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The BulletinFebruary 22, 2019

The Bulletin: Environment taxes firmly back on agenda

Photo: Getty Images
Photo: Getty Images

Good morning, and welcome to The Bulletin. In today’s edition: Tax Working Group puts environment taxes on the agenda, social worker registration bill questioned, and DHBs bleeding red ink.

Sound the clickbait klaxon, because today’s Bulletin is all about tax policy. We’ll get to everyone’s favourite political football – the Capital Gains Tax – a bit further down the page. But it has been covered extremely extensively elsewhere, so I want to start by looking at another area of the Tax Working Group’s proposals – the full report after all being pretty bloody long. That area is the proposed environment taxes.  

To start with, I want to pull out a couple of key quotes from the introduction that give a flavour of what is proposed. Bear with me here. 

“It should be noted that no attempt has been made to incorporate possible revenue from environmental taxation in the development of revenue- or fiscally neutral packages. Suffice to say that environmental tax revenue could be recycled in a number of ways, especially to fund and support a faster transition to a circular economy, as well as offsetting the impact of such taxes on modest-income households.” (Page 8) There are clear opportunities to increase environmental taxation, both to broaden the revenue base and to help address the significant environmental challenges we face as a nation.” (Page 10) Environmental taxes can be a powerful tool for ensuring people and companies better understand and account for the impact of their actions on the ecosystems on which they depend.” (Page 11)

What does that mean in practice? Basically, under these proposals the taxes would be used to do what governments have pretty much always failed at: use brute economic muscle to force polluters to change their practices, and cut emissions. The government has a stated goal of transitioning New Zealand to a low-emissions economy, but so far haven’t really put in place any real mechanisms to get there. These proposals could actually start to do that.

But specifically, how? There are a few key concrete proposals here: a beefed up emissions trading scheme so that it operates more like a tax, use of taxes to address water pollution, expanding the waste disposal levy, and the introduction of congestion charges for transport. Pertinently, the TWG recommends in quite explicit terms that agriculture be included in those measures, though in the ‘concessions’ section, the TWG also “recommends that the Government review
various tax provisions specific to farming, forestry and petroleum mining with a view to removing concessions harmful to natural capital, while also considering new concessions that could enhance natural capital.”

In English, that basically means NZ’s nature is a big part of our economic success, so do good by the environment and you won’t get whacked, do bad and you will. A few groups have put out press releases in support, and it’s very unlikely the farming sector to welcome the new taxes that affect them here. But they’re really worth watching, because the way the government responds to these proposals will send a pretty strong signal about their commitment or otherwise to the environment.

So, the rest of it: We published a quick summary of the main proposals here, published a range of views from a range of experts here, and expert Terry Baucher has pulled out some other under-reported by important proposals here.  Our business editor Maria Slade, who has coordinated all this magnificent coverage, has also gathered up the most explosive takes on the proposed form of capital gains tax here. In terms of the political reaction, it’s probably far too early to read much of anything into it. Labour have been ultra-cautious, reports Stuff, and National are calling the CGT as “an attack on the Kiwi way of life,” reports the NZ Herald. In case you were wondering, yes, that line also makes it into the most explosive takes collection.

The finer details of the proposals will now either be accepted, refined or refused outright, and we’ll know more about that later in the year. Like it or not, we’re going to be talking about it, and over the next few weeks we’ll cover each bit in much more depth. But just to reiterate – we have at this stage absolutely no idea what the proposals picked up by the government will look like – as finance minister Grant Robertson kept saying yesterday, nothing has been ruled in or out.

Finally, I cannot leave this topic without mentioning this early challenger for most brilliant social media headline of the year. The NZ Herald got incredible engagement rates with the following tweet: “Capital gains tax will make it harder for renters, man who owns 80 Hawke’s Bay homes warns.” Honestly, I take my hat off to whoever wrote that.

The Social Worker Registration bill has passed through Parliament, meaning mandatory registration social workers. In a press release, minister Carmel Sepuloni said it would give vulnerable people greater protection, and increase standards.

But there are some significant fishhooks some in the sector are concerned about. For example, the idea that social workers will have to have specialist qualifications to work in more tightly defined roles is considered to be really tricky to implement, will throw up barriers against people continuing to work in the profession, and ignores the reality of social work. These points are outlined in much more detail by John Darroch on the Reimagining Social Work site.

Every single DHB is now financially in the red, with the total deficit now up to $207 million, reports Stuff. The numbers are pretty bad, and health minister David Clark has put DHBs on notice that unless spending is brought under control, that failure to do so could result in wholesale membership changes. One of the biggest deficits is held by the Southern DHB – the ODT reports that ministry staff have been called in to help them sort it out.

However, a major driver of the deficits is increased staff costs, so it may be that health funding has to go up to compensate. Well, go up even further – $100 million was in the last budget specifically to address deficits.

Public transport services in Wellington are in crisis over a shortage of drivers to staff them, reports Stuff. A range of train services operated by Tranzdev have been cancelled indefinitely, and dozens of bus services have been cancelled every day. Here’s a potentially pertinent detail though: Many Transdev drivers have gone to work for Kiwirail who pay better, and bus drivers have been involved in various forms of industrial action for some time now. Given unemployment is currently so low, if these companies want to continue delivering services, one solution might be to pay their workers more. Just a thought.

New Zealand’s timber importing industry is being accused of being complicit in the oppression and environmental degradation of West Papua. Writing on The Spinoff, activist Maire Leadbetter says the importing of the type of wood called kwila contributes to what some describe as a ‘slow genocide’ in West Papua. The territory is claimed and administered by Indonesia, and there has been a long running independence movement who often clash with the Indonesian military.

There’s excellent wall to wall coverage of Te Matatini, the nationwide festival of kapa haka, on Māori TV right now. I’m just linking to their home page, because it will be well worth checking in with more over the weekend. One that I particularly wanted to highlight was this short story about the Ruatoki performance, highlighting the scourge of methamphetamine. I ask because if anyone’s got a video of it, I’d be very keen to see it – Also while we’re talking about kapa haka, this essay from Leonie Hayden about the role it played during her teenage years is a must read.

There has been criticism of Privacy Commissioner John Edwards’ decision to write an article on The Spinoff. The article was in favour of the rights of transgender people to be able to to change their gender on official documents – describing it as a matter of dignity, and a fundamental human right. Spokesperson for the group Speak up for Women Ani O’Brien discussed the article with Sean Plunket on Magic Talk, questioning whether it was appropriate. John Edwards has made a defence against those arguments, tweeting that the article was entirely within the statutory functions of his role.

From our partners: Climate change has already affected how electricity gets delivered to customers, and it’s only going to get more challenging. Vector’s Chief Networks Officer Andre Botha outlines what the lines company is doing to respond.

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Right now on The Spinoff: It’s all about the Kiwi way of life, really. Hayden Donnell takes on the idea that new taxes will be an assault on the Kiwi way of life, by asking in his acerbic and acidic style – which Kiwis exactly? Elle Hunt writes an ode to a slang term not found anywhere outside our shores – the word pashing. And Don Rowe has a weather report for the monster upcoming weekend of festivals and gigs, and that includes quite possibly the biggest gig by an NZ band of all time – the Six60 show at Western Springs.

It’s fair to say there’s probably not a lot of things I agree wholeheartedly with Reverend Francis Ritchie on. But I do have a great deal of respect for him and his work, and this piece on his blog I’m in strong agreement with. It’s called ‘The Importance of Talkback Radio,’ and goes into why it can be a unique medium in getting contributions from everyday people – in particular he singles out Newstalk ZB for that. It’s probably the most important lesson I ever took from my time producing radio, and one I try to apply as much as possible now – that people deserve the chance to have their say. Here’s an excerpt:

I’m aware that when I turn on a mic, whether it be with my co-host or by myself, that if the point of the show is audience interaction, then I bring the paintbrushes via the topics, but the audience brings the colour. It gets proven time and time again when the callers make a show surpass anything that I expected to happen. I enjoy the people that interact with the shows I am a part of. Their ability and willingness to come to the table, whether they like me/us or not is particularly important.

I devour news at a voracious rate every single day. But if all I did was read what journalists write, I’d be in a bubble. Those written articles are important, but they can only go so far. As a minister I want more – I want to know what people really think… and not just those who make a living from sharing their thoughts. Importantly, I want to hear those thoughts in conversation – which is vastly different from the seeming scattergun approach of social media where comments fly from the safety of keyboards with little consideration or in-the-moment pushback.

There’s some drama going on around Joseph Parker’s potential fight against Britain’s Derek Chisora – one that Parker’s camp was targeting as a way back to the top. It turns out it won’t go ahead, with the NZ Herald reporting Parker has pulled out, over his management’s anger that Chisora’s camp wouldn’t agree to terms. It basically comes down to a disagreement between promoters David Higgins and Eddie Hearn. Honestly, I’m unlikely to pay to watch a boxing match, but I’d put up good money to live stream a negotiating session gone wrong.

Finally, the supreme Halberg Award for the year has gone to Tom Walsh, who as this report on Radio NZ shows, wears a kilt to formal events. So good on him I say. Lisa Carrington won her third Sportswoman of the Year in a row, Winter Paralympics gold medallist skier Adam Hall won the main para-athletes category, and the Black Ferns Sevens have been named team of the year – interestingly beating a field made up almost entirely of women’s teams.

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