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  • rmacculloch

The Economic Consequences of Luxon's Announcement of not wanting to govern with Te Pāti Māori

Today the Leader of the National Party ruled out coming to any arrangement with Te Pāti Māori in forming a National-led government after the 2023 election. Sir John Key did form a coalition with the Māori Party, together with ACT. This blog is focused mostly on economic matters - of course there are political reasons for Luxon's announcement linked to winning the next election - but our focus is on how it could affect our economic future.

Many pro-market beliefs & policies, like Charter Schools, are embraced by Māori, and have been strengthened by the rise of the Māori economy, yet are opposed by Labour / Greens. The PM has a personal dislike of Charters. More private provision, including of education & health-care, is of rising interest to Māori, who have more capability than ever to play key roles as competitive suppliers. Yet anything to do with privatization is opposed by Labour / Greens, which both promote State dependence & control. Both those parties are covering up how their fundamental economic ideologies will forever frustrate Māori aims.

So any marriage between Labour, Māori and Greens will always be dysfunctional. It's a pity when Māori long-term economic prosperity depends on beliefs & values inconsistent with present Labour / Green economic policy, but more in line with National / ACT, that arguments about issues like co-governance have gotten in the way. Te Pāti Māori must figure it has more to gain in the short-run being part of a Labour / Green coalition due to gains from redistributions of wealth & power than from reforms that would improve the efficiency of the Māori (and entire Kiwi) economy. For Election 2023, we now have three aligned parties sharing one thing in common - a burning desire for redistribution.

Should NZ vote for a Labour-Green-Te Pāti Māori coalition, here's just one example of the conflicts that will arise: Labour-Greens will want capital taxes, yet our Treasury states, were these to be implemented, "Specific consideration would need to be given to the treatment of Māori freehold land & iwi assets" (p. 76, NZ's Long Term Fiscal Position below). Which I guess means such assets would be exempt.

How can such issues ever be resolved?



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