Stuff: Undisclosed money threatens next election

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If anyone wanted to channel hundreds of thousands of dollars to a political party, and do so without the public’s knowing the first thing about it, the High Court has just shown them how.

In a judgment last week that has caused consternation among the political class, the court ruled that the activities of the New Zealand First Foundation, a fundraising vehicle for the Winston Peters-led NZ First party, were completely legal.

The foundation had taken nearly $700,000 from wealthy donors who believed they were giving to the party and had annotated their bank transfers with tags like “donation” and “Good luck Winston”. The foundation then used this money to pay bills incurred by the party: $140,000 here for its 2017 campaign, $10,000 there for boxer Joseph Parker’s conference speech.

Before last week’s ruling, most people assumed the sums given to the foundation would be deemed political donations, and the donors’ identities disclosed, so the public could see who was giving what to whom, and make up its own mind as to whether any influence had been secured. Given the ever-present potential for money to buy political favours, this openness is an essential means by which a democracy’s integrity is maintained.

The public had a right to know that, when NZ First was preparing to block a capital gains tax, the foundation had received tens of thousands of dollars from people associated with billionaire Graeme Hart, who gave partly because they were opposed to said tax.

It had a right to know that Peters, a two-time racing minister, was regulating an industry that had given tens of thousands of dollars to the foundation. Failing to disclose these sums should, in my view, have been a flagrant violation of electoral law.

In the NZ First Foundation case, however, the two defendants, who have name suppression, escaped punishment. Not on the substance, though: Justice Pheroze Jagose found “comprehensive evidence [the defendants] deployed the dishonest scheme in order to deceive the party and party secretary”.

They were cleared, rather, on a troubling technicality. Justice Jagose ruled that payments are donations only if they are given directly to a political party or to people engaged “in the administration of the affairs of the party”. Because the defendants were not involved in NZ First’s day-to-day running (at least, not in the capacity in which they received the money), the payments were deemed not to be party donations, and there was no obligation to disclose them.

When the Electoral Act was drafted, no-one anticipated a scheme quite like the NZ First Foundation. The result? Anyone, from any political party, is free to set up an aligned but technically separate organisation, make sure they themselves steer clear of party “administration”, collect big donations, and pay the party’s bills in complete secrecy.

To say this has troubling implications would be to put it mildly. The door is open for all manner of undisclosed money – including unlimited foreign donations – to pour into political party coffers before next year’s election. Transparency and integrity have both been put at risk. The urgent task now is to shut that door – indeed to lock it, and bar it with steel.

Fortunately, a great danger is met with a great opportunity. Alarmed by the rising tide of donation-related scandals, the Government has just introduced a bill that would require more donors’ names to be disclosed and force parties to publish annual accounts.

Though it has its flaws, the bill nonetheless presents the perfect chance to add provisions that would close the NZ First Foundation loophole. The steps needed are simple. The definition of “party donation” must be widened to include any donation designed to assist a party, regardless of the recipient’s job title. That would clearly identify the problem.

Failure to pass those donations on to a party must be made a criminal offence (not just a technical breach, as at present), and one that attracts sweeping penalties. That would properly punish the bad behaviour.

Lastly, as the Electoral Commission recommended in its review of the last election, the law needs a general “anti-collusion” provision, similar to the broad anti-avoidance clauses in tax legislation. That would ensure any future deceptive schemes are caught, even if not explicitly anticipated in law.

New Justice Minister Kiri Allan ​has asked officials to look at this urgently. Some fear the rush to close the loophole before next year’s election will lead to bad law. But that is surely a much smaller risk than the risk of doing nothing at all, and thus giving undisclosed money free reign.

Stuff: Here’s how Labour could outflank Luxon on tax

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“To tax and to please, no more than to love and be wise, is not given to men.” So wrote the 18th-century Anglo-Irish statesman Edmund Burke, and if the postwar embrace of high taxes seemed temporarily to contradict his claim, the last few decades have given it proof. Certainly no modern-day Labour Party likes talking tax.

After autumn’s intense debates, the tax conversation has been more muted, but we can expect it to flare up again – and perhaps even dominate next year’s election campaign. If so, questions of fairness will be central.

National’s plans to axe the top tax rate and reinstate interest deductions for landlords are not, I suspect, especially popular; they look too much like a handout to Christopher Luxon’s rich cohort, and he now seems to mention them less. But even his call to adjust the tax brackets suffers from the same problem.

Luxon would raise the thresholds, so that the 17.5% rate applied only to income above $15,600 rather than $14,000, as currently; the 30% rate would kick in at $53,500, not $48,000; and the 33% rate at $78,100, not $70,000. But even these changes, though superficially aimed at middle New Zealand, would benefit high earners the most. The saving for a public-sector manager on $120,000 would be $1042, but for a minimum-wage checkout operator just $112. From a fairness point of view it is unfathomable.

Labour’s response could be to simply deny the need for any change. The typical Kiwi is not overtaxed: far from it. According to the OECD, just 19.4% of the average New Zealand salary goes in taxes, the lowest in the developed world except for Colombia and Chile.

If middle New Zealanders are struggling, it is rather because wages are low, firms that face little competition can raise prices sky-high (hello, supermarket duopoly!), and public services are patchy. (If anything, average Kiwis would be better off paying slightly more tax, as long as they got significantly better public services.)

Labour could take this line, and hope that cost-of-living payments and wage rises can ease middle New Zealand’s inflation anxieties, especially if any coming recession is relatively mild.

If, though, people feel themselves to be overtaxed, the clamour for change may continue. Labour may then need to contemplate tax reform – but the kind that favours the bottom and the middle, not the top.

One must park, for a moment, the problem that New Zealand simply does not raise enough revenue. If we taxed like the European countries whose public services we admire, the Government would have another $20-30 billion a year for education, welfare and health. But having ruled out a capital gains tax, and being disinclined to implement levies on wealth or inheritances, Labour has few options there.

It can, though, fix the tax system’s tilt against the poor. GST hits low earners hard, and they are taxed on every cent of income. Conversely, many of our multimillionaires pay a lower tax rate than people on the minimum wage.

Labour could take the $1.7b cost of Luxon’s threshold adjustments and – as former party staffers such as Clint Smith have suggested – redirect it towards more progressive tax cuts. For the same cost, Labour could make the first $5000 of income tax-free. This would save a minimum-wage worker 10.5% of $5000, or $525 – nearly five times Luxon’s offer. Average earners would get the same tax cut.

But so too would the very wealthy. And losing $1.7b in revenue would be a blow for Labour. Could it recoup the tax cut from the rich? It has promised no further taxes this term, but could make pledges for 2024 onwards – lowering, for instance, the threshold at which the 39% rate cuts in from the current $180,000 to $120,000, and introducing a new top rate of 45% on income over $250,000, similar to Australia’s. That could recoup roughly half the $1.7b cost.

Labour would then need only another modest proposal – a levy on unimproved land value, say, or curbs on multinational tax avoidance – to make its changes revenue-neutral. Of course, the tax increases might then seem to be mounting – especially if one includes social insurance. So Labour might have to park any further tax proposals and accept some revenue loss overall, or rely on the tax take outpacing expectations (as it has done recently).

There are no easy options. Still, Labour has ways to protect much of the $3b in new spending set aside for future years, while outflanking Luxon by offering most Kiwis a much larger tax cut than he ever could. This would be a long way from the ideal world in which all forms of income, including capital gains and inheritances, are taxed fairly. But it might at least prove Burke wrong.

The Conversation: ‘They’re nice to me, I’m nice to them’: new research sheds light on what motivates political party donors in New Zealand

Co-written with Lisa Marriott. Read the original article on The Conversation

Proposed changes to New Zealand’s political donation rules have put the spotlight on donors who give thousands and the motivations they have for their generosity. Our current research into New Zealand’s political donations system aims to shed light on this often obscure process.

Last year, just over NZ$2.73 million was donated to ten of New Zealand’s 15 registered political parties.

Current rules require the public disclosure of any donations over $15,000. The government has proposed dropping this public disclosure threshold to $1,500 (a move opposed by both the National and Act parties).

The proposed reforms to the political donation rules follow Serious Fraud Office investigations into the handling of donations received by the National, Labour and NZ First parties. All three investigations have resulted in court proceedings, with the first case just ended with the judge reserving his decision.

Given the apparent confusion and disputed legal requirements around transparency, a basic question needs to be asked: why do wealthy New Zealanders donate to political parties?

As part of our research into political donations, we have interviewed several party donors across the political spectrum.

We asked them why they donate, whether they expect to exert any sort of influence from their donation, and what views they have on other features of the current system, such as the disclosure of their name and the size of their donation.

Our interviewees were not concerned about transparency. Having each given over $30,000, their names were published online within ten days of their donation.

All accepted this transparency as a necessary part of a democratic system. Some even believed it had positive effects, for instance in encouraging others to donate.

Our interviewees’ reasons for donating varied. Most invoked some desire to “participate”. Participation took different forms – from supporting a party that had similar values to the donor, to just being part of the political process.

Perhaps unsurprisingly, academic research suggests political influence is expected from donations – although supporting existing policies is also a factor. But the donors we spoke to said they did not gain extra influence as a result of their donation, nor did they seek it.

A couple of cautions are in order, however. The fact they were willing to be interviewed by researchers may suggest our interviewees were more comfortable with their donations than other donors might be.

Second, even while insisting they did not gain extra influence, some made other comments suggesting some level influence was a consequence of the donation. One noted interactions with multiple prime ministers and party leaders, some of them directly connected to fundraising. Such figures had, for instance, been to the donor’s house for meals.

Another donor said making a large donation would generate the opportunity to arrange a direct meeting. Even if policy is not explicitly discussed in such contexts, donors and politicians are clearly building close relationships.

These are the conditions in which the interests and beliefs of political leaders may gravitate towards those of donors, especially since ordinary voters do not generally get such privileged access.

Some donors alluded to such closeness. One said, speaking of the party to which they donate, “They are nice to me, and I’m nice to them.”

Another acknowledged that while donations were made in self-interest, “The self-interest is [seen as] public interest.” That is, donors rationalise actions designed to further their own interests by arguing this overlaps perfectly with the public interest, even though such a correlation is far from guaranteed.

Some would argue the process for regulating donations works, evidenced by the ongoing court cases. However, those cases were triggered by whistleblowers, not because of regulatory oversight in the first instance. We cannot rely on whistleblowers to report all instances of alleged wrongdoing.

Much electoral reform work is currently taking place, including the contested changes to donation disclosure rules and a wider independent review of the Electoral Act.

With two more donations-related court cases to come this year, pressure is mounting for changes to the way political parties are funded.

Such reform appears necessary to create greater transparency about donations and ensure that trust in Aotearoa New Zealand’s political funding system is not permanently eroded.

Stuff: Ardern’s low-key school food revolution

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On a grey midday at Mana College, brightly coloured trolleys begin to appear outside classrooms, bearing crates of food. It’s the latest instalment of the free lunches programme, a signature Jacinda Ardern policy that feeds 220,000 children in low-decile schools across the country.

Mana’s acting principal, Greg Sharland, tells me the lunches have been “a real game-changer” in a school that previously had pupils going hungry or subsisting on the cheapest junk food. In times of poverty and rising prices, families’ food budgets often suffer. “Having a good, healthy, packed lunch is really challenging for some of our students,” he says. “This has broken down some of those barriers for us.”

Eloise Bason, a senior pupil, agrees. A typical lunch now might be teriyaki chicken and rice with vegetables, or a bean and roast beef burrito, with fruit to follow. “Personally, I have been really enjoying school lunches. I have found them very balanced [nutritionally].”

Ardern’s scheme has a twofold rationale. It ensures the country’s poorest children are fed, but is also designed to raise school results. Hungry kids make poor learners: a recent evidence review found that school food programmes, commonplace in other countries, lift pupils’ marks.

The first national evaluation of Ardern’s version, published last year, had too little data to make claims about attendance or grades. (Further research is under way.) But it found pupils had better diets, felt more settled, and were far less hungry.

Sharland says that, although the ravages of Covid have rendered rigorous evaluation impossible, anecdotally the scheme is raising achievement. “It definitely helps with energy levels in our last period classes,” Bason adds.

At nearby Porirua College, principal Ragne Maxwell is another enthusiast. “In all the years of educational initiatives [I’ve seen], this is the one that has made the single biggest difference for our kids,” she says. Their eating habits have changed – “they aren’t filling up on pies and $1 bottles of fizzy drink” – and having fewer hungry and “wired-up” kids means fewer playground incidents.

She even thinks it’s reducing obesity. “It’s phenomenal in terms of well-being.”

The programme’s success is all the more startling given this Government’s struggles to deliver core policies and its tendency to fold under political pressure. Not that long ago, conservatives were ardently opposed to a scheme that, as they saw it, trespassed on to an area of parental responsibility and let lazy families off the hook.

But once Ardern made it clear she was undaunted by this anger, it rapidly melted away, leaving the political landscape permanently changed. (One wonders what such staunchness might have achieved elsewhere.)

It helped that there were overseas models to emulate. The scheme’s design, too, has been near-ideal: it was piloted first, then adjusted; it provides lunches to all children at qualifying schools, removing stigma; and it is flexible, so that the 170-odd schools with working canteens can make their own lunches, while the remaining 700 or so buy them in. Big change, done slowly: it’s how the “radically incremental” Ardern government was supposed to work, but mostly hasn’t.

The scheme’s early weakness was waste: news reports detailed thousands of meals going uneaten. But the problem seems to have been brought under control. At Mana, the caterer surveys students and tweaks the meals. “We haven’t seen the tuna wrap back on the menu,” Sharland says wryly.

Official data from a small sample of schools suggest just 10% of meals are wasted. Many parents, contemplating the mouldy packed lunches they have discovered under their child’s bed, will feel that nine from 10 is a decent hit rate.

The scheme’s left-wing critics sometimes claim it would be redundant if the Government had solved child poverty. But it is, Sharland says, “about so much more than just having food in your belly”. Students and teachers eat together. “It’s an opportunity … to connect – particularly in this Covid world, where we have found connection difficult.”

It’s also “a great way to educate people”. Showing beats telling: “It’s easy to say, ‘You should eat more healthily’, but what does that look like? Now they are [seeing] it every day.”

Maxwell agrees. “It’s part of building whānau and learning about appropriate eating – that it isn’t always about sitting in front of the TV.” She reframes a conservative talking point: “You are not just giving them fish, you are teaching them about fishing.”

Porirua College makes its own lunches; Sharland hopes an upcoming refurbishment will allow Mana to do likewise. From there, he envisages a quiet revolution that the Government itself has perhaps only glimpsed.

The free lunches could, in time, become the hub of a holistic, interconnected system in which the school grows some of its own food, pupils help prepare it, and that work earns them qualifications. “We’d love to do that,” he says.

Stuff: White men are being asked to be humble, not silent

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The best-selling crime writer James Patterson, as you may have read earlier this week, has just had to apologise for saying that white men face “another form of racism” and are being pushed out of the publishing industry. His claim echoes that of another cultural kingpin, the superstar podcaster Joe Rogan, who last year said straight white men were being “silenced” by woke activists.

These are perilous days indeed for a near-billionaire author who outsells Stephen King and Dan Brown combined, and for his fellow victim, the host of a podcast downloaded 200 million times a month. But jibes like this, though satisfying, only get us so far.

Rogan and Patterson are expressing a fear increasingly held by older males: that society no longer seeks their views. Indeed, they feel their opinions to be scorned and denigrated. This frightens them deeply because they, like us all, are social beings, reliant on the regard of others; not to be heard is almost not to exist. (A point, of course, that traditionally marginalised groups have often made.)

The upswell of this fear is worrying, in at least two ways. First, it may lead to an aggressively masculine backlash. Second, it represents, I think, a misunderstanding of what is actually being sought.

Even if there were an attempt to cancel older white men en masse, it has clearly failed, given their constant presence on platforms like those that Patterson and Rogan enjoy. (And in this column, indeed.) More to the point, I don’t think the demand is actually that white men fall silent.

In some corners of the internet, one may hear calls for them to be forever quiet; phrases like “pale, male and stale” can be deployed in ways that imply every older white man is past his use-by date. For the most part, though, what I hear is a request for something subtly different: humility. It’s not the speaking that’s the problem, it’s the dominating: the need of so many men to hold forth at length, to speak over others, to assume theirs is the most interesting and most important voice.

As Anne Elliot, one of Jane Austen’s finest heroines, says in the novel Persuasion, “Men have had every advantage in telling their story ... the pen has been in their hands.” In my own working life, some of the most excruciating scenes have come in meetings where a woman is clearly trying to say something, but a succession of older white men talk over her until their attention is, slowly and belatedly, drawn to her existence.

All this could be avoided if they – if we – were more attentive to the wisdom and life experiences of others. We might better acknowledge their contributions, rather than feeling that we must claim all insights as our own. Slower to speak, and quicker to listen, we would learn more, have our perspectives better illuminated and shaped by others, and find defter solutions. (Most problems benefit from the attention of different – and diverse – minds.)

Consider this, though: for a certain class of highly educated men, the speaker’s authority is all – or most – of what they have. Strip that away, and they are left bare, exposed, even humiliated.

Nor can we pretend that greater equality will be painless. Contemplating the Patterson case, the journalist Adrienne Westenfeld is of course right to criticise “the erroneous belief that an expansion of opportunities for under-represented groups is an oppression of white men, rather than a necessary and long-overdue correction of imbalanced scales”. And when things are expanding – more jobs, more positions, more opportunities – this correction need come at no-one’s expense.

But many of the most prestigious spots are in limited supply: corporate management positions, senior academic roles, top public-sector jobs. As we remove the barriers that once stood before highly capable women, Māori and other candidates, the less able white men – who previously got their positions through confidence, contacts or simply sounding the way we expect experts to sound – will, as things stand, lose out.

But that phrase, “lose out”, points to a deeper problem. No white man – no-one of any stripe – should feel themselves a loser if they cannot climb a given hierarchy. If our whole identity were tied less closely to our perceived occupational success, the rebalancing of the scales would not seem such a threat.

That state of mind, in turn, would be more readily achieved in a less competitive world, one that still values excellence but supports everyone to achieve it, and celebrates it in all walks of life, not just among the great and good. Then it would be easier for older white men to see the current moment for what I think it is: a call not for silence, but for humility. For something, in other words, that makes us better people.

Stuff: Ardern's govt has failed to deliver meaningful gains in growing trust

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In Jacinda Ardern’s rightly lauded Harvard speech last week, the best line came when she spoke of the need “to ensure [that] difference, the space where perspectives, experiences and debate give rise to understanding and compromise, doesn’t instead become division – the place of entrenchment, where dialogue departs, solutions shatter and a crevice between us becomes so deep that no-one dares cross to the other side”.

The rhetoric was impressive, the sentiment commendable, the analysis accurate. In particular, the prime minister drew our attention once again to the deep irresponsibility of social media and the algorithms that promote the most extreme content, pushing viewers towards division, not difference.

Yet for all that, the address had at least one major defect. It’s not just that the prime minister was vague as to how those algorithms could be improved, or that her much-touted Christchurch Call has only slightly amended an internet still heaving with hate speech. The regulation of global social media giants, after all, is not something she controls.

More bothersome is what is happening in Ardern’s own backyard. Or rather, not happening. One of her speech’s other themes was trust: the foundations of a strong democracy, she noted, include trust in institutions, experts and government – something that “can be built up over decades but torn down in mere years”.

What, though, has Labour done to substantively enhance trust in government? The prime minister’s own leadership has, I think, been largely positive for democracy, never more so than when she embraced kindness, and eschewed hate, following the Christchurch mosque attacks. But that is a product of her own style and personality, and will depart with her when she leaves politics.

The deeper question is whether Ardern has changed anything in the structure of g​overnment that will outlast her time in Parliament; whether there is any enduring and substantial alteration in public processes. Sadly, I think there is not.

One can point to noticeable if minor improvements. Far more Cabinet papers are published (something that would be unfathomable in many other countries), and ministerial diaries likewise. This allows us to better understand how the government makes its calls and who influences its politicians.

Public Service Minister Chris Hipkins says his fellow ministers front up to select committees far more than their National predecessors did. The promised creation of a register of the true owners of New Zealand companies will also enhance trust in public life.

It’s not enough, though. Distrust in government – or indeed anything else – may not be as bad here as in, say, the United States. There may be no crisis. But we cannot be complacent, given the democratic deficits that do exist, and the growing attempts to instil mistrust, manifested most obviously by the parliamentary grounds occupiers.

According to journalists, governmental abuses of the Official Information Act – delaying responses to questions, redacting information and other subterfuges – are as bad as ever. Statistics claiming to show more requests are answered on time may simply reflect the fact that officials have been asking for more extensions.

And all this pertains to just one half of the relationship between the governors and the governed: the dissemination of data from the former to the latter. More important, probably, is what runs the other way – the ability of the public to become involved in shaping the political decisions that affect them.

A strong democracy may, as Ardern said in her speech, rely on “debate and dialogue”, but it depends equally on political participation. If we are to build trust in government, that g​overnment needs to be much more open and responsive to citizens’ input.

This would mean, at a minimum, involving citizens more in designing the services they use, so that things happen with them rather than to them. Beneficiaries and frontline Work and Income staff should be able to co-design the way that welfare offices work, rather than having these things handed down from on high.

This would also mean adapting overseas innovations like crowdsourced legislation, in which ordinary individuals work together to suggest laws and even write new constitutions. Or citizens’ assemblies, in which a demographically representative group of people is selected to discuss a major issue and make recommendations that set or influence policy. Or community-led budgeting, in which residents hold public meetings to debate, and then directly allocate, part of a city’s infrastructure budget.

All these things are happening, right now, in other countries. They work, they deliver better services and they build trust. They provide spaces for citizens with very different perspectives to encounter each other, to listen and learn, and to find consensus.

Yet Labour had made no noticeable steps in this direction before the pandemic, and there are few signs of greater impetus now. If the prime minister wants to leave a substantive legacy, that needs to change.

Stuff: Poorer Kiwis sidelined in rush to help ‘squeezed middle’

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It’s always a bold move, in a Budget, to deliberately bar the poorest New Zealanders from its centrepiece policy. Yet that’s what happened yesterday.

The surprise announcement of a $350 ‘’cost of living’’ payment was carefully targeted to the ‘‘squeezed middle’’, excluding anyone earning over $70,000 – but also those receiving the winter energy payment, among them pensioners and everyone else on a benefit.

The Budget does, admittedly, have some bright points, the starriest of which is to reverse an inexplicable and decades-long injustice for sole parents on benefits. Up until now, child support payments from their ex-partners have been taken by the state to “offset” the cost of their benefit.

This has always been bizarre: the point of child support is to do what it says on the tin, support children, not reduce a government’s net welfare costs.

Campaigners have urged the full “pass-through” of child support, as it is known, for years now, and will be delighted. Some 40,000 parents will benefit, typically by $24 a week, and an estimated 6000-14,000 children will be lifted from poverty. Elsewhere, Community Service Card holders will get permanent half-price public transport, and poorer households will have their dental grants increased from $300 to $1000.

But that’s about it from a Budget mostly devoted to salving middle-class pain. In one sense, it’s scarcely surprising: middle-income voters swing elections, and they feel – rightly or wrongly – that previous Budget packages, and their big benefit boosts, have helped the bottom more than the middle.

As I’ve written before, middle-class people may say there is too much inequality – but only because they believe themselves to be its principal victims, while the rich evade taxes and the poor gorge themselves on the supposedly over-generous welfare state.

There is, though, widespread sympathy – I think – for poorer (as well as middle-class) families facing rising fuel and grocery prices. So even politically speaking, the exclusion of beneficiary households from the cost-of-living payment seems strange.

Philosophically, it looks worse still. The Government’s own logic here is tortuous. The Treasury’s Budget release says inflation will have a greater immediate impact “on low and middle-income households”.

It is, in fact, even more unequal than that: over the last decade and a bit, the cost of living has risen just over 25% for the typical household, but 35% for the poorest households. Those most affected by inflation have been excluded from the payment designed to address it.

The logic here is probably fiscal: even with beneficiaries excluded, the payment will cost over $800 million, and the Government’s refusal to raise much more tax means there is little left in the kitty.

Either way, the decision poses major problems for the Government’s anti-poverty drive and the targets it has set itself to cut child hardship in particular. It has done moderately well so far, thanks mostly to 2018’s $1 billion-a-year Families Package of payments to low and middle-income households. Anywhere from 20,000 to 60,000 children, according to the measure, have been lifted out of poverty.

But progress had flat-lined, and foodbank queues lengthened, even by the middle of last year.

Projections in the Budget paint a mixed picture: the declines in poverty, thanks to child support and other changes, are balanced out by the increases, as the cost of living bites. In a few years’ time, the projections say, child poverty will be where it is now: lower than when Labour started out, but still far higher than it should be.

Labour has three main child-poverty targets for 2024; as things stand, it will miss at least two, and perhaps all, of those targets. This is potentially disastrous for a prime minister who has put such store by this issue, and for whom kindness is supposedly paramount.

The absence of any big-bang welfare spending in the Budget was, admittedly, predictable. There has long been a sense that Labour feels it has “done” benefit increases for this term.

The problem is that the advice from officials is exactly the opposite: alongside moves to get beneficiaries into paid work, and to tackle housing and debt issues, the Government needs an equivalent of the Families Package every term if it is to keep making inroads into poverty. Yet no such package has been delivered, and even in the unlikely event of one coming next year, it would be too late, at least for the 2024 targets.

In the final analysis, the big story here is the failure of what Education Minister Chris Hipkins likes to call “radical incrementalism”, the Government’s strategy of trying to achieve its grandest goals step by step. This works only if you are prepared to increase the ambition of your policies at every point along the way. Instead what we see, for the poorest New Zealanders, is a slowdown.

Stuff: The right-wing recipe to cure climate change that is doomed to fail

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If the price of petrol continues to soar, will you be able to seamlessly shift to taking the bus instead? On such questions hangs the fate of the climate change fight.

Outright deniers having been banished to the fringes, the debate now turns on how best to reach net zero by 2050.

And while most observers believe a wide range of tools will be needed, a rearguard effort is being fought by those who would deploy just one lone policy: putting a price on carbon.

If, the argument runs, everyone has to pay a price for their carbon pollution – $100 a tonne, say – they will automatically cut their emissions. And, knowing their options far better than Beehive bureaucrats, they will find the cheapest method possible.

Such views are a throwback to 1980s-style market fundamentalism, which held that almost all problems can be solved by individuals buying and selling things. It is a largely discredited dogma.

Yet the old cry of “just get the prices right” still echoes in some corridors.

The New Zealand Initiative think-tank, scion of the 1980s right-wing icon the Business Roundtable, recently published a report accusing the Government of committing “fraud” simply by promoting other climate policies, like enhancing public transport.

The report’s author, Matt Burgess, now works for National leader Christopher Luxon. Which creates problems for the party.

Last month, its climate change spokesperson, Scott Simpson, had to publicly disavow the Burgess report, saying it “does not reflect the National Party’s view”.

Think-tankers can think all they like; Simpson has to get elected by a public that wants governments to actually do something on climate, not just attach price labels.

The Burgess report, though, is backed by ACT, which could help form the next government. Right-wing lobbyists the Taxpayers’ Union, and some of Simpson’s colleagues, take market-fundamentalist lines. So it matters that these ideas are out there – and wrong.

There are, for starters, changes that individuals and businesses simply cannot achieve. Only the government can make the investments in the national grid needed to enable more renewable energy.

Many price signals get lost in transmission.

If driving becomes costlier, but there are no decent walking, cycling or public-transport options, people won’t switch.

Ditto if carbon pricing makes an EV cheaper over its lifetime, but families can’t afford the upfront cost. Hence the need for cycleways and clean-car discounts.

The market-fundamentalist view is also short-sighted.

Decades ago, solar and wind power were expensive, and shunned by market-fundamentalist politicians. Others, fortunately, understood that if government invests in something, its massive purchasing power can help create a market, allowing firms to rapidly drive down costs through learning-by-doing.

Prices today are not the same as prices tomorrow. Those past state investments lie behind the now-plummeting price of wind and solar.

Another problem: since the carbon price increases gradually, it doesn’t always deter bad decisions now.

Firms invest in polluting technologies while they are still cheap; when the price rises, they must either abandon their stranded assets, or become powerful lobbyists for a high-pollution status quo.

Politically, too, emissions pricing alone is a losing strategy. The public feels the pain in higher prices, but sees no immediate gain. Politicians fare better if they can point to positive investments like improved public transport or job-rich green-energy schemes.

Such emission cuts might diminish the pressure on other parts of the economy to decarbonise – but if so, the government can simply reduce the number of carbon “permits” it issues to industry. It is plain wrong to say that policies beyond carbon pricing will achieve nothing.

Of course, as Burgess points out, one cheap way to meet our climate targets would be to forget about reducing the carbon we emit and simply plant more trees to suck it out of the atmosphere. But the required afforestation of another 1.5 million hectares of farmland would be politically untenable.

There is no guarantee the carbon would stay captured – what if the forests all burnt down, or were harvested with no replacement? Betting the farm on forestry, as it were, would be an unfathomable risk.

Of course prices can be a useful tool. But there is so much they can’t comprehend.

Encouraging cycling, for instance, cuts emissions – but also makes for happier and healthier people. Only by looking beyond carbon prices will we spy such opportunities.

This isn’t just a crisis: it’s also a chance, as Simpson puts it, to create “behavioural change in the way we live, do business, and exist as a society”.

It requires us to make collective decisions on collective investments – and not just force the choices onto isolated individuals grappling with a crude price instrument.

Stuff: How do we fairly tax the rich?

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The holes in New Zealand’s income tax net become more apparent by the day. When it comes to the several hundred Kiwis with fortunes over $50 million, nearly half of them – according to IRD research – pay a lower tax rate than minimum-wage workers. They take much of their income as untaxed capital gains, or find other means to avoid or evade making a larger contribution to the public purse.

At least one-third of those fortunes, my own analysis suggests, are being handed onto the next generation. Those inheritances are income, just in a lumpier, more irregular form than conventional salaries. Yet those lucky few will pay no tax on that income, as New Zealand – unlike many other countries – has no inheritance tax.

Further down the ladder, a similar unfairness applies. People who sell properties after the brightline test expires pay no tax on their income, while salary-earners pay it on every cent. Inheritances increasingly allow some young people to buy houses while others languish, property-less.

Both capital gains and inheritances, of course, are good in and of themselves; the problem is simply that not all income is being taxed equally. Every fortune has been generated partly by drawing on a common pool of resources – public roads, schools, ultrafast broadband, other infrastructure – and tax is an essential way to replenish that pool.

For this reason, a landmark 2018 OECD report recommended that countries levy both a capital gains tax and an inheritance tax. Both can be designed to exempt smaller amounts of income, enhancing their fairness and political feasibility. Some capital gains taxes exempt the family home, or the first few hundred thousand dollars of its value.

Ireland’s lifetime inheritance levy, meanwhile, allows people to receive gifts of up to NZ$540,000 tax-free, but taxes all subsequent inheritances they receive. The revenues can then be used to compensate those unlucky enough not to inherit. The focus on taxing the receiver of the income, rather than the giver, makes it harder to avoid than New Zealand’s old estate tax, scrapped in 1992.

Alternatively, the OECD report found, countries can deploy a wealth tax: an annual levy on the largest fortunes – those over, say, $2 million or $5 million in New Zealand. This effectively taxes the above flows of income once they have accumulated as wealth.

This requires upper-end wealth, including family businesses, to be valued annually, making it slightly more complex than levies that, like a capital gains tax, are applied when a sale has already been made. But Switzerland has a wealth tax, and raises several billion euros a year from it.

Some would argue New Zealand’s rich would simply head offshore. But where would they go?

Australia, with its capital gains tax? Britain, with its inheritance tax? The United States, with its capital gains tax and its inheritance tax? In all these places, New Zealand’s well-off would also pay higher tax rates on their standard salaries – 45% in Australia, for instance.

Wealthy people are less mobile than we think. In America, where each state levies its own income tax, research shows multimillionaires do not move to the states with the lowest rates. Despite its wealth tax, Switzerland has not been suddenly abandoned by its billionaires. Family ties, a country’s ability to ensure peace and order, and the quality of its infrastructure all hold people in place.

The wealthy might still move not their physical selves but their assets, hiding them in the Bahamas and other secrecy states (or tax havens, as they were formerly called). Countries’ inability to track and seize the assets of Russian oligarchs shows the success of such contemptible methods.

But that failure will only further spur the decades-long growth of automatic exchanges of information, in which tax authorities provide their foreign counterparts with details of the income and wealth held in their country by overseas residents. The international community is slowly repairing its tax net. New Zealand should do likewise.

Stuff: Labour's rearranging of the furniture does not amount to a vision

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When their political careers end, perhaps Grant Robertson and Jacinda Ardern should take up interior decoration, since they so enjoy rearranging the furniture. Whether it be polytechs, the health sector, or even the current talk of the town, Three Waters, they appear convinced that restructuring – the shuffling around of agencies and staff – is the surest route to success.

All governments are prone to restructure: it gives the appearance of being busy. When National was last in office, Steven Joyce created a bizarre super-ministry, MBIE, by wrapping housing into economic development. Labour then had to restore housing to a ministry of its own. But fewer excuses can be found for its other restructures.

Take the long-running reform of vocational education, which involves a mega-merger of the country’s 16 polytechs and institutes of technology into one body, Te Pūkenga. Nowhere do the reform documents adequately explain why this new body, unwanted by the public, is needed.

Yes, some polytechs are collapsing, partly because there is too much unnecessary competition, too many institutions offering duplicated courses. But this could surely be fixed by the existing Ministry of Education taking a stronger hand with the sector, rather than creating yet another centralised bureaucracy, distant from local communities.

And what is the wider vision here? The reform documents contain the usual banal, management-speak bingo: the new system, we are told, will be “collaborative, flexible, innovative and sustainable”. But there’s no inspiring, fully worked-out conception of a lifelong learning system in which public funds ensure people’s skills and interests are perpetually renewed.

Andrew Little’s health reforms suffer the same issues. Even if few lament the passing of district health boards (DHBs), is wrenching structural change really the solution to their defects?

Their duplication, admittedly, makes them an easy target: 20 seems too many for such a small nation. And everyone loathes the postcode lottery that leaves rural West Coasters receiving worse care than urban Wellingtonians.

But guess what? It’s impossible to deliver care completely from the centre. So the health white paper envisages “four regional divisions and a range of district offices (Population Health and Wellbeing Networks in DHB localities)”. Service decisions will still be made “close to the ground”. Welcome to the new bureaucracy, much the same as the old one.

For many issues, structural change is irrelevant. When a Christchurch woman crashes her car in Wellington, the local A&E doctors may have no access to her medical records. So let’s mandate information-sharing between agencies. Why leap straight to restructuring – especially when it’s so disruptive? Even public-sector HR managers think it “costs a lot and promises more than it actually delivers”, one New Zealand study found.

Little’s reforms will heighten uncertainty and stress for already burnt-out health workers, and damage future morale. British research suggests that, after a major restructure, staff can take five to six years to regain their former productivity.

The wastefulness is mind-blowing. And time spent restructuring is time that could have been spent improving services straightaway.

In health, again, vision is lacking. Labour could have promised to fund a truly preventative health system – the fence at the top of the cliff, not the ambulance at the bottom – or one centred on community-based care, backed by new technologies that allow self-monitoring and treatment. But nothing so innovative is clearly set out, only gestured at vaguely.

Ironically, of all the government’s proposed restructures, it is the most controversial, Three Waters, that is actually the least troublesome. The four centralised water bodies would create economies of scale, co-governance with Māori is welcome, and the water sector’s core goals – well-maintained pipes, reduced contamination, and so on – rely more on centralised standards than local sensitivity.

Still, the political backlash may require an alternative plan: forcing councils to set aside more money for infrastructure, for instance, or centralising delivery only where they fail to meet exacting quality standards. Restructuring can be politically costly even when right pragmatically.

Taken together, the restructures – even in education and health – may not be an unmitigated failure. They’re just not what you’d do if you knew what you were doing. For there’s no disguising this Government’s lack of a coherent outlook. Values and ideas aren’t in short supply; they simply haven’t coalesced into an ambitious and cohesive worldview.

Within modern-day Labour, ideology is, in the words of one former adviser, “about as popular as flared trousers”. Even when flexible, ideology makes clear what you stand for – and therefore what you don’t. It forces difficult discussions, and leads to people leaving your beloved broad tent.

Vision, for a left-wing party, also tends to be expensive, and Labour has never wanted to have tough conversations with the electorate about tax. Much easier, instead, to talk mushily about values few could dislike (kindness, anyone?), muddle some policies through, and keep on rearranging that furniture.