Opinion: NZ's conservatives don't like GST exemptions, so where are their principles in other debates like over the ETS?

Opinion: NZ's conservatives don't like GST exemptions, so where are their principles in other debates like over the ETS?

By John Pagani*

New Zealand's conservatives are establishing a pattern of abandoning their principles when they are faced with a tactical challenge. (I'm not talking about the new micro-party; I mean the right hand side of our political spectrum.)

The first example I noticed was the conservative response to capital gains tax - a policy easily compatible with conservative ideas. You noticed how conservative writers and commentators tied themselves in knots trying to distinguish between the principle, and Labour's proposal. Bill English even confessed that 'theoretically a conservative gains tax is a good idea.'

Then last week conservative bloggers took a perverse position on the problematic involvement of the SIS in politics.

They were busy squealing about the obscure 'he-said-no-he-said' issue. Whatever. But a state agency getting out of control is a classic issue for liberal conservatives. 

Their principles are meant to be anchored in a restrained role for the state, respect for the rule of law, and institutional integrity. These principles are one of the dominant strands in New Zealand's political development. 

The involvement of our security agency in a partisan political hack job violated all of those principles. And New Zealand's conservatives ignored a challenge to their principles because they wanted to play tactical games.

It struck me again on the weekend debating emissions trading.

A lot of conservatives are occupied with denying any need for an emissions trading system. That is coherent conservative position, although not a necessary one - ask Simon Upton.

But if you are going to have an emissions trading scheme, there is no principled conservative position that can defend subsidies for agriculture.

I think the problem is that the ETS is little understood. When we talk about 'free credits' and 'leaving agriculture out of the ETS', the issue gets framed as 'do you like agriculture or not?' and conservatives instinctively say 'yes'.

But those questions should be given their proper meaning - 'do you want to subsidise agriculture?'

That is entirely what the ets argument is about - subsidies. Who gets them, and who pays for them.

I am generally a supporter of active industry policy. I can support subsidies to help industries develop, for example. Subsidies to assist job creation and training partnerships.

But I can't see a conservative argument for any of that, and I certainly can't see the conservative principle that defends subsidies to our dominant export industries.

How is it a conservative position to tax New Zealanders more so that our strongest economic sector can be subsidised? 

You would expect ACT, for example, to take this position. But they are focused on fighting the ETS in any form. 

Imagine that a government wanted to introduce a GST, and they planned to bring it in with exemptions for food and petrol, say. ACT and National would have the option of opposing the GST because they oppose new taxes - but you would also expect them to say 'if you are going to have a GST you should make it apply to everything.'

Why don't they take the same principled attitude to an ETS?

So many of New Zealand's conservatives are intellectually incoherent. I don't mean 'incoherent' in the abusive sense, but in the sense that they lack an internally consistent system of ideas.

That probably explains how the all-antenna-no-compass Prime Minister ends up with an economic policy based on drift, not leadership.


*John Pagani is an independent political consultant and writer who has worked as an adviser to Labour Leader Phil Goff. He writes his own blog at Posterous.

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So many of New Zealand's conservatives are intellectually incoherent. I don't mean 'incoherent' in the abusive sense, but in the sense that they lack an internally consistent system of ideas.

That's pretty much normal for Authoritarians which is what conservatives generally are.

No, there can be just as much authoritarianism in socialism as in conservatism; and just as much libertarianism in conservatism as in socialism.  They're different continua and so different combinations are possible.

Having said which, I am having trouble conceptualising what a socialist-libertarian position would look like.

Anyway, who are these conservatives who support the ETS but don't want it applied to agriculture?  Mr Pagani's article is a bit short on the specifics.


No, there can be just as much authoritarianism in socialism as in conservatism;

Actually, there isn't. This isn't to say that there isn't some but most authoritarians are on the right of the political spectrum as Bob Altemeyer makes clear in his book that I linked to.

I am having trouble conceptualising what a socialist-libertarian position would look like.

Best place to look for socialist-liberal policies would be the Greens and Alliance. Act isn't liberal at all and are almost as authoritarian as National.

We'll have to part company, sorry. There's no way I am accepting that the Greens are liberals.  Many of their policies are profoundly illiberal, explicitly intended either to prevent people from acting in the way they would want or to force them to act in a way they don't want.  It may be for the best of motives, but it's still authoritarian.

Does this help?

Don't cheat at the test now....

Thanks, but no, not particularly, for I didn't find any explanation of the criteria or evidence for the assignment of different parties to different quadrants. 

I did prove that it's possible to be a right-wing libertarian, since that's where I ended up; and I also noted how the site "demolished the myth that authoritarianism is necessarily right wing". 

Agreed - the criteria for 'classifying' classical musicians is just as poor (though I think it was meant humorously)

Sounds as though you and GBH are similarly grouped...(from memory).

tell us about Labours Pledgecard $800,000.00 rort of taxpayers money ,John .




Pretty principled eh ...


Don't forget sing- a-long-a-Maori song and midnight golf!

or Chris Carters 'WASSUP" badge !

ps - see what his  Reverand ex-partner  that used to be at AUT  got up to ,  perhaps Mr Pagani can fill us in with what other role models Labour is associated with

Why are you comparing apples with oranges, John?  Oh I forgot, you're a socialist. To you guys there are no differences between apples and oranges, and watermelons.  

If conservatives are intellectually incoherent, perhaps you could explain Labour's position on GST to me. After all it was a labour Govt. that brought it in in the first place, and made it apply to everything, correct? And now Labour wants to introduce all sorts of exemptions to it???? So what does that mean, John?

And you’re calling who incoherent again?

"a labour Govt. that brought it (GST) in in the first place, and made it apply to everything, correct?"

Not quite David, residential rents are exempt and I don't have a problem with that, the absurd housing (landlords) subsidy via WINZ should go though.

However, if we are going to give exemptions (as we are now), presumeably for the social good, then there is no reason that healthy foods, milk etc shouldn't be considered for exemption as well. This is standard practice in similar economies (UK, AUS)

And, again why not have higher taxes on certain other goods? Well we do, fags and booze for example. Maybe extend that to include some other, imported, luxury goods. Why have the same tax rate on a Ferrari as a litre of milk.

So I think John has a point re inconsistancies.

gonz and davidb, your partisan feelings and name calling are getting in the way here. debate it on the facts......we have very biased people such as pagani, cactus, kerr, newland etc. of course we need to challenge what they say, but if you treat their writings in a more rational manner you might get some better results...i mean c'mon, "socialist"?

Phil Goff touts CGT as a way to prevent Speculative Property Bubbles . Maybe he could explain why Australia , which does have CGT, has had the biggest property bubble imaginable , and now has the most expensive houses in the ENTIRE English speaking world .

Its clear that Captial Gains Tax is a "resentment tax"  , that has only ever been introduced in coutnries by Leftwing or left leaning Governments.

People should never lose sight that savings and Capital is the only thing on the planet that can create jobs , and be used to create  employment .

Governments produce nothing whatsoever , they simply spend taxpayers money and make transfer payments.

In tight times all we need is more taxes. A tax on air even. People will not give a rats about the environment when their living standards fall. Better to light a high belching fire when you cannot afford electric heating to keep warm, bugger the extra CO2.

How about we kill all of the cows, we get a good 1 off hit of cheap protein followed by starvation. But hey, the earth will be 0.000000001 degree cooler:)

The tax side of the above article aside....Bernard and David what place does a propaganda piece about Goffs blow up with the SIS have on this site ???

John, if I had an advisor who helped manage me to 28% in the polls id sack him.


Im surprised Johns article didnt include a plea for helpers for their cake raffle and sausage sizzle on Saturday- apparently Labours  short of dosh for electioneering - not surprising with  having to refund taxpayers from PledgecardGate, MPs resigning etc

Take it logically.

An incumbent regime can no longer begin - it's already done that. So it's only option is to go until it fails. The only question is 'when?.

Some low-impact regimes (Neanderthals come to mind for some reason - perhaps I read the post above) can survive for millenia.

High-impact one, logically, don't/can't last as long. High-impact ones which are on an exponentially-growing track, have to hit the wall early and hard.

The problem here is that both 'sides' above, are part of the 'conservative' element. It's like watching two kids fighting in the back seat of a car careening off a cliff.

I'm glad that the Nats are finally drifting away from their 2008 election script .

The world is dynamic , and those set in stone ideals that Labour absolutely adored , have placed the Kiwi economy in peril . At last National is showing glimmers of intellectual life , that the future is not all rosey & ready to be mapped out in precise detail .

...... We need a debate on these issues , who really benefits from the ETS ? Anecdotally it appears as just another tax to be imposed most heavily on the lower and middle  income citizens ........

Does anyone seriously believe that the extra cost of the ETS won't ultimately trickle down to the consumer !

Of course the costs find their way to the consumer.  The consumer sees a clear price differential between products with a low carbon content and products with a high carbon content, and is therefore encouraged to buy the former.  Similarly, producers are encouraged to make the former. 

Thus, who benefits from the ETS:  Those who make and buy low-carbon goods and services.   That's the whole point of it. 

I completely agree with Mr Pagani that it's incoherent to support an ETS but argue for exemptions to it.  Thing is though, he doesn't provide any actual examples of anybody adopting such a position and nor do the comments in response to his article.

What will happen is that low-carbon services and goods will be competing.  Partly for the same market share (local competition, reducing return) but also in trying to seek out the wallets of the tidal pools of their markets, they will be forced to try to take market off those above price setters .... while meeting all the demands and costs of the ETS profiteers (establishing carbon status, compliance costs for rules and policies for "low carbon" endorsements, no profit from ETS speculation). 

All participants in the ETS - which should be all commercial activity, directly or indirectly - have to meet those costs.  Low-carbon producers get a commercial advantage - they have fewer costs to meet, because they don't need to buy as many permits (or they can sell more).&



  As for existing low carbon servicer & producers they will only gain if something increases the demand for their wares.  Cutting back on "carbon petrol" won't mean I hire another "low carbon" secretary.  
  That kind of demand shift (favoring low carbon serv&prod) will only be able to occur in these circumstances; iff (1) The product/service has equivalence in usage AND (2) if price is the critical buying point.
 If those 2 conditions are not both met, then all that happens is a rise in cost structure.

Yes, if you are not able or willing to adjust your purchasing practices, or your manufacturing methodology, away from high-carbon and towards low-carbon, your costs will rise. That's the point of it. Those who are able to be flexible and adaptable will do better. That's the point of it, too.

ETS = Voodoo economics

Gonzo and GBH - well of course if you have to pay your way, it costS more that if you didn't.

Denial of obligation is immature, both.



running late for lectures today ?