Paradise Papers Reveal Absurdity of GST

As if the Panama Papers weren’t enough, we have had more information about the barely legal and unethical dealings of the super-wealthy following the release of the Paradise Papers. Much of the focus has been about how individuals and corporations with the help of tax havens are able to structure their affairs to minimise their tax bills. In effect, they are stealing from taxpayers who bear an undue brunt of the cost for keeping their respective governments functioning.

This scandal has largely gone unnoticed in New Zealand because the corporate media is too busy recapping events in reality TV shows such as Couples Spend More Money Than Anticipated on Ego Projects, and  Ignorant White People Discover That Arranged Marriages Aren’t That Great After All. So I’ll need to turn to international media again. The Guardian is the most prominent Anglophone newspaper that has covered the Paradise Papers and has put out too many articles to cover in any great detail, but I would like to discuss one that particularly caught my attention:

2017 Formula One World Champion Lewis Hamilton avoided paying up to £3.3 million of VAT (value added tax, known as GST in New Zealand) when importing a Bombardier private jet. The jet was made to look like it was available for charter, by doing so VAT can be claimed against the purchase and running costs associated with business operations. VAT can not be reclaimed when jet was used for leisure purposes. Depending on the breakdown of business and leisure travel, Hamilton may have been required to pay a proportion of the £3.3 million in VAT.

My disdain for the wealthy avoiding taxes is not limited just to Hamilton, but to everyone who has been caught out in the Paradise Papers. If you want to live in a civilised society, someone has to pay for it. It is only logical that those with the most wealth are liable for most of the taxation levied by governments. The quality of life of the majority of the population suffers when governments are not able to provide high quality services such as education, healthcare, and security.

Furthermore, the wealthy are only wealthy because of public infrastructure, an educated and healthy workforce, state-funded research and enforced intellectual property laws. Were it not for strong and effective government, they could not have achieved what they have been able to do. It is in their best interest to support government, and that means paying taxes. Weak arguments such as “the government would just waste money anyway” are just shallow excuses made by sad individuals trying to allay their guilt.

Of course it one thing to insist that the rich should pay their full amount of taxes voluntarily, but no one listens to me. Instead it is up to governments to close down the loopholes in the law that have been exploited. What I find interesting about Lewis Hamilton’s case is that he was able to avoid VAT, a consumption tax like GST.

GST has been defended by neoliberals because it was seen as “simple”, “efficient” and “hard to avoid”. The Paradise Papers have shown that all of these arguments are a complete sham. GST is nothing more than a regressive ideological act of faith that puts more pressure on ordinary people while allowing for the rich to become richer. Even worse, there are mechanisms which allow wealthy people to actively avoid GST on big-ticket purchases!

Governments are largely paying lip-service to the idea that something must be done, but don’t expect the oligarch-funded centre-right to do anything about it. Meaningful change starts by electing solid left/centre-left candidates to national office. It’s encouraging to see Bernie Sanders and Jeremy Corbyn come out against the practices highlighted in the Paradise Papers. The British government should also intervene in their overseas territories to harmonise the tax structure within the UK. That action alone would close so many loopholes featured in the Paradise Papers.

It’s vital to the long-term welfare of our society that it is properly funded by those who have the ability to fund it, who also happen to be those who have benefited the most from it.

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NZ 2017 Post-Election Limbo: My Thoughts

One and a half weeks ago, the people of New Zealand went to the polls to determine the make up of our next Parliament. Election night was a letdown for all sides, with no established bloc able to command a majority. Like 1996 and 2005, New Zealand First finds itself holding the balance of power*.

Firstly let’s note that National didn’t win. While it’s disheartening to know that ~46% of voters are either gullible or sociopathic, the centre-right is in trouble. Its coalition partners have either been taken out or rendered irrelevant. For National to stay in government, they need to do a deal with either NZF or the Greens.

Coalition negotiations have not begun yet, largely in part because special votes are still being processed and the final result may result in a few seats changing hands. Winston Peters, the leader of NZF has shown little interest in starting negotiations until the final result is clear. And fair enough, there’s no point coming to an agreement now that could be jeopardised when circumstances will change.

In this vacant period, news media and political operatives have started interviewing their typewriters and put out some truly dreadful dreck during the past week. Let’s go through those now:

National has a right to govern: No it doesn’t, and it’s unsettling that commentators are claiming that National has some kind of “moral” authority (warning: NZ Herald) to form the next government. Besides the fact that “National” and “morality” don’t belong in the same sentence, there is no constitutional stipulation that the largest party has priority when forming a government.

National/Green coalition: This idea is frankly ridiculous. Environmentalism and right-wing politics are fundamentally incompatible. When the right wing stop putting money and conservative organised religion before everything else, then there may be a case to be made. The Green Party would be nothing more than window dressing to make National look better. All of the analysis behind it is completely unwarranted as the Green Party membership can (and will) block the parliamentary Greens from coalescing with National.

Trying to read Winston: NZF has always promoted a weird mixture of left and right policy, hence both sides are quick to point out similarities and proclaim that NZF should go with them. I think James Shaw was correct to point out the common ground between Labour, Green and NZF during his election night speech. It’s much easier to imagine the three agreeing on a policy schedule that doesn’t deviate too far from what they campaigned on. Meanwhile, it’s hard to see National abandoning free-market economics and cutting immigration rates.

Peters hasn’t appreciated this idle speculation while the votes are still being counted and nobly insists that personal issues with the National Party will be put aside during negotiations. I don’t think he will be able to detach his feelings towards National and I don’t expect him to. National ran a deplorable campaign filled with lies, hollow bribes and dirty attacks that almost pushed NZF out of parliament. It’s not just a matter of personal relations, National cannot be trusted to govern fairly and transparently in the interests of all New Zealanders. It is my opinion that Peters should not reward such scumbaggery with another term in government.

MMP is Broken: Fairfax let two of their far-right headbangers out of the asylum to attack our quasi-proportional MMP electoral system (Grant’s article is here, du Frense’s is here). Their arguments are nothing more than the characteristic whining sounds made by arrogant National supporters. Apparently it’s an affront that their party has been denied minority rule. The fact of the matter is whoever can muster the support of 50% + 1 seats forms the government.  It makes no difference whether that is one, two, three, or four(!) parties. Common complaints about how small parties holding the country to ransom have popped up again. One just needs to look back to the UK in June to see that the same outcomes are just as possible in FPP systems.

That’s not to suggest that MMP is perfect. The 5% threshold has shown to be unfit for purpose. Parties such as ACT  and United Dunne Future have/had no real constituency to speak of, yet they are/were entitled to parliamentary seats. Meanwhile, NZF in 2008, Colin Craig’s Conservative Party in 2011/2014 and Gareth Morgan’s The Opportunities Party in 2017 gained many more party votes and no seats. I think the threshold should be lowered to 0.8% (i.e. 1 parliamentary seat) to mitigate the disproportionality of micro parties that rely on winning an electorate seat. A lower threshold means less wasted vote, which keeps the National Party further away from power, which is always a good thing.

With National likely to lose more seats once the special votes have been counted, I expect this week will see intensification of the corporatist demands for NZF or the Greens to give National the coronation they believe is their right. I can only hope both minor parties stay strong and will be able to make a deal between Labour and themselves. The three have already shown themselves to be a competent and responsible administration (sort of, the Greens were at arms length during the 48th parliament). We look set to be facing an opportunity for such a government again. I, along with many other New Zealanders encourage Labour, the Greens and NZF to take this opportunity for the good of our country.

*Balance of Power also happens to be the title of the 1986 album by the Electric Light Orchestra. Heaven Only Knows what the outcome will be. Stable government is So Serious, it’s good to see the parties Getting to the Point. The negotiators are living Secret Lives while the negotiation details are hidden from the media. Is it Alright that the National Party was able to run a campaign of Endless Lies?

New Zealand Election 2017: Fake News Makes an Appearance

The current state of play in New Zealand’s general election is radically different from two months ago. Then Labour Party leader Andrew Little valiantly stepped aside in favour of the charming and articulate Jacinda Ardern who has done well to communicate a raft of popular policies. The public has responded in turn, Labour has now led the National Party for two successive One News/Colmar Brunton opinion polls.

Where there’s strong Labour polling, desperate National party dirty tricks follow. This week, finance minister Steven Joyce claimed that Labour had failed to account for $11.7 billion of announced spending. This claim has widely been regarded as false, even by right-wing economists. Much of the spending will in fact be paid for from operating expenses. Humourously, it has also been revealed that Joyce failed 8 economics papers at university (which he attended for free). The events of this week have demonstrated that he is unfit to serve as finance minister.

Even though swathes of analysts have dismissed Joyce’s claim, the fact that the media reported it in the first place has the potential to cause unwarranted damage to Labour’s electoral fortune. The only person who has piped up in agreement with Joyce was Prime Minister Bill English. As a Catholic, it comes as no surprise that he doesn’t have a problem accepting falsehoods.

So let’s tentatively say the fake news budget hole backfired on the Tories. More fake news was ready to take its place. This time it’s from the obscure Down syndrome advocacy group Saving Downs who have taken issue with Ardern’s pledge to decriminalise abortion. Saving Downs doesn’t like this stance and decided to extract sympathy for their position by fabricating an image to make it look like Labour’s policy was more extreme and would allow abortions up until birth.

By plying fake news about Labour Party policy, Saving Downs has played into the hands of anti-choice interests. The anti-choice viewpoint is generally dishonest and morally inconsistent (try it for yourself). We should respect the bodily autonomy of pregnant people who should be able to choose to terminate their pregnancy for any reason at any time. Those reasons include results from (optional) medical tests that suggest the quality of life of the resulting person may be compromised.

The Labour Party is to be commended for putting forward a strong economic vision that rightfully makes wealthy property owners, resource extractors and polluters pay more tax. At the same time, Labour is committing to spending on initiatives that will provide more opportunities for the public. Similarly, Jacinda Ardern should be commended for front-footing New Zealand’s shameful criminalisation of abortion by advocating for the rights of pregnant people. Conversely, fake news purveyors such as Steven Joyce and Saving Downs must be condemned by the mainstream media in the strongest terms possible. Our democracy must be protected from the manipulation of the populace that fake news seeks to achieve. I can only hope that future polling (and the election result) shows that Kiwi voters see straight through these deplorable tactics.

UK 2017: May Loses the Unloseable Election

I’ve been rather quiet about the snap-election called in the United Kingdom that took place on June 8. This was for two reasons: (1) it was completely unnecessary and was a contradiction by Prime Minister Theresa May who had promised not to call an election, and (2) I was terrified, UK Labour under the leadership of Jeremy Corbyn was polling very poorly and under unwarranted media scrutiny. It looked like a disaster was on the cards.

The campaign was fascinating, the UK Conservative Party was able to squander a 20% lead in the polls to a 2.3% lead on voting day, while Corbyn led UK Labour to their best result since the early Blair years. It was the result those of us on the left had hoped for, but didn’t hope for too strongly given the past heartbreaks we’ve endured. There’s a few points that I would like to raise from the whole event

Labour’s messaging was superb, from the leaked manifesto which offered policies that appealed to marginalised Britons, to turning the “weak on security” meme back onto the Tories with their criticism of spending cuts to police and fire services. The Labour result was extraordinary, the vote share was now up to 40%, with 12.9 million votes, which eclipses Milliband’s result from the 2015 election.

Thus Corbyn’s position as Labour leader is now secure and there is no prospect of a leadership challenge, with the exception of the moronic Chris Leslie who had another go with the now discredited Blairite slogans. I was always a fan or Corbyn, like Bernie Sanders in the USA, he had the potential to redefine politics with his straight-talking decency. I was impressed by his substance over style manner and how he would relay questions from the public during PMQs. I can think of no better representatives for the people than Corbyn and those who follow his example.

It was amusing to see right-wingers give themselves whiplash by shifting the goalposts following Corbyn’s better than expected result. Firstly he was criticised because he would lead Labour to a humiliating defeat. When he does well enough to strip the Tories of their majority, he is criticised for not winning. Such analysis focuses on the 56 seat gap lead the Tories have while ignoring that this is a distortion caused by the FPP system. If the seats were allocated by PR, then the gap would only be 15 seats which doesn’t look like a great victory? It comes as no surprise that right-wingers choose to ignore FPP distortions as it benefits their party and demonstrates their contempt for democracy when it doesn’t go their way.

There’s another great irony in this result. One of the most common criticisms of MMP, the electoral system used in my home country of New Zealand is that minor parties hold undue influence when forming a coalition with a major party. This was predicted to bring economic ruin (which hasn’t happened) by failed finance ministers and corporate robber-barons. FPP was praised for producing strong governments with working majorities, even though it screwed the will of the people. MMP was derided for allowing the “tail to wag the dog”. And lo, here we have an FPP election that produces that exact result!

To hold on to power, the Tories look set to do a deal with the corrupt, wasteful retrogrades known as the Democratic Unionist Party. This leads to all kinds of problems in terms of the Northern Irish peace process and concessions that will be unpopular in the UK. May’s hold on the Tory leadership is also weakened, although nobody seems interested in replacing her. Time will tell whether this government can last, or if a new election will be held. So long as Labour doesn’t trigger it (parties causing unnecessary elections seems to be unpopular), they are well placed to win next time around, although post-election polling is still thin on the ground at the time of writing.

Most importantly, this is a huge defeat for vapid centrism, the prevailing line of thought in 21st century centre-left social democratic political parties the world over. Their obsession with the vague concept of electability has been demonstrated to be a falsehood. It’s no longer good enough to be “not as bad” as the lunatics occupying the political right-wing, now is the time to make a positive case for popular left policies in a way that involves the public. Now is the time for Jeremy Corbyn.

Why does the Maxim Institute Hate Democracy?

Earlier this month, the Maxim Institute, a far-right think tank based in Auckland published an article about the urban/rural divide in New Zealand.The institute has done some “research” that indicates that there are differences in lifestyles and attitudes between regions in New Zealand. They forecast that a greater proportion of the population will live in urban centres (70% in 30 years time). Strangely the institute chooses to frame this as a problem:

That’s a lot of urban voters, and it’s going to be very tempting for politicians to focus more and more on urban interests in order to win those votes, possibly at the expense of the rest of the country.

It could also make it easier for urban voters to ignore or mock the interests of voters living in very different communities.

I don’t see the problem. If the vast majority of the population lives in urban areas, then it is only right that politicians focus on urban interests. That’s democracy in action. It’s also assuming that policy development is a zero-sum game. This is not strictly true, a policy designed to help urban dwellers does not necessarily harm rural dwellers.

Let’s also keep in mind that the opposite situation exists at present. Politicians already prioritise property owners and corporations at the expense of ordinary people. Policies such as irrigation schemes and the dilution of water quality standards are designed to benefit rural voters while harming the interests of the wider public. Why doesn’t the Maxim Institute write about these issues instead of this one that they made up?

It’s worth mentioning that the urban-rural divide is a cornerstone of political analysis in USA, where it plays a massive factor in elections. Donald Trump can credit the urban/rural divide with handing him the presidency that he didn’t deserve. The electorate is divided into a series of winner-take-all states where the number of electors is not proportional to the state populations. Narrow victories in swing states and the over-representation of small rural states turned a 2.7 million vote deficit into a 77 vote surplus in the electoral college. By preserving and accentuating a bias in favour of rural areas, the American right-wing have been able to engineer electoral victories in the face of popular defeats.

When we keep this in mind, the motives behind the Maxim Institute’s article become much more sinister. They don’t say it, but it is implicit that they think that the electoral system should be redesigned. I imagine they would want something less proportional, like FPP that favours rural constituencies. Never mind that FPP has been rejected by the public twice during the past two and a half decades.  While they may cry crocodile tears about their contrived decline in rural areas, this is all about securing right-wing power over New Zealand for years to come.

As things stand NZ has a very proportional voting system. There is no reason for this to ever change. If the increase in the numbers of urban voters is a problem for the political right, the problem is with them, not with the voters and not with the electoral system. If this is typical of the standard of work that the Maxim Institute is producing, urbanisation should be the least of their worries.

My Opinion on the Andrew Little Defamation Trial

On Monday, news broke that the Leader of the Opposition, Andrew Little has been partially cleared of defaming the owners of a hotel chain. This verdict makes writing the post easier as I know that some of Little’s statements were not defamatory and can report on them with less fear of negative consequences. Having read up on online defamation, I should be OK if I stick to verifiable facts and genuine statements of opinion. Of course that’s no guarantee. As Little has found out, you can be sued for defamation even when what you said wasn’t defamatory. The comments about the case on social media and other blogs were probably more defamatory than anything Little ever said. But I guess suing an internet random doesn’t have the same gravitas does it?

How did this all begin? The founder of the Scenic Hotel Group hotel chain donated $101,000 to the governing National Party prior to the last election. One month later, Scenic Hotel Group was awarded a government contract to run the Matavai Resort in Niue. That these two events occurred is beyond doubt, the issue is a matter of optics as to whether there is any connection between the events.

I think the timing could be described as “interesting”, or “unfortunate” as a cynical mind can’t help but wander, especially since there is history with National Party donors and unfortunately timed government contracts such as Beemer-gate. In that case, the dealer saw sense and didn’t sue anyone. With the hotel incident, Little made some comments where he alleged corruption. The Hagamans sued him for defamation prior to an investigation by the Auditor-General. Once the Auditor-General got involved and gave the process the all-clear,  Little apologised to the Hagamans.

From the reports of proceedings in the trial, Lani Hagaman said that she wanted a suitable public apology. I think that the statement on the Labour Party website was sufficient. They should not have expected an apology before the AG investigation when they sued him, why should Little apologise when the facts are yet to be determined? I found that Little was being sued for $2.3 million inconsistent with the claim that Hagaman just wanted an apology. I am unconvinced by the excuse that it is to restore Earl Hagaman’s reputation. Ironically, my opinion of Hagaman is diminished by the fact that Lani Hagaman thinks that his reputation can be restored by an amount of money that would bankrupt Little. If they didn’t want me to think poorly of them, then they shouldn’t have donated money to the National Party in the first place.

I am also concerned about the political motivations that could have been involved. National Party donors and presumably supporters suing a Labour Party politician unsettles me. Will suing for defamation under unconvincing circumstances become a tactic for the wealthy and powerful to censor dissenting voices? The integrity of our democracy is more important than the feelings of greedy multi-millionaires whose own actions do more to harm their reputation than anything Andrew Little could say. Fortunately, one of the findings of this case was that Little has qualified privilege as Leader of the Opposition to draw attention to potentially murky dealings. As noted by Antony Robins, this is good for democracy.

Unfortunately, it may not be over yet. Lani Hagaman looks to be seeking a retrial over the inability of the jury to decide whether Little had defamed Earl Hagaman. She also does not believe that Little is not protected by qualified privilege. Little has washed his hands of the issue as has the corporate media, who have moved on to other things.  By donating to the National party, companies are making a statement that they view their customers and New Zealand with contempt. However, contempt goes both ways so I will not be purchasing goods and services from Scenic Hotel Group in the forseeable future.

Dear Paul Moon, Free Speech at University is Doing Fine

The world seems to be in hysterics these days about universities being left-wing hiveminds that suppress the “free speech” of individuals or groups who hold viewpoints seen as “politically incorrect”. Much of this stems from the ignorance of the general public, who aren’t exactly familiar with universities and have no idea what they are talking about when they say “political correctness”. This hysteria is largely pushed by the political Right, who are upset that they rejected reality and are now underrepresented in academic faculty.

For some reason, some Very Serious New Zealanders are worried about free speech being under threat in NZ universities following the closure of a quasi-fascist club at the University of Auckland such that they signed a letter, led by AUT Professor of History Paul Moon. The European Students Association started out with some alarming Nazi imagery on their social media page and the claim to “promote European culture on campus” which is typical vague weasel language used by white supremacist groups. If they were genuinely interested in European cultures, they would have created multiple groups i.e. Italian Students Association, French, German etc in order to cover the vast range of cultural practices covered in Europe. Similar distinctions exist already with other international student clubs. If you actually wanted to celebrate things like French architecture or Swiss chocolate, then you would just say so. You wouldn’t hide it behind a Nazi slogan.

While we will never know what their true future intentions were because they gave up soon after, I suspect they were taking a softly-softly approach to get their foot in the door and then gradually acclimatize the student body as they ratcheted up the racist rhetoric. Of course, they used their failure as an opportunity to cry fascist oppression, gaining the attention of those who signed the open letter. It’s ironic that they don’t see the opposition to the club as being an exercise in free speech itself. Freedom of speech is not a guarantee of a platform, nor does it mean freedom from criticism. Nothing is wrong with free speech at NZ universities. For example, past incidents at the University of Canterbury demonstrate that students are free to do dumb stuff and they are free to suffer the consequences of said dumb stuff.

The signatories are claiming that there is a problem where there is none and by doing so are unwittingly playing into the hands of fascists. Fascist groups want to become more prominent without facing any opposition because they fail when they are opposed. They are trying to use claims of free speech to silence their critics (oh the irony)! Fortunately, many students, staff and the general public will continue to be rightly horrified by the attempts to normalise such an abhorrent ideology and will use their voices to discredit them.