Ani, there's a quirk about MMP and minor parties that is not highlighted enough. A vote for a party that doesn't make the 5% threshold is proportionally divided and distributed to the other parties according to the % they poll. In the 2023 election I voted for a conservative minor party. I was horrified to learn that 60% of my vote had been allocated to a party I abhored. Immediately before an election if your favored party doesn't look like it will make that 5% threshold it's imperative that you change your vote to a party that most represents your political leanings or you'll end up supporting the wrong side.
One of those male candidates has the head tilt of a tranny. Just needs a dress - no shave even - and he'd be good to go. Lest we forget they loooove the gender woo woo.
I think you've described them well. To me they feel cold, stark, lanyard TOP heavy, and ultimately fake.
I was under the impression that they were a centrist party, and offered to help with policy formulation.
As an economist land value taxes are very attractive, they are the most efficient form of tax the state can levy and can be used to remove or reduce other inefficient taxes (income tax, company taxes).
If you levied a land value tax and used that to reduce income and company taxes, you would see GDP boom, and the tide of Trans-Tasman migration turn.
I was primarily working in this space, as well as the citizen's income (though a UBI is better, both are more efficient than means-tested welfare) and superannuation policy (which is pretty good, much better than anyone on the left is promoting).
The other policies that have been crafted elsewhere in the party really have come out of left-field for me! Not at all interested in abolishing prisons, or embedding co-governance...
As an economist - please explain what exactly is GDP because it is not the same as productivity. It is the movement of money for goods and services such as shopping or a lawyer's or accountant's bill so allowing a bigger gst clip. Am I wrong? John Key used immigration to bolster GDP in order to make the economy look like it was doing well. More immigrants, more vehicles, more grocery and appliance shopping, higher demand for housing just means more money going around, it does not mean higher productivity. In fact we were a far more productive country with a lower hard-working population rather than what we are becoming, money movers.
As for land value taxes I am puzzled how this would make 'GDP boom' - this just means taxing hard working people who have saved and wisely bought themselves a home (the ones that the Greens call 'rich'), it does not mean they have any money left over. Such a tax would ultimately result in people losing ownership of their property, at least for pensioners or those on low incomes, building up a huge debt to the government against their property (a form of death tax) and shutting any children out of inheritance. The end goal is probably to push people out of private land ownership, then who would be paying the taxes?
1) GDP is measured on a value-added basis. I.e if your input costs increase, and your end product sells for the same price, GDP decreases.
2) You are absolutely right that simply adding more people demanding and producing more goods and services increases GDP, but does not necessarily increase GDP per capita. GDP per capita is increased when each person is able to produce more output. GDP per capita is an imperfect measure of productivity, but it is a good baseline measure. Ultimately to increase GDP per capita (and therefore productivity, and therefore wages and profits -> living standards in aggregate of New Zealanders).
Re: the efficiency of land taxes, this comes to the ultimate question of what taxes you levy, why, and how they affect the real economy.
Land taxes are attractive to economists, because they lead to the best incentives when the tax is levied, relative to other forms of taxation.
Tax income too much and people are more incentivized to avoid reporting it, and don't strive as much to maximise their income (incidentally, MOST of the ways people maximise their income are productive, so this is a productivity loss).
Tax company profits too much, and people are less incentivized to invest in growing productive businesses and/or incentivized to base their businesses offshore (and the high paying head office jobs with them..)
Tax wealth directly and people are less incentivized to save and invest, & highly incentivized to avoid the tax. You also have the problem that capital is highly mobile, and individuals are more highly mobile the more capital they have. So the group you attempt to levy the tax on, finds it easiest to escape it by heading offshore.
Capital gains taxes also disincentivise saving and investment.
The last two taxes you may think are worthwhile if you place sufficiently high value on the equity of taxation relative to the efficiency of taxation.
Land is different to other forms of capital, as it is not mobile. You cannot take your section to Sydney. If you tax land you encourage people to invest in maximising their return from their land. A single house or a ground level carpark on a large section, gets levied the same tax as an apartment block. So developers build an apartment block, and the net income after taxes from the land increases. This is why this tax is so efficient. It is the only way to tax capital while creating positive investment incentives as a result of the tax, rather than negative. The productivity impact is doubled if you then use the taxes raised to lower other productivity impairing taxes (company taxes, income taxes).
Most proposals to levy a land tax typically acknowledge the problem that pensioners may face, especially those quite advanced in life, and enable the tax to be deferred until the estate is wound up.
I personally am in favour of this element of the policy being time-limited (i.e perhaps new pensioners, 10-15 years after the tax system is reformed - so current 50-55 year olds - can't claim the deferral. The intention being that people adjust their retirement settings, placing more of their wealth in income generating assets in retirement, and less in a large property not generating any cashflow.)
Note: end goal is not to push people out of private land ownership. End goal is to push investment to more productive sectors of the economy, rather than overspeculating in finite resources (land).
The old argument that raising taxes frightens wealth is not born out by evidence. Look at Sweden. At the same time, there is plenty of evidence that greater equity promotes social cohesion, happiness and less crime. Consider what Scotland is currently doing in its Community Wealth bill. We are very behind in our thinking. https://www.democracycollaborative.org/blogs/the-long-road-to-economic-transformation
Sweden does tax a higher % of GDP than NZ that is true - though I’m not sure it’s quite the example you are looking for.
Their high tax % primarily comes through high income tax rates. I note that the 2026 budget will reduce the non-resident tax rate from 25% to 20% to increase international competitiveness.
They have lower corporate taxes than NZ - at 20.6% - all the Scandinavian countries do. High income taxes combined with low corporate taxes doesn’t stop you building wealth, but ensures that you do so in a way that maximises productivity (i.e keep the profits in the business, and reinvest them) rather than splurging on luxuries.
Sweden also got rid of it’s wealth tax in 2007 in order to boost investment, curb tax avoidance, and prevent capital flight.
Wealth taxes in particular are one of the most efficient taxes you can levy. They hit both productive capital accumulation (investing on productive businesses, building new buildings and renovating existing ones, investing in R&D, plant and machinery, all of which leads to higher demand for high paying jobs raising incomes) and unproductive capital accumulation (speculating on finite resources i.e land prices) equally.
So you have less of each activity, one of which is an activity you highly desire.
They are often extremely inefficient for the Crown to collect, with estimates of up to 40% of the revenue raised being spent raising the revenue. Great for accountants and lawyers, who can spend longer than the entire tax year arguing over the value of hard to pin down assets!
On top of that, they can lead to capital flight, as wealthy families invest their money out of the country/move entirely to avoid the tax.
So disincentivises saving and investment, pushes the wealthy and their resources out, and cost a lot to collect. Terrible. Good for equity. But extremely inefficient.
Land taxes on the other hand do not suffer these problems. You can take your shares, fine art collection, labour and business to Sydney, but you cannot take your section.
There is moderate potential for some inefficiency in collection as there is still arguing over the value of the land, though much less than other harder to pin down assets.
If Sweden reduced income taxes, and replaced that revenue 1 for 1 with land tax revenue, their system would be more efficient, their GDP would grow AND their society would be more equitable, as the burden of taxation shifts away slightly from those who rely on income (typically younger people with less assets) to those who own assets.
How do you envisage a Land Value Tax working Matt? Unimproved land provides no income to actually tax.
Some countries apply a type of speculation tax on unoccupied land so I can see some logic to that.
Whatever is designed, it must not punish residential owners (who may have little income in their later years), plus administrative costs would need to be carefully considered, as well as practical simplicity of any such scheme.
Land taxes may be attractive to economists, but they overlook the important social goods arising from wider home ownership, in particular political stability, family cohesion and wellbeing. A UBI is simply Communism in drag - "you pretend to pay us and we pretend to work" as they used to say in the Soviet Union. Or not to work as the case may be, so much for increasing per capita GDP. As for promoting more productive investments, thousands of older folk were badly burned in the widespread collapse of finance companies during the GFC, including the loss of life savings in many cases, leaving "bricks and mortar" the only rational investment option. New Zealand's financial markets remain cowboy country today.
Whenever someone says their policy/thoughts/actions are 'evidenced-based', it is proper to ask the question: whose evidence, and why did they produce that evidence - what was their motivation?
Thanks for indepth analysis, very helpful. I always assumed TOP was Centre-slighty-Right with a few socialist policies in the mix, simply because of the connection to Gareth Morgan - how wrong was I! It's actually rather frightening because die-hard Green voters who have seen their party morph into a pack of weirdos will likely turn to TOP.
Thanks for the warning Ani. I seem to remember that Top in one of its earlier incarnations fielded Mika, James Wallace's pimp in Auckland central several elections ago. I won't vote for any party that fields recent immigrants with woke agendas trying to interfere here. Places like the USA and Mexico (Greens) Top (Tranada) etc.
Claims of policy being "evidence-based"are not at all just rhetorical tricks, Ani. To claim otherwise is profoundly anti-enlightenment. You are essentially claiming that nothing can be said to be "true", or factual. That is a concise rephrasing of the philosophy of postmodernism which you elsewhere disparage and reject. Given that I follow your writing because you're so good at critically analysing and deconstructing people's claims of "evidence based policy" this is quite an odd position to take.
Well, here's an example. I asked the previous leader Raf Manji about TOP's thoughts on whether a man could be a woman if he says so. He said they could. So, if that's "evidence-based" then I'm a monkey's uncle.
If you asked the people who use the claim 'evidence-based' where is this evidence, they would point you solely to academic publications and the other work of academics.
So in the TOLP world, only academics and academic-adjacent knowledge workers have 'evidence'.
Thanks for looking into this with such depth. This is the information we need.
Thanks Ani, have often wondered what they actually stood for........now I am Left in no doubt.
In other words a more refined version of the loony, left Greens and the screeching Chloe Swarbrick.
Plus a dash of the racist Maori Party by insisting Treaty “ principles “ are adhered to throughout all government agencies.
Can these charlatans please advise what exactly are the so - called “ principles “ they refer to.
Or are they made up on the fly ?
If TOP really do think they centrist, then what is considered centrist has dramatically changed.
Ani, there's a quirk about MMP and minor parties that is not highlighted enough. A vote for a party that doesn't make the 5% threshold is proportionally divided and distributed to the other parties according to the % they poll. In the 2023 election I voted for a conservative minor party. I was horrified to learn that 60% of my vote had been allocated to a party I abhored. Immediately before an election if your favored party doesn't look like it will make that 5% threshold it's imperative that you change your vote to a party that most represents your political leanings or you'll end up supporting the wrong side.
Dumb post. This is why nothing ever changes in the NZ political system.
One of those male candidates has the head tilt of a tranny. Just needs a dress - no shave even - and he'd be good to go. Lest we forget they loooove the gender woo woo.
I think you've described them well. To me they feel cold, stark, lanyard TOP heavy, and ultimately fake.
Excellent analysis Ani. Such people terrify me.
They're communists with smart phones.
Bit of an inside scoop.
I was under the impression that they were a centrist party, and offered to help with policy formulation.
As an economist land value taxes are very attractive, they are the most efficient form of tax the state can levy and can be used to remove or reduce other inefficient taxes (income tax, company taxes).
If you levied a land value tax and used that to reduce income and company taxes, you would see GDP boom, and the tide of Trans-Tasman migration turn.
I was primarily working in this space, as well as the citizen's income (though a UBI is better, both are more efficient than means-tested welfare) and superannuation policy (which is pretty good, much better than anyone on the left is promoting).
The other policies that have been crafted elsewhere in the party really have come out of left-field for me! Not at all interested in abolishing prisons, or embedding co-governance...
As an economist - please explain what exactly is GDP because it is not the same as productivity. It is the movement of money for goods and services such as shopping or a lawyer's or accountant's bill so allowing a bigger gst clip. Am I wrong? John Key used immigration to bolster GDP in order to make the economy look like it was doing well. More immigrants, more vehicles, more grocery and appliance shopping, higher demand for housing just means more money going around, it does not mean higher productivity. In fact we were a far more productive country with a lower hard-working population rather than what we are becoming, money movers.
As for land value taxes I am puzzled how this would make 'GDP boom' - this just means taxing hard working people who have saved and wisely bought themselves a home (the ones that the Greens call 'rich'), it does not mean they have any money left over. Such a tax would ultimately result in people losing ownership of their property, at least for pensioners or those on low incomes, building up a huge debt to the government against their property (a form of death tax) and shutting any children out of inheritance. The end goal is probably to push people out of private land ownership, then who would be paying the taxes?
Hi Maggie, two things:
1) GDP is measured on a value-added basis. I.e if your input costs increase, and your end product sells for the same price, GDP decreases.
2) You are absolutely right that simply adding more people demanding and producing more goods and services increases GDP, but does not necessarily increase GDP per capita. GDP per capita is increased when each person is able to produce more output. GDP per capita is an imperfect measure of productivity, but it is a good baseline measure. Ultimately to increase GDP per capita (and therefore productivity, and therefore wages and profits -> living standards in aggregate of New Zealanders).
Re: the efficiency of land taxes, this comes to the ultimate question of what taxes you levy, why, and how they affect the real economy.
Land taxes are attractive to economists, because they lead to the best incentives when the tax is levied, relative to other forms of taxation.
Tax income too much and people are more incentivized to avoid reporting it, and don't strive as much to maximise their income (incidentally, MOST of the ways people maximise their income are productive, so this is a productivity loss).
Tax company profits too much, and people are less incentivized to invest in growing productive businesses and/or incentivized to base their businesses offshore (and the high paying head office jobs with them..)
Tax wealth directly and people are less incentivized to save and invest, & highly incentivized to avoid the tax. You also have the problem that capital is highly mobile, and individuals are more highly mobile the more capital they have. So the group you attempt to levy the tax on, finds it easiest to escape it by heading offshore.
Capital gains taxes also disincentivise saving and investment.
The last two taxes you may think are worthwhile if you place sufficiently high value on the equity of taxation relative to the efficiency of taxation.
Land is different to other forms of capital, as it is not mobile. You cannot take your section to Sydney. If you tax land you encourage people to invest in maximising their return from their land. A single house or a ground level carpark on a large section, gets levied the same tax as an apartment block. So developers build an apartment block, and the net income after taxes from the land increases. This is why this tax is so efficient. It is the only way to tax capital while creating positive investment incentives as a result of the tax, rather than negative. The productivity impact is doubled if you then use the taxes raised to lower other productivity impairing taxes (company taxes, income taxes).
Most proposals to levy a land tax typically acknowledge the problem that pensioners may face, especially those quite advanced in life, and enable the tax to be deferred until the estate is wound up.
I personally am in favour of this element of the policy being time-limited (i.e perhaps new pensioners, 10-15 years after the tax system is reformed - so current 50-55 year olds - can't claim the deferral. The intention being that people adjust their retirement settings, placing more of their wealth in income generating assets in retirement, and less in a large property not generating any cashflow.)
Note: end goal is not to push people out of private land ownership. End goal is to push investment to more productive sectors of the economy, rather than overspeculating in finite resources (land).
For a bit of easter reading.... https://www.unitybooks.co.nz/products/land-trap
The old argument that raising taxes frightens wealth is not born out by evidence. Look at Sweden. At the same time, there is plenty of evidence that greater equity promotes social cohesion, happiness and less crime. Consider what Scotland is currently doing in its Community Wealth bill. We are very behind in our thinking. https://www.democracycollaborative.org/blogs/the-long-road-to-economic-transformation
Hi Liz,
Sweden does tax a higher % of GDP than NZ that is true - though I’m not sure it’s quite the example you are looking for.
Their high tax % primarily comes through high income tax rates. I note that the 2026 budget will reduce the non-resident tax rate from 25% to 20% to increase international competitiveness.
They have lower corporate taxes than NZ - at 20.6% - all the Scandinavian countries do. High income taxes combined with low corporate taxes doesn’t stop you building wealth, but ensures that you do so in a way that maximises productivity (i.e keep the profits in the business, and reinvest them) rather than splurging on luxuries.
Sweden also got rid of it’s wealth tax in 2007 in order to boost investment, curb tax avoidance, and prevent capital flight.
Wealth taxes in particular are one of the most efficient taxes you can levy. They hit both productive capital accumulation (investing on productive businesses, building new buildings and renovating existing ones, investing in R&D, plant and machinery, all of which leads to higher demand for high paying jobs raising incomes) and unproductive capital accumulation (speculating on finite resources i.e land prices) equally.
So you have less of each activity, one of which is an activity you highly desire.
They are often extremely inefficient for the Crown to collect, with estimates of up to 40% of the revenue raised being spent raising the revenue. Great for accountants and lawyers, who can spend longer than the entire tax year arguing over the value of hard to pin down assets!
On top of that, they can lead to capital flight, as wealthy families invest their money out of the country/move entirely to avoid the tax.
So disincentivises saving and investment, pushes the wealthy and their resources out, and cost a lot to collect. Terrible. Good for equity. But extremely inefficient.
Land taxes on the other hand do not suffer these problems. You can take your shares, fine art collection, labour and business to Sydney, but you cannot take your section.
There is moderate potential for some inefficiency in collection as there is still arguing over the value of the land, though much less than other harder to pin down assets.
If Sweden reduced income taxes, and replaced that revenue 1 for 1 with land tax revenue, their system would be more efficient, their GDP would grow AND their society would be more equitable, as the burden of taxation shifts away slightly from those who rely on income (typically younger people with less assets) to those who own assets.
How do you envisage a Land Value Tax working Matt? Unimproved land provides no income to actually tax.
Some countries apply a type of speculation tax on unoccupied land so I can see some logic to that.
Whatever is designed, it must not punish residential owners (who may have little income in their later years), plus administrative costs would need to be carefully considered, as well as practical simplicity of any such scheme.
Land taxes may be attractive to economists, but they overlook the important social goods arising from wider home ownership, in particular political stability, family cohesion and wellbeing. A UBI is simply Communism in drag - "you pretend to pay us and we pretend to work" as they used to say in the Soviet Union. Or not to work as the case may be, so much for increasing per capita GDP. As for promoting more productive investments, thousands of older folk were badly burned in the widespread collapse of finance companies during the GFC, including the loss of life savings in many cases, leaving "bricks and mortar" the only rational investment option. New Zealand's financial markets remain cowboy country today.
Ani’s article is a gem! It cuts through the political spin with clarity. On the face of it, TOP is a WOMBAT - a ‘waste of money, brains, and time.’
Thanks for calling them out as fake centerists. People need to know what they are voting for.
Thank you, Ani, a good read, and very comprehensive. It’s all we need to know.
Whenever someone says their policy/thoughts/actions are 'evidenced-based', it is proper to ask the question: whose evidence, and why did they produce that evidence - what was their motivation?
Thanks for indepth analysis, very helpful. I always assumed TOP was Centre-slighty-Right with a few socialist policies in the mix, simply because of the connection to Gareth Morgan - how wrong was I! It's actually rather frightening because die-hard Green voters who have seen their party morph into a pack of weirdos will likely turn to TOP.
Thanks for the warning Ani. I seem to remember that Top in one of its earlier incarnations fielded Mika, James Wallace's pimp in Auckland central several elections ago. I won't vote for any party that fields recent immigrants with woke agendas trying to interfere here. Places like the USA and Mexico (Greens) Top (Tranada) etc.
Claims of policy being "evidence-based"are not at all just rhetorical tricks, Ani. To claim otherwise is profoundly anti-enlightenment. You are essentially claiming that nothing can be said to be "true", or factual. That is a concise rephrasing of the philosophy of postmodernism which you elsewhere disparage and reject. Given that I follow your writing because you're so good at critically analysing and deconstructing people's claims of "evidence based policy" this is quite an odd position to take.
Well, here's an example. I asked the previous leader Raf Manji about TOP's thoughts on whether a man could be a woman if he says so. He said they could. So, if that's "evidence-based" then I'm a monkey's uncle.
Away with you.
If you asked the people who use the claim 'evidence-based' where is this evidence, they would point you solely to academic publications and the other work of academics.
So in the TOLP world, only academics and academic-adjacent knowledge workers have 'evidence'.