Budget Day 2025 arrives with cuts, cookies and promises of ‘no BS'
With months of pre-budget announcements behind us, the real detail lands today – including where the axe will fall to fund the government's plans, writes Catherine McGregor in today's extract from The Bulletin.
A 'no BS' budget in a high-debt reality
It's Budget Day, when finance minister Nicola Willis finally reveals what she's calling the 'no BS' budget – though its 'formal, Christian' name is the 'Growth Budget'. But can a budget really deliver economic growth at a time of fiscal constraint? Commentators are sceptical. As Liam Dann notes in the Herald (paywalled), despite the 'growth' branding, the government's room to manoeuvre is limited by high debt and inflationary pressures. It will likely try to address the growth conundrum with one simple trick: 'reprioritising money from areas it thinks aren't boosting growth, to ones it thinks will', Dann writes.
A stimulus package isn't on the cards; at best, the budget is expected to be fiscally neutral, or even mildly contractionary. Willis says it will be a 'reality budget' that delivers 'genuine hope for the future', but growth, in this context, may have more to do with political messaging than immediate economic outcomes.
Pre-announcements pave the path
As both Liam Dann and The Spinoff's Alice Neville point out, the standard run of pre-budget announcements serve a strategic purpose: they allow governments to seed positive headlines while keeping the inevitable cuts under wraps until the main event. That strategy has been on full display this year, with big-ticket items like a $12 billion defence package, a $577 million screen production rebate, and over $774m in redress for those abused in state care announced in advance. The final document, released at 2pm today, is expected to include 'one or two' attention-grabbing initiatives designed to dominate headlines – and hopefully draw attention away from the cuts.
A narrow fiscal tightrope
At the heart of Budget 2025 is a reduced operating allowance of $1.3 billion, making it the tightest in a decade, Neville writes. While capital spending has been nudged upward to $4 billion, operational spending (ongoing costs for things like public sector wages and infrastructure maintenance) has been slashed or reallocated, with pre-committed funds eating up much of the budget. A major savings drive – including billions clawed back from the pay equity reforms and cuts across a swathe of ministries – has allowed the government to launch new initiatives without significantly increasing debt. Still, as BNZ economist Matt Brunt notes, the operating allowance is 'likely not even enough to cover natural cost increases from population growth and inflation'.
The government's gamble is that reprioritisation, rather than fresh borrowing, will deliver a good-enough result. There'll be 'no rainbows, or unicorns either,' Willis said on Wednesday. For people worried that their public sector job is at risk, it's not exactly a reassuring line.
Lockups and lamingtons
The rituals of Budget Day offer a touch of levity amid all the spreadsheets and political spin. At 10.30am, journalists and analysts descend on the Beehive's Banquet Hall to read the budget in the lockup, a strictly embargoed zone with no phones, internet or contact with the outside world until 2pm. 'It's like a sleepover, with all the lollies. An exam, with all the pen and paper. A digital detox, with all the blocked internet access,' wrote Jessica McAllen in The Spinoff back in 2018.
The lockup is also famously obsessed with snacks: in past years, sausage rolls, sushi and lamingtons (or the lack of them) have sparked almost as much commentary as the fiscal outlook, writes Anna Whyte in The Post (paywalled). Willis' own routine includes cookies baked by her children and, at day's end, a whisky from the prime minister – just 'one dram', she clarified yesterday. After the embargo lifts at 2pm, the rest of the day is filled with speeches, standups, press releases and parliamentary debate.
As ever, The Spinoff will feature coverage throughout the afternoon and into Friday. This evening, look out for the traditional crossover episode of Gone By Lunchtime x When the Facts Change, with Toby Manhire and Bernard Hickey chewing over the biggest stories from the day, and what they could all mean for New Zealanders.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Spinoff
19 hours ago
- The Spinoff
AI job losses are coming – and entry-level workers could be the first to go
After years of hype and hesitation, artificial intelligence is beginning to displace real jobs, writes Catherine McGregor in today's extract from The Bulletin. The quiet start of a loud disruption For many workers, the presence of artificial intelligence in the office has so far been subtle – a bit of text from ChatGPT here, an AI-generated image there. But a profound shift in the labour market is coming, many business and AI insiders say. Anthropic, maker of the Claude AI models, has found that while AI is being used mainly for the augmentation of tasks, a transition toward automation – actually doing the job – is well underway. 'Most [workers] are unaware that this is about to happen,' Anthropic CEO Dario Amodei told Axios. 'It sounds crazy, and people just don't believe it.' His warning was echoed by Axios co-founders Jim VandeHei and Mike Allen, who said they had 'talked to scores of CEOs' about how they're thinking about AI. 'Every single one of them is working furiously to figure out when and how agents or other AI technology can displace human workers at scale,' they wrote. 'The second these technologies can operate at a human efficacy level, which could be six months to several years from now, companies will shift from humans to machines.' Tech jobs may be the canary in the coal mine If that sounds alarmist, the numbers suggest otherwise. A global survey of senior executives found that 10% of all job roles could be eliminated by AI within five years. That figure, described as 'modest' by Dr Paul Henderson in his recent Maxim Institute report, Gone for Good: AI and the Future of Work, would still cause 'a marked disruption in New Zealanders' lives'. Some sectors are already showing signs of strain. Software development, in particular, has seen entry-level jobs disappear with the rise of coding assistants and no-code platforms. The IT news site CIO reports that teams are being restructured around AI tools, favouring experienced developers who can supervise machine-generated code over junior staff who once cut their teeth writing it. As Meta's Mark Zuckerberg put it earlier this year, mid-level engineers – and presumably the junior coders aspiring to join them – may become unnecessary 'in 2025'. A grim forecast for new graduates It seems that those searching for their first office jobs are most at risk. Amodei has predicted AI could wipe out half of all entry-level white collar jobs in the next five years and in the New York Times (paywalled), Kevin Roose reports that numerous firms are 'making rapid progress toward automating entry-level work', while others are becoming 'AI-first', evaluating whether a job even needs a human before posting the vacancy. While this trend is most visible in the US, its implications are global – including for New Zealand, where many graduate roles mirror their overseas counterparts. The IMF has warned that up to 60% of jobs in advanced economies may be affected by AI. If so, the dream of a secure professional career may become a luxury afforded only to those already through the door. Education in the age of artificial answers For those still in education, the concern is not just if there'll be a job waiting – but whether they're truly learning anything at all. In The Spinoff this morning, Hera Lindsay Bird documents the creeping use of generative AI in New Zealand schools and universities. Some of the quotes from teachers and lecturers are eye-popping. 'My main beef with AI is that it made me into a grown adult asshole who had 18-year- old enemies,' one says. 'I wanted to be a teacher not a cop.' Lindsay Bird writes: 'Almost every educator I spoke with, from primary school teachers to those supervising postgraduate dissertations, raised serious concerns,' she writes, 'with some teachers estimating that up to 80% of their students relied on ChatGPT to complete assignments. 'I spoke to MA supervisors whose history students theses were riddled with fictitious sources and 'archival' Midjourney photographs, and primary and intermediate school teachers, who said students as young as 11 were using it to answer simple personal prompts, such as 'what did you do in the summer holidays?' and 'what was your favourite penguin in the text?''
NZ Herald
a day ago
- NZ Herald
Seymour on Māori funding: Need over race in Government policy shift
He went from being abused at Waitangi this year to the Bombay Hills to the opening of Tipene, St Stephen's School, a new charter school on the former site of the old St Stephen's College, which was closed in 2000. Untangling Government targeting can be confusing. Apparently funding for Māori-focused schools, be it charter or kura kaupapa, is fine. But funding for a Māori Health Authority, Te Aka Whai Ora, ended last year, and the authority was disestablished. Specific funding for Māori housing programmes was cut from Budget 2025, and funding for Māori trades training was cut. But funding for Māori wardens was increased, and continued for Whānau Ora. It is okay for Māori health providers to be contracted to increase immunisation rates for Māori babies. But when ACC tendered this year for expertise to reduce work injuries for Māori and Pacific people in the manufacturing sector, where they are over-represented, Act contacted the ACC Minister, and the Minister asked ACC to rethink. Ethnicity has been removed as one of five factors in what is called an equity adjustor for waiting lists in the health system, and a move by the last Government has been scrapped to screen Māori at a younger age for bowel cancer on the basis that they get it earlier. So when is targeting okay and not okay for Māori under Seymour's philosophical approach? Essentially, it's when all factors other than race have been ruled out. But he is defensive about the way Act has been criticised for it. 'In a lot of this debate, people assume we are opposed a group of people or a culture where in actual fact we are opposed to an arbitrary way it comes about.' When it comes to charter schools, Seymour says they present no discrimination, and that the fact that some are set up for Māori is neither an advantage or disadvantage. "There is a misconception that I and Act are opposed to anything Māori," says David Seymour. Photo / Mark Mitchell 'There is no discrimination in the policy. It says if you want to set up a school you must basically demonstrate three things: that you've got an idea, that you've got capacity to plausibly deliver on it and that you have community support. A wide range of people were doing it, including a kaupapa Māori school. 'The thing there is nothing in the policy that says you have advantage or disadvantage in being a Māori school.' The difference with the Māori Health Authority On the other hand, the Māori Health Authority had effectively said that New Zealand would have two health commissioning agencies because the most important thing about a person was their ethnicity.' 'With a charter school, by contrast, there's no putting different patients into different boxes,' said Seymour. 'People themselves can choose a school with a certain style. The difference is that charter schools are bottom-up. The Māori Health Authority was top-down.' Seymour cites the Cabinet Office Circular headed 'Needs-based service provision', which was issued to all in September last year as part of National's coalition agreements with Act and NZ First to set out its expectation that services should be delivered on the basis of need, not race. The salient parts state: 'The Government seeks to ensure that all New Zealanders, regardless of ethnicity or personal identity, have access to public services that are appropriate and effective for them, and that services are not arbitrarily allocated on the basis of ethnicity or any other aspect of identity. The circular draws on international law, the International Convention on the Elimination of All Forms of Racial Discrimination, for temporary circumstances in which affirmative action is acceptable. It quotes the convention: 'Special measures taken for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms shall not be deemed racial discrimination, provided, however, that such measures do not, as a consequence, lead to the maintenance of separate rights for different racial groups and that they shall not be continued after the objectives for which they were taken have been achieved'. The circular is essentially Government policy and sets expectations for ministers, chief executives and officials involved in service design, commissioning, and delivery of government services. Voucher system in tertiary education Seymour does not have a problem with the variety in the education system but does have a problem with any affirmative action courses that have lower standards for Māori or other groups. 'Tertiary education now, at least, is essentially a voucher system,' he said. 'You go to any registered tertiary institution and the state will fund your places. 'Do I have a problem, for example, with Te Waananga? No. If people want to go to the University of Auckland, they should. If they want to go to the Waananga, they should. Will they get different treatment at each one? Probably, but that's a pluralistic society. 'That I don't have a problem with.' But he was completely opposed to lower standards of admission for Māori to say, medical school. 'That is different access to opportunity based on your race, versus presenting and delivering the opportunity in different ways in a marketplace place and the latter I completely support, and that's what charter schools are.' He said he recently chastised a supporter of his who had complained about a netball tournament in Whanganui where you had to speak Māori for the whole tournament, and you could be penalised for speaking English. 'And I just said, 'Why is this a problem?'' It was no different to a camp for French language students where you could speak only French at the camp and there would be no problem with that. 'We have no problem with multiculturalism. It's discrimination and preferential allocation of resources that we have a problem with.' Seymour said he did not have a problem with using Māori health providers to have better access to Māori patients with defined needs. 'If you can genuinely show that ethnicity is your variable and that is better than any other way in making sure that all patients get better service, then we support that. 'But what we don't support is a framework where the starting premise of the law is that we are divided into tangata whenua and tangata Tiriti, and that is the lens through which we must always look. That I think is wrong. 'There is a misconception that I and Act are somehow opposed to anything Māori. We are really not.' Changes to ACC targeting So why did Act object to ACC's tender to reduce work injuries in the manufacturing sector, with targets for Māori and Pacific workers who have disproportionately higher injuries? 'There are two very different things here,' said Seymour. 'Do we believe in devolution and competition, and choice in the delivery of social services and we absolutely do. 'But then there is the question of 'should you then group your patients and commission different levels of service, regardless of who the providers are, by their ethnic background?' ACC Minister Scott Simpson had initially believed he had followed the cabinet circular, said Seymour. 'But the cabinet is very clear. It says you can use ethnicity as a variable for directing resources but you need to be very sure there aren't other variables that you could have used first – because we have so much more data than just a person's ethnicity and we can do far more accurate targeting if we are prepared to use the richness of data we have in the IDI [Statistics NZ's Integrated Data Infrastructure] rather than just defaulting to race. 'We need to be a lot more nuanced and sophisticated in our use of data,' said Seymour. ACC has since changed its practices. New guidance for staff has been developed to support the application of the Cabinet Office Circular to ACC's commissioning practices, said Andy Milne, ACC deputy chief executive for strategy, engagement and prevention. 'This will ensure that we evidence the need for any targeted commissioning and demonstrate that we are following the guidelines set out in the Government's circular.' ACC data showed that Māori and Pacific people disproportionately experience high injury rates in the manufacturing sector, which is one of five high-risk priority areas for ACC. In 2024, 18% of work-related weekly compensation claims in manufacturing impacted Māori (Māori constitute 14% of the workforce), and 11% of work-related weekly compensation claims in manufacturing impacted Pacific people (10% of the workforce). The original tender sought a target outcome of 5461 claims to be saved by the end of the benefit realisation period (approximately 10 years from the delivery phase). At least 18% of the claims saved were to be from Māori, and 11% from Pacific people. After Act and the minister's intervention, the tender was reissued by ACC without the ethnic targets, and closed last week. Targeted services is 'good government' Nicola Willis took the paper on the circular to cabinet last year as Public Service Minister, and it also revoked the previous Government's affirmative action, the progressive procurement policy, which aimed to get Government agencies to award 8% of their contracts to Māori businesses. 'I am concerned that retaining targets for a specific group (or groups) of businesses based on ethnicity sends the wrong signal to agencies about awarding contracts first and foremost on public value,' Willis wrote. 'I consider this approach, regardless of how carefully it is implemented, leaves an impression of an uneven playing field and a perception (whether warranted or not) of potential discrimination.' The cabinet paper acknowledges the benefits of targeted services, not just to ethnically defined groups but disabled people, seniors, people living in rural area or those with diverse sexualities or gender identities. 'Services targeted or designed for specific population groups are an established feature of good government,' she wrote. But where targeted services were proposed, 'I expect these to be informed by clear evidence of a disparity, and evidence that culturally responsive or population-specific service models would be more effective. In other words, targeted services should coincide with a focus on need…' She said the proposals were consistent with the Crown's obligations under the Treaty of Waitangi. 'We are committed to achieving equitable outcomes for all New Zealanders, and I acknowledge this will often require services targeted or tailored to specific ethnic population groups, subject to the analytical rigour proposed in the circular to confirm such need.' 'I believe the need is overwhelming." Labour Social Development spokesman Willie Jackson. Photo / Mark Mitchell Former Māori Development Minister Willie Jackson was one of the first to condemn cuts to targeted programmes in this year's Budget, including the Māori Trade and Training. 'The Government should hang its head in shame after a budget that takes a knife to more Māori programmes,' he said on Budget day. He felt it keenly. For six years as a minister in the Labour-led Government, he worked with Finance Minister Grant Robertson to build up targeted funding for Māori to a total of about $1b a year by 2023. He also drove the now-ditched progressive procurement policy for Māori businesses to get a slice of the $50b annual procurement of Government agencies. In his view, targeted funding, particularly using Māori providers in health and social services, is the most effective way of getting to Māori in the most need. 'I believe the need is overwhelming and the facts show the need is overwhelming in terms of Māori,' he told the Herald. 'There is a big group and a growing group who just trust Māori processes, and their Māori health provider. And they are shell-shocked at the moment.' 'Our people trust our people' He believes the reason Seymour is averse to targeting on race is because it was his way of 'walking away from Treaty obligations.' So why did Labour decide to set up a Māori Health Authority? Was it a Treaty obligation or a measure for more targeted delivery? 'The inability to access health was a huge factor in terms of the Māori Health Authority. Always at the forefront was need, but of course the Treaty was there too,' said Jackson. 'But I believe we always operated from a position of need, and Māori absolutely fulfilled that criteria. That is why I pushed so hard over that time for targeted Māori funding. 'He can call it racist, but our people trust our people.' There were 'incredible gaps' in Māori statistics that needed to be addressed with ''for Māori, by Māori' strategies.' And he believes most New Zealanders supported it. 'They just want common sense. They want fairness. They don't want extreme in terms of the Māori stuff and where Māori funding is due. They don't want separate everything.' Jackson was not sure if Labour would go to next year's election promising to reinstate the Māori Health Authority, Te Aka Whai Ora. 'But we will bring back in absolutely Māori-targeted funding. We are committed to targeted funding,' he said. 'We have learnt some of the lessons of the past' 'The reality is Māori want more funding and more resources. I just want to get our people the necessary funding and resources. 'It doesn't have to be in any separate entities, and maybe it won't be if we get back in because we have to learn some of the lessons of the past.' But Robertson acknowledged that funding and resourcing for Māori had been minimal. That was why target funding under Labour rose so much. 'And that is no racist funding. That is funding based on need. 'But also, there is a Treaty obligation. We are a partner, and that's how governments should look at things,' said Jackson. 'It doesn't mean that there is a Māori takeover. It is just an acknowledgement that the biggest need in this country is Māori.' While Jackson believes that National is 'buckling' to David Seymour's view of targeting, it is clear that National's ministers are less vexed by it. 'It was a fiscal, not philosophical' Speaking about the Budget in May, Social Development Minister Louise Upston justified ending funding for Māori Trades and Training on the basis it had been time-limited funding and that was where she first looked for savings. 'The Māori Trades Training fund was established during Covid times and then extended in 2022 and due to expire 30 June 2025,' she said. 'For things that were due to end, there had to be a very, very strong reason why I would have to continue them and have to find savings elsewhere.' Budget 2025 had focused on employment, and the intervention that had been the most successful was case management 'so that is where we have focused the resources'. In the past year, it had funded $21 million for 52 providers for expenses incurred on programmes that supported Māori through Trades and Training. But Upston insisted it was a fiscal decision, not a philosophical one based on the Cabinet Office Circular approved by Cabinet. Louise Upston said the focus in this year's budget went on case management. Photo / Mark Mitchell 'Totally and absolutely. It had nothing to do with the name of it. I looked at all programmes that had a time limit.' She said she had felt no need to conduct any reviews of programmes in Social Development in the light of the circular. 'If you look at Social Development, it is pretty clear who is over-represented in job seeker numbers. It is young people, it is Māori, it is Pasifika, it is disabled and to a lesser degree, women. 'What I wanted to do is make sure we are funding initiatives that are effective, and we have data and evidence to prove they have the greatest impact at supporting people back into employment.' The He Poutama Rangatahi programme for young people not in education, employment or training (Neets) continued, with $33 million, down from $44 million, but that is targeted at all Neets. Housing Minister Chris Bishop, with Finance Minister Nicola Willis, says he wants a more granular housing system. Photo / Mark Mitchell Housing funding consolidated Housing Minister Chris Bishop said the targeted Māori housing fund, Whai Kainga Whai Oranga, administered by the Ministry of Housing and Urban Development and Te Puni Kokiri, had been consolidated into a single funding source with several other housing funds. 'The money hasn't disappeared. It has just been consolidated into a different fund, and one of the things that fund will be looking at is who they can partner with in order to deliver houses for people in need. 'The intention is for the Government to be much more deliberate and targeted about the housing solutions that are invested in around the country. 'That fund will end up investing in a range of different Māori housing solutions around the country.' He was confident it would be an effective fund for supporting iwi in post-settlement governance entities and Māori land trusts that wanted to do things in housing. 'What we are doing with the housing system is to move towards a much more granular system, more evidence-based, where we focus on the right house in the right place for the right people. 'The system at the moment is way too much one-system-fits-all.' He said he wanted the system to be more targeted to need. 'We know where the housing need is, but the system doesn't actually cater for that at the moment. We know where the regional needs are.' There was a role in working with Māori housing providers 'in the same way as there is a role for kura kaupapa, there is a role in working with Māori health providers, who did an excellent job during the Covid pandemic, for example.' Bishop's office later confirmed that $188 million in uncommitted Māori housing operating funding and $383 million capital funding were reprioritised. New housing priorities include: $200m for 400 affordable rentals to be delivered through Māori housing projects ($48m opex; $151m capex) $168m for 550 social housing places to be delivered in Auckland ($128m opex; $40m capex) $300m for 650-900 social and affordable rentals through the new Flexible fund ($41m opex; 250m capex) What's the answer to disadvantage? So, back to Seymour for the last word. What would Seymour's approach be to lifting Māori out of the state of disadvantage they find themselves in in so many social statistics? The answer is dynamism. 'First of all, it's not all Māori and not only Māori. I would say all people who are in a state of disadvantage will benefit from a more dynamic opportunity because when there is more dynamism, there is more opportunity. 'For example, if there are more homes being built, it is more likely a young person will end up owning one. 'If there are more companies being formed with more capital investment, it is more likely that someone who doesn't have a good job or opportunity right now will get one. 'If there is more innovation and more schools opening up that are engaging students in newer and better ways, it is more likely that a person who doesn't have a good opportunity to get an education will get one. 'In my view, it is dynamism. We are seeing this with whole countries. You look at South Korea, Singapore, Taiwan, Ireland, some of the more successful eastern European countries such as Estonia, they've gone, often in less than two generations, from a situation where essentially everyone is destitute and down on their luck and lacking opportunity…to dynamic opportunity. 'Suddenly, new companies are being built, new houses are being built, and people have recovered their self-esteem because they have taken on challenges and overcome their challenges. 'That's the only thing in my view that makes anyone feel good.'
Otago Daily Times
a day ago
- Otago Daily Times
The clamour for a capital gains tax is pure political theatre
Being successful is no reason to be taxed, Gerrard Eckhoff writes. The pure theatre of Budget Day has passed, but not the predictable demand for more spending from the political left. These political parties are planning to rob Peter to pay Paul, courtesy of a capital gains tax (CGT) as they will effectively lock in the support and vote of Paul. Demanding money with menace usually results in jail time, unless you are a political party. In that case you get sentenced to an all-expenses-paid, three-year term in Wellington. It needs to be explained by the Left why it is so wrong to be able to sell your main asset untaxed after a lifetime of work and retire with some discretionary spending money. It is very clear the advocates of more and more tax believe that a CGT is needed to offset what they see to be the original sin of being productive and successful. At a time when productivity is so desperately needed, nearly 50% of our parliamentary representatives want to further tax the already productive — even more. The impact of a CGT on the elderly will be profound as the government takes another 30% of their retirement income but it is the young and their future that a CGT will ultimately destroy. The young will all be eligible for CGT on their assets at the end of their working life. Their assets such as land or a building in 50 years' time will be worth a few thousand percent more than its value today due to government-inspired inflation, so a $3m home will be commonplace. One particularly false belief is that all capital gain is unearned income. Not so. So many small businesses owners (70% of New Zealand businesses) invest in their enterprise to grow its base and resilience rather than pay themselves an income commensurate with the hours of work, the dollars invested, not to mention the risk involved. Paying staff, GST, rates, insurance and income tax etc takes first call on company expenditure as does the task of ensuring the business stays afloat. If a lifetime of work is to be taxed on the sale of the business, why bother to grow the asset, employ staff, pay GST, ACC levies and all manner of costs associated with business development? The hope for a comfortable retirement is rendered inert by a CGT, imposed on those who risk everything, by those who risk nothing. The much-vaunted Tax Working Group led by the late Sir Michael Cullen did not appear to fully understand the social upheaval a CGT will impose. Despite the vast number of reports promoting this tax, it is rare to read of the inevitable capital losses or how the benefit of more tax and spend by government, stimulates the economy. Nor is the impact of any capital gain being taxable ever openly discussed. Once this tax is invoked on the very wealthy — the less wealthy will also then be in line for promotion into the upper echelons of defined wealth and so on down the line — due to inflation. A CGT therefore will ultimately destroy the incentive to work, take risk and grow assets. The family farm or the urban family business face a very similar situation. So many families farmed their land or ran their business for little financial reward, drawing basic living expenses in order to grow the business — so why bother when a CGT is the major beneficiary of your years of hard work? A CGT will also ensure corporate farming replaces the family ownership of the business and highlights an inherent fault within our social structures — that of how to achieve an equitable succession within a family which is difficult enough without a CGT. A CGT is a racecourse certainty as soon as "the tax and spend gallery of the envious" get voted back in. Few members of the Left have ever owned and run a business so simply do not understand the implications of extra taxation on small businesses. Even if the spending power of the government is enhanced, the opportunity and advancement of the less well-off is not. Why is that? Socialism inherently wants success to fail and independence to become dependent — on the state. It is about power and control. It is incomprehensible that so many who contribute to society, are likely to watch the things they gave their life to lost to excessive taxation. They will not. Society functions due to two things — incentive and sanction. Incentives actually shape the future. Political silence over this issue can be taken as tacit approval of a CGT and its numerous close relatives — the land tax, the wealth tax, asset tax, inheritance tax which all hover over those who choose to take a risk to benefit themselves and their family. And that is why we all — but especially the young — face a very uncertain future under the politics of envy. — Gerrard Eckhoff is a former Act New Zealand MP.
