When a levy isn't a tax and Greens aren't green

Bill English has a degree in English, which should have inculcated respect for correct word use — if he hadn’t become a politician, a breed which bends language for good and ill.

So in claiming not to break an election promise not to raise taxes, he asserted his new airport levy is not a tax. The Shorter Oxford Dictionary defines a levy as “a tax, esp. one raised for a particular purpose”. It is a hypothecated tax, as the petrol tax is.

English also delayed the phase-down of the ultra-fast broadband tax — levy — on telecommunications companies (and so us in their bills). And he has in effect imposed a tax on short-term capital gain from property, though not many are likely to pay it.

Set aside that in March English said taxing capital gain would not halt house price rises. His sudden, Damascene, income tax extension is, as John Key acknowledged at his regular press conference on May 18, a form of capital gains tax.

This is a lesson for Labour. It could last year have cast its bungled capital gains tax as a tax on income on which some, generally better-off, people unfairly don’t pay tax.

The Key-English formula opens a door for Labour to extend that tax to longer time periods. But only if it gets smarter.

Little’s budget speech was loud bluster and miscued lines. Next day he seemed to back means testing the pension for over-65s still in work which he had to scramble to deny later and which Grant Robertson was still having to bat on TV3 on Saturday.

Little also seemed unprepared to respond effectively to the budget’s $25 a week benefit rise and supplement to the in-work rebate for low income-earners. Only later did other MPs remind us of Labour’s 2014 “best start” $60-a-week-a-child policy.

The Child Poverty Action Group (CPAG) did better. It said the Key-English formula was a signal acceptance of the principle that income is an important factor in child poverty — which English calls hardship and deprivation. At the election Key dismissed that principle.

The issue now is what the income should be. CPAG, of course, reckoned it not nearly enough.

The principle has wider implications. If the minimum wage has to be supplemented by taxpayers in Working for Families — in effect a subsidy to employers — what is the in-principle Key-English case against the “living wage”?

Robertson expanded on that: doling cash to those in difficulty “isn’t the same thing as actually having a plan to create the prosperity and the wealth that will mean those people don’t have to be on benefits”.

The old Labour rule, going back more than a century, was that a wage should be able to sustain a modest family.

Can Labour develop policies to restore that benchmark in a modern, highly globalised society? “Progressive” think tanks in big countries stacked with brilliant academics struggle with the conundrum.

Robertson has dipped into those think tanks, including the Centre for American Progress, which set up an eminent-persons “commission on inclusive prosperity”. Robertson brought its report back from Washington in April.

It has five underwhelming suggestions: sharing productivity gains with employees; raising skills across the population; innovation and regional clusters; injecting long-termism into corporate governance; and global cooperation on tax avoidance.

There is a geographical as well as a socioeconomic dimension of “inclusiveness”. Regional disparities are growing. Demographic trends will grow them more. A regional social wellbeing index is to be unveiled on Friday.

The Northland by-election gave a glimpse of a simmering rural and provincial unease and resentment, which includes mayors and businesspeople. Unattended, this could in time gnaw at National’s vote.

This was not a budget focus. One exception: $25 million for Cawthron Institute-type research initiatives outside Auckland, Wellington and Christchurch. That includes Dunedin, smarting at the Invermay cutback.

That tiny sum points up another budget gap. Key-English continue to invest less in science and research than the OECD government average.

Labour (its 2000s science sleep over) and the Greens promise far more. Retiring Green co-leader Russel Norman is especially hot on that.

The budget was also light on the natural environment. Its water section was presented principally in economic terms. That matches the skimpy “consultation” on the climate change target, in which unbecomingly coy officials have been fronting phalanxes of green activists.

But even the Greens were offline. Co-leader Metiria Turei stuck to social issues in her budget speech. You could have mistaken her for Labour. Only on Sunday did Norman add a climate change dimension.

That is a poser for their conference this weekend. Are social and economic policies flow-ons from a specialist ideas-factory for environmental (and human) sustainability? Or is the environment one item among equals?

Like Little, the Greens’ new co-leader elected this Saturday has work to do.