Red Alert

Archive for the ‘select committee’ Category

Contempt for democracy

Posted by on March 2nd, 2013

Even supporters of National’s Charter Schools have asked for changes to draft legislation currently before the Education and Science Select Committee. While the overwhelming majority of the 2,000 or so submitters have opposed the idea, and presented compelling research, facts and arguments against them, a handful of supporters have put forward suggested amendments to the Bill that are practical and sensible.

I don’t agree with the whole concept of Charter Schools, and will continue to oppose them. Nothing I’ve heard from submitters has convinced me that we need them, or that our existing publicly-owned and operated schools can’t deliver the supposed ‘flexibility’ and ‘innovation’ these new for-profit schools are supposed to showcase. But if the government is determined to plough ahead, they could at least work to knock the rough edges off the legislation they’ve hastily cobbled together as payback for the Key/Banks ‘cuppa tea’ deal.

Sadly, the government isn’t listening. They’ve already kick-started the process of setting up these new privatised schools before the Bill has even been reported back from select committee, let alone debated and voted on by the whole House. We only finished hearing public submissions on Wednesday. The committee hasn’t yet had the chance to consider what changes to recommend based on them.

This whole process has been a sham. New Zealanders don’t want to see schools set up as profit making businesses. And they certainly don’t want to see Government funding used for schools that employ unqualified teachers, and don’t have to teach to the New Zealand curriculum.

The composition of the Board to oversee the schools establishment, announced yesterday by John Banks, makes it crystal clear that the Government’s real aim is the commercialisation of the school system – not lifting student achievement. National and Act are obsessed with the idea that competition will somehow improve educational outcomes. Even the Treasury doesn’t believe that.

We should be focused on making sure every school is world-class, instead of wasting time and effort on the ideological experiment of Charter Schools. There are some positive changes in the Bill to other areas of education policy (for example more flexibility around school opening hours) but they are being well and truly over-shadowed by National’s ideological experiment in privatising education.

Op ed: Committees need opposition chairperson

Posted by on July 10th, 2012

The following op ed was published in today’s Dominion Post.

In New Zealand Parliament’s committees can and have played an important part in shaping legislation. Their current form has mixed ancestry, a bit of Westminster, a healthy dose of Geoffrey Palmer idealism, and some influence of MMP tempered by the current lack of truly independent backbenchers in our House.

Committees get the business done. More bills go to them than in any comparable overseas jurisdiction. The public, informed and not, make submissions. They are heard, amendments are made and bills are sent back to the House. Occasionally it becomes clear legislation is unworkable and it goes to the bottom of the order paper and is later dropped.


National’s priorities

Posted by on June 20th, 2012

This morning I’m at the Government Administration Select Committee. We’re currently holding a public hearing on the Estimates for Vote Prime Minister and Cabinet. Officials have just confirmed that this year’s Budget has allocated about $6.5 million of new money for a new IT system that will allow Ministers to get their Cabinet papers online.

I asked whether they had been asked by the PM to find this money by ‘reprioritising’ their existing spending. Apparently not. It seems DPMC are subject to a different standard of accountability than the rest of the public sector.

Not a great look for the PM to find $6.5 m of taxpayers money to fund a new filing system for cabinet papers in the same Budget they hiked up taxes for paperboys, a move that is only going to raise $14 million over the next 4 years. Shows where John Key’s priorities lie…

Asset Sales: Labour’s minority report

Posted by on June 14th, 2012

Last week we released our minority select committee report on the National Government’s Asset Sales legislation. They treated public opinion on this issue with utter contempt and abused the select committee process.  National has an irrational ideological obsession with asset sales. It is the one overriding priority of this government.

You can read the full report here.


Keeping our assets

Posted by on June 11th, 2012

Controversial Asset Sales legislation will face its second reading in Parliament this week. 

It is still possible to keep our assets.  In a piece recently published in the Otago Daily Times, I explain why and how.  

As my colleague Clayton Cosgrove has already pointed out, the normal process has been abused.  Just 0.6% of submissions supported the idea at Select Committee – for good reason – and there are holes in the proposal that future generations will have to deal with. 

The proposal is a dog.

Unfortunately it looks like National members of the committee had cotton wool in their ears. The Government seems determined to plough ahead with its plan to sell off our best revenue generating assets.  They have seemingly no regard for what expert submitters and the general voting public thinks.

In the face of such arrogance, some are tempted to despair.  Not so Grey Power, and other community members of the citizen led campaign to keep our assets.

People are already out collecting signatures for a citizens’ initiated referendum.  The Government could choose to ignore the referendum, but it would be foolish to do so. 

Labour has set up a website in support of the campaign to save our assets. It outlines how you can get involved. There are plenty of campaign resources and you can download petition forms.

Asset sales bill on the move

Posted by on June 8th, 2012

Parliament’s Finance and Expenditure Select Committee Chair Todd McClay has announced he expects to report the Asset Sales Bill back to the House six weeks early, instead of the original date of 16 July.

How 1448 submissions, of which 9 were in favour and 1421 were opposed, (0.6% in favour and 98.1% against) can be adequately condensed beggars belief.

But as we know National will try almost anything and when you have Treasury write its departmental report before hearing all submissions, anything is possible.

In doing so the government has abused the normal processes of the select committee and bequeathed a series of problems for future governments to rectify.

Unless there’s urgency and whether you’ve won an election or not, governments put legislation through a select committee process for two good reasons.

Firstly, you want to get it right. This bill is full of holes – many of which you can drive a bus through. The copious faults identified by expert and community submitters are compounded by a process of inadequate consideration and pre-emptory deliberation.

Secondly, you should give submitters the right to have their say because they might actually have some good ideas to improve or amend the bill. So why did they bother even going through the select committee process?  This is the government telling the experts and the community that they don’t want to listen.

It’s clear that these tactics were used to limit adverse publicity and attempt to undermine the nation-wide petition for a referendum, rather than enable the committee to go about its business in a thorough and properly considered way.

No evidence was given showing this bill will improve the economic, social and fiscal position of New Zealand. This legislation will only increase power prices, increase asset inequality and make New Zealanders poorer and more indebted to the world in the long-term.

We will know early next week if they plan to sell our assets under urgency. In the meantime listen to my interview on Radio New Zealand this morning.

Enemies of democracy

Posted by on May 24th, 2012

Yesterday marked the end of hearings on the government’s disgraceful Mixed Ownership Model Bill.

Astoundingly we were told that Treasury officials had already written their report, before all submissions were heard. It proves that the deal has been preordained and that the government doesn’t give a damn what people think. This is totally reprehensible.

National have treated submitters with contempt, in most cases only giving people a few minutes to submit and one question from the committee. Maybe it’s because they have only heard one submission in favour of their main plan for the economy.

Bereft of any principled ideas or integrity, its members like Maggie Barry have taken to bullying and intimidating submitters – even trying to force submitters to disclose who they voted for at the last election.

Everyone has the right to submit to Parliament and MPs irrespective of who they voted for. They don’t need to be bullied by Maggie Barry. That’s democracy.

The mask hiding the National Party’s typical disdain for democracy has once again slipped. They’ve made a mockery of the select committee process, the submitters and the issue that close to 80% of people oppose. The government should be ashamed.

It never had any intention of listening. Because they know that people resolutely oppose the sale. Instead they’ve had to resort to bullying members of the public who dare to speak out.

Radio New Zealand covered it very well this morning. Have a listen

Allan Peachey … a man who put kids first

Posted by on November 7th, 2011

It was both very sad and a surprise to hear about Allan Peachey’s death today. I worked on the Education and Science Select Committee with him, some of my family taught at Rangitoto College under his reign.

He impressed me with his deep understanding of education and real commitment to getting the best for kids. Ultimately for him that was the test. He was no friend of National Standards. For his passion and understanding alone, he should’ve been the Minister.

He chaired the Select Committee in a true spirit of bipartisanship and was unfailingly polite to those who came before us. We differed in our politcal views – sometimes quite a bit – but that’s politics. We are poorer for his parting.

Our condolences go out to his family.

Democracy denied by smug Nats

Posted by on August 12th, 2011

Earlier this year Phil Goff and I accepted a petition signed by almost 6,000 Kiwis concerned about the government’s cuts to compensation to those suffering from work-related hearing loss. Thanks to National, people with hearing impairment are the only group of New Zealanders required by law to demonstrate a particular percentage of disability before rehabilitation will be offered under the ACC scheme.

At yesterday’s Transport and Industrial Relations Select Committee meeting National members voted en-bloc to report back the petition of Louse Carroll and 5857 others to the House without hearing a single piece of evidence. That’s undemocratic and a slap in the face to all those who sought to have their concerns heard by their House of Representatives.

Having actively discriminated against those with hearing loss, the National government is now turning a deaf ear to their concerns. They aren’t even willing to allow them to come to Parliament and have their say. That’s frankly disgraceful. If almost 6,000 people were willing to take the time to sign a petition to Parliament, the least their elected representatives can do is allow them the courtesy of a hearing.

Of troughs and trotters……

Posted by on June 24th, 2011

On Wednesday evening, the night before examining Murray McCully over the MFAT estimates at select committee, I received the answers to my raft of questions. There is one Annex of which people should avail themselves. It is the spreadsheet of consultants and contractors and is accessible here. Have a look and see for yourself. Page 39 for starters, but there is plenty of interesting reading there.

One name stood out for me – Charles Finny, formerly of the Wellington Chamber of Commerce, now of Saunders Unsworth. Paid $54,135 for work done between 1 November and 24 December 2010. Nice pay rate for 2 months’ work! I’m sure he wouldn’t have had any sick days – oh, that’s right, he’s a bloke. No uterus, no sick days.

Charles Finny’s contract was not put out for tender. Why not? At a rate of $27,000 a month, you’d think that might be tendered. McCully wasn’t aware of the details, he said, but knew Finny had the requisite skills.  There are lots more questions to ask here – like, at what threshold does a requirement to tender kick in, etc., etc. McCully had given another gift to one of his mates.

Add that to: $75k contract to former Nat MP, Mark Blumsky for development work in Niue (requisite skills – the man used to be a shoe salesman?); current Nat MP Allan Peachey being made  Special Envoy with the permission of the PM no less, to go round the Pacific and talk about education (is that what he was elected by the good people of Tamaki to do?); current Nat MP John Hayes, appointed to chair a committee which disburses money to aid NGOs (a committee he might have to interrogate as Chair of the Foreign Affairs select committee?).

These men might all be good blokes, but how would anyone know? They haven’t been subjected to any form of competition. I thought the Nats liked competition. Nope? They just like extra perks and income. This is taxpayers’ money, not McCully’s personal slush fund.

Old dog lost his shine but hasn’t forgotten all his tricks

Posted by on June 23rd, 2011

We had Rodney Hide at select committee this morning to take questions on local government estimates. His fur seems to have lost some of its shine since the Brash coup. But he was in good form this morning: typically unrepentant on the Auckland super city IT cost blow out.

When he wrote in the Herald last June the super city’s new computer system would cost only $126 million, did he know then that it would cost another $450 million to complete over the next few years?  No, apparently not.

Continuing a discussion we had at last year’s estimates hearing, did he accept now that the Auckland ratepayer considered the whole cost of the new IT system to be a cost of the establishment of the super city, as opposed to just the initial pre-amalgamation costs?  No, again.

We got on to his new review of the system of local government which a Cabinet paper had promised would begin with stakeholder consultations open to the public, but now appears to be a series of invitation-only closed-door meetings with participants asked not to discuss the proceedings outside the meeting.

He wasn’t bothered by the secretive nature of the meetings: at least officials were consulting stakeholders, they could have just gone ahead and developed the reform proposals without talking to anyone.  I guess that shouldn’t surprise anyone. This is the Minister who handed 75% of Auckland local government over to hand-picked corporate boards who now do most of their business behind closed doors.

Would he guarantee there would be no forced council amalgamations following his review of the system of local government? His bemused expression seemed to acknowledge that barring some political miracle he won’t be around to guarantee anything after November. I think he is probably mentally moving on to other things already: his answer, no he could not give that guarantee. He didn’t know what a future Labour local government minister might do.

P.S. Nikki Kaye asked some wonderful patsy questions about how successful the super city has been. I wonder if she will be campaigning in Auckland Central on its success with Rodney at her side?

On torture

Posted by on May 15th, 2011

Last week the Foreign Affairs, Defence and Trade select committee considered a resolution from Keith Locke (Greens) calling for an inquiry by the committee into the allegations raised in the recent Metro article, that NZ Defence Forces in Afghanistan had handed detainees over to other forces (US and Afghani) who were known to torture prisoners for information. This would be in breach of the Geneva Convention, the UN Convention Against Torture, human rights in general and make a mockery of our current participation at an international level on the UN Subcommittee for the Prevention of Torture.

The Nats on the committee decided to block this inquiry. Labour and the Greens voted in favour of it and the Nats rolled us with their majority.

At the end of last year, I asked for the NZ Defence Force to come to the FADT committee and explain how the “rules of engagement” in war worked and how we maintained our commitment to our well known anti-torture position, especially in Afghanistan. This was long before there was a whiff of a story from Jon Stephenson (Metro).  Kevin Riordan (NZDF’s head legal man) came and gave us a full briefing in public session (although noone from the public was there!), explaining that when detainees are held by NZDF soldiers, the decision on who to hand them over to, particularly if we knew they were likely to be tortured, went right back to the head of our NZDF. This isn’t a decision made by anybody in the field – it goes right to the top – in this case, GG-designate, Gerry Mataparae.

Why wouldn’t we have an inquiry into this? Our international reputation is being impugned by this journo. Are there any grounds for that? Even if it happened on Labour’s watch, wouldn’t we want to know so that it didn’t happen again? Labour is happy for an inquiry to occur. Why did the Nats vote it down?

A government with its ears tight shut

Posted by on November 3rd, 2010

Surprise, surprise, the Government has completely ignored the submissions and protests of those opposing changes to the Employment Relations and Holidays Acts.

The Select Committee has reported back on the two bills and have recommended almost no changes. In the Employment Relations Bill No 2, the extension of the 90 day no rights trial periods to all workplaces, the restricting of workers to their unions at work and the weakening of personal grievance provisions remain.

In the Holidays Amendment Bill, employers will still be able to demand a medical certificate for a single day’s absence (one of the more silly provisions that I really thought the government might ditch) and the sale of the fourth week’s annual leave and the weakening of rights around alternative statutory holidays will go ahead.

What’s annoying is while the government’s is prepared to rush through bad employment law under urgency to please an international corporation, they are not prepared to listen to the 8,000 people who took the trouble to make submissions opposing these two bills, or to the 22,000 workers who rallied across New Zealand a couple of weeks ago.

There’s nothing about these changes that will improve productivity or enhance workplace relationships. There’s nothing here that will help our wages keep pace with, let alone catch up with Australia.  This is a feeble attempt to please employers and business at the expense of some pretty fundamental rights. 

The only possible message for Kiwi workers from this is that the government has its ears tight shut when it comes to their issues – unless they want their ideas and help to get through a recession.

The H word

Posted by on October 20th, 2010

Today is an important day for wage and salary earners in New Zealand as they come out in rallies across the country protesting against the government’s determination to drive through unnecessary and unfair changes to industrial and holiday laws.

Update : By lunchtime today, 15,000 workers had attended rallies across NZ in the biggest protests against a government’s attacks on workers rights in more than a decade.  Thousands more are expected to come out during the afternoon. 

But while we’re waiting for reports on their action, here’s an ironical story (or some might use the word we are not allowed to use in parliament, the “h” word) about government members on the Select Committee in charge of the bills that workers are protesting about today.

Yesterday, National MP Tau Henare was publicly refusing to apologise for calling a teenage select committee submitter “a liar”, after he attacked James Sleep, 18, in his submission to the Transport & Industrial Relations Select Committee on the 90 day no rights bill.

James didn’t lie. I know, because I was there. He got one detail in his oral and written submissions a little bit mixed up. All Tau had to do was clarify, but instead, he called James a liar, and a bullshitter. And he’s gone further in the media saying :

Why would I apologise for a little turkey who got found out lying? He was reading out a submission and I was following it and in two parts … it was a completely different story.

He’ll get over it and if he doesn’t, well, then, too bad … He’ll learn from his experience.”

But then there is the NDU member, who had her first ever written submission to the committee sent back to her because, according to the Government members on the Select Committee, she made an “offensive comment”, which was :

Can we put John Key on a 90 day trial and sack him after the 89th day?

What?  It sounds like an absolutely fair point to me – whereas Tau Henare has used his power as a government member of a Select Committee to harass a  young person who had the gumption to show up and make a submission.

It’  s probably lucky the NDU member ddidn’t have to front the committee, because goodness only knows what would have happened to her.

more, More, MORE

Posted by on September 30th, 2010

While Red Alerters have been debating tax and GST this week, Carol Beaumont and I have been wading through the submissions to the Select Committee on the Employment Relations Amendment Bill and Holidays Bill.

Yesterday and today were long days with submissions from a mix of employers, unions and individual workers.  What’s disappointing is how employers seem to go onto autopilot – not only supporting National Party legislation, but wanting more still.

After weeks of the Minister of Labour claiming that the 90 day trial period is “voluntary” and that “employees don’t need to have a trial period if they don’t want one” her business supporters are saying that’s not enough.

Business New Zealand, EMA, the Hospitality Association, Air NZ, the Meat Industry Association, Ports of Auckland and a whole raft of other employers are saying the 90 day trial period should be the default provision for every worker in New Zealand.

What that means is your job will be subject to the 90 day trial automatically.

Depressing.  I often wonder if employers actually think, because if they did, they would know that this is not the way to productive workplaces and closing the wage gap with Australia.

However, there’s been some lighter moments.  Our Chair, David Bennett is struggling with the notion of unions and their role, even although the whole basis of the Employment Relations Act is around building productive employment relationships through good faith, trust and confidence and the promotion of collective bargaining.

His boss, John Key is quite happy to recognise unions as “social partners,” to engage with them to tap into the ideas of workers to get the economy through a recession.  The Government (along with Business NZ) confidently fronts up to the ILO every year and boast about NZ’s tripartite relationships – yet Mr Bennett thinks that unions are like lawyers – offering a service – and as such, should have no “special” rights.

Clearly, such old thinking is still alive and well in the National Party.

The consequence of the radical change in the early 1990s and the low levels of unionisation and collective bargaining is that New Zealand now has a thriving employment law industry with literally thousands of lawyers – all of them making good money out of employment relations.

We’ve heard from some of them on the select committee and while I have respect for their profession, quite frankly, few of them have a clue about the day to day relationships that are needed in the workplace to make it operate productively.

The Employment Relations Amendment Bill (No 2) and the Holidays Amendment Bill are a lawyer’s gold chest. I predict we’re going to see quite a few more of them in the Employment Authority and Employment Court in the coming years if these bills go ahead.

I knew Kiwis believed in fairness

Posted by on September 19th, 2010

A UMR survey released today by the CTU shows that 80 per cent of New Zealanders oppose the Government’s planned changes to dismissal law.  Previous polls had asked the question about whether respondents supported a 90 day trial and unsurprisingly, the majority said yes – because after all these were already allowed under previous law.

But the government’s proposed changes in the Employment Relations Bill (No. 2) remove the right of all workers to be told why they have been sacked and to challenge that reason (among other things).  As the Human Rights Commission told  the Select Committee last  Thursday  :

It is unusual for Parliament to take away rights, particularly such a fundamental right as the right of access to a hearing. Denial of redress in this manner in something as basic as employment has profound human rights implications.

The UMR Research telephone survey of a nationally representative sample of 750 New Zealanders asked the following question:

“Do you think that all employees should have the right to appeal if they think they have been unfairly dismissed, even if their dismissal was during the first 90 days of their employment?

The response was:

Yes                             80%

No                               18%

Unsure                          2%

Submissions have already begun on this Bill and will continue day and night over the next few weeks to allow the large number of submitters to be heard.  Even then, thousands of what the government calls “form” submissions and those who have gone to the trouble to add comments will be ignored.

I agree with the CTU that the government needs to rethink this policy.  People from across the spectrum of incomes, ages, regions and occupations strongly oppose what the Government is doing and that’s not surprising.  This law offends against the basic Kiwi value of fairness and access to justice.

ACT rolled the Minister of Labour’s recommendation that the  90 day no rights trial period be limited to workplaces of 50 or less and won an extension of it to all workplaces.  Surely, now ACT is so discredited, the government can afford to be brave enough to revisit this policy and do the right thing by Kiwis?

Abuse of the parliamentary process

Posted by on September 16th, 2010

An important part of our legislative process is the select committee. Almost all of the laws that come before the House are referred to a select committee for detailed consideration. The public are normally given an opportunity to make submissions, and membership of the committees is shared amongst all of the parties in the House.

Under the Standing Orders, a select committee can’t normally meet while the House is sitting. This ensures that MPs can fully participate in parliamentary debate. It also ensures that when select committees are meeting, members aren’t distracted by the need to follow what is happening in the debating chamber.

Unfortunately, the National government have taken to routinely using their majority in the House to short-circuit the process by moving referral motions to select committees such as this one:

“I move that the State Sector Management Bill be considered by the Education and Science Committee, that the committee report finally to the House on or before 24 November 2010, and that the committee have authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).”

Why should we care? We should care because they’re watering down the strength of our democratic institutions. We should care because having select committees meeting at the same time as the House sits will prevent small parties from fully participating in the select committee process (perhaps that’s why the Maori Party regularly let National MPs take their place?). We should care because it will prevent MPs being able to give select committee (or House) work the attention that it deserves.

Where a piece of legislation requires a tight timeframe, an abridged process might be justified. But the born-to-rule tories are now using this referral motion for every piece of legislation that comes before the House. It’s an abuse of parliament and it should stop.

Effective select committee submissions

Posted by on August 19th, 2010

Today I’m in Auckland all day with the Local Government and Environment Select Committee. We’re hearing submissions on Rodney Hide’s latest attack on local democracy. We’ve got a bit of a marathon session today, running pretty much non-stop from 9am to 9pm. Even then each submitter only gets 15 minutes to highlight their key points and engage with MPs on the committee.

Reading through the papers last night it struck me how some people or groups are far better than others at getting their points across in a conscise manner. There are literally thousands of pages of submissions for us to work through. I’ve made an effort to look through all of them and I have to say I read some 2 page submissions that were far more comprehensive and valuable than others that were 40 odd pages or more.

I also appreciate those submitters who come well prepared, highlight the 2-3 points that are most important to them and then spend the rest of their allotted time discussing issues with the committee. I’ll never understand why people feel the need to spend their whole 15 minutes reading their submissions aloud leaving no time for real discussion.

I now sit on several select committees and I find the work involved really satisfying and interesting. I admire people and groups who take time to submit and appear before select committees, but I do wonder how we can encourage them to be more effective in the way they do it?

Farrar on #OpenLabourNZ

Posted by on May 14th, 2010

David Farrar on Kiwiblog has some initial ideas on open and transparent govt. It’s taken me a wee while to get round to commenting on them. Which is no reflection on his ideas. I hope he’ll have more.

Here they are (in Farrar’s words):

So what are my initial ideas for an open and transparent government policy.

  1. My previous suggestion that all Cabinet level documents be automatically placed on the Internet by DPMC within six months of creation.
  2. Expanding Parliament TV to include select committees
  3. Requiring all payments (above a modest threshold) from a Govt agency to be listed on a central website

All worthy of discussion. I think making broadcasting the public sections of select committees  would be a huge step forward. Obviously not everyone’s cup of tea but would certainly make the process of government much more  visible.

Funny that I agree more with Farrar than with Trotter so far!

What do you think?

Tax and the Budget Policy Statement

Posted by on March 4th, 2010

Parliament’s Finance and Expenditure Select Committee has just released its report on the half-yearly Budget Policy Statement.  This  politely worded document contains some useful nuggets of information that arose from Bill English’s testimony to the committee, and summarises FEC members’ views of what they heard.  Some of it was reported at the time, but it is worth reiterating in the context of the broader tax reform debate.

  1. English reiterated that the tax pacakge will be fiscally neutral.
  2. Raising GST to 15% is the government’s intention.
  3. This was not presented as a “revenue raiser on its own” but was needed to help pay for cuts to tax rates.
  4. The main rate change would be at the top end, with likely alignment with the Trust rate at 33%.
  5. Although there was talk that middle and lower income earners would be “no worse off”, committee members pointed out the huge inequity of top rate reductions for the few, versus standstill at best for the many.  There is no disguising the relative shift of the tax burden.

FEC members pushed on how the government would achieve fiscal neutrality given its stated intentions to compensate for GST – the numbers did not appear to add up.    Mr English first disputed the Tax Working Group’s estimates (funny how when he agrees he quotes them) that show full compensation costs almost all the extra revenue increased GST raises; then said rate cuts woul be largely funded from taxes on property.

Having excluded a comprehensive CGT, Land Tax and RFRM, the amount able to be raised from changing building depreciation rules is insufficient (only $0.3 to $1 bn compared to a revenue requirement of $1.2-$1.5bn ).  So if the government cuts the top rate as much as they’d like, it doesn’t leave a lot left over for the great majority of taxpayers.

Mr English then wriggled around on what a partial CGT might look like – discussing a bright line test to change the “intent” rules around property speculation.  English has also proposed “ring fencing”, a measure that he has ridiculed in the past as a ‘disastrous’ proposal.( )

It is very debateable whether that would fix the tax inequity between investment classes.  It is even more dubious to suggest that the additional property taxes would all be borne by top tax rate individuals – what about retirees and middle income earners with one or two investment proprties who may need to sell up? It looks like the intervention into the property market will really be a revenue gathering exercise to pay for tax cuts to the top rate, rather than a principled approach to addressing distortions as English claims.

And nowhere in the MOF’s presentation was there any talk about closing down the other tax planning rorts.  Funny that.

More broadly, the government cannot escape the contradiction that:

  1. It says it has enough revenue to deliver big top rate tax reductions for the few (but not the many).
  2. But it will drastically reduce new spending to $1.1 bn in Budget 2010 and onwards – inevitably resulting in real front line service cuts to Health and Education.
  3. There was no discussion of restoring superannuation pre-funding, Kiwisaver incentives,  restoring contributions to the SuperFund, or R and D tax credits, even though Treasury has previously advised all are prudent and necessary.

My impression of Bill English’s presentation was that no matter how it is dressed up, the government’s intentions are stark and predictable: raise taxes for the many and cut them for the few, and cut services for the many to pay for it.