OPINION
Have you met Mr Numbers yet? He’s been touring the country, talking to “tens of thousands” of people (his words), telling them a lot of numbers.
This much crime, that many kids not in school, this many weeks to wait for a specialist medical appointment, that much more household debt.
Yep, it’s Christopher Luxon, leader of the National Party.
These things are all real issues, no question. All of them and many more are in a precarious state. But Luxon is using numbers to do far more than just point to Government failure.
“I’m sorry I’m going on so much about numbers,” I’ve heard him say, before launching into more sets of numbers.
He explains that he’s comfortable with numbers, because of his background in business, and he believes they reveal what’s really going on.
“The numbers don’t lie.”
This is clever politics. His audiences might not remember the numbers, but they do remember that Luxon is Mr Numbers. He must know what he’s talking about, because listen to him spout those numbers!
It was surprising, then, to discover last week that the party’s flagship tax policy is riddled with dubious assumptions and plain miscalculations. Between them, Luxon and his deputy Nicola Willis hardly seemed to know their numbers at all.
The policy relies heavily on allowing foreigners back into the property market and imposing a 15 per cent tax (on $2 million-plus sales) on them for the privilege. This, they say, will bring in an average $740m a year.
But they don’t seem to have recognised that some foreign buyers will be exempt from the extra tax because of our obligations under free-trade agreements. Nor did they allow for our tax treaties, which prohibit this kind of extra tax. Deputy leader Nicola Willis admitted on TVNZ’s Q+A that they did not even seek advice on this before announcing the policy.
So it’s a plan that relies on circumventing the rules. As economist Eric Crampton from the right-wing New Zealand Initiative think tank told RNZ yesterday, that’s not good enough. We shouldn’t be looking for ways to avoid our international commitments.
The debate has turned into an arcane argument about tax law, but there’s another, much simpler, way to look at it. National’s numbers don’t make sense.
If the expected revenue of $740m is 15 per cent of the value of property sales to foreigners, that puts the full amount at $4.9 billion, each and every year.
Where’s that coming from? OneRoof reports that in 2021, the peak year to date for luxury house sales, 334 homes worth $5m or more were sold, with 32 of them worth more than $10m.
But National wouldn’t get its $4.9 billion of sales to foreigners unless they bought, say, 1000 homes worth an average $5m each.
This is what commentators call a “heroic assumption”. It requires the number of $5m homes on the market suddenly to become four times larger.
Luxon faced criticism for these numbers when he faced the media on Sunday, after his campaign launch. But he didn’t clarify, amend, or do anything to suggest he understood them. He doubled down.
It’s not that he doesn’t know his numbers. But it does seem that whether they’re right or not doesn’t always matter.
At that campaign launch, the first issue Willis raised in her speech was “the cost of Government”. It’s up 80 per cent since Labour first took office in 2017.
The figure is correct, and quoted often by Luxon as well. And National is undoubtedly right that some of the money will have been poorly spent.
But the two big reasons for the extra spending are not secrets. One is Covid-19, with all the massive and often ongoing health, social and economic costs that has imposed.
The other is the Government’s record spending on transport, housing, health, education, climate action and more, following decades of underspending.
Do we think it’s right teachers are now better paid and more hospitals are being built, or not? Do we welcome our biggest housing boom since the 1950s, with its thousands of new social housing units, or is that a waste of money? Do we think Cyclone Gabrielle was a wake-up call, or should we assume it will never happen again?
Labour has been panicked by National and Act’s attacks on spending, and has already promised $8b in cuts. National says it will carve out $8b more. Both promise to preserve “front-line services”.
But while the focus should obviously be on the front line, the promise is pernicious. This isn’t policy-making driven by good data analysis, it’s empty populism.
If you remove back-office staff, you undermine the ability to plan and measure the work and ensure value for money. You cut the support services for front-line staff and you force them to do more admin work themselves.
Effectively, that reduces their outputs anyway, while piling on more pressure. So more of them leave. We know this already: just ask hospital staff, teachers, police...
Of course, as Act leader David Seymour has reminded us, another option is to blow up whole departments. Still waiting for someone to explain how that was a “joke”.
For the record, according to data from the Public Service Association, we spend less on our public services as a percentage of GDP than Britain or Australia. The proportion of people working in the public sector, related to the whole population, has not changed for 20 years.
National’s big new tax policy also creates a “climate dividend” for households. But it does this by stripping out a whole range of climate-action spending that benefits all of us.
Auckland Mayor Wayne Brown has pointed out one example: the Auckland Regional Fuel Tax will go, creating a $2b hole in the city’s transport spending.
This will mean an end to free public transport for young people, along with other improvements like better services and the electrification of the bus fleet.
National said last week the free-fares policy was “unworkable”, but half a million Aucklanders have signed up for it.
It’s hard to overstate the damage this will do. Households getting a little bit of money in the hand, but having public transport services made more expensive and less convenient, will increase emissions and congestion and make the roads even more dangerous than they are now.
What a contrast to the views of outgoing National MP Todd Muller, who made his valedictory speech in Parliament last month. Being “realistic”, he said, about what this small country can do, “cannot mask the inevitable: we must reduce our gross emissions and seek efficient ways to offset them in the short term.
It is a challenging path [that could be] drowned out by simple tag lines of denialism or catastrophisation, or even kick-it-down-the-roadism.
“As we sit here today, we cannot meet the gaze of our youth on climate action and that should not sit easy with us.”
Luxon’s new pledge card commits to “net zero by 2050″. I asked Mr Numbers on Sunday why there was no target for 2030 or 2035, as scientists everywhere are pleading for. He said the pledge restates the party’s position since 2015.
Net zero by 2050, in the absence of any other targets, is dreadful kick-it-down-the-roadism. It’s hard to think of a worse use of numbers.
Those Auckland e-buses, by the way, now number 133. We have the second-most in Australasia and the target is for a 100 per cent zero emissions fleet by 2035. It’s a target National’s policy will make impossible.
As Luxon says, numbers don’t lie. But do they always tell the truth?
One more example: the minimum wage. National wants an economy with “higher wages and salaries for us all”, said Luxon on Sunday, and his tax plan will give workers on minimum wage about $20 more per fortnight.
True. But National and Act have voted against every increase in the minimum wage since 2017. Those increases, courtesy of Labour, the Greens and Te Pāti Māori, have made recipients $556 a fortnight better off. That’s a much bigger truth.
Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues, with a focus on Auckland. He joined the Herald in 2018.
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