How badly will James Shaw’s private school debacle affect the Greens? Will it push them out of Parliament? This is increasingly the question being asked as the scandal rolls on and on this week.

After all, the two main polling companies have had the party very close to the 5% MMP threshold in their surveys for the last year. So, the Greens only have to lose a small amount of support and they will be tipped out of office.

Greens badly wounded

Most commentators seem to believe that the Green Party has been seriously undermined by the decision to grant nearly $12m to a private eco-school. This is because it suggests the party has lost its way and no longer represents its traditional and more radical vision.

This is best explained today by leftwing commentator Chris Trotter, who argues in the Otago Daily Times that Shaw has successfully transformed the party into a “woke” pro-business party that is just trying to make capitalism more green – see: A Sorry excuse for a Green Party.

According to Trotter, Shaw “offered living proof to the rising generation of ambitious Green Party activists that they could look sharp, rub shoulders with the rich and famous, and still be non-gender-specific siblings in the struggle to save Parent Earth. Just like Bono.” And in the end, Shaw’s approach is partly responsible for driving their vote down, possibly pushing the party out of Parliament.

Trotter elaborates on this in another piece this week about Shaw’s Establishment green politics – see: From safe bet to Shaw loser.

Of course, the Greens have always had both a radical and moderate side, and this tension poses a challenge. In today’s NZ Herald, Matthew Hooton explains “The Green Party is an unstable coalition of the true believers who have sustained the movement for nearly 50 years and the coveters of $150,000 Audi Quattro e-trons who vote for it” – see: James Shaw dives straight into the Metiria Turei trap (paywalled).

Although most Green activists might be to the left of the Green MPs, the party’s voter base is much more middle class and, according to Hooton, Shaw is actually in line with these Green voters: “For him, being Green is not so much about overthrowing capitalism but things like global carbon trading, renewable energy, trendy new start-ups and instilling higher environmental and social consciousness in the next generation. At a stretch, you could even imagine Shaw accepting nuclear and gene technology to cure climate change. Within this outlook, the Green School fits nicely.”

Essentially, therefore, the scandal is actually a logical reflection of a contradiction in the party that has always been there: between the left activists and the “Audi wing” of the party, especially in the wealthy electorates it normally does so well in.

Some of these points are also well made today in RNZ’s Caucus election podcast, and Tim Watkin talks about that key Green division: “Many in the party see it as the voice of the down-trodden. In truth, most of its votes come from the comfortable middle-class” – see: The naughty prefect & The ‘single source Of truth’.

According to Watkin, the left of the party feel Shaw has let them down by failing to progress a leftwing, environmental agenda. Instead, he has apparently chosen a private school to die in a ditch over: “there are those in the party long wary of Shaw’s corporate Green agenda who would love to see him gone. They are exasperated that Shaw has spent three years saying he couldn’t put his foot down over issues such as welfare reform, water-bottling plants or getting agriculture into the ETS – that mean old Winston was bullying him – but found the strength to fight back… on behalf of a private school.”

Labour to benefit from the demise of the Greens

The Labour Party might be seen as an ally of the Greens, but it would be a mistake to think that Labour doesn’t want to kill off the Greens or at least take some of their votes off them. This point is made strongly by Hooton today, who says Labour are suspected of leaking some of the details of the scandal to the media, undermining Shaw. He draws parallels with the 2017 Greens scandal in which Labour leader Jacinda Ardern was seen as throwing Metiria Turei under a bus.

Here’s Hooton’s point about the current Labour-Green dynamic: “Labour is no more interested in sharing power with the Greens than with NZ First. If it can get both out of Parliament and govern alone, so much the better. Ardern is no unhappier about Shaw’s problems than Turei’s three years ago. Green supporters are now confronted with the awful possibility their party will leave Parliament next month and unravel.”

Similarly, the Herald’s Claire Trevett emphasises Labour’s refusal to get implicated by the scandal: “if Shaw had hoped for some cover from the other government parties, they all but threw him to the wolves. Education Minister Chris Hipkins bluntly refused to take any blame, pointing the finger straight at Shaw” – see: Will James Shaw’s endless sorry save the Greens? (paywalled).

Trevett believes Labour will benefit from the Greens demise: “there is an alternative safe harbour for any disgruntled supporters. That is Ardern and, judging from her lack of defence of Shaw, she has every intention of welcoming those voters with open arms again.”

Other reports show key Labour politicians have been very keen that Shaw answer for his decisions. For instance, when it emerged that Shaw had held up signing off other Government funding decisions in an apparent “ultimatum” email, Finance Minister Grant Robertson said: “He used those words and he has to be responsible for them” and Robertson “wouldn’t be drawn on whether the email amounted to a threat from Shaw” – see Derek Cheng’s Revealed: 44 projects worth $600m at stake over James Shaw’s ‘ultimatum’ email.

RNZ’s political editor Jane Patterson also believes Labour are well placed to win votes off the Greens over the saga: “The Greens might be a Labour ally but it’s every party for itself as they all gear up to resume campaigning and if there are any votes lost from the Greens, Labour is the most likely beneficiary. Or disillusioned Green supporters just may not vote. This is an incredibly volatile political environment and Labour will be out for every vote it can get. Shaw’s management of this situation has made it worse” – see: James Shaw battles to restore his credibility.

Similarly, Heather du Plessis-Allan says “They’ve lost voters to Labour as it’s out-greened them with moves like the oil and gas ban. The popularity of Jacinda Ardern makes it hard to win those voters back” – see: James Shaw has a bigger problem than the Green School saga.

Du Plessis-Allen says the party is now in trouble: “Up to now, I’d been confident that it didn’t really matter too much where the Greens were polling. On the night, I thought, their supporters would flock back to save them. But now, you’ve got to ask whether those supporters think they deserve saving.”

The Greens can survive the scandal

Not all commentators think it’s all over for the Greens. In Tim Watkin’s item (above) he reports that the RNZ Caucus podcast journalists don’t believe that the Greens are in trouble: “the Caucus crew don’t think this controversy is a fatal blow to its election prospects. The angriest voices come from within the party and, once the crystal dust has settled and the bio-energy cleaned, few are likely to switch their vote away from the Green’s policy agenda, even if they are losing patience with Shaw as leader. A determinedly centrist Labour Party and a John Tamihere co-led Māori Party are hardly magnetic alternatives.”

Writing in the Guardian today, Massey University’s Claire Robinson thinks the Greens have time to turn the scandal around: “In the Greens’ favour is that elections are not won or lost on single errors this far out from election day. If the election was still 19 September it might have been curtains for the party. But there are still 30 days until advance voting starts on 3 September and 45 days until election day on 17 October. This gives Shaw plenty of time to publicly make it up to his supporters whose faith in his green credentials will have been sorely tested by this incident” – see: James Shaw’s mea culpa on Green School funding exposed his lack of political nous.

The NBR’s Brent Edwards thinks that rather than hurting the Greens, the controversy could actually boost them. He believes the discontent is more of a “internal disagreement” and Shaw’s apology has been “extraordinary” – see: Will James Shaw’s contrition earn Green Party support? (paywalled).

Here’s Brent Edwards’ main point: “In the Green Party’s case, though, honesty and contrition might work in its favour, rather than condemn it to electoral defeat as many suggest. Will Green Party voters, upset by the investment in the Green School, give Shaw credit for taking the blame? And the warning that the Greens might risk falling below 5% might galvanise their more lukewarm supporters to swing in behind.”

Also writing in the NBR, Dita De Boni makes a defence of Shaw’s decision, essentially suggesting that although he was “careless”, it was a fairly harmless allocation of funding, and that it is creating an over-reaction – see: Greens once more enter election a divided force.

She worries if voters desert the Greens, then the result might be a NZ First-Labour government, or even a single party “milquetoast” Labour adminstration. She therefore calls on leftwing Green activists to pull back on their divisive criticisms of Shaw.

Similarly, the Herald’s Simon Wilson says there is too much to lose if the Greens dip out of Parliament, as they have already achieved so much, up against a conservative and weak prime minister and Labour Party. Especially for the causes of climate change and inequality, Wilson calls on progressives to support the Greens, despite Shaw’s mishaps – see: James Shaw and the honour of politicians (paywalled).

Shaw’s changing story

The problem for Shaw and the Greens is that the story and scandal won’t die. Every day more is revealed, helping unravel Shaw’s version of what occurred. The Green co-leader has gone to ground, refusing interviews.

One of the turning points this week was news that the green school was mixed up with new age type mysticism – see Anna Bracewell-Worrall’s Couple who called COVID-19 ‘manufactured natural disaster’ held ‘DNA activation’ event at Green School.

Then a video emerged of Shaw telling party members that Education Minister Chris Hipkins gave some sort of approval to the funding of the private green school, an allegation that Hipkins strongly denies – see Jane Patterson’s Green School funding: James Shaw contradicts Chris Hipkins on implicit approval in leaked video.

Shaw also justified his decision on the basis that the local New Plymouth District Council had chosen to be a funder of the project, which also turned out to be entirely untrue – see Catherine Groenestein’s Council rebuts assertion over Green School funding.

Today, further details of what the owners of the school are developing at the site have come out – see Robin Martin’s Green School’s planned ‘eco-village’ development news to James Shaw.

Finally, for more on what Greens activists and supportive commentators are saying about the scandal, see Henry Cooke’s The Green Party picks up the pieces after a damaging week sparked by the Green School ‘mess’.

Socialism versus Progressive Capitalism

I was disappointed that the Green Party continues to reject a distributive Universal Basic Income (UBI) in favour of a redistributive and polarising Guaranteed Minimum Income (GMI) model. GMI is the antithesis of UBI. The essence of UBI, through flattening income tax, is the creation of a dividend – a return on collective capital – that is received by every economic citizen of a country. Universal Basic Income should represent progressive capitalism, not socialism.

(I plan to develop the concept of economic citizenship in this space next week. But the essence of the concept is that everyone over a certain age – most likely 18 – is an economic citizen of one and only one country; and that immigration can be understood as a transfer of economic citizenship. Many of the people discussed in my Foreign Lives Matter are in fact economic citizens of New Zealand.)

The essence of the Green policy is to extend New Zealand Superannuation to all working-age adults who are not ‘fulltime workers’. And the graduated income tax scale is steepened, not flattened as per the requirements of Universal Income Flat Tax. The Greens’ GMI is to be funded by redistributive income and wealth taxes.

The Green Party’s recently announced policy divides New Zealand’s working-age population into two distinct groups – a beneficiary group and a working group – and relies on heroic assumptions around the working group’s willingness to transfer huge amounts of income to the beneficiary group. And by replacing the present poverty trap with a ghetto trap. Precarious workers – who are a substantial minority of all workers, and who straddle the two abovementioned groups – would face even more impediments to having their needs addressed.

(The ‘ghetto trap’ referred to can be summarised as high EMTRs – effective marginal tax rates – faced by people who would normally wish to transition from the beneficiary group to the working group.)

This policy announcement confirms, in the minds of most people, that the Green Party is a socialist party – like the former New Labour Party that formed the core of the 1990s’ Alliance – unlike the progressive party that seceded from the Alliance in 1999.

Taxes and Behavioural Change

Taxes may be imposed for two distinct reasons. One reason is to raise public revenue. The other is to modify behaviour; to address ‘negative externalities’ in economist language. The Green Party has always been confused in this regard, seeking to tax bad behaviour in order to raise public revenue. The perfect behavioural modification tax raises zero revenue. When the taxed behaviour – such as vehicle speeding – ceases, then the tax raises zero revenue. Today the Green Party wishes to both raise revenue from asset speculation (what they call ‘wealth taxes’) and to eliminate asset speculation. If they wish past property speculators to become a stable future tax base, then they will need to find policies which will ensure that property prices remain unaffordably high.

The other obvious social change that would result from the implementation of the Green policy would be the reversal of fifty years of shifting from one-income to two-income families. In practice, this will mean a substantial shift of women from the labour force (from the ‘working group’ abovementioned) into beneficiary status.

The policy is generous to one-income families, and quite ungenerous to low-wage two-income families. Based on these incentives, we could expect working class mothers to exit the labour force, and to withdraw their children from childcare. Further, if the fathers are not earning much – or are in precarious employment – they would become dispensable as household providers.

I presume that Child Support would continue much as it does at present. That would mean that – where possible – benefits paid to single or repartnered parents would be funded in the first instance by non-caregiver parents. This would push low paid working non-caregiver parents into quitting their jobs – ie joining the ‘beneficiary group’ in order to avert bankruptcy.

In general, this policy does little for the present crisis of hardship faced by people in work, and could be expected to aggravate the existing disconnect between working class – who now largely vote National – and the beneficiary classes.

The Covid-19 Pandemic and Asset Prices

I suspect that most of the work on this Green policy was done pre-pandemic. The costings – heroic at best – are unlikely to make any sense in the present pandemic environment. During the current emergency, any policy to raise taxes is tone deaf. All initiatives in the emergency need to be funded by new money.

The asset valuations used to estimate revenues from wealth taxes are largely fictions, based on the assumption that demand for these assets remains high, and that selling of assets is restrained. Assets can only be correctly valued when those assets are realised (ie sold). The inflated ‘paper’ valuations are dependent on few realisations (sales) taking place. Any situation that prompts increased sales of financial assets would lead to substantial reductions in asset prices, unless those prices were to be propped up by a willingness of the Reserve Bank to bail out asset-holders by purchasing assets (ie printing money) at inflated prices. These fickle assets are by no means the “rainy day savings” that their owners can assuredly “fall back on in hard times” (quoting from the policy document). In unmitigated hard times, nobody has economic security.

Learn from the 1930s

The Great Depression of the 1930s brought to light the cruelty of a welfare system based on providing private charity only to the ‘deserving poor’. The result was a strong public groundswell in favour of universal benefits, and away from the intrusive processes of household means-testing and character evaluation.

The First Labour Government was elected in 1935 on the basis of promises to deliver a universal welfare state. This meant free education and hospital care. And it meant access to decent social security benefits with minimal intrusive bureaucracy. And it meant universal superannuation for persons over 65 who did not qualify for an age benefit; and the promise of a universal family benefit, payable to all mothers.

(It is important to note that, while Labour won the 1935 election in part on this promise, it also benefitted from a union with the monetary reformist ‘social credit’ movement – very strong in the provinces – and from a split in the then governing coalition; a split that lead to the formation of the Democratic Party. The Democratic Party played a spoiling role in the 1935 election, much as the New Zealand Party did in 1984.)

In practice politics post-1935 was not so simple. While a plan for universal welfare was formulated in 1936, Labour’s left-wing preferred a redistributive welfare state much as the Green Party want today. Labour’s right-wing – mesmerised by compound interest – wanted to establish actuarial (contribution-based) welfare funds; funds that promised to pay big future benefits to higher earning working men.

For most of the next three years, the Labour government’s factions tore at each other over which was the best way to dishonour their 1935 promise. In early 1938, it seemed very likely that Labour would lose, when all it had to do to win was to implement the reforms it promised in 1935. Labour’s position was rescued by its leader – Michael Joseph Savage – who belonged to neither faction, and had the ability to read the public mood. (It was Savage’s leadership at this moment which made him, in the evaluation of many, the New Zealander of the twentieth century.)

Savage went to the people with a policy on universal superannuation that united rather than divided the people. The 1938 result was the biggest electoral victory for a single party in New Zealand’s history. The universal superannuation began in 1940, initially at the modest amount of $20 per year, but with a formula to raise that amount annually, with the long-run aim that it would reach the level of the Age Benefit, and then combine with the age benefit.

(That convergence eventually happened, though the merging of the two benefits only occurred in 1976 under Robert Muldoon. Roger Douglas – a descendant of Labour’s actuarial school – abolished universal superannuation in 1974; Muldoon, again reading the public mood, reinstated it.)

The inchoate public mood is for a Universal Basic Income based on the Universal Income principles that I have outlined; an inclusive rights-based payment. The political problem is that five sets of gatekeepers keep the proposal off the immediate agenda. These gatekeepers include the ‘redistributive left’ and the actuarial ‘financial literacy’ right; essentially the same groups who opposed the 1938 reforms. They also include mainstream journalists (some of whom still do not get MMP, let alone UBI), career academics, and career bureaucrats; people whose careers are more enhanced by having problems than by resolving them.

(I recommend ‘The politics of social security: the 1938 Act and some later developments’ by Elizabeth Hanson, published in 1980 by Auckland University Press.)

Conclusion

The Green Party tax-welfare policy represents an example of orthodox redistributive western socialism. It is divisive left-wing politics. While the Green Party knows that such a policy will never be implemented, it nevertheless represents a gambit designed to put pressure on Labour to produce a ‘lite’ version of the same policy. (The Act Party has used use the same stratagem re National.)

There are alternative policies that unite people rather than divide them. In 2020 we need to focus on people’s basic economic rights, just as in the 1890s we focussed on people’s political rights.

The Greens have shaken up the election campaign with the announcement of their radical poverty and action plan to reform welfare provision and introduce a new wealth tax for millionaires. It’s a big-thinking, controversial policy and has generated a lot of disagreement over how radical it is, whether it could work, and what it might mean for the election. 

For the best reporting on the announcement, see Henry Cooke’s Green Party’s $8b plan would guarantee income of $325 a week, and pay for it with a wealth tax on millionaires. This explains how the Greens’ wealth tax would apply a 1% levy on people who have net assets above $1m – exempting the first $1m – and this would rise to 2% for subsequent wealth over $2m. There would also be new higher marginal tax rate of 37% for earnings over $100,000 a year, and 42% for earnings over $150,000. The increased revenue would be used to pay a “guaranteed minimum income” welfare payment of $325 to all those not in full-time work (including students, unemployed, part-timers, retired).

Praise from the left

Leftwing blogger No Right Turn is incredibly happy with the policy, saying: “Its bold, its progressive, it would make us a better, more equal society” – see: The Greens’ opening bid is transformational change.

Although the blogger would prefer a land tax rather than a wealth tax, which he suggests is easier for the rich to evade, he says a lot of the quibbles with the policy – such as whether the rich will simply be able to avoid the tax – are unfounded, as these can be fixed in the implementation phrase. However, he’s disappointed that the Labour Party appear to oppose the policy, which he puts down to too many in the party owning investment properties and generally being a force for the status quo.

Leftwing commentator Chris Trotter is also deeply disappointed by Labour’s apparent opposition to the policy, and suggests it’s typical of the party’s general moderate orientation in a time that requires boldness – see: Labour will not win with a yeah-nah strategy.

Trotter believes the Greens’ new policy “has the capacity to get young, poor voters up off the couch and into the polling booths.” He foresees the party possibly rolling out a similarly radical suite of policies which might “offer the voters something pretty close to a complete re-prioritisation of all the activity that makes up the New Zealand economy”.

Fellow Daily Blog writer Martyn Bradbury, is also a big supporter of the new policy: “For the first time in 3 years, the Greens finally give a reason why New Zealander’s should vote for them, and I’m genuinely surprised and pleased. The middle class woke identity politics, which has been so toxically alienating for the Greens and is why they have been floundering in the Polls, has been sidelined in favour of genuine social justice in welfare and a real economic philosophy of taxing the rich” – see: Finally a reason to vote for the Greens!

Newsroom’s editor Tim Murphy also praises the Greens’ policy for its radicalism and vision, saying the party deserves praise for being “the first party to offer a big, detailed and transformative policy in response to the economic tornado that is Covid-19. This is what political parties should be doing, 80 or so days out from a general election in the context of a major economic downturn” – see: The Greens’ cunning plan. He adds, “The Greens have shown us a medium to longer-term response to the economic crisis that challenges current political limits.”

Here’s Murphy’s main point: “the value in the Greens going early and going hard with such a sweeping policy is that the party has offered a response to the biggest crisis since the Great Depression that offers change beyond an orthodox, vast Government stimulus and infrastructure build. The party will be betting New Zealanders shaken by the rapid and comprehensive threat to jobs, incomes and futures will be open to a new, collectivist and non-judgmental platform where Kiwis accept they need to pay more from any wealth they have above million and two million dollar limits to help their sisters and brothers. Is there a new normal in compassion and sharing the burden?”

Critiques from the left

How radical is the policy? Leftwing playwright and satirist Dave Armstrong is generally supportive of the new policy but warns against seeing it as some kind of socialist nirvana: “So when we look at the Greens’ ‘far Left’ wealth tax, we have to remember that it is a slightly Left-of-centre party big on the environment and with the Right-wing ‘realist’ faction of the party firmly in control. To pay the Greens’ wealth tax you have to own an asset worth more than a million dollars. Even then you only pay a small amount of tax based on the amount over a million. So all those residents of leafy Wellington suburbs, mine included, can relax – especially if you co-own a house. Even if you own a million-dollar house and a million-dollar company, you’ll more likely be paying your accountant more per year than the wealth tax” – see: Greens’ wealth tax will appeal to Labour’s Left-wingers.

Armstrong points out that not only will the wealth tax be “about as potent as a shandy in global terms”, the resulting increased welfare payments will still be inadequate: “For many of us, living on $325 a week would be incredibly difficult. It’s hardly largesse.”

The Greens, Armstrong argues, are actually in broad alignment with all the parliamentary parties, who largely agree on the basic taxation settings: “Our five parties have an unspoken consensus that corporate tax must stay low, that indirect taxes must rise and direct taxes must fall, that our crippling – for the poor – GST rate of 15 per cent must remain, and that corporate tax be modest.”

However, the Greens’ policy will be useful for Labour, Armstrong says, because it means that they will be able to “come up with a wishy-washy centrist scheme to address child poverty and inequality and when there are howls of outrage from the anti-beneficiary Right, Labour can say, ‘it’s very moderate – nowhere as radical as what the Greens were proposing’.”

Leftwing blogger Steven Cowan is dismissive of the new policy, largely because it amounts to a band aid rather than a solution for inequality and poverty, which is actually produced in the economic system rather than the welfare system. He complains that the Greens are only willing to treat “the symptoms of the disease itself” as a way of avoiding the necessity of fundamental economic transformation – see: Treating the symptom and not the disease.

Like Armstrong, Cowan argues that the Greens’ proposed $325 per week isn’t enough to live on, and in fact is much lower than what the current government has deemed is necessary for those who lost their jobs during the current recession (they get $490/week). And because the Greens haven’t so far pushed Labour to be transformative during the last three years, Cowan finds it hard to imagine them doing it in the next term – hence he sees the policy as dead in the water.

Critiques from Labour and the right

Prime Minister Jacinda Ardern has poured cold water on the Greens’ policy, saying the wealthiest New Zealanders would simply change how they structure their assets in order to pay much less tax than the Greens have calculated. She has complained that the Greens have included some “fairly heroic assumptions” in their calculations that the proposed new tax would raise $8bn – see 1News’ ‘Significant behaviour change’ needs to be factored into Green’s proposed wealth tax, says PM.

Here are Ardern’s main points: “Some of the assumptions around people’s change in behaviour, they aren’t necessarily factoring in a significant behaviour change which often tax amendments like this would drive… Also the fact that people would change the value of their assets in order to avoid tax, the fact that people will often move funds offshore and also I’m interested in the underlying modelling which is not necessarily something I’ve had access to.”

On the political right, others have made some similar arguments about the weaknesses of such a wealth tax. National-aligned blogger David Farrar says the wealthiest can afford to use accountants and lawyers to hide their wealth: “Of course the super wealthy will pay nothing. They will have all their assets in trusts. This asset tax will just affect the prudent retired person or small business owner who has managed to save some money, but don’t have fancy lawyers to hide everything in trusts” – see: Greens want to tax, tax, tax.

Evaluations of wealth taxes

For an in-depth and thoughtful examination of the general pros and cons of wealth taxes, it’s worth reading Henry Cooke’s The crucial feature of the Greens’ wealth tax that would exempt most family homes. He explains why such taxes are not commonly advocated for in New Zealand: “There is a reason we tax income more than wealth in this country. Taxing wealth is very hard – both politically and logistically. It’s fairly easy to clip the ticket on someone’s pay packet every week, but a lot more difficult to ascertain exactly what they own, what it’s worth, and whether the public morally thinks that worth should be taxed at some level.”

Cooke also outlines how the Greens’ version of a wealth tax is actually rather moderate, and says it is difficult to see how it would raise as much revenue as the Greens suggest. This is because the tax only applies to the marginal income above a very high threshold, and assets such as houses are divided in value between the various owners – with each owner getting a $1m exemption.

So, for example, even if a couple owned a $2.1m home and had no mortgage, they each would only pay $500 a year in the tax. And, in fact, such couples might have the potential to reduce this further by making their children co-owners of the home: “it isn’t clear what would happen to stop people just putting their kids on the title of their home, spreading the wealth around a family and avoiding the tax.”

Similarly, Thomas Coughlan has written about how a wealth tax fits within the broader tax system, again pointing to the complexities of introducing this type of taxation – see: Taxing wealth: a necessary step, or unachievable pipe dream? He argues the benefit of the current system – which relies heavily on tax on incomes, spending, and corporate profits – is its effectiveness: “This ensures high rates of compliance because there’s no great reward for the costly practice of stashing your income somewhere the taxman can’t get at it.”

Coughlan interviews Robin Oliver, formerly the IRD’s deputy commissioner of policy and a member of the Government’s tax working group, who argues that such a wealth tax will have problems with valuing assets. He says a land tax would be preferable: “A land tax would be relatively more easy to implement as land values were independently calculated for rating purposes.” Oliver says: “All we’ve really got in New Zealand in assets is land… What we have is land, what’s untaxed is land.”

How the Greens’ policy might impact the election

Is there growing public interest in a wealth tax? Richard Harman thinks there might be, and he also points to growing international interest in such taxes – see: Ardern shuns Greens’ wealth tax; Nats mount scare campaign.

The problem, Harman says, is that the Labour Party will have very little desire to implement such a policy, making it “more or less dead on arrival”. And with Jacinda Ardern being so opposed to implementing a capital gains tax, she is “hardly likely to agree to a capital gains’ tax’s lesser cousin, a wealth tax.”

The Greens could yet get their plan implemented according to Barry Soper, who points out that with NZ First likely to be out of the picture the Greens might have the ability to make the policy a bottom-line for post-election negotiations – something the Greens aren’t ruling out – see: Is the Greens’ poverty plan a flight of fantasy? Think again.

For this reason, Soper suggests Labour’s best bet is to totally rule out the Greens’ proposal, otherwise it will give National and NZ First a strong campaigning message: “Smiling all the way to the ballot box if that doesn’t happen will be National, which will be out selling what a Labour/Greens coalition could look like. And so too will be handbrake Peters, who’ll be out there reminding the electorate of what he stopped Labour from doing”.

Similarly, Heather du Plessis-Allan urges Labour to unequivocally rule out the policy, lest it chase away centrist voters – see: Why the Green Party’s wealth tax is bad for Jacinda Ardern.

Here’s du Plessis-Allan’s main point: “Labour clearly hasn’t learned from the capital gains tax fiasco last election. Remember how that played out? As soon as the PM promised a CGT, her polls started falling. This time, it might not be her policy, but if it’s coming from a party she is most likely going to need, it’s close enough for some voters. Unless she rules this out, there is the risk that this becomes capital gains tax 2.0.”

Finally, for more about the advantages of a wealth tax, details of how it might work, along with some of its challenges – it’s worth reading Max Rashbrooke’s January report for the Tax Justice Aotearoa NZ: The case for a net wealth tax in New Zealand.

Analysis by Dr Bryce Edwards – One of the central elements of any democracy is information. Voters need to know what’s going on in government for accountability to be possible. That’s why in New Zealand we have various conventions, as well as the Official Information Act (OIA), which are supposed to allow the public to see how decisions that affect them have been made. 

The idea of open government is an important one. Yet over the years, National and Labour-led governments in New Zealand have been finding ways to reduce their accountability by keeping official information from the public.

That’s why the current controversy involving Associate Transport Minister Julie Anne Genter is important. She is refusing to make public a letter that she wrote as part of government negotiations over some major transport spending decisions. Some see this as being in contravention of the OIA and the general principles of open government promised, not only by the new Government, but specifically by the Green Party which has campaigned in the past for more open government.

The issue relates to a Government transport package for the Wellington region, titled “Let’s Get Wellington Moving” (LGWM), which involves $6.4b of spending on various initiatives. Associate Minister of Transport Julie Anne Genter wrote to Transport Minister Phil Twyford on March 26 about the package of expenditure, making some arguments about what particular projects should get priority funding, and which ones should be delayed or maybe scrapped. And when the final project was announced, it seemed that she had got her way, with the Green-friendly projects agreed to, and the ones they don’t like (tunnels, improved roads, etc) delayed or scrapped. The result has therefore been controversial.

Not surprisingly, many want to know how the Government came to their decision, and whether the now infamous letter from Genter to Twyford might have had an impact on changing the decision. Speculation has been rife, but Genter has refused to make the letter public, despite claims that under the OIA the public have a right to see it.

Has the Green tail wagged the Government dog?

In Wellington local government, there have been stories about how the Genter letter attempted to leverage Twyford’s decision by various threats of resignation and havoc if the Greens didn’t get their way on the transport spending decisions.

On Wednesday, Collette Devlin published an investigation into what had gone on, with allegations that Wellington Mayor Justin Lester had told councillors that unless the transport package was accepted the Government would be destabilised, with Green MPs threatening to resign, which had the potential to bring down the Government – see: City councillors claim Green Party agreement used as leverage to get agreement on Let’s Get Wellington Moving.

Here’s the main point of the article: “The Green Party confidence and supply agreement would have been put in jeopardy if a watered down Let’s Get Wellington Moving wasn’t accepted, city councillors claim. A number of Wellington city councillors have revealed to Stuff the behind-the-scenes conversations that pushed the mass transport deal over the line in council chambers.”

This story has been followed up today with further details from city councillors. For example, “Diane Calvert confirmed Lester said the Green Party would withdraw from the coalition if it didn’t get what it wanted.” The article also points out: “what Lester actually told councillors remains hotly disputed, with councillors adamant that their version of events are true. Despite the corroboration between councillors, Lester has denied any conversations took place” – see Collette Devlin and Tom Hunt’s He said, she said: Disagreement over Genter-Lester LGWM spat.

National Party Blogger David Farrar has characterised the Genter email as “blackmail” against her own government, and pointed out that someone in the Wellington City Council must be lying about it all: “Either Lester is lying or multiple Councillors have decided to lie in unison. Lester is of course an official Labour Party Mayor which means his loyalty is primarily to Labour, not Wellington” – see: The truth emerges.

Farrar also points out that although there have been various denials about the story from Genter and Twyford, they have chosen their language very carefully to deny that a resignation was offered in the letter, but not whether a resignation was threatened in the letter. And he concludes: “So now Wellingtonians know why they are condemned to a decade of growing congestion because the Green Party forced Labour to kill off any significant roading projects, and the Labour Mayor went along with them.”

Should Genter release the letter?

Some arguments have been made against the Genter letter being released. For example Wellington Mayor Justin Lester has reportedly said that the public isn’t interested to know why decisions have been made, only the outcome, and they just want to see the transport projects get going.

Disagreeing with this, Newstalk ZB journalist Georgina Campbell has argued “Just because the decisions on Wellington’s $6.4b transport overhaul have already been made doesn’t mean people don’t care about how those calling the shots made them” – see: Open and transparent? Release your letter Julie Anne Genter. She also says “as Lester is so fond of reminding the general public, LGWM is the biggest transport investment the city’s had in decades. It’s therefore hard to believe Wellingtonians wouldn’t be interested in how that investment was decided.”

The same article cites Labour Party councillor, Daran Ponter, who is the sustainable transport committee deputy chairperson on the Greater Wellington Regional Council: “Let’s see what it is that she had pushed for and the direction that she has changed, because the things that have arrived on Wellingtonians’ plate in relation to Let’s Get Welly Moving are certainly not the things that they identified as projects they wanted when it went into the parliamentary process”.

Newstalk ZB’s Barry Soper also makes the case for the release of the Genter letter, saying: Taxpayers deserve to know what Julie Anne Genter and Phil Twyford are hiding. He says “Wellingtonians are left speculating as to what influence the Greens have had in foiling the $6.4 billion transport plan.”

And he complains that the Greens’ refusal to release the letter means they simply aren’t living up their promise of transparency in government. He says: “They’re obviously hiding something and the taxpayer has a right to know.”

Parliament’s Speaker, Trevor Mallard, has added to the momentum for the release of the letter, refuting claims by Twyford that convention dictates that such letters can’t be released. Mallard says from personal experience as an Opposition MP, he’s expected the release of such official correspondence, saying “I know that I had, as an Opposition member, regularly received copies of letters between Ministers” – see Derek Cheng’s Speaker shoots down Phil Twyford’s reason for keeping information secret.

Mallard has gone further: “I made it clear in the House that I didn’t agree with the Minister’s assertion that all Minister to Minister letters were withheld as a matter of course. I think we’ve now agreed that’s not the case.”

Debates about whether the Genter letter is subject to the OIA

In refusing to release her letter to Twyford, Genter has argued that the correspondence simply isn’t subject to the OIA. This is because, she says, the communication wasn’t a ministerial letter, but instead was sent in her capacity as an MP rather than a minister. This raises some important questions over whether politicians in government can argue that their negotiation of Cabinet decisions can be deemed to be non-ministerial.

If such negotiations, in this case between the Transport Minister and the Associate Transport Minister, are simply between MPs rather than ministers, then Genter is correct. And therefore, the OIA doesn’t apply, and her letter doesn’t need to be released. This is covered in Georgina Campbell’s story, Chief Ombudsman to investigate Julie Anne Genter’s secret letter.

One problem for Genter’s argument is that her letter was sent on official ministerial letterhead, and was signed off with her ministerial title. But for this she blames stationary supply issues, saying “As it happens I had only one type of letterhead but that is something I will be changing”.

Another problem for Genter’s argument is that she has already been answering written and oral questions on the issue on the basis of the letter being a ministerial one. And on this, Parliament’s Speaker has also made it clear that Genter can’t simply change her mind and now suggest that the ministerial correspondence in question was a Green Party letter not subject to ministerial conventions, saying: “Once the House has been told it is a ministerial document, it is almost certainly not appropriate to reverse that.”

Another line of defence to stop the letter being released is to argue that it is “not in the public interest” because if such correspondence was regularly released, ministers wouldn’t feel comfortable having the necessary “free and frank” discussions on issues, knowing their words would end up in the public spotlight. And there is some backing for this position from Chief Ombudsman Peter Boshier who recently made a similar ruling, saying there was “strong interest in maintaining the Government’s ability to undertake effective and efficient political consultation with political parties” – see Zane Small’s story, Julie Anne Genter’s justification for refusing to release letter to Phil Twyford.

If such a decision applied in this case, it would show just how broken the Official Information Act is says Matthew Hooton in his hard-hitting column today – see: Julie Anne Genter’s antics over the lin  (paywalled). He says this would be absurd: “She claims she wrote as one ordinary MP to another on an inter-party matter. If that rule takes hold, Finance Minister Grant Robertson and his associate David Parker could claim all their correspondence about next year’s Budget is just two Labour MPs communicating about their re-election plans.”

Hooton details the origin of the OIA and how, over time, each government flouts the rules more than the last: “over the years the politicians have corrupted departmental processes using their so-called no surprises rule. An eternal rule of politics is that, when it comes to ethical questions such as complying with the OIA, each Government is worse than the one before. They adopt all the dirty tricks of their predecessors and invent new ones of their own.”

In terms of the letter in question, and Genter’s involvement in the Wellington transport decision, Hooton says the letter must be released or she should resign: “Under the OIA, the public has a legal right to see this to-ing and fro-ing about why their taxes will be spent on one thing instead of another. The Genter letter seems to have been pivotal.”

And he’s sceptical about the decision to shift transport resources into a tram for the city: “A billion-dollar airport tram in a hilly city with a population of just 220,000 and only another 300,000 in its wider region would be globally unusual. We should expect to see detailed consideration of arguments and counterarguments as the two ministers debate whether the tunnel or tram should have priority.”

Finally, Ben Thomas argues that the most revealing part of the saga probably won’t be the contents of the mysterious letter, suggesting that Genter’s evasiveness has created a frisson around the letter that is unlikely to be matched by reality. But he says her actions do give us a glimpse into “the soul of the government” by showing ministers don’t even feel the need to try anymore when seeking to avoid accountability or transparency – see: Julie Anne Genter and the game of hats.

The Greens were going to be the principled core of the Labour-led Government, but instead are regarded by many as having been largely ineffective and submissive in power. This is leading supporters and others on the political left to ask some difficult questions about the direction the Greens are going in, and whether they will start to have more influence over the Government.

Former chief spin doctor for the Green Party, David Cormack, is worried, suggesting in his Herald column yesterday that the party has lost its courage, visibility and radicalism in power – see: Do the Greens deserve to be re-elected?

Although largely an encouraging pep talk for the Greens, Cormack’s column is fairly brutal in pointing out that Green MPs “have largely rolled over and acquiesced” instead of pushing an agenda for leftwing or environmental change. And not only have they been weak and moderate, they have failed in their promise to hold the Labour-led Government to account.

This could all change, Cormack says, but only if Green MPs decide to “step up” and actually fight for change. He argues they have a lot of potential leverage if they are courageous enough. With Labour having sold out so much, he suggests “You’ve got the chance to be the only real leftist party. Do you have the courage to take it?”

Responding to this analysis, blogger No Right Turn asks: When should the Greens get their Winston out? His answer is that they should play hardball to get the Zero Carbon Bill passed: “That is the Greens’ reason for existence, what they are about as a party. They need to deliver, for their supporters, and for the planet. And if their partners refuse – if Winston uses his veto, or Labour collaborates with National to water it down into more time-wasting, ineffective bullshit, then I fully expect the Greens to pull the plug and topple the government. Because the future is at stake, and it cannot afford for us to piss about on this.”

Another Greens-friendly political commentator, Martyn Bradbury, has also become increasingly distraught at his party’s actions – or lack of action – while in power. Today he blogs to say that the party is “in serious danger of not being returned to power in 2020 which is an absurdity when you consider climate change is the most pressing issue our species is collectively facing. The Greens have gone backwards in the last 3 elections and always over poll before an election, so if they are at 6%, slipping below 5% is a real possibility” – see: 18 months till election 2020 – how is the NZ Political landscape?

Bradbury says “As someone who has voted Green my entire life, it will be a deep sadness to watch them squander their legacy so meaninglessly.” He proclaims “The experiment of Marama Davidson as leader has been a dreadful mistake while James Shaw is about as effective as a day old corpse in a deodorant advert.”

What’s the cause of the Greens’ intense malaise? For Bradbury, it’s their increasing focus on identity politics and causes other than the environment: “The alienating middle class woke identity politics is terribly popular on Twitter, but in real life the woke politics of proclaiming all men are rapists, demanding white bros delete themselves from social media, attacking lesbians for not accepting Trans demands, insisting white supremacy violence is the fault of all white people, arguing free speech is white cis male privilege and reclaiming the word cunt is about as electorally attractive as a cup of cold vomit.”

It’s poor leadership, Bradbury says, and he recommends the party goes back to a focus on climate change. See also his recent blog post, Forget National’s leadership meltdown – what about the Greens?

Economist, environmentalist and TOP leader, Geoff Simmons, has some similar criticisms about the effectiveness of the Greens in government, suggesting that James Shaw has become a very weak environmentalist: “he is forced to back the tentative actions of his Government on two of our biggest environmental crises, fresh water and climate change. Don’t even mention fishing” – see: Greens toothless and divided.

For Simmons, too, it’s the Greens’ preoccupation with “identity politics” that is their weakness: “Quite frankly I think we have bigger fish to fry with our housing crisis and polluted fresh water. Regardless, I’m not sure activism really moves the debate forward in that space. I’m sure it plays well to part of the Green Party base, but does it help our society change for the better? These sorts of debates currently end up being used to shut down constructive conversation, not encourage it. Reasonable people are too scared to even ask questions or voice an opinion, for fear of a social media pile on.”

As co-leader, Marama Davidson has become the leader of the activist Greens, and a counterpoint to James Shaw’s more Establishment-style. Thomas Coughlan recently interviewed Davidson for his profile: Davidson: very Green, very outspoken and a lot to prove.

Coughlan explains that Davidson won the co-leadership contest against Julie Anne Genter precisely because she was the MP to “put a halt to the apparently unstoppable inertia dragging the party to the centre”. Davidson “was popular with the party’s activist left, who lobbied strongly for her to put her hat in the ring in the hope she would counterbalance Shaw’s perceived corporate-ness and pull the party back to the left.”

This profile examines whether she has been successful in that goal. Coughlan relays that critics say Davidson has merely continued to distract the Greens from core campaigns, especially when she spoke out about her intentions to “reclaim the C-word” for the public: “Observers felt it showed a lack of focus from the Green leadership as the campaign drew ever more attention, diverting people from the party’s work elsewhere. Less time thinking about climate change, more time thinking about, well, the c-word.”

According to this interview, Davidson has pulled back from such campaigns, suggesting the fault lay elsewhere: “Brown women in politics have a certain double standard judgment that I’m not going to change that means I have to be extra mindful”.

Davidson is certainly campaigning to dump the Greens’ fiscally-conservative support for the Budget Responsibility Rules. This campaign might see the Greens move to the left. But, Coughlan says, this would present significant challenges: “The looming question for the Greens is whether or not they can force the larger party’s hand – getting them to release, or even loosen the purse strings in any future Government. Doing so would require some intense political posturing. The Greens would essentially ask Labour to risk tarring themselves with the brush of profligacy and fiscal irresponsibility — something the party has worked for years to avoid.”

Earlier this year Davidson came out with a strong statement against the Government’s fiscal policy settings: “We are sitting on a surplus, we have the lowest cost of borrowing in recent history, and our country has crumbling infrastructure successive governments have kicked the can down the road to future generations.”

She announced the Greens were having a review of these settings, which would continue for a number of months, resulting in a new policy for the 2020 election – see Henry Cooke’s Greens to review self-set debt rules before 2020 election.

For more on this, as well as a discussion of other ways the Greens might reposition themselves for next year, see Henry Cooke’s The Greens are looking forward to 2020 already, and the possibility of a world without Winston. According to this, “The election is next year, and the Greens are getting ready by staking out positions on the left.”

Really, the party is going to have to score some greater wins on environmental issues, and especially on climate change. Even the National Party is finding that it can try to out-green the Green Party, with Simon Bridges recently saying: “If you look at the current Green Party and the current government, you’ve got a situation where we’re not getting cameras on fishing vessels, they won’t do the Kermadecs… They’re not making sufficient progress. For those who voted for Labour and the Greens because they thought they would get a greener government, well I’m not seeing evidence of that today” – see Joel MacManus’ Simon Bridges: Green Party isn’t making ‘sufficient progress’ on the environment.

There will also be continued pressure from the fledgling Sustainability New Zealand Party, who will seek to point out where the Greens might be letting down the environmental cause. For example, Conservation Minister Eugenie Sage’s decision to rule out gene editing – which might otherwise be used as “a breakthrough science solution for predator eradication” is being criticised by the centrist rival party – see Finn Hogan’s Vernon Tava calls out ‘anti-science’ Green party.

Of course, the Greens have had some big wins. Richard Harman pointed these out at the start of the year: “the end to irrigation funding; the ban on offshore oil exploration; the move away from funding motorways; funding for conservation measures and a more aggressive scrutiny of foreign land purchases” – see: Once were radicals – the Greens in government.

According to Harman, the Greens first year in government has actually been very good. He says that their operating style is far from radical, but from his point of view that’s a plus: “Yet paradoxically for a party which has its roots in the protest movement and still likes to propose radical change, its approach to politics proved to be remarkably conservative. They are not given to big bold political gestures and unlike NZ First who seem to prefer confrontational politics, their whole strategy has been to move slowly and cautiously closer to the centre of power. It is a strategy which is beginning to pay off.

Finally, to view how satirists have portrayed the Greens, see my blog post, Cartoons about the Green Party in Government.

The five percent MMP threshold is regarded by many as the biggest problem in our electoral system. Every couple of years there are calls to fix what many see as an undemocratic and excessive barrier to proper proportional representation. However, these debates normally end in a stalemate over what change should be made to the threshold, and how that change could be implemented. 

The last time this debate fired up was in the aftermath of the 2017 general election, when the minor parties received an historically low vote, prompting questions about the role of the MMP threshold in preventing new parties from entering Parliament and keeping the party system dynamic. I covered this debate at the time in my column, Time to scrap or reduce the 5% MMP threshold.

This time, the debate has arisen courtesy of a private members bill being proposed by the Green Party’s spokesperson on the electoral system, Golriz Ghahraman. The Electoral Strengthening Democracy Bill seeks to have Parliament legislate a number of changes to the electoral system, including a drop in the threshold, from five percent to four.

Political commentators and politicians are reacting with great interest and a mixture of support for and opposition to this proposal. There are two main issues being discussed: 1) Is what the Greens are proposing an appropriate way to implementing a change to the threshold? And, 2) Is a four percent threshold the right level?

1) Challenges to the Greens’ political process

There have been plenty of allegations thrown at the Greens about the party’s motivations in wanting to lower the MMP threshold, and about their proposed method for doing so. The party has suggested that the change in electoral law could be made by a simple majority vote in Parliament, and implemented in time for next year’s election.

This afternoon, however, the Greens’ hopes for lowering the threshold before 2020 were scuppered by Jacinda Ardern who ruled this out – see Craig McCulloch’s PM rules out change to MMP threshold before next election.

From the right of the political spectrum, commentator Matthew Hooton has tweeted that the Greens’ proposals are “Completely corrupt & outrageous.” This is because, he argues, the Greens are wanting to make these significant changes to the electoral system without getting either any sort of cross-party agreement or public support (via a referendum). He suspects the Greens are motivated by self-interest in trying to ensure that they are not ejected from Parliament if they fall below the five percent threshold next year.

National Party leader Simon Bridges has similarly condemned the proposals, saying “I think it will be outrageous if they seek to bring such a change in before the next election” – see Richard Harman’s: MMP threshold reduction possible.

According to Harman, Bridges says that “up till now significant constitutional change had not been done without strong bipartisan support” and the Greens’ “Bill was designed to screw the scrum against National and save the three-party Government’s bacon.”

Bridges also points out that if the Greens were serious about electoral reform and doing so in democratic way, they would have taken part in the current parliamentary review of election rules: “A first term Green MP has put this forward when on the Justice Select Committee there is an electoral law review going on at the moment, and the Greens haven’t even deigned to go to that.”

Rightwing blogger David Farrar also discusses the threshold issue and says that “lowering the threshold to 4% may have merit, but should only occur either by consensus of parties in Parliament, or a referendum. This looks like the Greens worried they won’t make it back and wanting to change the law to help them” – see: Greens obviously worried about the 5% threshold.

Farrar argues, instead, in favour of “Nick Smith’s suggestion that we entrench the entire Electoral Act so not a single clause of it can be amended without a 75% super-majority in Parliament.”

It’s not only the right who have suspicions about the Green Party’s motivations and ethics in pushing for electoral reform that might benefit their own side. Leftwing blogger Martyn Bradbury says today that the Greens’ agenda amounts to “ruthless corruption” because it seeks to “gerrymander MMP” for “naked self-interest” – see: Why are the Greens attempting to gerrymander MMP legislation to benefit them? He says this episode “is proof positive our Millennial Greens have come of age and are now as politically venal as everyone else.”

Bradbury has the same objections about process and motivations as some of the rightwing critics, but he also adds that the Greens’ choice to propose that the threshold is only lowered slightly – instead of more radically to 1-3 percent – is also self-serving because it would still be sufficiently high to protect the Greens from any emerging competition: “the threshold that would most benefit the Greens while killing off any other proto-political movement”.

Former Green Party activist Danyl Mclauchlan draws attention to “the terrible, terrible optics of a political party that is part of the government, and hovering just above the 5% threshold in the recent round of polls – and which routinely under-performs the polls on election day – attempting to alter the electoral system to its own advantage” – see: The best argument against lowering the MMP threshold? Winston Raymond Peters.

But should the merits of the threshold-reduction case really be overshadowed by debates on the motivations and supposed self-interest of those leading the arguments? Not according to Tim Watkin, who says that such “a knee-jerk response” makes “little sense and stops us having a proper squiz at how we should run the country” – see: Lowering the threshold – let’s not lower our standards.

Watkin also points out that “The Greens have always backed a lower threshold, even when the polls had them in double digits.” He congratulates the Greens for “putting the state of our democracy back on the table for all of us to poke and prod at.”

2) Is a four percent MMP threshold the right level?

Tim Watkin has a very good discussion about what level the MMP threshold should be but points out that there really isn’t any perfect number. He surveys some other countries: “You can look at Germany with five percent and still see them struggle on for months trying to form a government or you can look at the sway tiny, racist parties are having in Israel where the threshold is a peculiar 3.25 percent. Yet you can also see Norway doing fine at four percent and Finland OK with no threshold at all.”

He says that there are essentially two main reasons to lower the threshold: 1) to allow more new minor parties to get into Parliament, and 2) to allow more of voters’ preferences to count, as currently, “the threshold also bans more than 130,000 voters from having the representative they selected”.

Danyl Mclauchlan actually gives one of the best arguments in favour of lowering or abolishing the threshold, which is worth reading at length: “It is obviously unfair and distortionary. A party that gets 5% of the vote gets six seats in parliament, while a party that gets 4.9% gets zero. Why should 131,508 voters (5% of the turnout in the 2017 election) have their votes translated into seats into Parliament, and a slightly smaller number have their votes nullified? And the threshold distorts the decision making process around who to vote for if their favoured party is in that danger zone. Does a Green voter vote Green, with the risk that their vote will get wiped out, or switch to Labour, who they support less but whose vote carries essentially zero risk? A 4% threshold still has these problems, but because the threshold is lower the unfairness and distortion are reduced. Why not lower it to 1%? Or whatever percentage is enough to capture a single seat in parliament (this number shifts around, depending on various factors).”

However, Mclauchlan says he’s not so convinced by his own arguments anymore, given changes in global politics and the recent experience of Winston Peters in government showing the dangers of allowing radicals into politics: “now that we’re seeing a global rise of extremist parties, a fascist government in Brazil, etc, it no longer seems like such an abstract fear. But my main problem with lowering the threshold is that it will also probably save New Zealand First, and it will make the New Zealand First model of politics so much more viable.”

A further interesting argument about reform comes from National MP Chris Bishop, albeit from when he was a law student. Richard Harman has published part of a 2006 law paper by the politician in which he appears to argue for the complete abolition of the threshold: “The abolition of an electoral threshold would provide for a more representative Parliament and a more democratic one… It would empower voters of minor parties, increase the proportionality of Parliament, and reduce voting distortion.”

On the question of the MMP threshold’s role of preventing a proliferation of small parties in Parliament and government, Bishop declares: “Democracy must triumph over stability.”

It’s also worth noting that Ghahraman’s bill would abolish the contentious MMP “one-seat” rule which exempts minor parties from the threshold if they win an electorate seat. Of course, the classic example is that of New Zealand First in the 1999 election. Winston Peters won the seat of Tauranga for New Zealand First, but his party fell short of the five percent threshold, winning only 4.07 of the party vote. Because of the one-seat rule, it meant that the party got five MPs. Under the Greens’ proposal a party in this situation would only be entitled to the one seat of Tauranga, and no list MPs. Would that be more, or less, democratic and fair?

According to blogger No Right Turn, this would make things worse, and therefore he says “I’m hoping that this bill is never drawn” – see: Strengthening our democracy? He explains: “I support eliminating the threshold entirely, and any reduction in it is a step towards this. But until the threshold is reduced to the level required to win two seats, then removing the one-seat rule will reduce proportionality, and damage our democracy rather than strengthening it.”

Finally, for the most recent and in-depth examination of the plight of the new minor parties struggling against barriers such as the MMP threshold, see Rob Mitchell’s Crunching of the minor party vote leaves little room for new talent.