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The front page news in the UK is that, "The Labour party has been drawing up options for how it could raise money through extra wealth taxes to help rebuild Britain’s public services if it wins the general election" (according to sources who have spoken to the Guardian). On that note, a high ranking former NZ Labour cabinet minister (and current MP) is spending part of June in Europe, including France - visiting economist Thomas Piketty there, who is the global wealth tax master-mind. This MP will also, no doubt, be comparing notes with the UK Labour Party. Both NZ and the UK face a similar problem - stagnant economies & declining public services. Both countries' Labour Parties don't want to increase income tax or GST or corporate tax, which they fear will create more stagnation. Both parties figure that taxing the capital / wealth of "the rich" would play well with most voters, who would not be targeted. NZ Labour's cunning plan will be to propose not only capital taxes, but combine it with a cut in income tax for middle earners.


So its already looking clear how Labour will fight election 2026 in NZ. The Kiwi economy will sit in a stagnant state for some time. The Nats will struggle to raise higher tax revenues. Willis' cuts to government spending will lead to declining public services. The only way out for National was to argue that it would dramatically increase the quality of those services by virtue of savings obtained from efficiency-orientated restructuring programs, like to health-care, which this Blog has long advocated. But it cannot & will not. Bill English, Steven Joyce, Paula Bennett, John Key & their types are still way too influential in National. Luxon, Willis and Bishop are their poodle proteges. The Coalition can't even order 12 drugs it promised without sending its health policies into chaos, let alone restructure "the system". Luxon better start looking like an "A-lister" himself, and not a "C-lister" economics thinker, with C-lister advisers, or NZ will be sunk once Labour gets hold of the wealth of our wealth-creators.


Get ready for election 2026 to be fought along these (capital tax) lines. DownToEarth Kiwi forecast our high inflation beforehand, forecast how interest rates would be going up (when even the Reserve Bank was not), forecast that our economy would falter after Labour's reckless spending & money printing campaign, and forecast nearly every policy focus in the Coalition agreement. We're confident of our new prediction about the capital tax battle-lines being drawn up, as we speak, in Paris by Labour, to be proposed in two years time.


Sources:

During her time at the Kennedy School at Harvard, where former PM Ardern is spending her life in exile waiting for the extreme divides she created in NZ to heal before venturing back to her homeland, she's been giving interviews. She has been painting a picture of herself as a leader of outstanding qualities; who healed division; who led with empathy (her brand), particularly toward children. When asked about the effects of her Covid policies on Kiwi youngsters, she dismissively laughed off the question. Since Ardern defined her leadership as being one guided by "experts", she cunningly answered as follows: at 43 mins 40 secs into the Kennedy School session, Ardern says she did a video that was put up on Facebook during the pandemic, where "I interviewed a really well-known clinical psychologist, or maybe counsellor at least, who specialized in kids, where he said to the parents of New Zealand, 'If you're kids are watching a lot of TV, then its fine .. they're going to be OK'", as she laughed, and her host laughed, and the Harvard audience laughed. "That is empathetic policy-making", Ardern concluded. Her Kennedy school professor host replied, "It's a beautiful example". The audience whooped in delight.


Yesterday, I received the latest articles from the Centre of Economic Performance at London School of Economics, where I once worked. One, "A generation scarred by the Covid-19 pandemic", is by Steve Machin, an LSE "big name" in education & labour economics. The study says, "By deploying the latest econometric methods to understand how children develop skills over time, using data from UK cohort studies, we estimate the educational & lifetime impact of mass school closures & deepening social divides on a generation of children. In previous work, we highlighted the likely devastating impact that school closures would have on young people’s life prospects. The disruption of the pandemic on pupils in England will mean lower GCSE grades well into the 2030s. We estimate that a quarter of pupils received no schooling during the first lockdown in early 2020. Pupils eligible for free school meals, those educated at state schools, & those from less affluent backgrounds, suffered learning losses at a much greater rate than their more affluent peers. Even our previous gloomy predictions did not foresee the perfect storm of factors that would exacerbate inequalities inside & outside education in the wake of the pandemic .. .".


NZ's lockdowns were far more severe than the United Kingdom's. So it turns out Ardern is talking uniformed, empty, marketing-your-own-brand, fake soundbites. As for the Profs at the Kennedy School singing along with her, pretending to be common people, they also should be ashamed. There's now exceptionally strong evidence that the effect on children of pandemic policies has been devastating. NZ's Labour Party hit the poor hardest, which will exacerbate inequality in NZ for the foreseeable future. Beware of Ardern, Hipkins and the Otago medical "experts" trying to rewrite history about the effect of their actions.




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