Sunday, April 30, 2023

Peter Wilson: The week in politics - April 28th 2023

Australia's citizenship deal, Green Party tensions and a tax debate

Australia's citizenship deal - was it genuine goodwill or has our prime minister been "played like a digeridoo"? Tensions within the Green Party are said to be "boiling" as the Kerekere row drags on, and evidence that the wealthiest people pay tax at a lower rate than the rest of us starts up another capital gains tax debate.

The Australian government's announcement that from 1 July Kiwis could apply for citizenship after four years cascaded through the media this week.

It's retrospective, it's a big deal, and it was recognised as one.

Luke Malpass, Stuff's New Zealand-born political editor, has personal experience of what it's like across the Tasman because he lived and worked there before returning to take up his current role.

"This is the circuit breaker that ends years of Australians slowly treating New Zealanders more and more shabbily," he said.

"It reverses more than two decades of sniffy Australian nativism that saw New Zealanders as bludgers at worst or just a junior partner that could be treated with a bit of contempt on basically spurious grounds."

The Herald's Michael Neilson said that after more than 20 years of tensions, the "transtasman family" might ring true again.

"This is excellent news for anybody caught up in the system, and a huge win for years of advocacy by successive New Zealand prime ministers of all stripes," he said.

Neilson said immigration issues in Australia were still highly political and much of the credit for the decision had to go to Prime Minister Anthony Albanese "who is not only supportive of New Zealand, especially so given both countries have Labour-led governments, but he is also riding a wave of popularity not seen by an Australian prime minister in a long time".

Sunday Star Times editor Tracy Watkins looked at the reasons why Albanese made such a bold move.

"Goodwill is rarely what motivates Australia in its dealings with New Zealand," she said, noting it was more than 20 years since John Howard "monstered his New Zealand counterpart Helen Clark" with a deal curbing many of the longstanding rights of Kiwis living across the ditch.

Watkins said circumstances were very different today.

"Back then, New Zealand and the legend of the Bondi bludger… were a political and fiscal headache for Howard," she said.

"Not so now. Research shows Kiwis who cross the ditch are more likely to be in employment than their Australian counterparts."

Watkins said that like New Zealand - and most of the developed world - Australia was desperately short of skilled and unskilled workers.

Kiwis were the logical choice to plug the gaps. "We're cheap, flexible, easily assimilated and can probably start tomorrow."

RNZ explained that since 2001 New Zealanders in Australia had been able to reside there on a Special Category Visa. While it allowed them to remain in Australia indefinitely, getting permanent residency and citizenship was much more difficult. It was expensive and there were no guarantees.

It meant they missed out on jobseeker support, student loans and disability payments, and even the right to vote - despite paying taxes.

Inevitably, making it much easier for New Zealanders to gain Australian citizenship led to warnings of an exodus and examples of what an attractive destination it is because of its significantly higher pay rates.

Stuff reported extensively, and it was grim reading.

"There's a real economic push for New Zealanders to move to higher-paying countries, and Australia is a higher-paying country," said Shay Peters, Australia and NZ managing director of recruitment agency Robert Walters.

"Australia is a much more attractive place to go to at the moment because pay rates are so much higher.

He thought New Zealand was at a "skills precipice" with inflation and the high cost of living making it a tough place to live.

Economist Cameron Bagrie expected the citizenship issue would be a big factor in people's decisions to leave.

"It's pretty well flagged that New Zealand is going to have a full-blown recession and the consensus is Australia is going to avert one," he said.

Then there was James Ireland, who shifted to Melbourne in 2018 after applying for a public transport sector job.

"It was basically the same thing I was doing in Auckland but near on double the salary," he said.

The report said Infometrics had tracked average earnings in New Zealand and Australia since 1994, which showed Australians were generally at least $200 a week better paid.

On Morning Report Kiwis who had made their lives in Australia said the new pathway to citizenship would give them and their families much-needed security.

Joanne Cox, chair of the Oz Kiwi Association, said she believed there would be a high uptake of Australian citizenship.

It would affect about 300,000 to 350,000 people, she saId.

The change means Australia will have a shorter citizenship requirement than New Zealand. It is five years here, and there's speculation the government could bring it into line.

The announcement was made when Prime Minister Chris Hipkins was in Australia, and there was a joint press conference after it.

He made headlines with his "it's a blimmin' good day for Kiwis living in Australia" comment and gave the credit entirely to Albanese. There had been no negotiation, he said.

Others weren't so optimistic.

National's deputy leader, Nicola Willis, told First Up: "Make no mistake, this is going to make Australia an even more attractive destination… and so I do fear we could see an exodus of Kiwis."

ACT leader David Seymour said Hipkins had been "played like a digeridoo" by the Australian government.

"They've just made a raid on New Zealand talent… and Hipkins is over there smiling and saying how wonderful it all is. In fact, he is trying to say one of the Labour Government's most substantial achievements is helping New Zealanders live in another country."

While this played out as the big story of the week, more was revealed about the row within the Green Party over Elizabeth Kerekere.

Two reports were published on the same day, which laid bare the division with the Greens.

Stuff: Māori, Rainbow Greens say Elizabeth Kerekere bullying claim 'dirty politics'.

RNZ: More Green members criticise Kerekere, say bullying targeted Māori, Pasifika.

The gist of the Stuff report was that two clear factions had emerged - "her supporters believe the leaks and bullying reports were part of a smear campaign from Greens unhappy about their proposed list rankings ahead of the election," it said.

"Inside sources say tensions are boiling and the party is becoming divided."

The report quoted sources as saying Kerekere's high ranking "ruffled a few feathers" in the caucus.

Kerekere is a first term MP who entered Parliament after being ranked ninth on the Greens list in 2020. She has been placed fourth on the draft list for this year's election, which is still being finalised through a membership ballot.

RNZ's report said "new accusers" were saying Kerekere's bullying included shutting out and belittling other Māori MPs, staff and volunteers.

"The bullying I have witnessed from Elizabeth Kerekere has mainly been targeted at young Māori," a Māori member of the Greens said, giving examples.

The member said Kerekere considered herself the party's authority on all Māori and Pasifika matters and frequently "lashed out" at those who challenged her.

One of the five people spoken to by RNZ asked that future coverage identify them as Māori "to dissuade the narrative that Kerekere's critics were all Pākehā".

An internal inquiry into Kerekere's behaviour was launched after she appeared to describe Chlöe Swarbrick as a crybaby in a message which went to the wrong chatline.

On Wednesday, Revenue Minister David Parker released the IRD's inquiry report which showed the wealthiest New Zealanders were paying tax at a much lower rate than most other people.

Parker commissioned the inquiry to find out more about the fairness, or otherwise, of the tax system. He wants politicians and voters to be able to have a more informed debate about tax rules.

A 2020 law change gave IRD new powers to require the wealthiest families to provide their earnings information.

The project took two years, and Parker said it was internationally ground-breaking.

It gathered information from 311 families who generally had a net worth of more than $50 million.

"Once ownership of businesses, properties and other investments were taken into account, alongside wages and salaries, their median effective tax rate is 9.4 percent compared with 20.2 percent for other 'middle New Zealanders'," RNZ reported.

The report said personal taxable income was only a small part of the economic income of the wealthiest families, with most of it coming from increases in the value of businesses, property and financial portfolios.

The report immediately kicked off another debate about a capital gains tax, which would target the sources from where the very rich get most of their income.

Jacinda Ardern wanted a CGT when she was prime minister but had to drop it after National mounted a scare campaign.

Parker insisted the report was not an excuse to attack the rich, it was all about having future discussions on tax policy based on solid evidence.

On Morning Report Hipkins said the government wouldn't be leaping to conclusions about what needed to change. There would be no new taxes between now and the election, and voters would know well ahead of it what Labour's intentions for next term would be.

He repeated that assurance in a pre-Budget speech the next day, when he said there would be no levies or taxes to pay for the cyclone damage.

National's leader, Christopher Luxon, interviewed on Newshub's AM Show, clearly didn't want to discuss the fairness of the tax system. He said the project had been created by the government as a distraction from the mess it had made of the economy.

Asked whether he was one of the super-rich who had been asked for details of his income, Luxon said he was not.

A leading inequality expert, Max Rashbrooke, told Checkpoint the IRD report had revealed "deep unfairness" in the tax system.

The disparity was surprising, he said, with the top 400 or so people having more wealth than the poorest half of the country.

Rashbrooke said Labour now faced a dilemma.

"Either they do something about the issue and then have a big fight about tax, or they don't do anything and they have to say 'we've identified this huge problem and we're going to do nothing about it'.

"It (the report) would obviously lead you down the path to say a capital gains tax, but Labour has bad memories of its last attempt to try to bring that into law. So whether they want to go there isn't clear."

This week's tailpiece goes to Stuff's political writer Andrea Vance: "If you've been paying attention, you'll know 'a review' is code for 'make it go away until the public forget about it'."

Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire. This article was first published HERE

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