Pages

Friday, September 6, 2024

Professor Robert MacCulloch: NZ Parliament's "sovereign powers".

 

Labour Leader Hipkins is on course to declare NZ's Parliament does not have "sovereign powers".

How come? As this Blog has reported before, Labour is plotting to stand for election 2026 on a platform of capital, asset & wealth taxes. The party is hoping NZ's economy will keep stagnating and social services, especially health, become even more run down. Hipkins (or his replacement) would like to argue the only way to fund them better is through such taxes. How does that platform end sovereignty of Parliament? Because capital, asset and wealth taxes won't be applied to Māori Authorities.

They already pay lower income tax rates. As the IRD explains, "Māori authorities file annual returns, have a reduced provisional rate of 17.5% and special rules for their income tax ..". Since their income is presently small on a national scale, this special tax rule doesn't attract news headlines. However, when it comes to their holding of capital, assets and wealth, it's diametrically opposite. Iwi Trusts and companies comprise the biggest landowners in New Zealand: Ngāi Tūhoe owning 243,495 hectares, CNI Holdings Limited (made up of Ngāi Tuhoe, Ngāti Manawa, Ngāti Tūwharetoa, Ngāti Whakaue, Ngāti Whare, Raukawa, and Te Arawa iwi) at 126,147 hectares, Ngāti Tūwharetoa at 113,414 hectares, Ngāi Tahu at 102,136 hectares, and Mangatu Blocks at 44,663 hectares.

Treasury has already stated that these Authorities should be exempt from capital, asset and wealth taxes (which were advocated last week by the departing NZ Treasury Secretary). If you don't believe me, read this line from Treasury's Long Term Fiscal Position Statement in 2021, "Taxing capital gains comes with an economic cost by increasing the overall tax rate on capital. However, it .. would improve the integrity of the tax system. Specific consideration would need to be given to the treatment of Māori freehold land and iwi assets". In non-bureaucratic talk, that means capital, asset & wealth taxes would not apply.

How would that exemption end sovereignty of NZ's Parliament? Because one of the primary defining powers of Parliament is its ability to levy taxes. That's what makes the sovereign the sovereign. Private citizens cannot force other citizens to pay them money by declaring a tax on that other person. That is what makes "the State" different from you and me. Once the State no longer has powers of taxation over particular groups in a society, it is no longer the sovereign authority of that nation. Since Labour would not dare to impose capital, asset and wealth taxes on a Māori Authority - who wouldn't pay even if they were charged - Labour's tax plan under Hipkins is to effectively propose the relinquishing of the sovereignty of NZ's Parliament within the next three years.

Sources:
https://www.ird.govt.nz/roles/maori-authorities
https://www.rnz.co.nz/news/in-depth/401186/nz-s-top-50-private-landowners-revealed
https://www.nzherald.co.nz/nz/politics/labour-discusses-capital-income-tax-on-ultra-wealthy-individuals/Z27AAVGTFNDHXEWDOWEDDW6TU4/
https://www.treasury.govt.nz/sites/default/files/2021-09/ltfs-2021_2.pdf


Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.

7 comments:

Anonymous said...

So the state has even created an "apartheid tax"? Guess it pays to "identify" as Maori eh.

Anonymous said...

Chris Hipkins said a couple of weeks ago that Maori didn't cede sovereignty so we can see where the future lies when Labour get back in.

Anna Mouse said...

If he thought this through he would understand where it leaves the country. He either does not care or he is plainly ill equipped in the brain department.....maybe it is both.

Peter said...

And they told us He Puapua wasn't policy! The battle lines have been drawn.

Anonymous said...

In Ireland in the 1930s, the Dail (parliament) declared independence from England, but it had to be ratified by a national vote (plebiscite). In this manner, the Irish parliament swiftly found fresh constitutional authority for its existence and powers – from the Irish people. It’s a legal process known as ‘autochthony’, which loosely translates to finding a new constitutional source of power once you unplug yourself from the original power source.

This never happened in New Zealand in 1986 when Labour declared legal independence from Great Britain, and turned the New Zealand parliament into the Crown itself by seizing all the power and authority from Westminster and enthroning a “Queen of New Zealand”.

When countries declare independence, there must be an absolute break in the constitutional authority. New Zealand MPs on the day before the Constitution Act was passed were still a branch of the London tree. Yet the day after they declared independence and cut their branch loose from the UK trunk, the New Zealand Parliament branch was miraculously still suspended in mid-air – but on whose authority did those MPs now govern? `

The local NZ media did not understand the implications of the new 1986 Constitution Act, and the Lange government never told them. The public awoke the morning after, not realising New Zealand’s parliament had just seized absolute power and enthroned itself as “the Crown”. It never went to a public vote, therefore remains to this day, technically illegal.

So, it begs the question, does our parliament have any sovereignty to cede?

Anonymous said...

"New Zealand's Parliament had just seized absolute power". That's utter rubbish and anyone with a slightest interest in New Zealand history can point to several key statutes that prove it. Sovereignty has been exercised in varying degrees by elected New Zealand Assemblies since the original Constitution Act of 1857. With one technical exception, full sovereignty was ceded by the UK Parliament in the UK Statute of Westminster of 1931. Nothing was subsequently seized that hadn't already been ceded by Britain.

Ellen said...

Condescending fools who try to wriggle around making special conditions for Maori must be over-ridden. All Maori - to be equal citizens of this country - need to pay tax like every other citizen and every other corporation. Otherwise, they are not equal. They are being treated as poor second-class people who can not be expected to function fully in the society. This is not negotiable.

Post a Comment

Thanks for engaging in the debate!

Because this is a public forum, we will only publish comments that are respectful and do NOT contain links to other sites. We appreciate your cooperation.