Missed Opportunity

About 5-6 years ago I picked up a copy of Gareth Morgan’s book The Big Kahuna from a second-hand book shop. I was really interested in his proposal to turn tax and welfare ‘on its head’. The tax overhaul is focused on three components: a Universal / Unconditional Basic Income (UBI), flat income tax, and a Comprehensive Capital Tax which covers land and housing. This proposal is the cornerstone of Gareth Morgan’s recently established political party – The Opportunities Party.

Before reading this book, I hadn’t really thought about a concept like a universal income, where the government gives every adult a small base income. No questions asked. This replaces our whole benefit system, including superannuation for 65+ year olds, the unemployment benefit, sickness benefits etc. Everyone gets the same amount, whether you are working or not.

It’s a pretty expensive policy too – in 2014 the Morgan Foundation put the policy cost estimate at $36 billion per year. So how is it paid for? According to the Morgan Foundation:

  • $21 billion is funding currently allocated to our current benefit system
  • $8 billion from the taxing housing and land through the Comprehensive Capital Tax
  • $5 billion from changes to income tax (proposed by the Morgan Foundation in 2014 as a 30% flat tax rate)
  • $2 billion from savings from cutting ‘bureaucracy’

As Morgan Foundation economist and current Opportunities Party Deputy Leader Geoff Simmons rather glibly put it in a 2014 Morgan Foundation video:

“Sorry public servants! All of those people working in our complicated Ministry of Social Development and Inland Revenue departments, you lose your jobs. Go out and do something more useful with your lives. That saves us $2 billion.”

Using the 2014 figures the UBI requires an additional $13 billion per year in taxation, but provides an unconditional guaranteed basic income for all New Zealanders. As covered in The Big Kahuna, the UBI:

  • Recognises the contribution of the 1 million people who work but are not paid, and without whom our society would collapse
  • Provides a cushion to lessen the impact of the casualisation of work
  • Eliminates the disincentive to work accompanying targeted benefits
  • Winds back the dehumanisation and stigmatisation of benefit targeting

How realistic is a full UBI? Even The Opportunities Party say a full UBI is “unlikely to ever totally replace targeted social assistance”. While it is an objective of the party to introduce a full UBI, the party’s policy platform for the 2017 election takes a more pragmatic approach and introduces a few targeted UBIs, some of them to be paid for by adding a means-testing element to superannuation.

It seems a bit odd for the proponents of a full UBI to want to introduce means-testing to the one part of our current tax and welfare system that actually acts like an UBI, but consistency aside I like the direction of the policy.

History Repeating?

So if I like the sound of some of these policies, why would I be concerned about The Opportunities Party?

My concern is that The Opportunities Party is not the right vehicle to push for a major policy overhaul like the introduction of a UBI in New Zealand, despite the party being led by one of the biggest champions for UBI in New Zealand. In fact I think the party’s prospects could actually hurt the chance of a UBI being introduced, or at least properly investigated, in New Zealand.

The introduction of a partial or full UBI would be a major change to our tax and welfare system – it requires political advocacy by a party or parties over a long period of time. It’s easy to come up with the policy, but you need to be in for the long haul if you actually want it implemented. It is a substantial policy and the benefits would need to be sold to a large portion of the voting public before it could be considered politically palatable.

New political parties have not done well in New Zealand in recent years.

  • Conservative Party – 2.65% in the 2011 election, 3.99% in the 2014 election
  • Internet Mana – 1.42% in the 2014 election

In 2014, the three-year-old Conservative Party were on the brink of entering parliament, polling at 4.7%. These generated some positive media coverage and it helped to shake a bit of the wasted vote risk. They only needed a few more votes and they’d be over the threshold. Of course this positive boost in the polling news was quickly undone when the Conservative Party’s press secretary resigned due to leader Colin Craig’s behaviour. The final result for the Conservative Party was 3.99%, falling short of the 5% threshold, resulting in zero seats in parliament.

The ten-month-old Opportunities Party has been consistently polling around 1.5%, well short of 5%. Gareth Morgan has blasted these polls as rubbish but has offered no real insight or evidence into what is wrong with the polling methodology. The “landlines!” complaint doesn’t really hold up either when several of the major polls now incorporate mobile phones (Roy Morgan) or an online component (Reid Research).

While their policies are radically different, there are a number of other organisational similarities between the Conservative Party and The Opportunities Party.

  • Both parties were founded by wealthy public figures (Gareth Morgan through GMI and Colin Craig through the March for Democracy).
  • Both parties have run highly visible marketing campaigns, with advertising budgets comparable to the larger political parties in New Zealand
  • Both parties have limited grassroots support in many electorates, with marketing focused primarily on large billboards and pamphlet mail-outs
  • Both leaders are the primary bankrollers for the party
  • Both leaders are political outsiders, unlike NZ First, Greens, ACT, United Future, Māori Party and Mana who all successfully contested their first elections with leaders who had been previously elected to parliament (Greens and Māori Party had one co-leader each that had been a Member of Parliament already)
  • Both leaders are polarising public figures – whether it be Colin Craig on smacking or Gareth Morgan on cats.

Despite the huge marketing budgets for both of these parties, it didn’t help the Conservative Party (or Internet Mana for that matter) and if the polling is correct it doesn’t appear to have boosted The Opportunities Party’s chances of getting into parliament.

2014 General Election Campaign Expenses

Party Votes Percentage Seats Campaign Expenses Expenses per vote
National Party 1,131,501 47.04% 60 $2,556,473.30 $2.26
Labour Party 604,534 25.13% 32 $1,275,201.36 $2.11
Green Party 257,356 10.70% 14 $1,297,609.58 $5.04
NZ First 208,300 8.66% 11 $268,530.23 $1.29
Māori Party 31,850 1.32% 2 $202,562.12 $6.36
Act Party 16,689 0.69% 1 $293,241.09 $17.57
United Future 5,286 0.22% 1 $1,995.06 $0.38
Conservative 95,958 3.99% 0 $1,914,072.38 $19.95
Internet Mana 34,095 1.42% 0 $1,008,926.26 $29.59

 

Good Things Take Time

Sustainable political movements take a long time to grow – they need to be nurtured over a long period of time before they become a viable force to realistically propose large-scale policy changes. The Green Party is a good example of this – they didn’t just appear out of nowhere to contest the 1999 election, they were the continuation of a political movement that had grown over nearly three decades through the Values Party and the Alliance. Many of the longstanding Green Party policies have become more mainstream over time and adopted by other parties, a large part due to the political longevity of the green movement. The same could be said about New Zealand First – it wasn’t a new political movement created out of thin air in 1993. In many ways it was a continuation of the Muldoon-era Red-Tory style of politics.

So why don’t I think The Opportunities Party is a sustainable vehicle to drive major change like the UBI?

Firstly, sustainable political movements cannot be reliant on leadership and funding from one individual for starters. You only have to look at the post-Colin Craig Conservative Party. Believe it or not, the Conservative Party is actually contesting this election and I bet you would struggle to name a single candidate. I know I can’t!

Sustainable political movements also need a support base that can hold the leader(s) to account. I cannot see how this is possible at the moment. There has been almost complete silence from The Opportunities Party candidates regarding Gareth Morgan’s twitter conduct. Maybe none of their candidates have issues with Mr Morgan and his press secretary Sean Plunkett harassing NZ Herald columnist Lizzie Marvelly on Twitter or using attention grabbing tactics with sexist undertones like the ‘lipstick on a pig’ saga. But even if they did have concerns, I can only assume there is very little they can do to hold their leader accountable.

In a December 2016 interview about the formation of The Opportunities Party, Mr Morgan said that he decided to start the party while he was overseas doing humanitarian work:

“I emailed the guys [at the Morgan Foundation] and said, ‘Okay, we’re going into politics. I’ll be home in three weeks. This is what I want you to do.”

This quote sums it up for me. If there is a disagreement in the party, one can safely assume it is either Gareth’s way or the highway. This is simply not sustainable in the long-term. There is a real risk of membership and supporter attrition if there is minimal flexibility within a party structure.

My concern is that Gareth Morgan’s choice to establish his own political party will potentially cement the UBI as a completely unelectable policy.

I would like to see a UBI investigated further. While I like the idea in principle, there are still so many unknown factors that would require closer assessment. I would want to know a bit more about the scale of government job losses that would come as the result of the ‘bureaucratic efficiencies’ if the UBI was adopted beyond the first steps proposed in The Opportunities Party’s 2017 platform. It is safe to assume that $2 billion in savings comes with a hefty number of redundancies.

I am sure there would be a few Green MPs that would be sympathetic or interested in the concept of a UBI, whether they state it publicly or not. Maybe even a few Labour MPs. While it seems extremely unlikely, maybe this could be a policy for Labour’s Tax Working Group to explore if they are successful this election.

In the meantime I guess we will find out the fate of The Opportunities Party and, potentially, the UBI this weekend.

Title photo credit: Lloyd Burr, Newshub

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3 thoughts on “Missed Opportunity

  1. Hi Nick,

    Very engaging and well presented article. You probably are aware, but in the late-1960s, a Universal Basic Income, or guaranteed income as it was then called, almost became a reality in the US. I believe it was conceived by Johnson advisor Daniel Patrick Moynihan, initially as part of the War on Poverty and later taken up by the Nixon Administration, which drafted a bill and ran pilot programs in several states, New Jersey being the most famous. Donald Rumsfeld, who then headed the Office of Economic Opportunity, was actually in charge of these pilots. Nixon became spooked that UBI would be a perverse incentive and pivoted toward a workfare approach at the last minute.

    Like

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