Media and Communications Minister, Paul Goldsmith’s handling of the BSA power grab follow 80 years of abysmal leadership by National Party governments re broadcasting, which have consistently betrayed their rhetoric about supporting competition and private enterprise.

The National Party Holland/Holyoake government of 1949-1957, did nothing of consequence to roll back the Savage/Fraser Labour governments nationalisation of radio.  No private radio under National then nor any TV at all.

TV came in 1960 courtesy of the Nash Labour government.  The only sensible thing I recall about the Holyoake National administration after it won the election late 1960, was to convert the old NZ Broadcasting Service into the more independent NZ Broadcasting Corporation.

When David Gapes and co wanted to set up private enterprise radio and they were  blocked.  They decided to broadcast from a boat but the National Party Minister Scott attempted to physically block the boat from leaving Auckland.  Fortunately that failed and so we had one private broadcaster.  The law was ultimately changed but getting a radio licence was very difficult and expensive.

I well recall a hearing in Wellington where Robin Cooke QC (Later Lord Cooke) was vigorously challenging Radio Windy’s case, presumably on behalf of the NZBC.  The so called private enterprise government had made getting a licence as hard as possible.

The second TV channel also had a convoluted history.  It could have had a private enterprise channel if entrepreneur Gordon Dryden had been successful in his advocacy but the incoming Kirk government favoured it being state owned, and Dryden was awarded NZ$50,000 compensation for the shabby way it was handled.

It was Roger Douglas in the Kirk Rowling government of 1972/5 that decided to split then two channels into two competing corporations – TV1 and TV2.  This happened after Kirk died on August 31, 1974.   It meant we had two news teams around the country and a new radio entity Radio NZ with commercial and non commercial stations.

Not acceptable to National Party leader Rob Muldoon who swept to victory late 1975 and declared he didn’t want two cameras on him at press conferences and so in 1980 the two channels were merged into one – Television New Zealand.

The Lange/Palmer/Douglas government of 1984-89 introduced many reforms which included broadcasting.  This opened up the opportunity for private TV and in late 1989 TV3 commenced broadcasting as the first private enterprise TV in NZ.  Pay TV operator Sky came later in 1990.  The new Act created the Broadcasting Standards Authority (BSA) as a check on the then powerful broadcasters particularly TVNZ and RNZ.

Early this year the Ministry of Culture and Heritage issued a discussion paper on media which included a statement to the effect that as the Broadcasting Act 1989 did not cover internet radio like entities such as The Platform, the Broadcasting Standards Authority’s (BSA) scope should be extended to them.   The advantage is seen to be consistency of regulation.

Instead of waiting for the government to decide on whether to proceed down this route the BSA decided existing law did give them jurisdiction over The Platform and presumably Reality Check Radio.  This is extraordinary.

One might have thought Minister Goldsmith would have said as we do not believe it has that authority it should await a government decision.  But no, according to Kiwiblog he told RNZ’s Media Watch programme:

“That’s in the media reform package that went out for consultation …. and the government’s yet to make final decisions.  “There is a lot of noise about it at the moment.  Of course if you are in the sector you want to draw attention to yourself and so a lot has been said.  I don’t think our democracy is under threat, but it’s an interesting little exercise.

“I think there’s a very small group in that category.  They’re within their rights to test that and it may well go to the courts.  I’m happy to let that flow through the system and see how it goes”.

I hope the Minister will regret these words because they won’t be career enhancing.

What he is saying is that if The Platform has to spend $100,000 or more testing this through the courts, with the taxpayers also including big costs, he is happy with that.  Truly disgraceful in my book.  What the  Minister and so many regulators don’t understand, is the commercial consequences of their actions.

Small businesses such as The Platform often live from hand to mouth.  They have no desire, or time or the money on expensive litigation.  Only arrogant regulators, of which NZ has far too many, could make such a truly callous and dopey statement.

What would happen if The Platform were brought under the BSA.  It would be inundated with complaints that The Platform had not acceptably dealt with their complaints lodged to it in the first instance.  The Platform has many enemies who would relish the opportunity to kill it with numerous complaints.

The real issue is whether the BSA is needed today.  Before this power grab I had argued in a submission to the Ministry it should be disestablished because I could only see mischief from extending its scope.

I have reviewed the BSA’s decisions of the last year.  Most are dismissed and rightly so.  News media does make mistakes and these are sometimes corrected.  Often the complaints are about matters of judgement and there is no point in the BSA second guessing judgements made by journalists working under pressure.

I found no issue of real consequence where the BSA had a very useful social role.  The news cycle is so fast that decisions rarely if ever matter in the scheme of things.  See the number of times Palestine comes up.

The big media change since the BSA was established, is its diversity.  No one can regulate it unless they want to emulate Russia or China.  This is not hyperbole.  Just think about trying to track down commentators on every internet based operation.

Public confidence in mainstream media is around 33% according to AUT.  Extending the BSA’s coverage to the likes of The Platform and Reality Check Radio will not increase confidence in mainstream media.  Its reputation was seriously damaged by its public funding during and since Covid.  Rightly so – I am with the 67%.

PM Luxon thinks the BSA has over reached.  The Government has four options:

1. Do nothing and see what happens in the courts
2. Extend the scope of the BSA to internet operations.
3. Make the BSA voluntary for everyone.
4. Abolish the BSA.

My strong preference is to disestablish  the BSA and allow all media entities to decide whether or not  to come under a voluntary entity such as the NZ Media Council, which also handles complaints.  Self regulation works fine with the Advertising Standards Authority (ASA).

ACT and NZ First have laid out their positions.  Is it too much to hope the National Party will end its dismal 80 year record and do the right thing?  Or will it be more muddle through?

Further reading:  Peter Williams, David Farrar (Kiwiblog), David Harvey (Former judge) and Gary Judd KC, particularly on Radio Hauraki.

The Ministry for Culture and Heritage is conducting a survey with “proposals to create modern media legislation”.  A worthy exercise but the actual online standard format is extremely clunky, not at all clear in parts and seemed repetitious.

For me it gets a D.  A pity because media is too important to be left to the so called experts and vested interests, of which there are many.

Submissions can be sent to: [email protected]   It’s best to track down the consultation paper on their website: mch.govt.nz and look for Media Reform.

Here is my own take on TV/video media regulation and funding.

Screens – should they be regulated?

I have just bought a new Samsung which with help from the installer ensures I have easy access to offshore streamers and local broadcasters and streamers.   Not sure there is a problem here requiring any regulation, but if there is the state should address.  This includes captioning.

Any regulation however must have regard for NZ being a tiny market and thus there is no point in adding unnecessary costs to all, to cater for the concerns of very few.  The marketplace is fast changing and has shown itself to be very adaptable.

NZ taxpayer funded content – where is it?

At present it is not clear to me which broadcast or streaming outlets are showing content created with the financial support of NZ on Air or The Film Commission.  It would be desirable if Kiwis could have a single place where they could view and then click on a link to the broadcaster or streamer carrying the content.  Cinemas are best ignored in this respect.

Merging NZ on Air and The Film Commission?  

While there is a case for merging the two because of overlapping scopes, I am opposed for two reasons.  First, the polytechnic and health mergers have showed how inept the state is achieving sound outcomes at a reasonable cost.  Second, while the two entities do have some overlap, creating one would be an enormous concentration of power that could create an obstacle to a creator of visual content out of favour with management.  Monopolies are best avoided whenever that is possible.

A better result would be to have some directors in common between the two entities.  They might even be accommodated in adjacent office space.  The Minister can also achieve some influence on how they work together the statement of expectations.

Broadcasting Standards Authority (BSA) extension of scope?  

Its proposed the BSA coverage be extended to cover local streamers such as The Platform and Reality Check Radio.

The likes of TVNZ and RNZ have the staff  to evaluate and deflect official complaints.  The private platforms are not so well resourced.  If coverage was extended to them, the system would be weaponised against them by the very active left of centre activists on social media to drive them out of business.

As the legacy media is less dominant than it used to be, the public has alternatives which they can view or listen to.  Even though I had six years in public broadcasting in NZ, Australia and the UK, and was a director of TVNZ for six years, I no longer listen to RNZ or view TVNZ news, because to me they have both been captured by their left of centre staff.

I do look at their websites because that is efficient but subscribe to: The Times, The Economist and The Atlantic, while also providing some support for The Platform and Wellington Scoop.

One option would be to make the BSA voluntary and self funded.  The better option in my view would be to disestablish the BSA and let the industry create its own form of self regulation if it chooses.   It seems to work quite well in advertising with the Advertising Standards Authority.

The statutory requirements for balance are not effective but should be retained in the TVNZ and RNZ legislation.

Should streamers such as Netflix be required to produce NZ content?  

I oppose this suggestion because the NZ market is truly so tiny it would not be worth while for say Netflix to commercially produce content just for this market.  The net result would be either very low cost low value content just to tick a box, or higher prices for NZ consumers.  The better option is for the state funder of NZ content to consider proposals from offshore streamers to help support NZ content.

What’s not in the MCH paper?  

Rather critically the paper does not discuss, as I recall, the sharp reduction in public respect for NZ media news.  The AUT research centre for Journalism, Media and Democracy (MAD) published its fifth annual Trust in News in Aotearoa New Zealand in 2024.

“The study’s finding show trust in news in general fell significantly from 42% in 2023 to 33% in 2024 and the proportion of those who actively avoid the news to some extent grew from 69% in 2023, to 75% in 2024.”  I am with the majority despite being a keen observer of media.

Some might say public trust has fallen because the media is financially stressed as digital advertising has been largely scooped by the likes of Facebook and Google, who do not provide original NZ news content.

There is some justification for that viewpoint, but in my view it’s not the real reason.  Qualitative research would be necessary to tease out the key reasons, but I suspect they are: the medias’ uncritical accept of a modern radical interpretation of the Treaty of Waitangi, the medias general refusal to give space to climate change sceptics far less deniers and the refusal, during the Covid phase, to allow much space for those who had alternative views and were negative on the vaccine.

For me it was the Treaty issue that is by far the most important reason for dropping subscriptions to NZ media.  Important constitutional issues at stake here and when the likes of Dr Michael Bassett and quality writer Graham Adams, are locked out, what says to me is the media does not actually support democracy.

What should the government do? 

Contract with one or more quality professional researchers to explore the issues raised in the MCH paper to see what real ordinary Kiwis think about the modern media.  This exercise could also have a few sessions with people working in the industry, not just CEOs.

I think this would produce vastly better information than the clunky poorly done survey under way.

Dear Paul

As the new Minister of Media and Communications you will be inundated with heaps of free advice and special pleading, all in the national interest of course.

For what it’s worth here is my assessment

Traditional broadcasting free to air content through either satellite or terrestrial transmitters is on its way out but will survive for a few years yet. Audio visual content distributed through the internet will become dominant whether the recipients have to pay or not.

The arts can sometimes pay their way, but over the last 1000 years they have often been subsidised, firstly by the wealthy but in recent times by taxpayers. As you well know there is a fairly widespread consensus that there is a public benefit from the arts which justify taxpayer support, along with that from private donors. Quality news and current affairs on TV/screens is both expensive and can help the democratic process, provided it’s done well.

Taxpayer ownership of TVNZ creates creates extra challenges and opportunities, as it is both a broadcaster and a distributor of audio visual content, purchased offshore and New Zealand content, some of which is subsidised by NZ On Air. NZ On Air which funds audio visual content to TV channels such as TVNZ and TV3, but also many other outlets – says it’s following the eyeballs.

Taxpayers fund both the NZ Film Commission and NZ On Air, which will find their scopes overlap increasingly, as to whether NZ content is distributed by broadcast, the internet or a cinema. In some cases it will be all three.

TVNZ is not worth much more than its buildings and cash less liabilities, but its worth keeping because of its delivery capability. Clearly its eroding advertising base means that in say ten years time the advertising will only be able to fund cheap overseas content, as is the case with privately owned channels. In the near future virtually all NZ content will need to be taxpayer funded, including news.

With the exception of the USA (which does have public media), all or nearly all Western countries have an independent state owned TV channel. I think despite much legitimate criticism of TVNZ’s news and current affairs programmes the case for keeping it enjoys widespread support.

What should you do apart from gathering all the relevant facts and meet stakeholders?

First, discard the option of subsidising legacy media by reducing Korda transmission costs. That would be like doing the proverbial into the wind.

Next, while merging NZ On Air and the Film Commission might make sense, park that idea for something simpler. You need to achieve rationalisation without getting bogged down by officials as they make a meal out of it. Just sack the boards of both and create one small common board for both entities. In time they might decide to have one CEO.

Third, take TVNZ out of the contestable NZ On Air system and fund it directly to supply NZ content as is done with RNZ. Require it to spend most of this money on outside contractors with news and current affairs the exception, as it could be done in-house or by a contractor.

The advantages of these three recommendations are that:

First, they don’t require time consuming legislation, just a three word change to the Broadcasting Act 1989.

Second, they take away the NZ On Air/NZ Film Commission duopoly on taxpayer support, by giving independent companies to deal directly with TVNZ alone and not having to convince also NZ On Air their programme ideas should be funded. It’s actually close to the Maori TV model, overlooked by most commentators.

I have not commented on the quantum of support of taxpayer support which in these difficult times need not be increased for a while.

Declaration: I was a journalist for seven years from 1969-1976 including the NZBC, ABC, UPITN, BBC and NBR. From 2011-2017 I was a director of TVNZ.

Yours sincerely

Barrie Saunders

The Stuart Nash email saga has triggered calls from many to regulate the lobbying industry, with specific suggestions about what should be done. The lobbying business is often presented as something a bit sinister and certainly dodgy, compared with the honest, bias free journalism we are fed daily.

The question to be addressed is, does the problem(s) warrant intrusive regulations and if so what should be done?

The insiders and revolving doors: I agree there is a problem with Ministers and Parliamentary staffers exiting the building to return as lobbyists. The problem is they have deep knowledge of what’s gone on and relationships which could allow them to have undue influence on decision making. I agree there should be a cooling off period of at least one year and double that for Ministers.

This a restraint of trade issue not a regulation of lobbyists. Clearly it should be written into contracts for all new Ministerial staff. Compensation might be appropriate for existing Ministerial staff who had planned on having a career as a lobbyist. The Cabinet Manual would need to be changed. In both cases the rules would have to allow for a change of Government. I don’t see non Ministerial MPs becoming lobbyists as a problem, as they are typically distant from decision making.

The Official Information Act: Much more important than regulating lobbyists is the oversight of the way Official Information Act requests are handled by the public service and Ministerial offices. A lot of gaming goes on and I find the Prime Ministers’ explanation about how the Nash email to donors was deemed “out of scope”, to be totally disingenuous. Any staffer with half a brain, would have realised the email was explosive. I suspect news of its contents did travel up the system and maybe even to then PM Jacinda Ardern.

I hope the Ombudsman Peter Boshier comes up with the facts and recommends changes to the way OIAs are handled including maybe criminal penalties for unwarranted suppression of information. One option he might like to consider is having his office involved in the actual decision making – by having someone based in the Beehive.

The lobbying business: I struggle to see what’s the problem with professional consultant lobbyists, lawyers, NGO lobbyists and others from entering Parliament Buildings to promote their views and policies. It’s called democracy. Buying policies through donations to political parties is another matter and I support much greater transparency than is currently the case. (See earlier post)

The lobbying business is often described as the wild west because we don’t have the specific regulation that Washington and Australia have. So what. Where is the specific Government regulation of print journalists, the clergy, academics and farmers? We have occupational regulation of say carpenters for good reasons, but I wonder how you regulate good behaviour for lobbyists. What I do know is shonky operators will be found out quickly and will not be successful. Like every Kiwi, lobbyists have to comply with the laws of the land and the Speakers rules for Parliament.

The problem with any new law is the risk of perverse consequences and unnecessary costs. For instance a register of official lobbyists might end up creating barriers to entry for say a PR firm that might wish to lobby only once every five years. Journalists claim they don’t know why a lobbyist is in the building and seeing Minister X. They could simply ask either party. What we do know is Minister X will certainly know why the lobbyist is seeing them. If registered lobbyists were required to show all their clients on a website why not the same for every law firm or other consultancy?

There is an issue of privacy also that needs to be accommodated. Ministers need to be able to discuss issues frankly with lobbyists, just as they sometimes do with journalists.

The media: The Parliamentary press gallery has a remarkably modest understanding of lobbying. They don’t seem to appreciate that much lobbying takes place outside Parliament. It’s often more cost effective to influence the government official who drafts the first discussion document that ultimately leads to a Bill, than make a learned submission on the Bill itself. Much Government policy is not found in legislation but in regulations, standards and decisions made by Government officials. Helping shape these is the work of skilled lobbyists who have the trust and confidence of Government officials, whose only motivation is to produce good policy that works.

I was quite frankly astonished when PM Jacinda Ardern got consultant lobbyist GJ Thompson to set up her office after the 2017 election and was Chief of Staff for a while before returning to his firm. Even more astonishing was the media’s relatively passive acceptance of this amazing decision. Only Victoria University’s Dr Bryce Edwards, complained loudly about it.

I am equally astonished by the way the media uses consultant lobbyists as political commentators. With the exception of Matthew Hooton, most of these lobbyist commentators run fairly predictable party lines, with the left of centre being very consistent. I do not believe lobbyists should be used in this way because they will have many agendas which go beyond the narrow interests of specific clients.

RNZ likes to think it operates on a higher moral plane because its advertising free and its statutory requirements. To me its use of lobbyists as political commentators is a disgrace. There are plenty of journalists and others who could be used to comment on politics and it’s much better the pool is widened so we don’t get the same old running the same old lines.

Will Government act? The decision to ask the Speaker to end issuing swipe cards for consultants etc is almost meaningless. I use to have one which allow me to enter the building but no more. I even had to make appointments with the Opposition to see them because the card only got me through the front door. Had a headline once over a small article which said “Swipe card Saunders”. This has only been an issue because Parliament journalists, who have they own cards, made it so. Now some realise that it really was of little consequence.

PM Hipkins will get the Ministry of Justice to give the Government a report in 2024. We may even get a lobbyists code for how they should operate. Don’t hold your breath for anything dramatic and I don’t want the taxpayer paying for it.

What’s not discussed by commentators is the positive role lobbyists play whether industry based or consultants. They can iron out dopey ideas clients often have. They also aggregate views of their members or clients and ensure decision makers are presented with coherent policy packages. These lower transaction costs for the Government and help improve the policy making process. It’s part of the consultation process and great for democracy.

Disclosure: I was a consultant lobbyist (Saunders Unsworth) for 25 years ending in 2015. Prior to that I worked for the NZ Meat Board, the Manufacturers Federation, Labour leader Bill Rowling in opposition and NBR. I was based in New York in the late 1980s which enabled me to observe how lobbying worked in the USA.

Last year I posted “democracy or partnership” and asked what do we want.  Since then, the partnership and co-governance concepts, have gained legs with the Three Waters proposals and the twin health authorities.  In addition, at local government level in the same vein, we have seen non-elected appointees given voting rights on council committees.   

PM Ardern uses the partnership term frequently, and in a TVNZ interview with Jack Tame, National Leader Christopher also equated the Treaty with partnership. 

When starting a journey, it is useful to know where it will end, otherwise one can end up in an uncomfortable zone, where retreat is difficult.  Somehow, I suspect few political leaders, other than the Maori Party and ACT, have really thought through the partnership concept, and we are heading for a rough time, unless there is a course correction.

Since writing last year’s post I have read the famous 1987 Lands case where the Court of Appeal, then headed by Sir Robin Cooke, opined the Treaty created an enduring relationship between the Crown and iwi that was “akin to a partnership”.  This followed legislative changes prior to 1987, to move from the Treaty texts, to the “principles” of the Treaty.  The principles were not defined in statute, but given to the Waitangi Tribunal to define.     

What does the Treaty partnership mean?

When writing last year, I assumed the term meant the two parties – Crown and iwi – were equals and should be governing the country together.  In other words, that the Crown itself was a partnership.  However, after reading the Court decision and further reflection, I believe what the Court had in mind was something much less expansive, that did not radically undermine democracy, and would be less divisive than what we have today. 

I don’t believe it decreed, or even had the view that the Crown-iwi itself, was a partnership, as two lawyers might form.  I think what the Court meant was the Crown had an on-going obligation to iwi, to honour the Treaty as best it could, having regard for current realities.  One such reality is that Maori do not live under tribal leaders, and all are tribally and ethnically mixed, including with “ngati-pakeha”.  

I am comfortable with this interpretation, which is liberal but not radical.   I recognise some Maori leaders and others prefer the expanded version, which is clearly not consistent with a credible democracy.

Legal definition of Maori – some practical issues

As most know the legal definition of a “Maori”, is any descendant of a Maori, which means over time the proportion of Maori in the community with a whakapapa connection will increase, without necessarily a concomitant connection to Maori community or culture.   I accept the legal definition, even though for some, it fails the common-sense test.  To me those with predominantly non-Maori ancestors are New Zealanders or kiwis, just as I am not English or European, even though my ancestors back several generations, came from the Northern Hemisphere.  Another way of putting it is that over time Maori and Pakeha have become different ends of the same biological and cultural spectrum.     

Treaty principles

The texts of the Treaty are precise, but because of translation issues, are not entirely consistent with each other, and so we now have the “Treaty principles” courtesy of the Waitangi Tribunal. However, the problem is they are infinitely elastic . In the eyes of many they provide the scope to relate all sorts of public policies to the “principles”. This road is a guaranteed formula for endless inward looking, often unpleasant and very unproductive debates. A country pre-occupied with looking at itself, is not heading to a good place.  There are many world-wide experiences we can draw from, showing the dangers of separatist policies.     

The good news is that within our democratic system there is ample scope to tailor services for Maori, other ethnicities and social groups.   The vaccine roll-out showed the limitations of one system working for all.  The same goes for education and social services etc.  Pacific Islanders are outside the Treaty coverage but they too sometimes require tailored services.  Curiously the large Asian grouping, with several ethnicities, seems to adapt well to mainstream policies.  

Of course, in 1840 when the Treaty was signed, few if any could have thought about state provision of education, health and social welfare services, to say nothing of the allocation of spectrum frequencies, which is why these matters should be treated on a social equity basis and not some tenuous link back to the Treaty.          

We have monumental challenges with school attendance levels and slipping education standards, housing affordability, obesity, productivity, and now inflation.  This Government is over reaching itself on several fronts.  It needs to take a breather and deal in a practical manner with the real problems it can solve, instead of creating new ones around an expanded version of the Treaty.  It would be a real tragedy if Labours’ major legacy was a diminution of our quality democracy.  

All political leaders should set out clearly how they see the partnership concepts fits with democracy.  The same goes for the media, which has been astonishingly silent on the single most important issue facing the country.  ACT and the Maori Party are clear, but for the rest their collective silence is deafening.     

Updated December 2025

Tax is neither “love” nor “theft”.  Governments require a proportion of GDP to protect its citizens, provide essential services, create a prosperous society and help ensure all have the opportunity to succeed.  Some incomes are way overtaxed and there are also gaps in the tax system.

Unlike many on the right, I don’t believe the most important issue is whether the central and local government spend 25% or 35% of GDP. The real issue is the quality of spending.

There is a vast array of interest groups who argue for more spending and claim that most Government departments and agencies are underfunded.   Departments themselves rarely if ever say they are over funded and offer money back to the Crown. I believe very few departments, if any, truly knows what an efficient system should look like, and nor do most of their ministers.  The NZ Taxpayers Union is one of very few organisations that actually wants to trim Government expenditure.     

Tax policy can help, but not solve by itself, some major problems such as high house prices, income inadequacy and wealth inequality.  In the case of house prices, even if the land was free, houses still cost too much to build.  I suspect the Accommodation Supplement actually supports rental rises in the private sector.  (See my post about housing, which is mostly a supply issue) 

The complex “Working for Families”, effectively allows employers to pay less than would otherwise be the case. Worse, it creates effective high marginal tax rates for hundreds of thousands of people. It cannot be abolished in one step but its negative effects could be reduced.

The median income in NZ is around $72,000.  No one on that income should be paying 30% of their marginal income in tax, as they currently do.  Nor should anyone earning a modest $80,000, face a marginal tax rate of 33%.   Income from labour is way over taxed, capital gains are undertaxed and asset transfer from parents to children, or other recipients, are not taxed at all.  

Taxing term deposits earning a bit more than inflation is simply not fair and partially drives the push into rental housing, by those with savings. The recent reduction in house prices has reduced the obsession with buying houses to rent, which I am happy about.

The last real reform of the tax system came from Roger Douglas’s 1984-7 budgets which slashed the top rate from 66% to 33%, introduced GST at 10% and eliminated a collection of wholesale taxes.  Since then the system has become very complex and thus difficult to change without disadvantaging someone.  

I propose there be four tax brackets: 10%, 20, 30 and 40%. The tax brackets should be indexed to median incomes.  

Income tax:

Income levels

$0-36,000 (half median income) 10%

$36,000-144,000                    20%

$144,000-288,000                30%

$288,000 plus 40%

This would massively reduce Government tax revenue which would have to be offset by other taxes and expenditure reduction.

Capital gains

Currently, contrary to popular belief, not everyone can avoid being taxed on their capital gains.  Property developers and share traders (as deemed by IRD) pay income tax on their profits, while those holding some offshore shares pay a deemed rate of return of 5% on their shares.  Second home owners can pay income tax on properties sold within 10 years.  

All taxes, particularly capital gains, have technical and political problems.   Taxes on unrealised gains often create cash flow stress, if little or no income is produced, while waiting until the assets are sold can distort investment decision making.  

The Michael Cullen report went over the top by ignoring inflation and created too many compliance costs to be viable operationally and politically.  

This area requires real tax expertise.  The Government should seek advice from the experts about the best way of bringing more capital gains into the income tax net, in way that is consistent with an economic growth strategy. Labour’s recent limited announcement that replaced the current two year “bright line for houses with a 28pc capital gains test, fails that test. It fails because it does not allow for ordinary inflation as do regimes in Australia and the UK and would be technically challenging for owners selling a beach bach after 30 years, to distinguish between maintenance costs and capital upgrades.

And while inheritance taxes have some logic, they are a very hard sell in NZ. with many technical complexities, so I have given up on them    

Unlike most on the right, I actually support a universal child benefit of say around $50 with an upper limit of four children. This policy would also require across the board reduction in existing benefits to families, to done in such a way that few if any are left worse off.

Taxes for “bad goods”

At present we tax alcohol and tobacco at high rates on the basis they discourage consumption of goods because they are bad for health.  There is a case for extending these taxes, but no change should be made without the most rigorous analysis of the facts including the record of them in other countries.

Environmental taxes:   

Any extension of these taxes (including carbon taxes) should again be subject to the most rigorous analysis.

Expenditure reductions:

NZ Super:

The age qualification should be increased from the current 65, to 70, by six months each year, starting immediately. The increase from 60 to 65 happened without too much fuss. People under the age of 70 who cannot work at their normal jobs for physical reasons, could access a benefit along with other beneficiaries.

Kiwisaver subsidies:  

End all KiwiSaver subsidies and make it compulsory at the 4 plus 4% level. Michael Cullen recognised that KiwiSaver benefits high income earners most, which is why he favoured keeping a national super universal system, and not follow the Australians with their means tested state pension plus heavily subsidised contributory super scheme.   

Corporate welfare:  

End any subsidies that could be deemed corporate welfare.  Potential to save more than $1 billion

State agencies:

The government has made very modest moves to trim costs. Something more fundamental needs to be done in a considered way, to reduce the tangled web we have created, as documented recently by the NZ Initiative. Given the ineptitude shown the state when it came to polytechnics, Industry Training Organisations and the health service, clearly we have a big competency problem and far too much leeway given to external consultancies, to be confident the system is capable of reforming itself.

Numerous agencies should simply be abolished and I might even go as far as including the Human Rights Commission in that group. We simply have too many altogether which clog up the decision making process without adding any value. In the case of some departments savings could be achieved by abolishing whole divisions or roles. Not hard to do once you start.

State benefits and moral hazard:

NZ, Australia and the UK have a common problem of far too many people between there ages of 18-25 on state benefits, instead of working or being in education or training. Apart from the cost to taxpayers, this threatens the future viability of our societies and is in effect a way of condemning these young people to a life of failure. Sir Keir Starmer is acutely aware of the risks and is struggling to convince enough of his caucus to take action.

In Oz the Labor government under Albanese has a very similar challenge. Associated with this common problem is the medical profession assessing far too many of the young as being on a spectrum that justifies their not working. See NDIS in Oz and our governments latest attempt at shift the responsibility from the taxpayers to parents. Am not sure our Labour Party understands the problem.

Lindsay Mitchell has done many posts drawing attention to the dangers. It would be great if people who consider themselves to be liberals would reflect on the social risks at stake here. While benefit systems are supported widely, the moral hazard aspect must be taken very seriously. Life is largely about incentives and if sponging of taxpayers is easy to do more will take it up.

Much more needs to be done in this area.

GST:

Only if absolutely necessary GST could be increased to 17.5% or even 20%. Clearly any increase would need to be accompanied by benefit increases. One of the advantages of increasing GST is that it captures spending by those with untaxed capital gains or inheritances, and also tourists. And remember GST excludes exports so does not undermine export competitiveness.

Conclusion

The proposals would improve the lot of those of average and below income and or wealth, at the expense of the rest.  While the wealthier sections of the population would initially be worse off, they also benefit from living in a less fractured society.  

Declaration: These are my personal views which have been informed by real life experience including: Press Secretary to the Labour Party leader Bill Rowling, PR Manager NZ Manufacturers Federation, a similar position at the NZ Meat Board including a 3.5 year stint in New York, consultant to the NZBR, 25 years as a Government Relations consultant and as chair of the NZTU, which ended in early 2021

Updated April 24, 2021

The departure of Donald Trump from the White House was a victory for the US democratic system, which only just succeeded.   If then Vice President Mike Pence had wavered under enormous pressure from President Trump and his cult-like supporters, Joe Biden might not be in the White House and there would have been serious civil disorder.  The Republicans haven’t given up, they are now trying to make voting more difficult in several states.  Democracy is a model under threat from many quarters, and losing around the world.

It is easy to forget how recently democracy has become mainstream.  In Britain women over the age of 21 only got the vote in 1928 and in the US, universal suffrage only became accessible to all Afro-Americans in the last 55 years, because, prior to the 1960s voting reforms, there was serious voter suppression in parts of the country.  Some former East European countries like Hungary have retreated from the democratic model and others like Greece and Italy have struggled to deal with major economic challenges. 

At present New Zealand has a quality democracy.   We have fairly-drawn electorates, an easy voting system, and a reasonable level of political literacy.  Money struggles to buy Government policy, which is all as it should be.  

However, we have no reason to be smug, because this democracy is under threat. Governments since 1987 and the Courts have been entrenching a modern view that the Treaty of Waitangi means there is an ongoing “partnership between the Government and Iwi”.  Some Maori leaders want a form of co-governance between Parliament, elected by all New Zealanders, with one which has to negotiate policy with iwi leaders.  

The partnership concept has been advanced in small steps, without the Government first holding an honest conversation with all New Zealanders.  Apart from concerns about the costs in the early stages of the treaty settlement process, New Zealanders have basically remained silent while governments negotiated settlements and wrote the subsequent legislation.  

I have voted in general elections for decades, and for referenda on liquor laws, the parliamentary term, MMP, marijuana and end of life choice, but never on whether we should have a partnership model of government with anyone else.    

For the record, while I prefer they don’t exist, separate Maori seats or even Maori wards, do not undermine our democracy, provided each is based on the same electoral numbers as general electorates and wards.  Nor do I think a requirement for central and local Government to have regard for the views of Maori, destroys democratic integrity, provided the consultation process is genuine, and also that it doesn’t necessarily mean agreement must be reached.  

These provisions help create social cohesion that is critical to successful democracies.  However, we could soon reach a point when the word “democracy” will not accurately describe our form of government.         

For anyone who thinks I may be exaggerating the threat to our democratic model, I strongly recommend they read the 2010 iwi-sponsored 129 page “The report of Matike Mai Aotearoa – the independent working group on constitutional transformation”.  It is all laid out with a plan to achieve the transformation by 2040.  The recommendations are not about making the Treaty fit within the current constitutional arrangements; rather it creates a whole new form of Government based around a minority view of what the Treaty means.

The recently released Government commissioned “He Puapua”, report of the working group on a plan to realise the UN declaration on the rights of indigenous peoples of Aotearoa/New Zealand, takes the iwi report a step further. It’s not clear exactly where this report sits with Government thinking, but looks like an indication of a pathway to radical change. 

New Zealanders need to wake up and get real about the Treaty, and the history of this country since Maori arrived around 1200 AD.  The three article Treaty was a well-intentioned effort on the part of the non-democratic British Government, to deal with what it saw as a very untidy situation in New Zealand, where 100,000 odd tribally divided Maori lived alongside a couple of thousand British settlers, some of whom were seriously disorderly.  

A key part of the backdrop to the Treaty were the inter-tribal musket wars in the decades up to 1840.  In his comprehensive book (“The New Zealand Musket Wars”) historian lawyer Ron Crosby, has written about the devastating impact on Maori in respect of the tens of thousands killed, enslaved or cannibalised.  Prior to the arrival of Europeans Maori tribes fought regularly but lives lost were modest compared to the Musket Wars for obvious reasons.  

Captain Hobson was asked to negotiate a Treaty which ceded sovereignty to the British Crown, protected Maori property rights and treated them all as British subjects.  At the time there were around 500 tribes, no secure property rights, no border controls and no central government, notwithstanding the 1835 tribal confederation declaration that New Zealand was a country.  

In the English version, Article 1 unambiguously had the Maori ceding sovereignty to the Crown.  Unfortunately, this was imperfectly translated into the Maori version, which most of the 500 Maori chiefs signed.   A few did sign the English version and some did not sign it at all.  The Treaty itself was written a few days before Hobson met with the Chiefs and the Maori version was translated by Henry Williams over a couple of days.  Inadequate effort was made to ensure both versions said precisely the same thing.   (See Claudia Orange “The Treaty of Waitangi”)

This must have been one of the most sloppily negotiated Treaties between any two countries (in our case Tribes) of the Nineteenth Century.  That it is seriously regarded today is a testament to the patience and long game played by Maori leaders, who have used the Courts and lobbied with great skill to claw back what they now see as lost ground.  It also attests to the reasonableness of the Crown in recent decades, to at least partially remedy the errors of the past.     

Regardless of the flaws in the Treaty process and subsequent events, New Zealand has slowly morphed into a fully independent democratic country, where everyone, including Maori, has a reasonable chance of a quality life.  Government legitimacy today derives from the quality of our current democratic institutions, not from what happened in 1840.      

It is a remarkable contrast with Australia where the aboriginals had been for roughly 60,000 years, yet were deemed to own no land – Terra Nullius it was declared to be.  The Maori had been in New Zealand for just 600 years prior to the arrival of the Europeans and were by the Treaty considered to own all the land, notwithstanding the reality there was only about 100,000, over a space now occupied by five million people.

Over the past few centuries, the democratic model combined with a well-regulated market economy, has proven to be far superior to: unconstitutional monarchies, theocracies, military dictatorships, anarchy and tribalism.  It has delivered freedom, higher living standards and increased life expectancy, for people of all races, even though within countries there are commonly divergences between ethnicities.  We should maintain and improve our institutions to meet the varying requirements of our largely successful multicultural society.      

Since 1840 we have seen the breakdown of the old tribal management and lifestyle, which has been replaced by Maori living in a similar way to the rest of the population.  At the same time, they have intermarried to considerable extent, and some like my successful middle-class second cousins, are as pale as myself.  Regardless of blood, all descendants of Maori are legally deemed to be Maori, regardless of skin colour.     

Iwi, newly enriched through the treaty settlement process, are now akin to large managed funds, with some statutory powers, not available to others.   That power can be used to commercial advantage.  It will inevitably lead to opaque public policy decisions which will undermine confidence in the integrity of Government.   

The media and others too frequently stigmatize Maori as impoverished and on the fringes of society.  That was some truth in that 100 years ago, but not today.   Most poor people are not Maori and not all Maori are poor, even though proportionally they are less well off than those of European descent, and have worse statistics in crime etc.  Like thousands of renting Kiwis, they face major hurdles becoming home owners and the same challenges providing for their families.  We have major equity issues with the bottom quartile, which requires urgent solutions.     

There are ways of meeting the different needs of Maori and other cultures within one democratic governmental system.  As a strong supporter of the market economy, I recognise that “one size does not fit all”.  There will be ways in say education and health services and possibly even prisons, that different systems can be developed for those Maori who want them.  It has to be handled in a practical manner – separate heart or cancer units in hospitals would for instance be absurd, because we barely have critical mass at present.  

All Kiwis should accept there is still some negative flow on from the previous colonial era.  None of these challenges should be beyond the wit of governments.  However, they should stop naively entrenching iwi powers in statutes, because that will end badly one way or the other, and New Zealand will lose its credibility as a quality democracy, with the same rights for all.  

Its democracy or partnership – we cannot have both.

Authorities: Keith Sinclair “A History of New Zealand”, Michael King, “Penguin History of New Zealand”; Claudia Orange, “The Treaty of Waitangi”; Vincent O’Malley; The New Zealand Wars”; Ron Crosby; “The Musket Wars” – see also Ron’s “The Forgotten Wars”; Elizabeth Rata, “Marching through the Institutions: “The Neoliberal Elite and the Treaty of Waitangi”; Brian Easton’s, “Not in Narrow Seas: The Economic History of Aotearoa New Zealand”; The report of iwi sponsored “Matike Mai Aotearoa – The Independent Working Group on Constitutional Transformation”. 

You can follow my posts at www.barriesaunders.wordpress.com

If our majority Labour Government is true to its roots it will:

1. Aim to increase the rate of state house building from the present 2000-3000, to 5000-10,000 over the next ten years. This along with necessary sales and demolition, would result in an increase from the present 64,000 units, to somewhere between 100,000 and 120,000.

2. Find cost effective ways of helping local government finance the infrastructure costs of new housing sites. The NZ Initiative has some some good policy work here.

3. Regulatory reform, including the RMA, is complex but must be done with great care and at speed.

Affordable housing is possible but it requires many things, including a Government that actually wants to achieve it. At present it looks like the PM and Finance Minister only want to slow home price rises, not reduce them back to the 2017 prices, when housing was a “crisis” in the eyes of Labour, and now just a serious problem.

This is not good enough – housing affordability should be a very high priority for the government – it trumps all but the economy. My big concern with the Government is their lack of understanding of how the machinery of state actually works.

It took nearly 40 years of poor public policy to create the present situation. It could be fixed within ten. Let’s see if our Government has the fortitude to grasp the nettle.