Over 350 people registered for this webinar with Dr Geoff Bertram on Saturday May 23. He started by debunking the dominant austerity narrative which says that government spending resulting in deficits must mean either borrowing or  "money-printing", which respectively either is a "burden on future generations", or inevitably leads to hyperinflation. That leads to a confusing argument that it is a strong Crown balance sheet with relatively low debt that provides fiscal space to increase spending. But it is Covid, not low Crown debt, that has opened up the fiscal space.

The mistake is to treat core Government like a household, that can spend only if it has cash in hand or a loan available. A sovereign currency-issuing Government is not like a household - its spending does not have to be financed in advance, and in the current downturn money creation is not inflationary. The New Zealand Government has monetary sovereignty - it issues its own fiat currency and collects taxes in that currency, it has a floating exchange rate, and no significant foreign-currency denominated debt. One constraint is the economy's dependence on oil priced in US dollars, but the current price is low and there is an over-supply.

He discussed money creation and debt, concluding that the 'burden' is about distributional issues and those issues are important - ongoing transfers from taxpayers to rentiers may not be in the long-run interest of society. Faced with Covid, fiscal space has opened up, and what is now needed is injection of demand via direct government purchases and transfers of cash to private households and firms  to enable them to purchase goods and services.

In future there might be inflationary pressure if the economy is pushed to genuine full employment (where it has not been for the past decade). He described five possible policy responses looking ahead to 2024. Treasury projections indicate a planned return to austerity. Bertram contends new Zealand needs to sustain a larger state sector which in his view means taxes on wealth, carbon and higher incomes to open up fiscal space. Preparation for those future tax changes needs to be done well before 2024.

This is but a summary of a fascinating webinar. You can watch the video of the webinar on YouTube here. Slides are here, and podcast is here.

We said we would try to bring content to the attention of the Fabians network through the lockdown and are working on several possibilities. Meanwhile, this is an article that caught my eye and in correspondence with the author we have come up with this package looking at the opportunity now presented to address the water quality problem in New Zealand. 

The original article was this one by Tom Kay, the Freshwater Advocate at Forest & Bird, in The Guardian, 'By failing to protect our water we have failed everything New Zealanders value'.

Tom noted that Forest & Bird has continued its work to protect nature during the lockdown. You can find an update on what Tom has been working on during the lockdown here.

Tom also made a brief video for us answering three questions on a) the nature of his own research on freshwater, b) what policies and strategies we need so that we protect freshwater purity and the values we sustain as New Zealanders, and c) what we can do now at our local level for freshwater.  The video link is here.

In the video, Tom mentions that F&B has come up with a raft of ideas for a sustainable economic recovery post COVID-19. Those ideas can be found here.

Finally, to support Forest & Bird’s work we have provided a link to their donations page. Please be generous in supporting their important work.

Reflections on Gough’s Heat, Greed and Human Need 

Stern dismissed any significant relationship between environmental and social policy, by saying that there is little point in equitable access to a train wreck.  Gough in his book, Heat, Greed and Human Need disagrees.  He states that equity, redistribution and prioritising human needs, far from being diversions from the basic task of decarbonising the economy, are critical climate policies.  The move to a green economy can only be successful if both environmental and social policies (eco-social policies, defined as policies that pursue both equity/justice and sustainability/sufficiency goals) are integrated.  When it operates within a global economy of gross inequality (between and within countries) it will fail to raise standards of wellbeing to a sufficient level, or it will fail to reduce emission at a sufficient rate, or it will fail at both. 

These are extraordinary times. COVID-19 is changing the world as we know it.

In the light of the Ministry of Health guidelines, I write to advise that we have decided not to continue to hold public meetings for the time being.

It’s great to have data-led decision-making being the basis of the advice we are getting and a resolute government guiding our way through the complications.

The advice is not to hold indoor gatherings of more than 100. We get close to that number on occasions but with caution in mind and awareness of the people who come to Fabians are in the risk demographic, we feel it is prudent to go to alternative ways to ‘excite debate’. We could find it difficult to trace people from seating patterns in venues.

It is also likely that venues may become restricted so planned events may need to be cancelled at short notice. As an alternative we hope to try a couple of strategies.

One is asking keynote speakers on topics of interest to us, if they would allow us to post a copy of their material in a paper, a PowerPoint presentation, a podcast, a link to an interview or a video. We can then post these to our site and perhaps enable interaction with the person to enable a Q&A.

We do not want to distract contributors with persistent discussion but keeping abreast with content continues the chance to engage and keep our community stimulated and aware of persuasive argument.
 
Second, we can consider using interactive technology to bring debate together. We could use Facebook or Zoom, for example, as ways to create exchange and networks of conversation. We would value some feedback on this.
 
·      Are you familiar with these platforms?
·      Do you feel confident you could participate?
·      Would you use it if we went down this track?
 
Of course, we can help here by posting guides on how to access such platforms. It may take a while for us to become robust at it but it can be the way we continue to inform members on issues and debates that are relevant to a progressive future.
 
It is amazing to see how much traffic there is informing the emergent post-viral world. Some seeks a speedy return to traditions but the more interesting stuff sees huge innovation in what might become the new normal – greater equity, social justice and better outcomes for the environment and climate.  For example; 
 
From a Next Systems Project: blog on: Learning from the crisis
 
Social Europe: How governments need to step up
 
So let’s get through this. It changes the dynamic of our events but does not prevent getting together in for now in smaller groups in pubs, homes and in networks.
 
Be strong, be kind and be Fabian


Phil Harington


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Tax Justice Logo

Why a #TaxJustice campaign – and why now?

New Zealand’s tax system is unfair and we need to fix it. A fair tax system is a powerful tool in building a society where every New Zealander gets a fair go.
The Tax Working Group has given us options to help fix our tax system. On matters like the Capital Gains Tax, the Tax Working Group has presented yet another solid case for treating all income the same whether it is capital income or earned income.

But, so far, there has been insufficient public focus on how tax reforms could create greater tax fairness. And the role of options such as the Capital Gains Tax in promoting fairness and reduced inequalities has not been prominent in in the public domain.

Tax Justice Aotearoa New Zealand sees a rare opportunity to emphasise that, if we want to reduce inequality and poverty, we need to make real changes to our tax system. The time to mobilise more voices that support a fair tax system, including a Capital Gains Tax, is now!

Who is Tax Justice Aotearoa NZ and how can you help?

Tax Justice Aotearoa New Zealand is an independent non-governmental organisation, linked to the global Tax Justice Network. We want transparent, democratic and fair tax systems for people and planet to flourish. To do this, we have initiated a #TaxJustice campaign. We have sufficient initial funding to go public with a couple of
billboards in Wellington and ads in several major newspapers.

The messages for this will be simple and direct, along the lines of ‘We need a fairer tax system involving CGT and we need it now!’

We can’t do this alone. The Fabian Society is supporting this campaign.  Can you chip in some putea/ funding to help make this happen?

Additional information