Monday, January 14, 2008

Wishful thinking

Yesterday's Herald carried a column from peter Neilson of the NZ Business Council for Sustainable Development, presenting the results of the latest research from online polling company ShapeNZ. Among the "findings" was the suggestion of a possible deal with the Greens for bold tax reform:

A National-Green- Maori Party-New Zealand First-ACT party cross deal on bringing in a new single tax rate of 20 cents in the dollar, funded by increasing GST from 12.5 to 20% - is most favoured by voters for these parties.


ShapeNZ asked people to chose between three tax reform options: cutting top personal income tax rates from 39c to 30c; cutting the top personal and corporate tax rates to 28 cents, or introducing a single rate of 20 cents, paid for by increasing GST from 12.5% to 20% (while fully compensating people of low incomes and benefits for price rises resulting from the GST increase).

The 20cents in the dollar option is the one most favoured by Green Voters (27%, compared with 6% for the 30c and 14% for the 28c options), ACT (53%), NZ First (35%) and Maori Party (37%).

I put the scare-quotes around "findings" because ShapeNZ uses a self-selecting sample for its surveys, weighted for age, gender, income and various other variables in order to make it "representative". This methodology is fundamentally unsound, and would be rejected by any self-respecting social scientist as having a high chance of producing significantly skewed results. It is basically a Stuff poll, and should be regarded as having the same level of reliability (i.e. none at all).

But even if you believe in ShapeNZ's voodoo methodology (in which case I know a finance company who wants some money), there's a second reason for doubting these "results" - namely that they are inconsistent with survey results taken on the same topic by the same method just three months ago. Back then, the tax option Neilson is touting was overwhelmingly rejected [DOC] by a similarly non-random sample, with 60% opposing it (most strongly) and only 17% expressing any support. So, either there's been a massive shift in public opinion in the absence of any real debate (or indeed, any mention of these particular tax options outside of these surveys), or one (or more) of these "polls" must be wrong.

But questions on methodology aside, I think the suggestion that the Greens and NZ First would ally with National and ACT to resurrect Roger Douglas's December 1987 tax package is just pure wishful thinking on (former Rogernome) Neilson's part. There's not even a suggestion they would back such a policy in their respective tax policies (Greens, NZ First), it is fundamentally incompatible with their commitments to social justice, and it would likely be regarded as a betrayal by their voters. Either party, or both, may be able to form a coalition deal with National after the election, but I really can't see this sort of tax policy as being any part of such a deal.