Gareth Morgan, Director of Gareth Morgan Investments
The political case for an inquiry into government’s relationship with big business has become compelling even if the judicial one hasn’t. Leaving aside its legitimacy, the Peters campaign with its loose cannon nature and “despicable” character attacks, has managed now to inculpate those, commonly perceived as recipients of economic privilege, with tax avoidance. This can only enhance the political fortunes of the anti-big business Alliance Party. For National, third in the polls despite an improving economy, defending the post-1984 economic formula which has spawned the economic polarisation between rich and middle income New Zealand, is an increasingly lonely pursuit.
Indeed if defeat in the polls looms National may well seek to distance itself from the sponsors of the big business/government cabal which the electorate so resents. One way to do this would be to establish a public inquiry into these links. Clearly official recognition of the need would be tantamount to acknowledgment that all was not well in the relationship between government and big business that Labour and then National have sponsored. In the eyes of many National Party supporters this would go a long way to discrediting the politics of the New Right and set the slate clean for a return by National – under new leadership of course – to the centre which Labour is currently trying to capture. Only then will National recapture the Rob’s Mob votes which have deserted them.
National’s present strategy is to remain sullenly resentful while Peters keeps chipping away highlighting the privileged treatment that some of corporate New Zealand received. That this should have occurred courtesy of tax law loopholes which persisted under a revamped tax regime purportedly designed to flatten out the tax base and make everyone pay their fair share, is a cruel irony certainly not lost on the electorate.
For the middle class who have burdened a higher tax load to pay the bill for the poor and aged, the spectre of big business avoiding their tax liability has been repugnant, no matter whether it was technically legal or not. The voting power lies with the middle class, a group no Party can afford to offend. While both National and Labour have done that, it has not been with impunity, as the Alliance’s growing support attests. Labour, via its post-Douglas purge is struggling to shake off that label. But National’s now ironically defending Labour’s old market prescription. Even on disposal of nationalised assets to wicked foreigners for example, only John Collinge has recognised the extent of traditional National supporter repugnance.
To have a chance in 1993 National will have to change course. Acceding to the populist demand for an inquiry would be such a political initiative. What a shame for them then that there’s so little to inquire into. That big businesses’ tax craftsmen were two steps ahead of the tax legislators has upset voters and confirmed their resentment of the belt tightening advice, smart alec Round Table members have foisted upon them.