Month: January 2014

National signs NZ up to Ethiopia land grab

A media release from the National Party states that NZ have signed a Food Security Cooperation Arrangement with the Ethiopian government.

Foreign Minister Murray McCully states that NZ’s involvement is:

…to assist in the development of commercial scale agriculture in Ethiopia, and build food security partnerships in the region.

Indicatively, the food security arrangement is less about feeding one of the poorest countries in the world, and more about commercial agri-business gaining access to millions of hectares of land in Ethiopia.

Fred Pearce explains in his book The Landgrabbers that:

The [Ethiopian] governments five year plan promises to lease 3 million hectares for large scale mechanized agriculture by 2015, much of it in the rebellious tribal border lands of Gambella (chapter 1, p.12)

Pearce also points out, the development of commercial-scale agriculture has devastating effects on those regions where the land is most sought by commercial interests. In order to get land ready for commercial agriculture, the government collects the dispersed local inhabitants (predominantly tribal groups) into state-designated villages while foreigners get exclusive use rights of their land, forests, fields and hunting grounds through arrangements like the Food Security and Cooperation Arrangement.

The effect on the inhabitants, the ecosystems, the wildlife and biodiversity in general is disastrous. In addition to being forced from their lands and into a lifestyle they are not accustomed to, they have their livelihoods snatched from them as their fields and forests are cleared, waterways diverted and lands enclosed.

Many end up working on the farms for low pay because they are now required to pay rent in the village they did not freely choose to live in to a landlord who took what had been freely available to them. Moreover, because they work on the commercial farms, they are unable to tend to their own food crops which makes food security even more difficult than their previous subsistence living.

The governments and commercial enterprises that participate in these land grabs often proclaim their businesses will lead to prosperity and jobs for locals. This is rarely the case. In Ethiopia, the companies bring in foreign nationals and the highland Ethiopians to do the technical work, while limiting the local lowland Ethiopians  opportunities  to unskilled  very low paid work. Despite that its the lowland Ethiopians whose land is most often subject to these land grabs.

To make matters worse these companies export most the food grown on these commercial farms. The locals lose their own ability to feed themselves through loss of land and an inability to buy expensive imported food, so that commercial agri-business can use their lands to feed foreigners for profit.

McCully’s media release highlights the commercial advantages for NZ in signing the agreement, pointing to Ethiopia’s proximity to key markets in the Gulf, but it is vague on the issue of food security.

Food security is defined by the WHO ‘as existing when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life.’ However, given the signals in the media release focusing on commercial scale agriculture I am doubtful that the arrangement concerns food security for the most vulnerable Ethiopians.

The National governments acceptance and support of commercial agri-busness in Africa is evidence that the colonial past lingers on.

This is exploitative, destructive, neo-colonialism. We should be ashamed that our Government would make us complicit in a practice that intentionally destroys the lives of already marginalised people for profit.

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Reviving Georgism: How the Greens could improve their taxation policy

Previously, I wrote that I would vote according tax reform policy because I consider tax reform as fundamental in resolving economic equality in NZ and abroad. It’s also no secret that my voting preferences are best understood in a left-wing framework, but this does not presuppose I would vote for a NZ Left party if their tax policy had worse outcomes.  Anyhow, I was reading the Greens taxation policy and decided this was a good time to write the third installment of Reviving Georgism and discuss how the Greens could improve their taxation policy to address the unrelenting economic inequality smothering NZ.

(Obviously, I am critiquing from a non-economist perspective but in light of Henry George’s economic theory)

Summary of Greens Taxation policy

The Greens state that they envision a tax system that ‘supports communities and the environment, encouraging sustainable behaviour while providing sufficient revenue for the effective operation of Government’.

They insist that a tax system should be broad based to avoid excessive reliance on personal and business income taxes, and that the tax base should include: Personal & Business Income Taxes, Consumption & Expenditure Taxes, Targeted Environmental Taxes, and Taxes that acknowledge the value of common property (Resource Rents).

The Greens also advocate Ecological Taxes (ET), a Capital Gains Tax (CGT), and a Christchurch Earthquake Levy (CEL) as part of their policy proposal. In addition, they recommend setting up an ecological tax commission, increasing the top marginal personal income tax rate, altering the progressive tax scale, and introducing a universal tax free threshold for the first $10,000 of income.

The Greens support exempting the family home from CGT, restricting foreign purchases of local assets, and treating investment income equally for tax purposes.

This taxation policy is intended to ‘shift taxes off work and enterprise, and onto waste, pollution and scarce resources’. The Greens insist under their taxation policy ‘clean business pays less and everyone pays less income tax’.

Note, I will not be discussing The Greens monetary policy included in the taxation scheme, in this post, except to point out that if productive income tax is abolished, individuals would receive their full wage and this is likely to be spent back into the economy, increasing the money supply in circulation without having to artificially create more money or print more money.

Why tax at all?

Most of us probably agree that under current economic conditions we need to fund public services for the most vulnerable members in our communities and for other community needs. And generally, tax is considered acceptable for this purpose. The question for now then is not whether we should tax, but rather what should we tax.

Of course, hard leaning right libertarians will probably dispute the use of taxation altogether, but for the purposes of this post, I will not explore that particular argument.

As pointed out in my previous posts on Reviving Georgism here and here, I explain how Henry George proposed targeting what we take not what we make and he saw this is as fundamental to eradicating poverty and instrumental in advancing progress.  I think that the Greens vision could be highly compatible with Georgism if more radical changes were made to their taxation policy  and if they simplified rather than complicated the tax system because their vision is not too dissimilar from George.

Analysing the Greens under a Georgist lens

Currently, the Greens taxation policy is not the fairest way to draw revenue for public services because it places a large tax burden on the productive earnings of individuals and businesses and burdens them with further costs attributable to an array of other taxes (existing and new).  But it does at least feature land and resource rents, which are not only relevant to Georgism but probably the most important component of an efficient and effective tax system.

I find the Greens phrase  ‘funding the effective operation of Government’ problematic, because it’s so general in nature it ignores that the tax system must be simple or efficient if we want effective government. As pointed out in the Taxing Question of Land ‘complex tax systems allow for avoidance, evasion and expensive administration costs to both the public and private purse’. So it is really a matter of fiscal responsibility to implement a simple tax system. The Greens seem to presume that the introduction of CGT counters the avoidance issues, but they ignore the cost it takes to administer further taxes and to enforce payment, and the fact that individuals and businesses may still be able to hide that revenue in offshore tax havens.   Unfortunately, the Greens policy does not simplify the monstrosity of a tax system we currently endure, it introduces a raft of new taxes without abolishing any existing taxes, and effectively feeds the monster.

The Greens also insist that a broad base tax system is necessary to reduce the burden on income earners, but seem to equate ‘broad base’ with many taxes. Broad base just means not restricting to narrow sources, and as the Land Value Tax Campaign argue land itself is the broadest base of all from which to draw public revenue since it’s the hub of basically all economic activity. The Greens seem to overlook the practical role of land and natural resources in this sense.

The Greens insist that their taxation policy lowers income taxes but it doesn’t. It raises the top PAYE rate to 39% for those that earn over $80,001.00. The Greens retain a tax-free threshold which is intended to offset the land and resource rents that form part of their ecological taxes. In addition, there is no reward for clean business, there is simply an exemption from paying the maximum rate.

In order to understand the alleged benefits of the Greens income taxation, I carried out a comparison between the current PAYE scheme and the Greens PAYE scheme. The table below shows the current thresholds and tax rates against the Greens taxation proposals. It also provides two examples illustrating that the Greens are wrong to say that ‘everyone pays less income tax’.

Current PAYE 
Tax rate
 
Greens PAYE
Tax rate
Up to 14,000
14,001 to 48000
48,001 to 70,000
70,001+
10.5%
17.5%
30%
33%
Up to 10,000
10,001 to 42,500
42,501 to 80,000
80,001+
0%
19%
33%
39%
(Note: all comparisons exclude all other levy's/taxes)
Example A: XX earns $90,000 per annum
AA under PAYE
$90,000
AA under Greens PAYE
$90,000
$14,000  - 10.5%
$34,000  - 17.5%
$22,000  - 30%
$20,000  - 33%
$1,470
$5,950
$6,600
$6,600
$10,000  - 0%
$32,500  - 19%
$37,500  - 33%
$10,000  - 39%
0
$6,175
$12,375
$3,900
TOTAL
$20,620
TOTAL
$22,450

Example A shows that someone who earns $90,000 p.a pays an extra $1,380 p.a under the Greens taxation scheme.

Example B: XY earns $48,000 per annum
XY under PAYE
$48,000
XY under Greens PAYE
$48,000
$14,000 - 10.5%
$34,000 - 17.5%
$1,470
$5,950
$10,000  - 0%
$32,500  - 19%
$5,500   - 33%
$0
$6175
$1,815
TOTAL
$7,420
TOTAL
$7,990

Example B shows that someone who earns $48,000 p.a pays an extra $570 p.a under the Greens taxation scheme.

So despite the Greens universal subsidy for the first $10,000 earned, no real benefit accrues to the income earner. The use of progressive taxation nullifies the intended effect of a tax-free threshold. It’s probably why Labour dropped it and why National have argued against it.

LVT avoids issues inherent in progressive taxation

Supporters for progressive taxation schemes typically argue that the most well off members in society should pay more than the least well off members. I agree to an extent, except I don’t think ‘well-off’ should have any bearing on actual income earned – such income goes to the income earner in exchange for their labour. I’d argue that well-off is those with the privilege of holding land, that is, those whose increases in wealth occur through the State sanctioned legal privilege of land holding (*NB, I do understand that there are persons who are asset rich and cash poor which needs special attention when implementing a tax reform such as LVT).

Other issues that concern me with progressive taxation are:

  1. self-employed earners may opt to work for cash jobs to avoid paying the higher tax rate, thereby reducing the amount of revenue collected for public services/effective operation of Government
  2. it could discourage individuals and businesses from acting charitably because of the increase in tax from their productive earnings, thereby reducing the funds that might otherwise be invested or directed toward charitable causes
  3. by having the income tax rate so high and introduction of resource taxes on top along with a raft of other taxes without removing any pre-existing taxes, may in fact drive down wages or employers may choose to employ fewer people to maximize their profits

Avoiding xenophobia allegations

I do worry about the restrictions on asset purchases targeted at foreign purchasers. Restricting foreign purchases of local assets suggests xenophobic attitudes, whether intended or not. However, if land rents are implemented, there is no need for the restrictions because the landowner becomes liable to pay the land tax. The rents accumulated are then redistributed back to the community whose efforts created the unimproved value of the land. This unimproved value is also why I think the Greens are wrong to exclude the family home as a source of tax revenue. Homeowners can simply hold their properties without making any improvements yet the land value increases through the efforts of others but the benefit of that unearned increment goes straight to the land title holder.

Greens compatibility with Georgism

In reference to my earlier posts on Georgism, I do think The Greens are right to argue that ‘work and enterprise should be encouraged and speculative investment in non-productive assets discouraged’, and I also agree that ‘the taxation burden should be reallocated away from income and towards resource use, waste, and pollution’, which is why I think the Greens policies could be highly compatible with Georgist economic theory.

If the Greens explored the fundamentals of Georgism, I think they could create a sound tax system that fits their vision while simultaneously addressing the economic inequality smothering NZ.

I think the best way to improve the outcomes of our most disadvantaged members is by abolishing income tax altogether.  This does not mean abandoning social security. The LVT is an effective precursor to introducing a UBI, and subsequently the dismantling of an overreaching State by reducing the need for many of the services the State provides. It is simple and  efficient.

In my opinion, The Greens are in a favourable position. Without the support of the Greens, Labour probably wont be able to govern. This means that instead of the Greens having to resort to incrementalism (after all, Labour have that covered) they can use their influence as part of a coalition to push more radical policy that is less State centred while trying fresh ideas to revitalise the Left and broaden their appeal across the political spectrum.

In summary, The Greens could improve their taxation policy by abolishing taxes on productive earnings and focusing on taxing land and resources. This would simplify the tax system, work toward reducing the size of government and act as a precursor to implementing a UBI.

 

FYI – Over the next week or so, I will be updating my blogshelf to include a page designated to Land Value Taxation. Please email me: ellipsister.blog@gmail.com  if you have a blog or website and want to make sure I include it! Thanks. 

Defending the Left-Right dichotomy

Following Pablo’s piece on Kiwipolitico, where he ascertains that ‘the Left is well and truly dead in NZ’, I noticed that there was relatively little commentary, well, aside from Whaleoil.

(A silent acknowledgment of a shared sentiment, perhaps?)

I don’t actually think the Left is dead, rather I think it’s dormant, largely due to what Pablo identifies below:

Many of the Left political elite prefer to maintain their positions in the status quo rather than heed the demands of their grassroots to push for fundamental change. Their concerns are about the distribution of power and resources–their own and that of the organizations they front–within the system as given, not about changing the system.

Many argue that the Left-Right dichotomy (LRD) is increasingly unhelpful and results in meaningless political generalisations. Others insist that the traditional LRD has changed (I’ve written a little on this see: Politics as a broader spectrum than Left vs Right, note that some of my views may have changed or slightly altered).

Bryce Edwards wrote about The Changing Nature of Ideological Conflict in NZ Electoral Politics in 2009. He suggested that many other dimensions are at play that can conflate and/or confuse where parties sit on a political spectrum. For instance, Liberalism is often conflated with the Left and Conservatism with the Right, yet we can all probably think of examples where this simply isn’t true.

In my experience, the generally accepted convention is that Left is symbolic of a Socialist economic vision (noting that there are variations within that Socialist worldview) and that Right is symbolic of a Capitalist economic vision (again noting that there are variations within that Capitalist world view). Given the wide scope necessary for discussing political spectrum’s and the various dimensions at play in full, this post is limited to discussing the LRD with regard to the conventions set out above. I am not presuming to be an authority on the issue and I acknowledge the risk of confirmation bias by limiting the discussion in this way.

Unsurprisingly then, I largely disagree that the LRD is either unhelpful or meaningless. Why?

Firstly, many of those who say the LRD is meaningless, still refer to it when discussing their own political views or the views of others. Arguably because its helpful for (1) differentiating their views from others, especially if one wants to create distance from a view they strongly oppose and (2) for building a rapport with like-minded individuals or groups. It is at least a helpful and meaningful as a reference point.

(On a side note, I notice that it is mainly those who have identified as Left who tend to disapprove of the LRD)

Secondly, it tells us something about the parties, that is whether they broadly subscribe to a Socialist or Capitalist worldview. Its helpful because as noted above, it gives us a reference point that we can assess or analyse the parties against and it highlights if the respective parties policies are consistent with the visions they proclaim.

However, I do think that the sentiment of meaninglessness has some teeth, that is, when a party claims to have a specific alignment (i.e. they usually indicate if they are Left or Right) but their policies are inconsistent with that alignment. This can make the LRD appear meaningless, but in my view, it only makes what the party says meaningless. It does not impinge on the LRD itself. Moreover, it legitimates the use of the LRD as a measure of credibility or honesty.

Lastly, the LRD is helpful for retaining a space for socialism to further evolve.

Morgan Godfery, blogger at Maui Street, tweeted:

which he later qualified as being the ‘the modern left’.

I can see the attraction in wanting to expand the definition of the Left to include those with socially democratic values albeit with capitalist inclinations. As a Socialist in a Capitalist society its difficult to reconcile ones practical life with ones ideological views. What I worry about is developing a concept of the Left that is so incoherent that it becomes both meaningless and unhelpful. I consider that including Capitalism within a Left framework is to concede to Capitalism. That is, we reinforce the  position that NZ Labour party have perpetuated since 1984 – that Socialism is an untenable vision.

Socialism is not the shit stain that Capitalists (irrespective of whether they call themselves Left or Right) proclaim and as such I think the LRD should be preserved because the ‘Left’ space gives Socialists a reference point (at least) that is unimpeded by an ideology with which it is inconsistent to further develop. Additionally, by allowing Socialism to evolve unimpeded, this may help to overcome the pejorative way in which a large proportion of the public view Socialism and the Left. So to this end, I defend the LRD, especially so in the current political economy.

Kim Dotcom: Left or Right?

A number of reasons were cited as to why Kim Dotcom’s Internet Party will align itself to the left. I have listed some of the more common ones I’ve seen below:

  1. Dotcom is incensed at the legal treatment he received under a John Key led National government, so will presumably align his party left;
  2. Martyn Bradbury (The Daily Blog) a very vocal left wing anti-capitalist blogger was recruited as the Internet Party’s political consultant, indicative that the party intends to align itself to the left;
  3. Dotcom appeared alongside left wing activists and political parties during the GCSB protests and public meetings, suggestive that he is sympathetic to the left.

On point 1, Dotcom is understandably bitter but I think it highly unlikely that he would have expected any different treatment under a left led government because Operation 8. His angst is personal not ideological.

On point 2, any anti-capitalist blogger that gleefully teams up politically with a capitalist who is part of the 1% the anti-capitalist despises, does not indicate alignment to the left for the party. It indicates a hypocritical blogger.

On point 3, Dotcom had every reason to attend those protests and meetings, the fact that the protests and meetings were run by the left was inconsequential.

The benefit of Dotcom’s Internet Party is making privacy, civil liberties and internet freedom an integral part of the political debate in NZ during election year. The debate is important.

My reckon, is that Dotcom will support whoever gives him what his party demands. Its not obvious to me that the Internet Party will align to the left. Its politics after all.

Pōwhiri and gender essentialism

Following an Editorial piece in the NZH on 8 January 2014, there is currently a debate (in NZ) regarding whether Māori women should be able to whaikōrero (make a formal speech) at pōwhiri (welcome ceremony) which requires that they sit on the paepae (orators bench).

The discourse is seemingly lead mostly by males – both white and Māori (Update: I am now starting to see voices from across the spectrum, and no I haven’t been reading the NZH comments section).

I was going to publish last night, but decided I should make sure I am certain of my views, since 1) they are probably very controversial and 2)I have been grappling with this issue since it was discussed in one of my Jurisprudence classes at University a couple of years ago (raised by Māori Law Lecturer Valmaine Toki). I decided to publish because I believe that as a Māori woman, I am not alone in my views, so I make no apology for disagreeing with the narrative largely lead by Māori men.

Graham Cameron writes a beautiful piece on the story of the pōwhiri and introduces his views therein.  I say its beautiful because he tells the story of pōwhiri so eloquently. And I agree that pōwhiri is not intended to dominate women. But my contention is that it is not sufficient to accuse critics of cultural imperialism while ignoring the views of Māori women who may in fact want to whaikōrero at pōwhiri.

I was introduced to the concepts of ‘gender essentialism’ and ’benevolent sexism’ by a Pākehā woman yesterday. And I agree with her that these concepts are prevalent at pōwhiri  and that they are discriminatory irrespective of custom. Additionally, these concepts are not unique to Pākehā culture.

Cameron’s piece alludes to the idea that because these tikanga customs and practices are culturally essentialist, gender essentialism is justified on these grounds.

How about that – a man justifying what is and isn’t important to the experience of Māori women at pōwhiri, you know, because culture dictates it.

Cultural essentialism does not justify gender essentialism. The mere fact I am a woman and must be protected (benevolent sexism anyone?) so I can have babies is no justification for depriving me the opportunity to whaikōrero at pōwhiri. I acknowledge that this is a really uncharitable interpretation of Cameron’s post, but as a Māori woman, this is how it reads to me.

A great proportion of this debate also centres around how karanga and whaikōrero are equally important aspects of the pōwhiri. And this is true, but it doesnt detract from the fact that they might not be equally important to the Māori women who actually want to participate in the whaikōrero.

Do I think that Māori should change this practice because the Speaker of the House says so? Absolutely not. Do I think Māori should have the discussion within their respective whānau, hapū, and iwi, allowing Māori women to express their own preferences and making consensus based decisions? Absolutely.

As Māori we are consistently talking about the fluidity of our tikanga, yet when a male privilege is challenged – cultural imperialism!

Admittedly, I am not as familiar with feminist theories and the various nuances as others are and I do feel like I might be less protective of this particular cultural aspect than others because I was raised in a predominantly urban environment with limited exposure to my Māori heritage.

But I will not sit idly back and let this discussion be derailed by the Speaker of the House and the dominant culture or by Māori men justifying gender essentialism based on a context that no longer afflicts our interactions with each other. Tikanga is fluid. It can adapt. But its up to Māori to decide if they will adapt.

(Note: this post was originally much larger, but I decided to reduce it so the basic message isn’t lost in a typhoon of academic speak)