WE DESERVE A LOT BETTER THAN WHAT WE'RE BEING DELIVERED

In the past two years corporate tax revenues have soared over 60 percent.  Rising company profits have prompted calls for a windfall tax.

THE WORSENING economic conditions means that the ANZ's announcement of a $2 billion plus profit for the past year was always going to be met with a hostile reaction. With ever more folk finding it ever more difficult to just keep their heads above water, ANZ's profit announcement - an increase of eight percent on last year - has been met with a call for a windfall tax on excessive corporate profit.

The Green Party has been seen as leading the charge for such a tax. But in April researcher Edward Miller of First Union was also calling for a windfall tax commenting: 'the year to March 2022, corporate profits in this country had spiked by a pretty staggering 39 percent... Profits jumped up to $72b in that most recent year. They hadn’t been at that level prior. And it’s the biggest increase that we’ve ever seen, both in terms of the raw dollars, whether that’s inflation adjusted dollars or non-inflation adjusted dollars, and it’s also the biggest percentage increase that we’ve seen, ever.'

Miller didn't quite manage to attract the headlines that the Green Party have received. Finance spokesperson Julie Ann Genter has suddenly shot to something approaching media prominence. She has tubthumped that the Labour Government 'can't afford to keep doing nothing in this area....Ultimately it's up to us to decide what kind of economy we want to have. And I would say most New Zealanders believe that everyone should be able to pay for food, their rent, their housing and the ability to get around.'

Given that the Green's have shown little interest in providing an alternative to the neoliberal market economy, one wonders what sort of economy Genter has in mind. A kinder and gentler capitalism?

Although the Labour Government hasn't flat out rejected a windfall tax, it hasn't expressed any enthusiasm for the tax either. Finance minister Grant Robertson's evasive comment that Labour was still working on its tax plan for next year's election isn't much good for people struggling now. No one will have taken comfort either from his comment that he 'hoped' that the corporate sector 'would not unnecessarily lift prices'. 

Remember - this is the same Labour Government whose leader made the unilateral decision to take a capital gains tax permanently off Labour's economic agenda. 

The Green's, seemingly permanently bound to Labour by the hip, have little room to manoeuvre and, in the end, will tag long behind Labour as usual. They should, at least, be raising a stink in Parliament but, such is the Green's timidity, they won't.  But maybe the Green's campaign for a windfall tax, with a general election on the horizon, is more about lifting the Green's out of Labour's shadow rather than any serious expectation to see the tax implemented. 

The idea of a windfall tax has shot to prominence at a time when the Reserve Bank is preaching that hiking interest rates are the only means to suppress inflation and rising prices. That means an increase in unemployment, as Reserve Bank Governor Adrian Orr has signalled:

'Returning to low inflation will, in the near-term, constrain employment growth and lead to a rise in unemployment," he said last week.

Orr has confirmed Karl Marx's astute observation that capitalism depends on unemployment - a 'reserve army of labour' - to keep workers desperate enough to agree to whatever work they get. Unemployment, in other words, plays a critical role in capitalism, preventing wage growth from threatening profitability.

What Orr doesn't acknowledge - and nor does Grant Robertson for that matter - is the further economic pain he is about to inflict on already struggling New Zealanders.

Business commentator Bernard Hickey comments: 'ANZ is making $6m in profit a day, and asset-owners are still doing OK, but the low-income renters who are bearing the most inflation pain and got none of its asset-inflation gain, are set to bear the most pain again as the Reserve Bank tries to create more unemployment.'

The neoliberal economic orthodoxy might say that suppressing inflation means increasing unemployment but it's a political decision weighted, again, against the interests of the working class.

What is needed is a left economic agenda that, in the short term, mitigates the effects of the crisis for working people by taxing the rich, controlling prices and socialising major expenses - the energy companies and the banks for starters. In the longer term we need an economic agenda that provides a framework for a different kind of economy, one based on human need rather than corporate profit.

The question is this: Is the current system really the best we can do?  But that is a question, unfortunately, not one of our present parliamentary parties are prepared to even acknowledge, never mind answer. They remain committed to an economic orthodoxy that might have allowed the one percent to prosper but delivered next to nothing for ordinary New Zealanders. We deserve a helluva lot better than this.