Good morning, Nat. While I agree 100% that our supposedly progressive tax framework is anything but, I would argue that most left-leaning people are aware of this, and it is largely a matter of political cowardice and inertia that has seen left governments mostly tinker around the edges, rather than try and shift the tax system away from income, labour and spending towards capital and land, the true markers of wealth.
Universalism is indeed fairer and more popular, and crucially removes both the stigma and the sharp cliff edges, but also significantly costs more. Whenever left-leaning governments have proposed more universalism around healthcare, say, the right have derided it as wasteful and expensive, and suggested that it only be focused on “those who need it most”. This has then tended not to transpire.
You rightly point out Super as a universalised exception which is wildly popular. Superannuation is a benefit; it is welfare. It is paid out of current taxation by today’s workers for people too old to work. Yet, most recipients would snarl with disdain if you described it as such. They would say that it’s an entitlement bc they have ‘worked and paid taxes for all their life’ even though that’s not how it is funded! This is because of the ridiculous stigma of language applied to the words ‘benefit’ and ‘welfare’. Until we are more honest as a nation about what people need rather than ‘deserve’, and crucially about how we fund that, real change will prove difficult.
Hi Bob, thanks for reading and commenting. I am not sure most people are aware of this, becase you could argue that there is no political inertia or bravery becase the voters don’t fully understand what that means. At the end of the day, our politicians are incentivized by their base. I can also argue that the reason the Right reacts to the Left os becase the Left hasn’t been able to untangle its fell from the neoliberal legacy of the 80s and 90s and we can’t seem to untangle that and that is fault of the Left, Right and voters alike.
The point about Superannuation being universal but never framed as “welfare” is fair enough but I think is beside the point. Im not arguing whether people call it welfare of entitlement. Im arguing that the tax structure required to keep having it needs to be reassessed. If we were honest about how all these systems actually work, we might be able to have a more productive debate about what fairness actually looks like. Nat
Oh, and loved the housing dilemma framing as well Nat. Is housing a human right or is it a financialised pathway to tax free wealth gain? It’s difficult for it to be both. One idea wants to decrease the housing price and the other wants prices to increase. Tricky.
Yeah, that housing contradiction is at the core of so many of our problems. If we want housing as a human right, prices need to come down—but our entire economy is built on housing as an asset class, which requires prices to go up. Messy.
This is why our policies are so confused—we keep trying to make everyone happy, and in doing so, we just reinforce the status quo. Glad that framing resonated with you!
Nice work Nat, you have articulated some great insights here. I like this one: “honestly: "With the current tax system, probably the Right—because I don’t think the Left can do what it wants to do within this framework. But if the tax structure changed to raise more revenue, I’d consider voting for the Left.” And so it goes…a different emphasis on the Neo-liberal steering wheel as the worn out jalopy - dysfunctional NZ Political System - veers left and right and left and right cruising down the road to nowhere in particular. A benefit of a doctoral program is intellectual rigour. The same rigour you’ve demonstrated here needs to find its way into NZ’s political discourse. Perhaps send this narrative to Chris Hipkins and Christopher Luxon to help them fully understand that building a better-fairer-wealthier society for all New Zealanders will require genuine reform, particularly with regard to tax. Keep up the great work. 👍👍👍
Well done Nat. This is an excellent article. I disagree with many of the specifics - there is a real economy that creates real cost constraints, surely much targeting is just a variant of "from each according to his means, to each according to his needs", etc - but the challenge is exactly what NZ needs.
There is a railway tracks view of politics that puts policies either on the left of centre track or the right of centre track, that is just flat out false. Part of the knowledge people who work for the state have is how much policies labelled "left" or "right" get those labels from pure historical accident. Better to think about the policies not their origin.
Wow! This is deep! The paradoxes embedded in our political system are well hidden. As you’ve demonstrated, there are so many instances where ‘left’ can equal ‘right’ and vice versa! Add to this the ‘adversarial’ environment of Parliament and it’s not surprising people feel helpless!
I'm extremely confused by your arguments. I've also read in your comments on another article where you've agreed with someone who said the Green Party were communists. And yet here you're saying the left aren't left enough. But let's forget that and look at your discussion points.
Means testing: the left definitely understand this is problematic. That's why first year of tertiary being fees free was universal and not means tested like in the 90s. School lunches should be universal.
Community support: the left definitely thinks charity shouldn't have to exist, government policy should be better. But let's not conflate that with community initiatives and decision making. You can have community decision making without it having to be charity.
Taxes: whilst Labour may not have had a CGT or wealth tax included in their policies, the Greens and TPM had comprehensive tax policies. The left understand that people like the Mowbrays derive their wealth from dividends and profit rather than salary. Their companies also pay taxes overseas, so a wealth tax for residents would ensure we capture these types of NZers currently under-contributing.
I've only been here a few days, but already I'm appreciating the depth of detail you go into to provide a balanced argument. Unfortunately, the way my brain works is to attempt to distill the content down to a few simple points (which is in this case clearly an underappreciation of your work). The overwhelming question I'm left with, is when is one of the parties going to present a vision of what an established New Zealand looks like, instead of relying on the policies of a young country driven purely by immigration and foreign investment? (Yes, very obviously that won't be the current government.)
Thanks Natalia for another insightful article insightful article revealing the annoying complexities and contradictions of reality. The ideologies are irrelevant because as you say the real question is as you point out, “does it deliver”- so we’re back to pragmatism.
But what’s pragmatic varies according to the times. The NZ of the 50s and 60s was a small highly controlled highly protected mixed model that appeared to work well for a long time. Ultimately it became incredibly inefficient and limited.
Just like individuals the country wants/demands more and more. Radio gave way to TV, agitator washing machines to automatic, everybody wants a dishwasher and a computer and cellphone - on and on! We expect more and more services and hospitals full of machines that go ping! It all comes at a cost and unless you’re getting richer it becomes increasingly difficult.
The corollary of more taxes is how are you spending what you have. Tax policy is full of contradictions. Yes wage earners pay lots of tax and is maybe overburdened. But is capital gains fair when someone mortgages their house to the max to start a business, works incredibly hard for years, and then sells the business but has to pay capital gains tax. What’s the incentive? There are lots of those people in NZ.
If there is trade whether it’s labour or products or capital there is a market. The Soviet Union and Eastern Europe demonstrated that it doesn’t work to ignore it.
So what are you left with - a mixed model. If you’re trying to make life fair you’re tilting at windmills. People are not created with equal abilities. So where is the fine line of giving as many as possible their best chance?
You’d need the wisdom of Solomon. That’s a lot to expect from ordinary people from all walks of life in an adversarial parliament.
It looks to me that what you are saying is that there are discussions we all could and should be having about our governance policies. While your article is primarily directed at people who would see themselves as on the left, your insights speak to anyone interested in effective policy imo.
I reckon that most New Zealanders share a common goal - differing in the details, of course. We want a system where every person gets a fair shake and where those who are disadvantaged are cared for and don’t fall through the cracks.
What you are saying, I think, is: let’s look at this directly as a governance discussion. As we do so, we should recognise key constraints that exist, including the frameworks we operate within—our tax system, our welfare policies, and our market structures.
To have such a conversation, can we identify those knee-jerk, crystallised left/right positions, acknowledge them with consideration, and then allow ourselves to look as clearly as we can at the realities. Can we discuss these issues openly, without the filter of ideological purity?
How can our fiscal and policy structures be reformed to genuinely support all New Zealanders? How can we create a system that offers robust support without being trapped by bureaucratic means-testing or market-only solutions? This isn’t about sticking to ideological labels—it’s about pragmatic, outcome-based solutions that ensure fairness and opportunity for everyone.
I appreciate the conversation you’ve sparked, Nat, and I hope this dialogue encourages us all to think more deeply about how we can shape a governance framework that truly works for every New Zealander.
BTW, can I suggest you would get a lot of useful challenge from Alec Nove's "The economics of feasible socialism revisited". It fits very much with your overarching perspective in this article, but provides a left leaning antithesis to the IGPS, the-1980's-reforms-were-NZ's-Year-Zero view of the world.
Good morning, Nat. While I agree 100% that our supposedly progressive tax framework is anything but, I would argue that most left-leaning people are aware of this, and it is largely a matter of political cowardice and inertia that has seen left governments mostly tinker around the edges, rather than try and shift the tax system away from income, labour and spending towards capital and land, the true markers of wealth.
Universalism is indeed fairer and more popular, and crucially removes both the stigma and the sharp cliff edges, but also significantly costs more. Whenever left-leaning governments have proposed more universalism around healthcare, say, the right have derided it as wasteful and expensive, and suggested that it only be focused on “those who need it most”. This has then tended not to transpire.
You rightly point out Super as a universalised exception which is wildly popular. Superannuation is a benefit; it is welfare. It is paid out of current taxation by today’s workers for people too old to work. Yet, most recipients would snarl with disdain if you described it as such. They would say that it’s an entitlement bc they have ‘worked and paid taxes for all their life’ even though that’s not how it is funded! This is because of the ridiculous stigma of language applied to the words ‘benefit’ and ‘welfare’. Until we are more honest as a nation about what people need rather than ‘deserve’, and crucially about how we fund that, real change will prove difficult.
Hi Bob, thanks for reading and commenting. I am not sure most people are aware of this, becase you could argue that there is no political inertia or bravery becase the voters don’t fully understand what that means. At the end of the day, our politicians are incentivized by their base. I can also argue that the reason the Right reacts to the Left os becase the Left hasn’t been able to untangle its fell from the neoliberal legacy of the 80s and 90s and we can’t seem to untangle that and that is fault of the Left, Right and voters alike.
The point about Superannuation being universal but never framed as “welfare” is fair enough but I think is beside the point. Im not arguing whether people call it welfare of entitlement. Im arguing that the tax structure required to keep having it needs to be reassessed. If we were honest about how all these systems actually work, we might be able to have a more productive debate about what fairness actually looks like. Nat
Oh, and loved the housing dilemma framing as well Nat. Is housing a human right or is it a financialised pathway to tax free wealth gain? It’s difficult for it to be both. One idea wants to decrease the housing price and the other wants prices to increase. Tricky.
Yeah, that housing contradiction is at the core of so many of our problems. If we want housing as a human right, prices need to come down—but our entire economy is built on housing as an asset class, which requires prices to go up. Messy.
This is why our policies are so confused—we keep trying to make everyone happy, and in doing so, we just reinforce the status quo. Glad that framing resonated with you!
Nat
Nice work Nat, you have articulated some great insights here. I like this one: “honestly: "With the current tax system, probably the Right—because I don’t think the Left can do what it wants to do within this framework. But if the tax structure changed to raise more revenue, I’d consider voting for the Left.” And so it goes…a different emphasis on the Neo-liberal steering wheel as the worn out jalopy - dysfunctional NZ Political System - veers left and right and left and right cruising down the road to nowhere in particular. A benefit of a doctoral program is intellectual rigour. The same rigour you’ve demonstrated here needs to find its way into NZ’s political discourse. Perhaps send this narrative to Chris Hipkins and Christopher Luxon to help them fully understand that building a better-fairer-wealthier society for all New Zealanders will require genuine reform, particularly with regard to tax. Keep up the great work. 👍👍👍
Well done Nat. This is an excellent article. I disagree with many of the specifics - there is a real economy that creates real cost constraints, surely much targeting is just a variant of "from each according to his means, to each according to his needs", etc - but the challenge is exactly what NZ needs.
There is a railway tracks view of politics that puts policies either on the left of centre track or the right of centre track, that is just flat out false. Part of the knowledge people who work for the state have is how much policies labelled "left" or "right" get those labels from pure historical accident. Better to think about the policies not their origin.
Wow! This is deep! The paradoxes embedded in our political system are well hidden. As you’ve demonstrated, there are so many instances where ‘left’ can equal ‘right’ and vice versa! Add to this the ‘adversarial’ environment of Parliament and it’s not surprising people feel helpless!
I'm extremely confused by your arguments. I've also read in your comments on another article where you've agreed with someone who said the Green Party were communists. And yet here you're saying the left aren't left enough. But let's forget that and look at your discussion points.
Means testing: the left definitely understand this is problematic. That's why first year of tertiary being fees free was universal and not means tested like in the 90s. School lunches should be universal.
Community support: the left definitely thinks charity shouldn't have to exist, government policy should be better. But let's not conflate that with community initiatives and decision making. You can have community decision making without it having to be charity.
Taxes: whilst Labour may not have had a CGT or wealth tax included in their policies, the Greens and TPM had comprehensive tax policies. The left understand that people like the Mowbrays derive their wealth from dividends and profit rather than salary. Their companies also pay taxes overseas, so a wealth tax for residents would ensure we capture these types of NZers currently under-contributing.
I've only been here a few days, but already I'm appreciating the depth of detail you go into to provide a balanced argument. Unfortunately, the way my brain works is to attempt to distill the content down to a few simple points (which is in this case clearly an underappreciation of your work). The overwhelming question I'm left with, is when is one of the parties going to present a vision of what an established New Zealand looks like, instead of relying on the policies of a young country driven purely by immigration and foreign investment? (Yes, very obviously that won't be the current government.)
Thanks Natalia for another insightful article insightful article revealing the annoying complexities and contradictions of reality. The ideologies are irrelevant because as you say the real question is as you point out, “does it deliver”- so we’re back to pragmatism.
But what’s pragmatic varies according to the times. The NZ of the 50s and 60s was a small highly controlled highly protected mixed model that appeared to work well for a long time. Ultimately it became incredibly inefficient and limited.
Just like individuals the country wants/demands more and more. Radio gave way to TV, agitator washing machines to automatic, everybody wants a dishwasher and a computer and cellphone - on and on! We expect more and more services and hospitals full of machines that go ping! It all comes at a cost and unless you’re getting richer it becomes increasingly difficult.
The corollary of more taxes is how are you spending what you have. Tax policy is full of contradictions. Yes wage earners pay lots of tax and is maybe overburdened. But is capital gains fair when someone mortgages their house to the max to start a business, works incredibly hard for years, and then sells the business but has to pay capital gains tax. What’s the incentive? There are lots of those people in NZ.
If there is trade whether it’s labour or products or capital there is a market. The Soviet Union and Eastern Europe demonstrated that it doesn’t work to ignore it.
So what are you left with - a mixed model. If you’re trying to make life fair you’re tilting at windmills. People are not created with equal abilities. So where is the fine line of giving as many as possible their best chance?
You’d need the wisdom of Solomon. That’s a lot to expect from ordinary people from all walks of life in an adversarial parliament.
Another nice one, Nat. And important.
It looks to me that what you are saying is that there are discussions we all could and should be having about our governance policies. While your article is primarily directed at people who would see themselves as on the left, your insights speak to anyone interested in effective policy imo.
I reckon that most New Zealanders share a common goal - differing in the details, of course. We want a system where every person gets a fair shake and where those who are disadvantaged are cared for and don’t fall through the cracks.
What you are saying, I think, is: let’s look at this directly as a governance discussion. As we do so, we should recognise key constraints that exist, including the frameworks we operate within—our tax system, our welfare policies, and our market structures.
To have such a conversation, can we identify those knee-jerk, crystallised left/right positions, acknowledge them with consideration, and then allow ourselves to look as clearly as we can at the realities. Can we discuss these issues openly, without the filter of ideological purity?
How can our fiscal and policy structures be reformed to genuinely support all New Zealanders? How can we create a system that offers robust support without being trapped by bureaucratic means-testing or market-only solutions? This isn’t about sticking to ideological labels—it’s about pragmatic, outcome-based solutions that ensure fairness and opportunity for everyone.
I appreciate the conversation you’ve sparked, Nat, and I hope this dialogue encourages us all to think more deeply about how we can shape a governance framework that truly works for every New Zealander.
Gracias por un excelente y claro artículo Natalia. Ponen en términos simples el elefante en la habitación. Abrazos.
BTW, can I suggest you would get a lot of useful challenge from Alec Nove's "The economics of feasible socialism revisited". It fits very much with your overarching perspective in this article, but provides a left leaning antithesis to the IGPS, the-1980's-reforms-were-NZ's-Year-Zero view of the world.