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

Book Review: New Zealand’s Prime Ministers: From Dick Seddon to John Key, by Michael Bassett

Available in selected bookshops nationwide.

Michael Bassett is a former university lecturer in history, who was first elected for the Labour Party in 1972, and became a cabinet minister in the 4th Labour Government in 1984. He should have some unique insights into the careers of the Prime Ministers in New Zealand, both as an historian and as an insider. But during his career, Bassett has moved from the left of the Labour Party to become the main defender of the faith for “Rogernomics” – so, associated with the ACT Party.

The book begins as mostly elite political biography, moves into some sharp personal polemics during Bassett’s era as a politician, and ends up cheer-leading for John Key. As an elitist historian, Bassett’s text for the early Prime Ministers is based on some classic historical works, without accounting for recent scholarship from university history departments. And as an elitist, Bassett continually name checks retired right wing economists like Gary Hawke, and Don Brash, who regularly appear for their anecdotal accounts of politicians. Bassett himself often slips into the first person, and goes from the past to the present tense.

One of the idiosyncratic aspects of this book is the amount of text given over to caretaker Prime Ministers, like Harry Bell, who gets almost as many pages as days he spent in office. Bassett’s use of initials for Bell can also confuse him with his politician father, F.D. Bell. The reason for this focus on Bell is his influence on the likes of Coates and other key figures in the interwar period, which is Bassett’s main area of knowledge as an historian. But the post-war period has an underlying narrative based on economic transformation, and its apparent link to academic theorising. He digresses to talk about Don Brash’s view on the role of Canterbury University (p.335) in the chapter on Bill Rowling, who was apparently gripped by Keynes’ thinking.

For Bassett, after Kirk, the Labour leaders do not shape up. Most of the invective is reserved for R.D. Muldoon. This is where Bassett gets particularly petty, including referring to Muldoon as “Old Pussy”, based on a schooldays anecdote. He repeats this term a number of times in the Muldoon chapter, as well as other unattributed anecdotes, like when the Treasury secretary, Henry Lang, waited outside the minister’s office all day to get his point across. This is portrayed as an example of the Treasury officials’ views being overridden, but Bassett misrepresents their relationship with the finance minister.

Bassett’s book includes a lot of black & white images, some from library sources, and others from his own collection or offered by recent Prime Ministers. The caption on the photo for the first page of Jenny Shipley’s chapter states that it was contemporary, when it’s obviously taken recently. Indeed, with no photographs in colour, other than the cover photo of John Key playing golf, it is hard to justify the $50 retail price tag. But then this book is only really for the political conservatives in the current debate.

Reviewed by Simon Boyce

New Zealand’s Prime Ministers: From Dick Seddon to John Key
by Michael Bassett
David Ling Publishing 2017

NB: The views in this review do not necessarily represent those of Booksellers NZ as an organisation. All of our reviewers are independent commentators.

Book Review: Tell You What: 2017, edited by Susanna Andrew and Jolisa Gracewood

Available now in bookshops nationwide.

cv_tell_you_what_2017This third AUP collection of ‘Great New Zealand Nonfiction’ was an engaging summer read, and may even turn out to be the best such compilation. Through a miscellany of styles and themes, patterns emerge, just like little ripples in a swimming pool, or batting statistics in test cricket history. At first it was a useful read during the slower periods in the recent Basin Reserve test match. But as the cricket got more exciting, and the injuries more serious, I realised that the essays demanded greater concentration.

Personal narrative and in-depth history are woven into everything from slave runs in 17th century Iceland and the 19th century Marlborough Sounds, to the previously unknown story of a Muslim immigrant herbalist, and a 1960s case of arsenic poisoning. Seriously obscure literary texts and pop culture kitsch from the 1970s form the background to tales of gendered angst. There are also some good selections from more mainstream journalism and essay subjects.

Giovanni Tiso makes a very good point about the assumptions of policy reformers over the course of a century when it comes to the spending habits of the poor. And Dylan Cleaver’s piece from the NZ Herald brings new life to the odd world of pigeon racing. There are also important and contrasting takes on the role of Maori protocol and sense of whakapapa in a number of the selections, some in specific cultural contexts, and others in the more complex considerations involved in the wreck of the Rena, or purchase of the Awaroa inlet. Talia Marshall’s treatment of the latter is both grammatically and thematically challenging, covers a whole sweep of Maori and colonial history, and also notes the loss of bird life in the Abel Tasman national park. Like a number of the authors, she questions our sense of place.

The main theme that emerges in this collection is the struggle for understanding between parents and children over time, including how to overcome a denial of family history. Toni Nealie’s ‘Bequeathed’ is a very structured piece that draws together her very fragmented family history, and focuses on lost grandparents, the complications of their ‘mixed race’ marriage, and the role of particular inherited items in creating meaning where memory had been shunned. The pain of maternal death and its implications are examined in Ashleigh Young’s ‘Anemone’, as she describes the journey to London to help her brother and nephew cope with the suicide of her sister-in-law. Young’s brother’s reaction is similar to that of a sea anemone; and her nephew finds an explanation in the intricacies of something called Minecraft. But Young herself can’t quite fathom the situation, or even use the word suicide.

Equally challenging, and somehow unfathomable, Tracey Slaughter’s account of her childhood in ‘Ashdown Place’, and the life changing effects of a swimming pool being installed. It becomes the venue for tawdry adult parties, what is now called ‘swinging’, and the seeds of permanent splits and reallocation of partners. Slaughter’s description of the cultural artefacts and reference points of the time are evocative in the extreme, at least for those also growing up in the ‘70s. And her final paragraph, where she recounts the seedy morning afters, as the child within returns to the swimming pool for a contemplative paddle, is sublime. But for all its literary merit I found myself troubled by this one, and the part where she suggests that the explanation is sociological – couples who married too young discarded their sexual mores in the heat of summer, but otherwise remained suburban conservatives. Perhaps infidelity was re-invented in the 1970s.

With that point made, Susanna Andrew and Jolisa Gracewood have done a fantastic job in compiling these essays. 2016 was also a good year for non-fiction writing if nothing else.

Reviewed by Simon Boyce

Tell You What: 2017
by Susanna Andrew & Jolisa Gracewood (eds)
Auckland University Press
ISBN  9781869408602

 

Book Review: Don’t Dream It’s Over: Reimagining Journalism in Aotearoa New Zealand

Available now in bookshops nationwide.

cv_dont_dream_its_overThe title for this collaborative book of essays and insights, borrowed from the Crowded House song, “Don’t Dream it’s Over”, is apposite and timely. From the song there is the line “…they come to build a wall between us…”. If we took that literally with regard to journalism, applied to the commercial model for media, it seems that the quality product will soon be found behind a paywall; and the mass media will not provide anything in the way of investigative reporting in the future. The contributors to this book  make it abundantly clear that long-form print journalism is on the wane, and, in any case, the whole future of the print media itself is in doubt.

A lot has already been written about this demise, however, and though covered here the real insights are into the specific role of New Zealand journalism. We like to think of Crowded House as a New Zealand institution, but do we similarly think of any of the local media with this level of esteem? Other than the regard shown for public broadcasting on radio, in the form of RNZ, one’s reaction to the essays in general is to ask what is worth saving in the commercial media? And does it actually matter? Those of us who do listen to RNZ for much of the morning and early evening are still well informed, by and large, and can then pick and choose what to read or view from the commercial outlets. But even then, RNZ can be challenged for its content, as some of the contributors do, on the basis of a deficit in their indigenous and Pacific stories.

Industry insiders, such as Brent Edwards, do concede that there has been a loss of trust between the audience and the media, and he is particularly critical of political coverage. RNZ is actually the only media outlet that covers the proceedings of Parliament, while all the rest of the Press Gallery simply focus on the game of politics without any substance of policymaking. I suggest that the so-called ‘political editors’ don’t actually report anything, but simply provide an insider commentary. Morgan Godfery provides a brilliant chapter ‘Against political commentary’, where he wrestles with his own involvement as a commentator, and trappings of the elite company he has kept. He refers to the idea of ‘savvy commentary’, and the narrow demographic background of commentators creating a hermetically sealed world. He refers to the odd premise that this perpetuates: “a belief that political progress comes from pragmatic insiders who know how to manoeuvre within the system…” With his critique in mind, we should also note how partisan most of the broadcasters have become, even though the media insiders refer to certain examples to counter this.

The book’s editors point to the release of Nicky Hager’s Dirty Politics as a catalyst for the collection, and contributors refer to the innovative use of the Panama Papers as a counter-example, whereby the government was held to account. Hager has his own chapter in the book, and the Panama Papers are mentioned a number of times, including in Peter Griffin’s essay on New Zealand’s fledgling data journalism ‘scene’. Griffin’s title is ‘Needles in the haystack’, but it might as well have been ‘Missing the wood for the trees’. This is because none of the contributors note that without the release of the Panama Papers as an international story, and with the New Zealand stories actually coming out of the Australian Financial Review, we would never have known that there was a tax haven operating in New Zealand. The local media seem to think that they are responsible for exposing this, and creating policy change, though nothing has actually happened yet to close the tax haven down. In fact, certain business reporters were aware of the trust law and the related industry, that is the basis for the tax haven. These are the same couple of reporters that noted that John Key’s agenda for an ‘international financial hub’ came to grief a few years ago. There is no mention at all of business reporting in this book, and its role in providing expert analysis of economic issues, even when it is still ideologically aligned to the right.

But, overall, the Freerange Press has done a great job with this book, and every chapter is worthwhile. Peter Arnett provides a foreword, and reflects on his being a foreign correspondent in Vietnam, something of a high point for the international press. There is also a chapter on the views of some journalism students, and, perhaps not surprisingly, they almost all want to work for major international broadcasters, other than the one who is happy to find a job at RNZ. The book has some very good design features, and some impressive motifs for each chapter heading, and the ‘tags’ at the end of the book. The ‘tags’ appear in place of a conventional index, which may, however, have been of some use given the length of the text. There is even a chapter that discusses the role of design in the digital age, which adds another dimension.

Reviewed by Simon Boyce

Don’t Dream It’s Over: Reimagining Journalism in Aotearoa New Zealand
edited by Emma Johnson, Giovanni Tiso, Sarah Illingworth and Barnaby Bennett
Published by Freerange Press
ISBN 9780473364946

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: 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

Book Review: Labour – The New Zealand Labour Party 1916-2016, by Peter Franks and Jim McAloon

Available now in bookshops nationwide.

cv_the_NZ_Labour_partyIf you asked someone on the street what the oldest political party in New Zealand was, I suspect most wouldn’t say it was the Labour Party. Most would have assumed that National had been around longer, having dominated post-war politics, if not the history books.

This book serves a specific purpose for the Labour Party centenary, and contributes to the historiography on the labour movement and its political wing. It will certainly appeal to those in the party who are interested in their history, and add to the knowledge of some forgotten characters and good Labour people who served the party as lesser lights in the Caucas and Cabinet rooms. I think the most successful part of the book is in the choice of the photographic plates and cartoons, and their reproduction with extensive captions where needed. Here we can view a story that begins with rather formally dressed men posing for group photos at conferences, being mostly European immigrants who were autodidacts, and then see, as colour photos reflect, a party with significant gender balance and multicultural contribution.

If we are to assess the merits of the text I have to be critical of the core part, with regard to political philosophy, and the academic assumptions about policy-making. The Labour Party was an anti-imperial, anti-war movement that took the idea of socialism seriously, and explicitly battled against what was called the ‘Money Power’. Despite their sympathies to the philosophy, both of the authors have focussed on the academic writing on the Labour Party and political history, with a very selective use of the extensive thesis writing of history students, mostly from Canterbury University. It was, however, Auckland University alumni that came to dominate Labour Party politics, especially in the period when Professor Keith Sinclair had control of the Walter Nash papers, which produced his biography, dissertations, as well as activists.

But the authors of this book don’t even mention the Walter Nash collection despite, or perhaps because of, its sprawling nature and the inadequate description of its contents. This means there is no update on the views expressed by Sinclair – the failed Labour candidate for Eden in 1969 – and his polemic against what he called the Lee-Sutch syndrome. This seems to come down to Lee and his followers being naïve about the possible financial policy in the 1930s, based on Reserve Bank credit; and Nash having an economist’s understanding of sound finance, based on a reading of Keynes. This is rather unconvincing in terms of economic theory influencing policy, and the fact that Nash accepted that Reserve Bank credit would be permanently financing State House construction. When the Reserve Bank Governor objected to this financial policy in 1939, he raised the interest rate for the Housing Account finance, and timed it to occur when Nash had to go to London for a loan conversion. This was the actual policy situation, in contrast to Sinclair’s view on the anti-Labour role of the Bank of England in those loan negotiations, and the mythology which still surrounds it.

Of course, by the 1980s the Labour Party had decided to leave financial policy to Treasury, and monetary policy to the Reserve Bank, and opened the floodgates for international finance. This effectively undid everything the First Labour Government had achieved with its policy of ‘insulation’, in a rapidly changing global system. But it also reflected a completely different party, which did not appreciate its history. As the party policy returns to urban house construction, maybe things have changed back.

Reviewed by S.A. Boyce

Labour – The New Zealand Labour Party 1916-2016
by Peter Franks and Jim McAloon
Published by Victoria University Press
ISBN  9781776560745