Jacinda Ardern displays political brilliance - and expediency in ditching Capital Gains Tax (CGT)

Jacinda Ardern displays political brilliance and expediency in ditching Capital Gains Tax (CGT)

Thakur Ranjit Singh

There is a Fiji Indian anecdote, bordering on stupidity –and hilarity, where an armed robber breaks into a rich lady’s mansion, and demands, putting a loaded gun at her head:

“Choose - life or money”

The rich lady replies” Take my life, as I will need the money in old age.”  

A compassionate Prime Minister who set a new standard on how leaders need to manage major human crisis and grief. She could have abused  her elevation of popularity to push for CGT but opted for  pragmatism, political reality and respect view of majority.

Jacinda Ardern had faced the same choices- either be blamed for ditching her promise, or losing an opportunity to do anything good for the underclass at all. And you can only do that if you survive as a government.

Like the rich lady being robbed, she had two choices. Either choose survival of her government, and coalition deal, and chance of a second Labour term, or fulling the promise of CGT, winning the battle, but losing the war, and a second chance. 

She had to choose from keeping on holding a very contentious and controversial hot potato, or blowing the wind out of Simon Bridges and National Party’s 2020 election sail.  National Party was already gearing up to have CGT as Ace of trumps for next election. Now that sail has fallen flat (wait for Simon to follow suit!) without any wind from CGT.

Jacinda Ardern is accused of not using her star status to push for CGT. She is damned if she does it,  and she is damned if she does not do it. But she used her judgement to survive and to redirect her abundance of energy and talents into projects that can realistically be achieved. 

I disagree, especially with those opinion writer pundits of doomsday who say the Prime Minister failed the country, failed CGT supporters within her party, and failed to use her popularity to sell this issue.

She showed her brilliance, lost a battle, but won a war. You can be certain that she was afforded the best advice, mostly from Aunty Helen Clark, (and Cullen) who themselves rejected CGT during their nine years in government. From their past experience, (read Cunliffe and Little) Labour knew that the details of CGT was hurting them at polls, hence they found it safer to park it at roadside, parked in Tax Working Group. And reviewing and weighing it from economic as well as political reality, they permanently parked it there. And in doing so, deprived the National Party of leadership stability, and heads may roll there soon.

National Party Leader, Simon Bridges is the biggest loser in ditching of CGT, as his trump card for 2020 election has been lost, and his leadership is in doubt - he may not last long.

Labour Party rightly opted for other ways to fill this vacuum, like transfer of wealth though Working for Families. Ardern admitted there were other steps that would be taken to improve the fairness of the tax system, pointing to steps the Government had taken to tighten rules around land speculation and their upcoming review of “negative gearing"(transfer of rental losses to reduce income tax from other sources) rules.

Her opponents need to appreciate that Labour Party realizes a CGT is not the only way to address inequality.  The Budget is coming in May, and in words of the old cliche –“there is more than one way to skin a cat.” The robust debate helped by media, resulted in shedding light in other alternative areas. Criticism of NZ First and Winston Peters is misplaced. They deserve credit for articulating the concerns of small and large businesses, from within Government. The MMP allows them the veto right, and they rightly used that.

And Labour has no mandate to impose CGT.  With their 36.9 per cent of the vote and Greens 6.3 per cent, the total makes to 43.2. And this is not a mandate. And looking at National at 44.4 per cent, opposition to CGT is even greater than Labour and Greens total combined. Hence, rejecting this, Jacinda Ardern was correct to say that there was a lack of mandate from New Zealanders for CGT.

Indeed, MMP is not a laughing matter. Under it, Winston Peters was perfectly right to veto CGT. Labour and Greens, with combined total of  43.2 percent had no mandate to impose CGT. NZ First deserve credit for articulating the concerns of small and large businesses, from within Government. That is the beauty of MMP!

The credit that Jacinda gets as a caring leader is that she listened and acted on what she heard. The main purpose of the proposed tax was to fix housing shortages and dampen house price inflation, but the tax working group was unable to show that imposing a capital gains tax would achieve these goals. Hence she used wisdom and judgement.

So you are saying that Jacinda Ardern is a coward and secured Labour Party a second chance by ditching CGT? And so you are saying she should be the sacrificial lamb at the CGT butchery and deny Labour Party the chance to implement numerous of other progressive, benevolent and socially conscious policies that National ignored by being “a Government of landlords”?

NZ Herald cartoon depicting pragmatism, judgement and brilliance of Jacinda Ardern. She chose not to be a sacrificial lamb, to be slaughtered in CGT butcher house. She chose survival of her government so she could come for a second term to deliver to her voters.

So, like that greedy rich lady wishes at the beginning of this article, do you also wish Jacinda Ardern to lose her government? Then how would she be saviour to so many who depend on her to reduce the inequality gap, among others?  Go ahead, make my day, answer, please.

How wrong was Fran O’Sullivan of NZ Herald opinion writer on Saturday 20 April, 2019, when she said:

Fortune praised her rallying skills. Ardern has those in abundance. Pity they were not used this week.

And on her heels, the Editorial writer of NZ Herald, John Roughen, in his column on 22 April, 2019 echoed similar negativity:

Labour has shown this will always be a timid Government. If it could not do a capital gains tax with all the stars well aligned, it will not do much at all.

Indeed, how off the mark were these celebrated writers of NZ Herald that they need to be corrected by an ethnic, Fiji Indian blogger, FIJI PUNDIT which has been rejected by NZ mainstream media.

They need to read and comprehend this article. 

Ardern’s face was projected onto Dubai’s Burj Khalifa, the tallest building in the world, that is the level of respect she had gained with her handling of terrorism attack in Christchurch.

I repeat that Ardern has been brilliant, compassionate, judgmental, and wise, has shown pragmatism, recognized political reality and will survive to redirect her abundance of energy, talents and compassion into projects that can realistically be achieved. 

And to attain these, one needs to be politically expedient. That is why she makes it to Time and Fortune magazines!

I salutes the Prime Minister for her brilliance that many cannot see.

[About the Author-Thakur Ranjit Singh is a Kiwi Fiji Indian media commentator and blogger at FIJI PUNDIT]