outer limits of the doughnut. The aim of economics in the 21st century, said Raworth, must be to find a way to get there and stay there. But the Covid crisis has made inequalities worse.

“We see it in gender and race, in class and in power.”

Doughnut economics, said Raworth, offers “a compass for humanity”.

She says she doesn’t have all the answers. No one does. Reducing our use of resources means reducing growth, and in conventional terms that creates poverty.

But Raworth is not put off. “It’s never been done before, but we have to work out how to do it. This is a new science, it’s not even 10 years old.”

In fact, Raworth does have some answers. She’s consulting to the city of Amsterdam on its post-Covid rebuild, and several other cities, including Los Angeles and Berlin, have also been inspired by her thinking as they plan their rebuild. I’ll write more on this soon.

In the debate, Chloe Swarbrick from the Greens argued for the wealth tax, pointing out that wealth in property is created by taxes spent on infrastructure.

I heard from a man this week who objected to the way a wealth tax would penalise people who bought a bach in Coromandel back when the road trip took six hours, and now owned valuable property but were not rich.

But Swarbrick is right. Those baches are now worth a fortune in part because the roads, paid for by taxes, now make the journey so much quicker.

Shia Navot from Top, however, argued against the Greens’ wealth tax, but not because wealth shouldn’t be taxed. TOP thinks there are better ways to do it.

Perhaps they’re right. Greens co-leader James Shaw has said many times, if other parties don’t like their proposal, he would welcome them coming up with something better.

Labour’s David Parker, the trade minister, told an OECD conference this week there is a growing gap between the wealthy who can leverage their assets at very low interest rates, and the young and others without assets. “There is a problem with this status quo around the world,” he said, “and we need a conversation about what the remedy might be.”

If the popularity of the prime minister has been the outstanding feature of this election, we’ve also witnessed – in the midst of crisis – a failure to build a good platform for that conversation, or any of the others we need to have.

Rapture on the one side, frank fearmongering and misinformation on the other. And although we’ve heard from people afraid they will lose their wealth, we haven’t heard so much from people like Natalie Moetu.

And yet we have the climate crisis to address, and jobs, poverty, housing, managing debt, spending all the new money well. And keeping Covid at bay.

At a Green Party rally on Wednesday evening Shaw said the decisions facing the next Government will be “orders of magnitude larger” than those already made in response to the pandemic. Who would doubt it?

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