Harawira's New Party

With all the political attention last week focusing on Don Brash and ACT, you could be forgiven for failing to notice that a new political party is being launched today.

Hone Harawira has finally got around to putting a party together, and has named it the Mana Party. I'm sure more information about this party will come out over the next few days, including what it stands for and who its candidates will be. But from what we know it is fair to say it will assume a position on the far left of the political spectrum, somewhere around where the Alliance is/was. Some of its policies may be so hard left that they will make the Greens look like Tories in comparison, if this open letter is any guide.

It's not a party I would ever vote for because, in spite of all the things wrong with capitalism, all the other systems are much worse. As laudable as the aims of socialism may be, most genuinely socialist regimes are places where you probably wouldn't want to live. A system that combines the best aspects of a market economy with an ethos of caring for those who have less, is likely to provide the best balance between the need for economic growth and the desire to help others.

We have a long way to go as a country before we can get to that point, and it's disheartening to read in the Herald today that, even as our economy flounders, executive pay continues to skyrocket. I am absolutely comfortable with a top executive earning big bucks if the organisation they work for is also performing strongly. We need businesses that perform well and continue to grow, because they provide jobs and tax income for the country, and if a dynamic corporate leader can bring about organisational change for the better, then let them get the rewards.

But while some top-earning executives may well be worth what they are being paid, the sharp executive pay rise overall, combined with the poor performance of our business sector, indicates that something has gone badly wrong.

On the other hand, the Harawira model of a controlled economy doesn't sound to me like the answer. I'm all for the rich paying more, but there was a reason why we abolished death duties (to mention but one example). For one thing, they encouraged the growth of trusts and other devices to defeat the revenue authorities.

A financial transaction tax (whatever that might mean) could well hurt businesses that are already struggling, unless it is very carefully targeted. What sorts of transactions would it capture? If we do anything to impede the flow of money through our economy it will probably be the smaller businesses that suffer. One of this country's most pressing economic problems is a lack of access to capital. So I'm very wary about talk of such taxes.

The bluntest but most effective way to "target" the wealthy is to raise the top tax rate. So long as tax increases are sensible, and don't terrify all of our brightest businesspeople into emigrating to Australia, they may still be the most effective way to capture revenue for necessary social services. Likewise some sort of capital gains tax on real estate investments, combined with a crackdown on tax loopholes (that's easier said than done, admittedly).

I'm cautious about nationalising any assets, such as "monopolies and duopolies" (to quote the open letter). There aren't actually that many that spring to mind. All I could think up were a couple of big telcos and the two main supermarket chains. I'm not sure how happy I'd be if the government took over my local Countdown. I suspect it would result in price rises across the board, because there would be no incentive to compete any more.

There's one other problem with this party, and that's its leader. I have a great deal of respect for what Hone Harawira has achieved, and I admire his tenacity and refusal to compromise his beliefs. But while those features make him a fearsome activist, they make him a lousy politician. I can well imagine this party being a five-minute wonder, and can only imagine the potential for bust-ups and fiery internal debates. With so many activists on board demanding different things, and all in a totally uncompromising manner, and with the king of activists in command, it just looks like a disaster waiting to happen.

I could be wrong about that last aspect, though. Because at the time of writing this post I'm still only speculating on who else will be involved in this party.

As for what it means for Labour, a party that is to the hard left may not do too much harm to its vote. Labour's occupied the centre-left for a couple of decades now, and parties to its left have come and gone (New Labour, Alliance, Progressives, etc). It's possible this new party might bleed some support from the Greens, and if there's a focus on Maori issues the Maori Party might lose a few votes too.

But this is all speculation, because I'm just guessing what the Mana Party will be all about, and what its policies and personnel will be.