ANALYSIS: By Bryce Edwards
Cabinet Minister David Parker recently told The Spinoff he’s reading The Triumph of Injustice – how the wealthy avoid paying tax and how to fix it, by Berkeley economists Gabriel Zucman and Emmanuel Saez.
The book complains that leftwing politicians throughout the world have forsaken their historic duty to innovate on taxation and force wealthy vested interests to pay their fair share. The authors say governments of both left and right have capitulated unnecessarily to the interests of the wealthy in setting policies on tax and spending.
Parker shares this ethos and it’s undoubtedly a big part of his decision to revolt against his leader.
First, Parker ignored constitutional conventions and spoke out against the Prime Minister’s decision last month to rule out implementing any capital gains or wealth taxes. And last week he resigned as Minister of Revenue, saying it was “untenable” for him to continue in the role given Hipkins’ stance on tax.
Clearly, Parker is highly aggrieved at Hipkins’ decision to rule out a substantially more progressive taxation regime, especially when there is such strong public openness to it.
In May, a Newshub survey showed 53 per cent of voters wanted a wealth tax implemented. And last week, a 1News poll showed 52 per cent supported a capital gains tax on rental property.
Parker has become the progressive voice of Labour
Parker has thrown a real spanner in the works for Chris Hipkins at a crucial time in Labour’s re-election campaign. Such dissent from a Cabinet Minister is highly unusual.
It’s also refreshing that it’s over a matter of principle and policy, rather than personality, performance, or ambition.
There will be some Labour MPs and supporters annoyed with Parker for adding to Labour’s woes, especially when the government is already looking chaotic. He’s essentially declared a “vote of no confidence” in his own party’s tax policy.
This is not the staunch loyalty and unity that Labour has come to expect over the last decade, whereby policy differences are suppressed or kept in-house.
But even though Parker was being criticised last week by commentators for throwing a “tantrum” in resigning his Revenue portfolio, this charge won’t really stick, as he just doesn’t have that reputation.
His protest is one of principle, not wounded pride or vanity, and it’s one that will be shared within the wider party.
In taking such a strong stance on progressive taxation, and so openly opposing Hipkins as being too cautious and conservative, Parker has become something of a beacon for those in Labour and the wider political left who are discontented over this government’s failure to deliver on traditional Labour concerns.
Is there a future for Parker in Labour?
Parker’s outspokenness may be a sign that he’s had enough, and is looking to leave politics before long. Being on the party list means he can opt out of Parliament at any time.
After the election, he may decide it’s time to retire, especially if Labour loses power. In fact, Parker has long been rumoured to be considering his retirement from politics, so it might just be that the time has finally come.
A private decision to leave might explain why Parker has decided to put up and not just shut up, and publicly distance himself from Labour’s decisions on tax for the sake of his reputation.
It’s also possible that Parker has chosen to try to pressure Labour towards a more progressive position on taxation, and this is the start of a bigger campaign. If so, he would be playing the long game.
Parker is now established as the most progressive voice in Labour, which could see him move up the caucus ladder when Hipkins eventually moves on — especially if Labour is defeated at the election in October.
And Hipkins might have inadvertently invited opponents to want to replace him with a more progressive politician when he made his “captain’s call” to rule out any sort of real tax reform for as long as he holds the role.
Given that they had an absolute majority in the last three years they can’t blame anyone else. And should they lose the election, the analysis from within Labour will certainly be that they were too centrist and didn’t do enough.
Parker would be a strong contender for the leadership sometime in the next term of Parliament. That is if he wants it and hasn’t simply had enough. There are signs that he would be keen — he ran for the top job in 2014, with Nanaia Mahuta as a running mate, but lost out to David Cunliffe.
Last week he reiterated that he was up for a fight, explaining his decision to stand down as Minister for Revenue, saying, “I’m an agent for change — for progressive change.
“I’ve been that way all of my political life and I’ve still got lots of energy as shown by the scraps that I’ve got into in the last couple of weeks on transport.”
Of course, when the time comes to replace Hipkins, the party will face the temptation to look for a younger and “fresher” leader. Until very recently, the likes of Kiri Allan and Michael Wood were seen as the future, but those options have disappeared.
And the party might do well looking to someone with more proven experience.
Parker could fit that bill — he’s been in Parliament for 21 years and served in the Helen Clark administration as Attorney-General and Minister of Transport. He is seen as an incredibly solid, reliable politician, with a very deep-thinking policy mind.
By contrast, the rest of the cabinet often seems anti-intellectual and bereft of any ideas or deep thinking, which means that they are too often captured by whatever new agendas the government departments have pushed on them.
Arguably that’s why the blunt approaches of centralisation and co-governance have so easily become the dominant parts of Labour’s two terms in power.
Labour needs Parker’s progressive intellectual politics
Regardless of whether Parker ever gets near the leadership again, it’s clear he has much to offer in pushing the party in a more progressive direction. Certainly, Labour could benefit from a proper policy reset and revival — which Hipkins hasn’t been able to achieve.
The new leader managed to throw lots of old policy on the bonfire, and he successfully re-branded Labour as being more about sausages and “bread and butter” issues, but Hipkins hasn’t yet been able to reinject any substantial positive new policies or ethos.
Parker’s dissent this week indicates that frustration from progressives in Labour is growing, and there are some very significant policy differences going on in the ruling party of government.
For the health of the party, and for the good of the wider political left, hopefully Parker will continue to be a maverick, positioning himself as an advocate of boldness and progressive change.
Parker recently selected Thomas Piketty’s Capital in the Twenty-First Century as the book “Everyone should read”. He explained that “As a politician who believes in social mobility and egalitarian outcomes, this book inspired me to seek the revenue portfolio”.
That Parker has now had to give away that portfolio says something unfortunate about the party and government he is part of. And if the last week also signals that Parker is on his way out of politics, that too would be a shame.
After all, in a time when parliamentary politics is about scandal, and the government has lost so many ministers over issues of personal behaviour, it would be sad to lose a minister who is passionate about delivering policies to fix the problems of wealthy vested interests and inequality.