Opposition leader Simon Bridges is throwing up his arms in horror at the idea of a capital gains tax. (Photo: Getty Images)
Opposition leader Simon Bridges is throwing up his arms in horror at the idea of a capital gains tax. (Photo: Getty Images)

The BulletinApril 26, 2019

The Bulletin: Bridges pushes for bigger focus on tax debate

Opposition leader Simon Bridges is throwing up his arms in horror at the idea of a capital gains tax. (Photo: Getty Images)
Opposition leader Simon Bridges is throwing up his arms in horror at the idea of a capital gains tax. (Photo: Getty Images)

Good morning, and welcome to The Bulletin. In today’s edition: Simon Bridges puts up bill with major tax system changes, social media crackdown call unpacked, and lower crowd numbers at main Auckland ANZAC services.

This happened earlier in the week, but is worth unpacking because it would be quite a big change to the tax system. Newshub reports National leader Simon Bridges has put a bill into the member’s ballot that would index tax brackets to inflation. He says they’re tax rises by stealth which accompany rising costs of living, and as incomes go up they automatically enter higher brackets.

As Stuff’s Henry Cooke points out, under the member’s ballot it almost certain not to pass if it gets pulled out, “but would force the Government parties to vote against an effective tax cut.” National has signalled they intend to campaign on the issue, which means that if it does come out there will be a voting record of that come election time. If Labour in turn opt to campaign on any of the other, non CGT recommendations from the Tax Working Group, that would set the terms of the debate on ground that National would be comfortable with.

The policy would result in the loss of about $650 million a year in tax revenue, according to Mr Bridges’ figures, reports the NZ Herald. When the policy has come up, finance minister Grant Robertson has often pointed to that figure as money that will have to be cut from elsewhere. And while the Budget Responsibility Rules are in place – vocally hated as they are by those who want bigger investments in social services – it’s difficult to argue that the government is currently over-spending.

A point of clarification – as people go up tax brackets, they only pay higher rates on their income above the previous threshold. So while the percentage of people earning above the 33% rate for incomes of $70,000 up has risen (11% of earners in 2011 to 17% in 2016) those people are only paying 33% on what they make on top of the $70,000. Even for those in that bracket, income earned at lower thresholds gets taxed at a lower rate.

It should be noted too that this hasn’t exactly been a dominant topic of conversation around Simon Bridges this week. Rather, that has centred more on whether his leadership is in danger. Many of the questions put to him during his weekly round of breakfast interviews – like this on the AM Show Stuff did a write-off on – were about his relationship with Judith Collins. He pushed back strongly of course that anything was amiss, but it’s precisely the opposite of what he’ll be wanting to get questions about. Tax is pretty clearly the defining issue his team think they can make up ground against the government on, and it is likely to be an area of heavy focus regardless of who leads National into the election.

There’s some interesting pieces to read with regards to the social media crackdown being spearheaded by PM Ardern and French President Macron. Firstly, what are the details of it? As InternetNZ’s Jordan Carter writes on The Spinoff, much of that is yet to be hammered out. However, he says what will be important is keeping the focus and goals of the crackdown narrow and targeted, and an automated solution could end up throwing up more problems than it solves.

Meanwhile on Politik, there’s a report that indicates there’s quite a bit going on behind the scenes diplomatically to bring more countries on board. The point of that is reportedly to come up with ways to force social media companies to pay financially for their failures. That is something that other countries have attempted in the past, but will have a renewed impetus since the Christchurch attacks were livestreamed on facebook.

Heavy security measures are believed to have lowered the number of people attending Auckland ANZAC services yesterday, reports Radio NZ. That was despite many events being consolidated so police could provide adequate protection. Security was significantly tightened at the events attended by Prince William. But in fairness, that was just one city – One News reports that the turnout in the tiny town of Te Anau was about 700 people – which is pretty significant given the population of the town is only 2000.

Speaking of ANZAC, here’s an incidental detail for those who were against including any form of Muslim prayer in this year’s services to ponder. Newshub reports that members of the Muslim community volunteered to help out with dawn services around the country. Then again, that’s not actually unusual – it happens every year.

An Auckland couple are struggling after being stung with big additional costs for a so-called affordable house, reports the NZ Herald. They thought they were buying the sorts of things that makes a house a home as well – like a driveway – under a deal they signed with a housing company. But it turns out there were tens of thousands of dollars worth of ‘variables’ that weren’t included in the initial price. Plenty of their prospective neighbours also said they needed to spend more to meet resource consent guidelines. A significant amount of legal action has dogged the couple ever since.

Farmers are increasingly finding there’s good money to be made in simply growing trees and keeping them there forever, reports Farmers Weekly. The story follows Warrick and CeCe James in the Selwyn Gorge in Canterbury, who have taken on the increasingly lucrative endeavour of what is being called ‘carbon farming’ – growing permanent forests in exchange for carbon credits. The former beef and sheep farmers say it’s also about giving something back to their region and the environment as a whole.

Officials in China and NZ have been directed to fast-track work on upgrading the Free Trade Agreement between the two countries, reports the NZ Herald. It follows meetings minister David Parker has been having with his counterpart in Beijing. Mr Parker has also been talking about the progress made on defining what New Zealand’s part in China’s Belt and Road initiative will be – he says one thing NZ will be pushing for is a ‘greener’ version of the infrastructure heavy programme.

Junior doctors are likely to begin strike action again on Monday, after a call to cancel industrial action was rejected, reports Radio NZ. When the Employment Relations Authority confirmed it would facilitate mediation in May, DHBs asked junior doctors to reconsider. However, their union said the only thing that would prevent strike action was a settlement to the dispute.

Zespri is looking likely to make bigger payouts to Kiwifruit growers this season, reports Business Desk. They’re yet to confirm the figures, but at this stage the indications for growers are good. Kiwifruit is the country’s largest horticultural export earner, ahead of wine and apples.

Newsroom’s Vanita Prasad has taken a comprehensive look at the issue of migrant worker exploitation among Chorus contractors. It follows a review which found that while some decisions by Chorus had been good, they failed to prevent widespread exploitation. Union representatives welcomed the review, saying it could help stop contracting companies from acting like they’re above the law.

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Right now on The Spinoff: Summer Joyan, a 13 year old Australian who wrote an open letter to Jacinda Ardern, writes about how NZ’s PM has changed the way some Australians relate to each other. Lawrence Arabia speaks to Gareth Shute about the process of songwriting and his ambitious programme of releases. Jihee Junn compares the four major ride-sharing platforms in use around Auckland. And Alex Casey takes a look at the various, increasingly ridiculous genres of period product advertising.

Also, want something to watch this weekend? We’ve got quite a few very cool video series coming out at the moment, and have collected them all in one place to watch right here.

Today’s question to win a Spinoff pen is all about history – email thebulletin@thespinoff.co.nz with your answer. This rather depressing sign lists all the businesses that used to operate out of this small town. Over the decades it was eclipsed by bigger towns to the south. The nearest of those has a museum which is proudly displaying its first ever exhibition of Māori taonga. Name both the town with the sign, and the town with the museum. 

And congratulations to Mateusz, who got Wednesday’s answer correct at 7.03am – clearly I didn’t make it difficult enough. That answer was of course Lake Tūtira, which was the subject of this fascinating Jamie Morton piece last year.

Today’s feature you’ll really want to bookmark to dip in and out of, because it’s a deeply and majestically involved read. It’s hosted on its own website – Anatomy of AI – and looks at the web of commerce, culture, environmental resources, technology and labour that are combined to allow a consumer to speak into an Amazon Echo. So deep does it go that I can’t really summarise it further without being reductive, but suffice to say, reading it greatly broadened my understanding of the world. Here’s an excerpt:

One illustration of the difficulty of investigating and tracking the contemporary production chain process is that it took Intel more than four years to understand its supply line well enough to ensure that no tantalum from the Congo was in its microprocessor products. As a semiconductor chip manufacturer, Intel supplies Apple with processors. In order to do so, Intel has its own multi-tiered supply chain of more than 19,000 suppliers in over 100 countries providing direct materials for their production processes, tools and machines for their factories, and logistics and packaging services.

That it took over four years for a leading technology company just to understand its own supply chain, reveals just how hard this process can be to grasp from the inside, let alone for external researchers, journalists and academics.

The Warriors have lost to the Melbourne Storm with a drop-goal. The NZ Herald reports they were right on track for what would have been a hugely unlikely victory, but even their best effort of the season wasn’t enough to bring the game home. The 13-12 margin will have the Warriors wondering about what could have been, as the team stay in 10th on the ladder with most other teams still with a game to play for the round.

And in the AFL, Collingwood have won their traditional ANZAC fixture against a relentless Essendon, 73-69. Before the game, both verses of the NZ national anthem were sung, which is notable for a competition that includes no NZ teams. The game also finished in incredible scenes, with many of the Essendon fans mercilessly booing Best on Ground winner Scott Pendlebury. Collingwood’s coach opened his after-match speech by admonishing the crowd – “shame on anyone who booed a champion,” he said. Meanwhile, New Zealand’s AFL team – the NZ Falcons – will play against the AFL Academy in Melbourne this weekend.

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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