Open Mike 11/08/25
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6:00 am, August 11th, 2025 - 93 comments
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Today's Posts (updated through the day):
Good, Democratic, Easy-To-Support Energy Policies
New political poll predicts hung Parliament https://www.rnz.co.nz/news/political/569564/new-political-poll-predicts-hung-parliament
This is the left's election to win.
First, we need visible consensus among the left. Three individual siblings talking as a family.
Second, we need a capital gains tax that only works on the top 10 to 20%. Not from spite or politics, but to give the 'bottom 80 or 90%" a chance to catch their breath after 41 years of neoliberalism not working.
Third, have a good hard look at the governments figures. There's been several reactionary appropriations in health and defence. If the budget was a balanced budget when it came out, where's the new money coming from. Find out and shout it from the roof tops.
That poll trend against the COC has been going in the wrong directon for them was obvious with the frantic flurry of govt media re-announcements trying to pump the polls in polling week. The other sign is the oligarchs are losing patience with Luxon, with a flurry of dewy-eyed pieces in the right wing echo chamber of NZME on Erica Standford.
My view is the phone is now off the hook for Luxon – public appearances now just remind a public that has made up it’s mind how much they don’t like him.
Hipkins though is barely registering – the vacuous, visionless and centrist managerialism of the neoliberal generation of politicians is standing out like dogs balls in our two main neoliberal parties. This isn’t just an NZ problem – from Karmala Harris to the New York Democratic establishment frantically touting Andrew Cuomo to that chinless and rudderless fool Starmer to Europe’s colourless and unispiring centrist technocrats Macron, Von Der leyen and every German leader since about 1990 it is part of the disease ennervating social democracies everywhere…
That’s a bit over the top.
The centre-left isn’t brain-dead: it’s still wrestling with how to adapt from the comfy consensus politics of the 90s and 2000s to a far nastier, more polarised era. It’s messy, sure, but not the same as being useless.
The real threat to social democracy isn’t Hipkins or Labour. It’s the well-funded, highly-coordinated, and openly anti-democratic forces of the new right. They’ve dragged not just the fringes but the entire mainstream conservative movement toward authoritarianism.
Like it or not, barring some massive political earthquake, we have to fight the slow creep of fascism with the tools we’ve got.
That means even a flawed Labour party has value. We can and should back Labour as a political brand while pushing hard for genuine structural reform from within. Sniping at Hipkins might feel good, but it won’t stop what’s coming. And it also won't magically conjure up a replacement with the charisma, skills, and electoral support to drive a progressive policy platform overnight.
It's easy for the Greens to flood the media with policy. They know full well that at 11% they will not be in a position to form the government. They are also aware that Hipkins will not roll over like a labrador puppy as Luxon did. Chippy could well call another election if the Greens stood fast, knowing the electorate would punish those seen to be trying to hold the major party to ransom.
I’m not sure that’s necessarily true. The electorate already factors in the policy pressures the Greens and TPM would bring to a left-leaning government: so if Labour failed to form one, voters would likely blame Labour for not doing the deal.
In that case, it’s Labour that would be punished, not the smaller parties.
Voters aren’t going to blame ACT for being ACT or the Greens for being Green. They’ll blame National and Labour for failing to form a ministry when they have so much leverage. Or, in the current iteration, they’ll blame National for making an incredibly stupid deal.
For the past 20 years in Aotearoa, larger parties have always formed the core of any new ministry, but the electorate expects, nay, demands, that the minor parties bring more ambitious and even extreme policies to the table. That’s exactly why people vote for them.
Refusing to accommodate that reality tends to look like bad politics. And voters know who’s responsible.
Calling a new election would be an incredibly high-risk play in anything other than a hung parliament. Especially when we already have precedent for the second-place party forming a government.
"In that case, it’s Labour that would be punished, not the smaller parties."
In these cases I thought it was the smaller party, who wouldn't be more flexible, that took the fall.
Evidence elsewhere suggests that when a government collapses, or can’t be formed, the biggest party usually takes the blame.
In the UK in 1974 and Sweden in 2014, the largest party copped most of the public criticism. In the Netherlands this year, Geert Wilders’s PVV took the heat after pulling out of the coalition where they were by far the biggest party, just not the one providing the PM.
Closer to home, think of 1996–1999, when National wore much of the fallout from its messy breakup with NZ First, even though Winston Peters was the one who initiated the divorce.
The only country with a comparable electoral system that’s gone through multiple elections in quick succession is Israel. And they’re something of a special case, given the ongoing Gaza crisis and Netanyahu’s personal incentives.
Those repeated elections didn’t shift the balance of power much, but they did keep the largest party, and its leader, squarely in the political firing line.
In any case, Netanyahu remains in thrall to his coalition partners, though that may have more to do with his desperation giving them far more leverage than they’d normally have.
Lets' just hope we have enough political common sense to avoid any messy complications.
/rant alert/
"…The centre-left isn’t brain-dead…"
Debatable. All the momentum and ideological heft is coming from the right. The "centre-left" is essentially nothing more than the rump of the centrist status quo.
"…The real threat to social democracy isn’t Hipkins or Labour. It’s the well-funded, highly-coordinated, and openly anti-democratic forces of the new right. They’ve dragged not just the fringes but the entire mainstream conservative movement toward authoritarianism.
Like it or not, barring some massive political earthquake, we have to fight the slow creep of fascism with the tools we’ve got…"
Well, I would argue the four decade long, sclerotic carapace of our mainstream neoliberal consensus is a major reason we've got to this slow creep of fascism. Centrists like Hipkins and Luxon are incapable of even understanding let alone admitting the neoliberal model isn't just broken, it has failed completely. The intellectual failure of the centre is complete and it is breathtaking. the authoritarian right are the ones with momentum and the ones proposing solutions, however awful and fake and wrong they might be. They see the trend to authoritarianism and oligarchic power and the collapse of liberal democracy as a fait accompli. NZ, like the USA and Europe, is in democratic decline. Centrism is incapable of addressing any of this crisis of democracy, and this incapacity produces ineffectual, incoherent and vacillating policies and politicians. And because the centre left is ineffectual the wider left looks weak, defensive and reactive. The centre left has been reduced to just clinging to a slowly sinking ship.
The left – let alone the centre left – has yet to grasp that Seymour and Shane Jones and the rest of them are in the same camp as Trump and Putin, the only difference is Russia and the United States are further down the disease path than us.
"…That means even a flawed Labour party has value. We can and should back Labour as a political brand while pushing hard for genuine structural reform from within. Sniping at Hipkins might feel good, but it won’t stop what’s coming. And it also won't magically conjure up a replacement with the charisma, skills, and electoral support to drive a progressive policy platform overnight…"
Labour is currently part of the problem. using your argument, the ship still sinks – just a bit later. Labour if it wishes to remain relevant needs to table a new form of politics. It needs to recognise our elites seem to be no longer interested in reality. As long as Labour remains in denial of the present and stuck in the cautious politics of an increasingly geriatric society it is not part of any solution to the slow creep of authoritarianism.
Jean-Luc Mélenchon has said the left shouldn't want to force voters to socialism or "…to accept some vision of utopia… dreamt up in some office, but to regain a taste for life! And to say to ourselves we can do great and beautiful things!" When I heard him say that, I was reminded of Michael Joseph Savage, who said (I paraphrase) "…we will make mistakes, but we will make a great many good things as well..!"
So if Labour wants anything more from me than a negative vote to keep that sinking ship afloat a bit longer, it needs to table a new form of politics, grounded in hope, that will tell me how we are going to regain a taste for life, and make some good things.
Otherwise I'll wait for whatever inevitably replaces it.
I’m not defending neoliberalism, or pretending Labour is delivering the politics we actually need. They’re not. And I agree that the centre’s inability to challenge the failed consensus is part of what got us here.
But burning Labour to the ground now risks leaving nothing in place to resist the right’s authoritarian project in the meantime.
The danger isn’t just that the ship sinks faster. It’s that the people who sink it also scuttle the lifeboats.
That’s the lesson we can learn from America, Russia, Hungary, and the other backsliding states: it’s not that radical breaks from the centre are inherently successful, but that when they do happen, it’s only after years of preparation and groundwork. Building a coherent ideology, establishing financial and communications infrastructure, and relentlessly praising allies while demonising opponents.
And it's incumbent on us, not the timid, comfortable yuppie classes that run Labour, to build that infrastructure and create those conditions. They will not happen by themselves.
That doesn’t mean giving Labour a blank cheque.It means holding the line where we can, buying time, and doing the work to create a politics that can actually inspire and win.
If we abandon the current terrain without an alternative already in the field, the right will seize it entirely. And if we can guarantee anything, it's that they will not give it back.
I'm with Sanctuary on this. Incrementalism has not been working for the left in the long term. Each time the NACTs get into power they pull the centre further and further to the right.
I agree we need to build a consensus from the grass roots. But that needs someone, or group to show leadership on this, as Corbyn and Momentum did in the UK.
The NZ GP is trying to do this, but they tend to target or attract middle class liberals. Many middleclass liberals support action on climate change and on poverty and worker exploitation in a way that doesn't really require them to change their comfortable lifestyles.
They have also turned many of us women off with their liberal feminism and neoliberal transactivism. They support liberal feminist views such as calling and treating prostitution as 'sex work' and also supporting non-commercial surrogacy. Both prostitution and surrogacy are both exploitation of women's bodies in the most invasive and damaging ways that are humanly possible.
We need leadership that will spell out the need for fundamental structural change towards robust public services, income and wealth equity, environmental sustainability and REAL housing affordability, as well as acknowledging the importance of female sex-based rights and provisions.
I don't think RP is arguing incrementalism (at least not in the conventional sense). I think they're saying that if we continue to undermine Labour without a replacement plan, we risk being unable to stop fascism.
We know what we need but what happens if we don't have leadership?
I'm not entirely convinced about Res' argument, but the point about attacks on Hipkins being cheap/easy and a fail is fair. For instance, who might replace Hipkins? I don't think I've seen any credible argument for someone better. Are we assuming there is someone better?
I don't know if there's someone better than Hipkins for Labour leader. I don't get into knocking him for things he's said and have supported many things he's posted on twitter.
But, I was thinking we need grassroots leadership to build widespread support in the community. It doesn't need to be a party leader.
That's exactly what they're saying 😀
I guess my argument boils down to not letting perfect be the enemy of… well… meh.
You can't beat back the tide of authoritarianism and the slow erosion of democratic society simply by shouting really loudly. Organisation, message discipline, and communication infrastructure is all that matters.
And Labour is our best, and really only, chance to build that.
This would make a great post. Seriously, imaging if all the good things the left are doing was laid out in terms of organisation, message discipline, comms etc. All we get is about how bad we are.
this too is another whole post.
The earlier the left tells the details of it's policies…
1. The more time the guvmt has to knock them (and they have 1st dibs on the media), and
2. The more those policies will be old news, come campaign time.
The media ignore Hipkins and any small blemish is blown up as "news".
We have to flood all forms of social media with memes.
Share our good writers of the left.
"Full Employment"
"Public Health"
"Public Housing"
"Public Education"
"Cultural Safety"
"Keep our Conservation Estate"
"A Fair Democracy"
True Sanc-people seem to forget that as soon as Hipkins became leader he started rolling back Jacinda's policies, moving Labour to the right and in the process blurring the Labour versus National choice.
Wonderful descriptions sanctuary. agree wholeheartedly. cheers
Lab 33.6 Gre 9.8 TPM 3.2 =46.6
Nat 31.8 ACT 8.6 NZF 7.8 =48.2
TMP winning all 6 seats gives a 2 seat overhang and leaves parliament at 61-61.
Note:Curia is the ONLY "pollster"* to put the Greens below 10% in the almost 2 years since the last election, and it has done this EIGHT times-see Wiki link below. Mr. Farrar is clearly manipulating the numbers and should be called out on this.
*Curia is not a member of Research Association NZ
https://en.wikipedia.org/wiki/Opinion_polling_for_the_next_New_Zealand_general_election
The mincing Farrar is one of the more evil figures of NZ’s recent political history, not so much in the public eye as he was, but still slaving away in the service of his masters.
If Curia has the two Parliamentary groups so close, I wonder what a more objective picture is.
Agreed. Curia always diss the Greens. The trend is heartening, and the 6.2 % who would not name a party.
NZ's business tax rate is 28%, since forever – a bit lower than Aussie's 30%.
https://tradingeconomics.com/country-list/corporate-tax-rate
Between 2015 and 2019, Norway lowered it's coporate tax rate from 27% to 22%.
In addition to its low-ish coporate tax rate, Norway also has a wealth tax
https://www.greens.org.nz/taxcalculator
The tax rate for the majority of Australian companies is 25% if they trade and their turnover is under 50m p/a.
We could lower our business tax rate to 22% and introduce a CGT at the same 22% rate that applies in Norway.
And yes Norway does have a wealth tax but like almost all wealth taxes it is failing.
Initially it brought in about 1% of total tax revenues but is now costing Norway because the rich are moving elsewhere.
https://imglobalwealth.com/articles/norways-tax-experiment-a-costly-exodus/#:~:text=In%202022%2C%20Norway's%20Labour%2Dled,annual%20revenues%20by%20%24146%20million.
I get that some (many?) high net wealth individuals are "disgruntled by rising fiscal burdens", and if "the rich are moving elsewhere" then that shows their priorities.
I for one would not be sad to see them go.
Do you have any ideas on how we might tax the rich other than a CGT?
If we were to lose the top 10% of our taxpayers the treasury would be without 25% of all tax collected (treasury 2021) Imagine how that would decimate Health, Education and Superannuation to name the big ones.
And we need to keep in mind that the lowest 50% of earners pay no net tax at all..
I'm quite keen on a lovely lovely wealth tax. Again, high net wealth individuals who are "disgruntled by rising fiscal burdens" can move elsewhere, as they have always been able to do.
https://www.greens.org.nz/taxcalculator
And I'd be quite keen to test how realistic that particular 'If' is.
They must be earning an absolute pittance – how do these serfs survive?
“Everyone“? The Greens estimate 3% of Kiwis would pay their wealth tax – perhaps 2/3rds of those not so keen wealthy Kiwis will dodge overseas?
https://www.greens.org.nz/taxcalculator
AFAIK, France does have a Wealth Tax at present.
If you define a wealth tax as a tax on net wealth – a persons assets minus debts – France no longer has any wealth tax.
They still have property taxes which are quite expensive.
You’re entitled to your definition to suit your narrative but it does make you look a bit trollish and disingenuous.
It’s called a real estate wealth tax (IFI).
https://www.service-public.fr/particuliers/vosdroits/F563?lang=en
Incog it is obviously possible to describe any and all taxes on wealth as "wealth taxes"
Do you have a definition of a wealth tax that is different to mine?
The reason that the French maintained the tax on property was that it was the small part of their wealth tax that actually generated any taxes. When the ISF was announced Belgium started began enticing the business owners to move there for tax purposes. Most wealth is to be found in equity in businesses (shares) not property. Think of all the billionaires you can name.
Twenty years ago pretty much all of the European countries had a wealth tax. ( i.e a tax on a persons net wealth)
But they raised so little tax they have either been abandoned or severely altered.
NZ does not want to lose those wealthy people and businesses who are currently the major contributors to our tax revenue by introducing a tax that will contribute little revenue.
https://taxfoundation.org/research/all/eu/wealth-tax-impact/
Agree with all of that except the implied magnitude of talent/capital flight (the sorted will be OK), and the "contribute little revenue" bit.
I feel like a bit of a fraud commenting on economic and tax issues as I have no background in these areas except what I have lived through.
To address the six points I agree a CGT would raise little revenue in the first years. Treasury estimated that it would deliver 400m in the first year and take ten years to get to 5.9b. A wealth tax would deliver an instant sugar hit although David Parker did not seem to get a number from the Treasury.
I don't believe a CGT would be a difficult sales job as many other countries have one and they really only impact the top 20% and they can be shown to actually work.
A wealth tax will always be an easier sell because it wont touch 97% of taxpayers. But what is the point of putting all of that political energy into selling an idea that will almost certainly fail.
And to the last point I think it would be equally possible for a future government to reverse a CGT or a wealth tax.
My experience is that wealth taxes create so much societal upheaval and raise so little money that they aren't worth considering.
Please explain how a person on say 60,000 per annum pays no net tax? They pay PAYE income tax for a start, they pay GST and they pay petrol tax plus the myriad of other hidden taxes.
So where is the 'thing' that gives them back all of the income they have paid in taxes to get them to net zero tax?
This is nonsense.
Importantly for any comparison, the Norwegian economy is very substantially propped up by North Sea oil
https://en.wikipedia.org/wiki/Economy_of_Norway
Not a scenario that NZ can copy.
So Aotearoa New Zealand can't (or shouldn’t) copy Norway's wealth tax?
https://www.greens.org.nz/taxcalculator
Shane is trying
Shane Jones is a fool. There is no great oil and gas field to discover***.
He is also a liar, the decline in gas supply is not from lack of new licenses for exploration (there was a loss of interest to search using existing licenses***) but decline of product from existing fields.
PS. It takes a decade or so to get from exploration to supply. 2018 ….. NZF was a coalition partner back then
Not just the continuing supply from the field, but their building of a rather large sovereign wealth fund. That will deliver revenues for longer than their oil fields.
A capital gains tax targeted at the wealthiest makes sense. Most capital income is already concentrated in the top 20%, so in practice it’s not “universal” in its impact.
But I’d push back on the idea that low business taxes are what keep an economy thriving. I’d argue the stronger case is that government spending drives business profits: not the other way around.
Much of what businesses earn comes from customers whose incomes are sustained by public investment, infrastructure, and services. Set business taxes too low, and you just inflate profits without boosting productive investment, while starving the public budgets that sustain demand.
In the long run, that means less growth, not more.
The real balance is pairing fair business taxation with ways to capture excess wealth, like a well-designed CGT, so both the public and private sides of the economy can thrive.
Without the businesses of a nation generating profits a government has no money to spend. So how could it be that government spending drives company profits?
It's basic economics. Government spending isn’t limited by corporate profits alone.
Revenue can come from personal taxes, sales taxes, customs duties, fees, royalties, borrowing, or even currency creation. This allows governments to spend in ways that directly raise business revenues, such as awarding contracts for infrastructure or purchasing goods and services.
The wages and payments from these projects ripple through the economy as workers and suppliers spend their income, boosting demand for other businesses.
Public spending also builds and maintains the infrastructure and institutions: roads, ports, schools, courts, and regulatory systems, that make profitable businesses possible.
This creates a feedback loop: public investment supports private profits, and growing economic activity in turn increases government revenue from multiple sources. Crucially, because governments can raise funds beyond corporate taxes, they can inject spending that stimulates profits before those profits exist.
This cycle is one reason why corporations in developed economies tend to be more stable and consistently profitable: strong, predictable public investment supports a healthy business environment.
In many emerging economies, where public revenues are less diversified and institutions weaker, this cycle is often interrupted by the cramping of public investment via graft, or the undermining of regulations by established actors.
Which, in turn, makes corporate growth more volatile and crashes more severe.
Res I'm sure you know a lot more about economics than I do but aren't all personal taxes, sales taxes, customs duties, fees, and royalties the result of business activity?
Surely a country can only borrow if lenders believe it will have the future income to repay the loan. And that money can only come from businesses that generate profits.
As for the idea that governments can just create money. Credit with no creditor. Heaven with no hell. If it worked why wouldn't everyone be doing it?
Public debt in New Zealand isn't too bad as a proportion of our GDP. But our public income is forecast to stay down into at least 2030 because the public tax take is low, because the economy is low.
Our private debt is now a big cooling factor across much of our economy because it is so high. Business and households who own houses are just keeping very, very tight. That also means no one is hiring.
The Reserve Bank doesn't help either. Currently lenders in the form of banks aren't lending anywhere near as much as they used to, particularly in mortgage loans. The Reserve Bank DTI limits in particular have put a severe dampener on real estate loans and hence the entire Auckland economy.
The Auckland Chamber of Commerce as of Friday is really clear that this government needs to do more to stimulate the economy.
Luxon's response was that they will continue to double down on cutting government spending. So we are going to stay in a recession in no small part caused by the government and the Reserve Bank.
Money for nothing.
Its much much simpler than that actually. The RBNZ is monopoly issuer of the $NZ, its the only place these get issued and it gets given license to do that by the govt. When any payments are made between the govts account and/or between other commercial banks accounts (e.g paying somebody at a different bank), these happen inside the RBNZs payments system. Obviously the RBNZ doesnt need anything to credit/debit these records. The RBNZ also doesn't need anything to loan interbank reserves to any banks, which it loans out at the OCR.
This also demonstrates that borrowing by the govt is actually not necessary for payments to be made, it could do away with this by having the RBNZ instead issue it an unlimited overdraft on its account and this would work as well. In exceptional circumstances the govt presently gets the RBNZ to purchase lots of govt debt (using the RBNZ ability as a currency issuer) which is also the same as having an unlimited overdraft (we call this Quantitative Easing).
To finish off the question arrises why the govt borrows when it doesnt really need to. The reason is for maintenance of monetary policy, e.g the ability of the RBNZ to maintain an above 0% OCR. If the commercial banks have plenty of clearence funds in the payments system (see above) then the value of these heads towards 0% which the RBNZ doesn't want. Instead these get locked up in govt bonds for an interest rate which is considered suitable for the low risk of the govt defaulting in the currency it issues (sometimes its called the risk free rate of return for this reason).
I think that money generally is created by the trading banks, when they make loans or mortgages. Governments borrow from the RBNZ by issuing them with government bonds, and then they make payments directly to the banks. If the RBNZ thinks it needs to reduce the money supply it can sell government bonds in the money market.
The RBNZ is probably not needed for this process since the whole process could probably be handled within Treasury, who could just sell bonds, or buy back bonds, when they think it necessary.
PS: The RBNZ's role in supervising the trading banks could be handled perhaps by the government audit department, so we could perhaps disestablish the RBNZ altogether. That's an idea which the CoC didn't think of when it planned on reducing the size of the public service.
Commercial banks also create their own kind of money, it's classified as most of M3. They don't however create clearance funds (also called high powered money) so won't necessarily be able to clear the payments they have made loans against or hold deposits for by themselves. Any payment to/from the govt or another bank clears through this system.
This is where the RBNZ and its OCR policy comes in, when banks are systematically short on clearance funds the RBNZ stands ready to loan these at the OCR present interest rate (which is also why the commercial banks flexible rates tend to go up and down in sync with OCR decisions). Any payment between a commercial bank and government clears through this system too.
Looking at quantities making up the money supply is generally going to be miss-leading. In the case of systematic shortage of clearance funds the RBNZ does not have much choice but to lend these (it's generally not mandated to allow commercial banks being unable to clear their payments). This means the RBNZ is unable to actually limit the amount of these funds, and puts the changes in M3 in the lead here. The RBNZ can increase the OCR in an attempt to limit peoples interest in borrowing, though historically this didn't stop house prices shooting up even with the OCR over 8%, it's not an effective control. More fundamental limits to how much commercial banks are allowed to lend could limit this in some ways, but its not something the RBNZ does with regulation directly anyway. The RBNZ does not target a quantity of money supply in any way, and when it last attempted to do so (about 1986/1987) it was ineffective and turned into the present OCR policy framework instead.
Depends on which economists you believe. Modern monetary theory – Wikipedia is reliant on the concept that, among other things, governments create money by spending it and destroy money by taxing it, in that order, so are never reliant on taxation because the government creates and spends the money first.
Craig I just checked your link on Modern Monetary Theory and apparently the idea comes from the same guys that gave us Modern Transgender Theory.
you'll have to explain that if you want to not look like a troll.
Just making a small joke
Werner is much better at it.
Prof Werner and all MMT economists understand banks in exactly the same way.
What is the basis of your claim, given the link provided in 2.3.2.1.2 shows no such connection?
How does a CGT help the bottom: low wager earners and beneficiaries? To me a CGT is what you do when you don't want to end poverty.
If the idea is that it will create revenue for government and thus lower income tax, is that what Labour is intending to do? Will they raise benefits?
Capital gains taxes would seem to be a government's "soft option". They can justify it simply by saying that "every other modern economy has a capital gains tax'. A better tax regime for rentals, in my opinion, would be to disallow tax deductions for interest, but allow deductions for depreciation (the latter is not the case at present). An excess depreciation claw back, limited by any capital gain, should operate when and if a property is sold.
An economy is like an engine that you can’t switch off while you repair it. You have to make adjustments on the move.
A CGT is one such adjustment: simply a way to redirect capital, improve productivity, and ease housing costs, all while the economic “engine” keeps running.
A CGT can:
When wealth piles up in property speculation, it doesn’t create new goods or services. It just bids up prices
While the effect would depend on housing supply and other factors, it could contribute to correcting the historical trend towards overvaluation in the property market.
So no, it's not a magical panacea that will eliminate poverty overnight.
But it could be a practical first step towards addressing several of the structural weaknesses that hold New Zealand’s economy back.
1 and 2 make sense to me. I’m not so confident that the increased revenue would be well spent, but the potential is there.
I’m sceptical about improving housing affordability. I don’t see how that works, apart from slowing down things getting worse. Housing is our gnarliest problem, and tweaks like CGT won’t really do much. If it were used alongside other factors, sure. But Labour aren’t looking at a whole systme design.
In many ways, house prices are shaped by capital flows, tax policy, and basic supply and demand. One reason so much of our capital is tied up in real estate is the relative tax advantages it enjoys compared with investing in the sharemarket or starting a business.
A capital gains tax that makes property speculation less attractive would likely cool the housing market by reducing demand, and could improve affordability by redirecting investment toward productive sectors that lift wages and economic output.
You’re right: we do have to look at the whole system rather than cherry-picking the easy or popular parts. But on the other hand, we also have to start somewhere.
As I suggested before, A CGT wont “fix” anything on it's own. But it’s one lever in a bigger toolkit. And the longer we wait to start pulling the obvious levers, the more entrenched the problem gets.
I understand the theory, I'm just not convinced that it would make a difference in NZ.
What sort of numbers are we talking about? People make less profit but still making profit?
What would people invest in instead? are all investors equal? If people can afford to buy houses and leave them empty, what difference will a CGT in NZ make in real terms?
A CGT wouldn’t stop every investor from buying property. Especially those wealthy enough to leave houses empty. But it would change the maths for a significant portion of the market, particularly leveraged investors who rely on both rental income and untaxed capital gain to make the numbers work.
If the after-tax return from property drops, some of that capital will flow elsewhere: into shares, private equity, business expansion, or other productive assets.
No, not all investors are equal, but it’s those marginal ones (those right on the edge of buying or not buying) who set the pace of price growth. That’s where the cooling effect happens.
Here’s a simple example:
Take an $800,000 rental, earning $35k/year in rent with $10k in expenses, and growing at 5% a year.
That ~$75k difference might not faze the ultra-rich, but it’s enough to change the behaviour of investors who are borrowing heavily or chasing quick gains: and those are the very people whose bidding drives prices up.
thanks. Do we know how many investors would be affected? (assuming no CGT on first property owned by people rather than legal entities)
That ~$75k difference might not faze the ultra-rich, but it’s enough to change the behaviour of investors who are borrowing heavily or chasing quick gains: and those are the very people whose bidding drives prices up.
I agree that it would be good to discourage investors who are borrowing heavily and driving up housing prices, but removing deductibility of interest would, I venture to suggest, be just effective, in achieving that, as a CGT. This would better than a GST since interest being a non productive expense should not be deductible anyway.
Raise government revenue
Perhaps. But asset prices seem under pressure at present. However wealth is always present and can be taxed.
Support a more productive economy
Alternative investments such as company shares are not necessarily more productive.
Improve housing affordability
There are probably better ways of achieving that: mandating higher interest rates on rental investments, or getting rid of tax deductibility for interest. Another possibility would be to adopt the Opportunities Party suggestion of a 100% deposit requirement on purchases of rental properties.
Actually, one of the problems with capital gains taxes is that interest paid over time, even if deductible, is unlikely to be offset by capital gain, which means that any gain is illusory unless interest payments are passed on to tenants. But this just increases rental values.
A direct tax on wealth is preferable.
I think there’s a subtle distinction here: investing in the share market may not always be as profitable for the investor, but it’s generally more productive and contributes more to the economy via funding businesses, innovation, and jobs.
By contrast, capital tied up in land does nothing for the wider economy. It can’t be accessed by those who need it, and it mainly serves to line the pockets of the landlord class and prop up the big banks.
I can absolutely accept the long-term necessity of a wealth tax. But I don't think it's a thing we can get to overnight.
I think there’s a subtle distinction here: investing in the share market may not always be as profitable for the investor, but it’s generally more productive and contributes more to the economy via funding businesses, innovation, and jobs.
Investing in the stock market may enrich the seller of the shares, as well as increase the share price, but it does not increase the the amount of money invested in productive activity (unless of course those shares are part of an initial public offering).
It is not possible to restrict CGT to the top 20%.
It is possible to restrict CGT to limited areas as we have done.
1. IRD focus on those doing up houses and flicking them on for profit
2. the bright-line test
But the top 20% would be those who make their money in business investment and or ownership, larger scale property ownership (farming) and those who have multiple properties (Luxon types) and other rich people (gold, coin, shares, paintings etc).
Options
1. a bright line test at 20 years as Treasury advise.
2. follow foreign company tax models – a lower rate on small companies 27 to 20-25% financed (local) by a larger tax on others such as at 33% on banks/supermarkets (often foreign owned). More money, after tax, is in the local economy. This was the US model pre Trump.
3. follow the tax design of Ireland and UK.
A CGT, a stamp duty (I'd use 5% on that over $2M), an estate tax (we had till 1993) and gift duty (we had till 2013).
I'd vary the estate tax system by collecting in it in advance of death (a pre payment, via 1% on assets, so that we get the money early – as we need it now).
4. something original
a 1% charge on the mortgages of landlords (excluding new builds).
The Greens campaigning has begun, but this sums up the sate of voting in NZ. How do we convince so many people to vote-preferably an informed vote- and can we blame them for giving up on the process?
Most people were “forced to fight for daily survival” and “lament politics”, she said.
“They straight up hate it.“How do we get a mass of exhausted regular people, fed up with politics, to engage and organise with a bunch of earnest nerds – that’s us, guys – to win power against some of the most well-funded and unscrupulous industries and political actors?”
https://www.stuff.co.nz/politics/360786467/anger-wont-get-us-anywhere-swarbrick-tells-green-party-rally
Workers of the World Unite. Amidst the general hate-on of Israelis (and FYI I do not support, like, or otherwise fascists of any race, creed etc etc )
…there are those (IMO many) who do not support Netanyahu and his fellow fascists war on the innocent in Gaza. IMO this is not just for the hostages. A strike against fascism.
American President Obama tells Israeli Prime Minister Netanyahu that as long as Israel builds in occupied land there will not be peace. In the second frame Netanyahu tells an aid that he has been told to evict all Palestinians so that the land cannot be considered occupied – 21 May 2009
https://www.politik.co.nz/jones-packs-out-another-meeting
Shane Jones taking the temperature of the Brexit crowd.
Not sure if he's preaching to the converted, or gaining new voters.
Lux wittering on about the CoC's "get rid of the red and green tape" solution to the wage gap between NZ and Aussie – he's between a Tape-Scissors-Rock and a hard place.
https://www.rnz.co.nz/national/programmes/morningreport/audio/2018999372/pm-luxon-on-latest-poll-showing-labour-ahead-of-national [@7:30 minutes]
Anas Al-Sharif was one of five Al Jazeera journalists murdered today by Israel,
This is the message he prepared before his death.
https://x.com/AnasAlSharif0/status/1954654953156358335
https://www.theguardian.com/world/2025/aug/10/prominent-al-jazeera-journalist-killed-in-israeli-airstrike-on-gaza
A day after Netanyahu welcomes western journalists into Gaza (they had been banned) to observe the occupation of the Gaza strip.
Net closing on Polish despot, Netangoebbels. NZ might recognise the state of Palestine.
https://www.1news.co.nz/2025/08/11/govt-to-consider-recognising-state-of-palestine-as-early-as-next-month/
Careful now, wouldn't want to accidentally fall on the right side of history.
Not his year. It's indicated we'll only identify pathways that make a state possible.
It is Oz that might in September. Whether it does will be determined by any conditions it sets, those that do not yet exist.
It seems they will because the PA has given assurances.
https://www.timesofisrael.com/liveblog_entry/australian-pm-says-canberra-will-recognize-palestinian-state-next-month/
That'll be Mr Mileikowsky.
Current Prime Minister Benjamin Netanyahu has in his office what might charitably be described as a relic and uncharitably as a kind of political fetish. It is a 2000-year-old seal in ancient Hebrew bearing the name “Netanyahu.” Here's how Mr. Netanyahu described its political significance to the European Friends of Israel in February of this year:
What he didn't mention is how, precisely, Netanyahu came to be his last name. His father was not born with it, nor were any other of his identifiable ancestors. His father was born Benzion Mileikowsky in Warsaw in 1910. The Prime Minister's grandfather, Nathan Mileikowsky, was an ardent Zionist who used the name "Netanyahu" as a pen name for political writing. Sometime after moving to British mandatory Palestine, Benzion abandoned the name Mileikowsky altogether in favor of Netanyahu. It was common practice among early Zionists to dispense with European and especially Yiddish names in favor of Hebrew ones.
https://ibishblog.com/2011/08/17/mr_mileikowsky_and_seal_netanyahu_perilous_encounter_between_modern_nationali/
To go DNA deep, then the more recent knowns.
The Mileikowsky/Netanyahu DNA is R1a, coded Y2630, called Ashkenazi Levite and associated with the Halevi surname (that of the former head of Military Intelligence who resigned over not passing on warnings of the Hamas attack plan) aka Aharon ben Joseph haLevi (a rabbi of Spain in its Moslem era).
This R1a branch origin is in the area to the east of the Kerch bridge (pre 2000BCE).
The poor man must be quaking in his boots at the prospect of Australia and/or NZ pretending to 'recognise' a state of Palestine within unspecified borders under an unspecified government.
I'm no expert but even the momentum towards this stance becoming official in an increasing number of western countries is significant. I suppose if and when the recognition of Palestinian statehood is almost universally accepted, Israel then will be officially occupying another state and must therefore be ejected.
A Palestinian state is something which Israeli supremacists have fought long and hard against, and the reaction of those with a similar mindset to you seems increasingly desperate. For instance, the Islamophobes at Kiwiblog are chucking their toys out of the cot.
Good times.
The "good times" are a matter of to what extent you enjoy seeing your elected representatives make a fool of your country, I guess.
Sad to see where Israel is headed under the 'guidance' of far-right cabinet ministers Smotrich and Ben-Gvir, who have Bibi by the short and curlies.
https://en.wikipedia.org/wiki/Trial_of_Benjamin_Netanyahu#
Poland exists despite 123 years as an unspecified state with unspecified borders.
/
Having a distinct language, culture or religion helps a lot with that. It's why the Kurds have a far better claim to statehood than the Arabs of Gaza, Judea and Samaria do, for example.
I see you prefer the place names used by the illegal occupiers. It's a form of dead-naming employed by Israeli supremacists.
Note it is Z93, not Z94.
https://cache.eupedia.com/images/content/R1a_migration_map.jpg
The Y2630 line is derived from R-Y2619 paternal line – this branched off from its ancestor R-CTS6 and the rest of humankind around 1300 BCE.