Book Review: Tax and Fairness, by Deborah Russell & Terry Baucher

Available in bookshops nationwide.

cv_tax_and_fairnessTwo well-known tax experts try to write a concise and intelligible book about tax. For the most part they succeed. This book is also intended to be part of a moral conversation about why we pay tax. In fact, its main contribution is to highlight some of the more technical aspects of tax in New Zealand, and make some useful comparisons to overseas practice.

The central part of the book involves explaining why the taxation of savings has gotten so complex and arbitrary. This affects both Kiwisaver and the Government’s Superannuation Fund, which appears to pay an inordinate amount of tax. Meanwhile, the country’s ‘love affair with property’ sees that go effectively untaxed, while the regular reviews of tax put a comprehensive capital gains tax (CGT) in the ‘too hard basket’, and the Treasury and IRD can’t agree on how to formulate a CGT in any case.

These chapters on the taxing of investment, and absence of tax on land and housing, are essential and could have been expanded. As it is there are many unfamiliar concepts to explain, and there is a risk of getting confused in all the acronyms. After learning about the ‘financial arrangements regime’, there is Tax, Tax, Exempt (TTE) policy; the Foreign Investment Fund (FIF) regime; the fair dividend rate (FDR) method; and the Portfolio Investment Entity (PIE) regime, before we get into Kiwisaver.

In particular, the FIF regime appears to have been rather baffling from the start in the 1980s, and has had to be re-booted a number of times. This points to the underlying theme within the narrative of the book. A lot of the key changes stem from the mid 1980s when there was supposed to be a simplification process, and the basic principle was to have a ‘broad base and low rate’ across all forms of income. However, examples like the FIF regime appear to be based on a theory of their own specific to the idiosyncrasies of New Zealand policymakers, especially in Treasury, as does the trust law change from the same period.

The trust law is mentioned a few times in the text, and both authors discussed the foreign trust regime in public debates during 2016, after the release of the Panama Papers. They seemed to agree that this had created a tax haven operation, but, rather curiously, they do not use the term at all in this book, even when discussing the tax-dodging multinational corporations. There is instead a nuance, when referring to the forms of income in ‘foreign trusts’ that goes untaxed; and this is apparently due to a loophole in the law. In truth, it was not a loophole at all, as the creation of the ‘foreign trust’ category was quite deliberate, and went against the advice of overseas experts in the crucial 1987-8 period. The only real question is why it remained unnoticed for so long, and why it was not reformed as well.

Although the book is apparently about fairness, the familiar terms for this – tax being more or less ‘progressive’ or ‘regressive’ – are never actually used in the text. Instead the concepts of ‘horizontal’ and ‘vertical’ equity are introduced, and are mentioned a few times in the detailed chapters. However, it is a pity that the concepts in the opening chapters, and the ‘moral conversation’ idea in the final chapter, are not necessarily integrated with all the technical detail.

Nonetheless, this short book is a credible effort in a very tricky conceptual minefield, and makes a good case for reforms.

Reviewed by Simon Boyce

Tax and Fairness (A BWB Text)
by Deborah Russell & Terry Baucher
Published by BWB
ISBN 9780947518608

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Book Review: Safeguarding the Future: Governing in an Uncertain World, by Jonathon Boston

Available now in bookshops nationwide.cv_safeguarding_the_future

Given the context of our world, with its 24/7 news cycle and incessant need to be ‘current’, the rise of populist politics that pander to reactive tendencies, a desire for quick ‘fixes’ (whether this be wall-building or oil drilling), and ‘perpetual election campaigning’, one could argue that we live a little too much in the now (which, as it happens, passes pretty quickly). The ever-widening gaps in society (both ideological and economical) and climate change mean that how we think about time and subsequently plan for the future could result in unprecedented consequences.

It follows that good governance is vital for keeping short-term thinking in check. In Safeguarding the Future: Governing in an Uncertain World, public policy expert Jonathon Boston makes a well-argued case for wise stewardship and ways to achieve this with economy and clarity. He starts by asking ‘How . . . can the chances of short sighted policy decisions – ones that threaten or undermine citizens’ long-term wellbeing – be minimised?’.

In response Boston proposes a design-based approach – one that is ‘more practical than ethical and more applied than conceptual’. He lays out the concept of safeguarding the future and does not shy way from the difficulties involved in achieving such an approach in the face of competing interests, before examining ‘The attributes of anticipatory governance’.

He goes on to assess how New Zealand is faring in light of this; it is a performance that is cause for both ‘celebration and lament’. Although there are some good frameworks and structures in place to protect long-term interests, such as Treasury publishing a report (independent of the Ministry of Finance) on the country’s long-term fiscal position, Boston emphasises that attempts to address environmental and socials issues have failed, grounding his argument in research and analysis.

The major hurdle he identifies is the ‘presentist bias in policy-making in the democratic world’ and the ‘excessive weight given to short term considerations’. This presentist bias plays out in a series of ‘Politically salient asymmetries’ or the time difference between the flow of costs and benefits. Yet this presentist drive is not the reserve of politicians alone, but shared across society: ‘On the whole, when individuals are confronted with intertemporal choices . . . biases tilt their preferences and behaviours towards the present.’

Both citizens and politicians find it difficult to pay for something now, when they personally might not see the benefits later. This might not matter as much for something like roading, which can be fixed at some point in the future, but it does matter for those long-term impacts that cannot be undone, such as the extinction of a species. This seemingly wilful refusal to heed massive long-term costs ‘reflects deeper pathologies within our democratic institutions, civil society and political culture.’

He illuminates the discord in our accounting, and what we, as a society and through our representatives, attribute value to. The types of costs and benefits typically reported on have the same old themes: capital, manufacturing, finances. But natural resources, as well as human and social cost-benefits, are not given the same treatment. Auditing these assets is important to ‘affect how policy-makers and citizens perceive the world, assess progress and judge governmental performance.’ Accountability is key. As Boston points out there are currently no requirements for government to consider whether their policy frameworks are intergenerationally fair – even when long-term impacts are highly likely.

In his agenda for reform, where the ‘aim is to shift the political context in which decisions are made by incentivising forward thinking and countering the presentist bias’, Boston sensibly advocates for change that is ‘evolutionary rather than revolutionary’ because this is cheaper, politically more expedient and less time consuming.

Crucially there is a need for durable, cross-party agreements for any meaningful change in policy and institutions to take place (otherwise things are undone, done poorly or stalled) – Boston cites superannuation as the most successful to date; political leaders need ‘to frame policy problems and proposed solutions in ways that can attract broad public support – perhaps because they appeal to long-standing cultural narratives and deeply held values’. Our parliamentary system needs examination (ones similar to ours show a similar lack of resolve) – he recommends commitment devices, the stating of long-term goals, and the strengthening of monitoring. And extending the term of governance to four years.

As Boston himself concludes in the book, the aim is not perfection, but betterment and this certainly available to us, not to mention critical. There is an implicit call to action for citizens within this – after all, citizens in a democracy have not only rights but obligations too.

Boston’s case for an intergenerational duty of care and ways to enable and better this are convincing and clear. Future generations are not able to advocate now, so we should. After all, as the philosopher Rawls is quoted in the book, ‘The mere difference of location in time, of something’s being earlier or later, is not in itself a rational ground for having more or less regard for it.’

Reviewed by Emma Johnson

Safeguarding the Future: Governing in an Uncertain World
By Jonathon Boston
Published by Bridget Williams Books
ISBN 9780947518257

Book Review: The Post-Snowden Era – Mass Surveillance and Privacy in New Zealand, by Kathleen M. Kuehn

Available now in bookshops nationwide.

cv_the_post-snowden_era.jpgBWB texts are fantastic short books written by specialists in the field. They provide good background to topical events, and it is particularly pleasurable to read books about New Zealand or written by New Zealand authors. As short books (and accordingly priced) they are accessible and very consumable. The Post-Snowden Era provides a brilliant hit of ethics, privacy and surveillance all in one tidy book.

Kathleen Kuehn is a lecturer in media studies with an interest in surveillance. She notes that we are told that the price of security is surveillance, but it isn’t quite the full story. Surveillance in the traditional sense has changed a lot, and with public/ private partnerships strongly in force, we have become complicit in our monitoring. With much of our ability to be monitored in the hands of commercial interests, traditional methods of controlling unwanted behaviour have been replaced by the free market.

Prior to reading this book I always thought that electronic surveillance sought to read emails or listen in to phone calls. It does that, but it is also the patterns created by our activities online – the combination of our shopping habits, social media activities and online searches that produce metadata. The metadata – the times we are online, who we call frequently or how we purchase items can be more revealing than the information in our emails. With most adults active digital users, each swipe of the Fly Buys Card, distances logged on Fit Bits and the location of our tweets enable analysts a comprehensive picture of our lives.

I really appreciated the opportunity to understand modern surveillance and Kathleen Kuehn has produced a very well written overview. I was quite startled by the extent of surveillance and feel much better informed on the issues raised as a result. The book is also well referenced and this provides an opportunity to dig deeper on the subject. A fascinating read.

Reviewed by Emma Rutherford

The Post-Snowden Era – Mass Surveillance and Privacy in New Zealand
by Kathleen M. Kuehn
Published by Bridget Williams Books
ISBN 9780908321070

Book Review: Three Cities: Seeking Hope in the Anthropocene, by Rod Oram

Available in bookshops nationwide.

cv_three_citiesRod Oram is an interesting example of a business journalist who has escaped the somewhat narrow confines of the daily press to become a columnist, and is able to discuss some of the big issues confronting the world. On his most recent Tuesday morning slot on RNZ National he talked about civilisation being at risk from global climate change and ecological destruction. The man-made environmental change to planet is what Oram means when referring to the ‘anthropocene’ in the title. But he remains in a minority of financial journalists who delve into environmental issues.

So Oram goes to three of the largest metropolitan areas in the world to look for others who are interested in ecological questions. This looks promising at first, even though the opening chapter about Beijing includes a lot of rather dry statistical information. And there he finds about the idea of ‘ecological civilisation’ which China confronts as it continues to industrialise, but faces certain financial and institutional challenges. In the conclusion Oram refers to other ideas he discovers in the Western metropoles, like the ‘doughnut economy’ and the ‘circular economy’. The sub-title of the book claims that “conventional economic policies are failing worldwide”, and he refers in the text to the ‘lifeless’ economic theory that plagues elite policymaking in the West. Oram also mentions something called Californian Ideology based on Silicon Valley values.

But, unfortunately, the book doesn’t really delve into the new ideas in any sustained way. Oram’s visit to three cities is based on his own familiarity with them, rather than really seeking new experience and opinion. There is a lot of personal narrative here for such a short book. And there are quite a few digressions as well, though some involve finding a Kiwi connection, like the Chinese store owned by Japanese interests which sells a Comvita gift box of 5 honey related items for 3031 yuan ($NZ750). He also refers to some interesting facts about a New Zealand firm LanzaTech, which has relocated to Chicago. However, I found the chapter about London rather disjointed, with an odd beginning about Jeremy Corbyn and Yanis Varoufakis. Oram writes quite a bit about the Financial Times where he worked in London, and the Northwestern University where he studied in the USA, but this does not add much to the big themes.

There is another version of this story which Oram presented for the 2015 Bruce Jesson Foundation lecture. There he talked about three crises which are linked: a fiscal or financial crisis for global economy beginning in 1971; the ‘Eco shock’ which has also been developing over the same time; and what he calls the ‘Corporate shock’, as exemplified in the Volkswagen company’s systematic deception over carbon emissions from its vehicles, being emblematic of the environmental costs of big business. If only the book were more focussed on the analysis of these issues, though the suggestions for local change in New Zealand at the end of the book are useful.

Reviewed by Simon Boyce

Three Cities: Seeking Hope in the Anthropocene
by Rod Oram
Published by BWB Books (Text series)
ISBN 9780994135407

Book Review: Playing for Both Sides: Love across the Tasman, by Stephanie Johnson

Available in bookshops nationwide.

cv_playing_both_sidesThe relationship between New Zealand and Australia, is like that in an extended family. While we love and support each other because we share so many things, we also pick at the differences, accentuate and ridicule them. It is a classic love-hate relationship.

In this BWB text, Stephanie Johnson explores at a more personal level her own experiences. As a writer, a wife and a mother, she shares her own journey and the way her crossing the ditch has influenced her writing and her feelings.

Johnson’s family have lived in New Zealand since the 1840s but she has lived in Australia as an adult, married an Australian and is often described as an Australian writer. She introduces the reader to other Kiwis who made the move, many never to return. However, she also points out that while they physically resided in Australia, they regarded New Zealand as home.

Johnson explores race relations, migrants, women’s rights, artistic freedom and the weather. But this is really a personal view because the telling is centred around the tour her musician son makes with his Mum as a roadie. This allows her to reflect on the places and people she meets, on their reaction to her son and his music and her own reflection on similarities and differences in the two nations.

I enjoyed the honesty of her writing. Her research added an historical element and the timing of the book is right. We are only now brave enough to look at our bigger, richer, stronger neighbour and ask if we are the same or we are different. I can see some robust discussion in a book group arising from this slim volume.

Reviewed by Kathy Watson

Playing for Both Sides: Love across the Tasman
by Stephanie Johnson
Published by Bridget Williams Books
ISBN 9780947492991

Book Review: The First Migration: Māori Origins 3000BC-AD1450, by Atholl Anderson

Available now in bookshops nationwide.

cv_the_first_migrationIn a traditional account from the Pacific island of Tikopia, we learn how one hundred people from the Nga Faea clan lost a territorial dispute and effectively went into exile: ‘The women and children were in the canoes; many of the men swam alongside . . . . So they went from sight, to be lost forever from the knowledge of men.’

Yet Atholl Anderson brings these people, and other traditions, back into view. In The First Migration: Māori Origins 3000BC-AD1450 Anderson seeks to show that there ‘is a history before history’ by widening the historical lens beyond the gaze of European observation of Māori , to incorporate a much broader timeframe, and the vast expanse of the Pacific.

Moving from the first migration, which began 5000 years ago when people started to move from South China to the Asian archipelago in a series of punctuated movements that would culminate in the arrival of tangata whenua in New Zealand, the book traces a long, incremental history. We learn of ‘genetic contributions, material cultural assemblages and economic commodities and strategies’, and are made privy to a process of ‘becoming’ before the actual ‘coming’.

Atholl outlines the network of elements necessary for this migration to be possible and considers the evidence available for us to access this fluid past: a series of movements before the final push to Aotearoa; winds (Atholl asks what if sailing conditions were different back then?); sailing technology; languages and peoples – who move through the centuries, eventually leaving the volcanic atolls off the Eastern Pacific for the ‘temperate, high islands of New Zealand’.

In this BWB text Anderson considers ‘what we know, and how’ about Māori origins in two parts: the first looks at the scientific responses to these questions; the second weaves in the historical accounts. The array of tools with which we look back, excavate and analyse are examined and critiqued, whether they be DNA, bacteria, pottery and tools, or genetic changes. He provides an account of the traces and varying spread of languages – from the slow-changing, wide-based Malayo-Polynesian marine languages to the Oceanic languages, which ‘may have changed quickly through repeated bottleneck effects’.

Then there are the rich traditional accounts, the details of which correspond across traditions and ‘provide significantly historical accounts of the tangata whenua migrations – of the individuals and groups who came, and the events that shaped their journeys’.

In just over one hundred pages, Anderson not only demonstrates the variety and means available for us to examine the past, but also brings together scientific and historical traditions, giving them equal consideration and presenting an accessible, humanised history.

For this reader, what is most striking – and stirring – ¬ is the concept of the voyage itself – ‘the implication of a large voyaging canoe setting off into the unknown’. There is neither adventure nor romance to be associated with this, rather a last solution for survival – where ancestors were forced on by ‘hunger, boundary disputes, personal feuds and warfare’. This is not only a useful lens through which to view a part of Aotearoa’s far-reaching history, but also to consider the current migrations of refugees. And in looking further back we see that origins have no fixed beginning point – that the past is not a static entity.

Reviewed by Emma Johnson

The First Migration: 3000BC -15450AD
by Atholl Anderson
Published by BWB Texts
ISBN  9780947492793

Book Review: Complacent Nation, by Gavin Ellis

Available now in bookshops and e-bookshops nationwide.

cv_complacent_nationGavin Ellis is the former editor of the NZ Herald, and a regular commentator on RNZ’s Nine to Noon, who is able to blend practical print media experience with some theoretical rigour. This is an excellent example of an extended essay, in a new digestible form, which BWB seems to have perfected. The book can certainly be read in one sitting, and provides much food for thought, but is it really a sampler for a more developed argument? Perhaps it draws together some recent examples of media practice, and government PR strategies, that aren’t necessarily the disturbing new trend that Dr Ellis is worried about.

The title suggests that the main problem is the ‘complacent nation’ of citizens, or civil society, but most of the text is about the role of government. Ellis states that there is a dangerous paradox, in that the more the government curtails freedom of speech, and thwarts the fourth estate, the less we citizens seem concerned by it. He has some historical examples from New Zealand, and some very contemporary media stand-offs, as well as some international comparisons, particularly from Canada. But the paradox seems to be that, although the number of journalists has greatly declined and the role of the press changed, the government seem ever more threatened by the possibility of sensitive information getting out, at least, the elected government does.

There are a couple of things that really interested me in the book concerning official information. The first is the role of the Office of the Ombudsman. This is a key role, but for those of us who have complained to the office about an information non-release and got nowhere, we have a slightly different perspective. Dr Ellis is worried about the media not being able to get information released, but they seem to do far better than the individual citizen.

It was, though, important to point to the criticism of the media by the former Ombudsman, Beverly Wakem, who claimed they acted like ‘rottweilers on heat’ in using O.I.A. requests. In fact, Ellis is arguing that the government agencies are trying to protect the Executive from any political embarrassment, and in withholding information are not acting in the public interest. There are also examples of imposing costs, or excuses like ‘commercial sensitivity’.

The second aspect of this involves the relationship between government agencies and their ministers. Ellis talks about the current relationship involving the ‘no surprises’ policy, in which all potential political problems for the minister have to be signalled in advance, and therefore controlled by the Executive.

One thing I thought about while reading this was that, whenever a practical problem comes up with public services, ministers are often quick to say that it’s an ‘operational issue’ and not their problem (the department’s PR people can deal with that). That seems contradictory: the ministerial office needs to know everything, but isn’t really responsible for any of the detail of policy implementation. Is it just the typical ‘passing of the buck’, and bureaucratic politics in the Wellington beltway, or is this of more constitutional significance? Hopefully the debate will now ensue.

Reviewed by Simon Boyce

Complacent Nation
by Gavin Ellis
BWB Texts
ISBN 9780947492946