Monday, October 31, 2022

Time for a windfall tax

Last week ANZ bank reported a record $2.3 billion profit - a full 0.6% of total GDP gouged out of our economy. And earlier in the year the Commerce Commission found that supermarkets were making a million dollars a day of excess profits due to their abuse of market power. Now, the Greens have finally stood up with a solution to this problem of corporate greed: tax it:

The Green Party is calling for a one-off tax on large companies making record profits of late due to high inflation fuelled by the pandemic, energy crisis and Russia’s invasion of Ukraine.

Under the windfall tax proposal, the money raised would then support people struggling with the cost-of-living crisis.

“An excess profit tax would be a simple and effective way for large corporations to pay their fair share, unlocking the resources all of us need to live with dignity, put a roof over our heads and food on the table,” Green Party finance spokeswoman Julie Anne Genter said.

The full discussion document is here, and it makes a compelling case. These excess profits aren't the result of innovation, of businesses delivering something new that people want. Instead, they're the result of consistent abuse of market power. And that's something we ought to discourage. Meanwhile, we have a state collapsing under NeoLiberal susterity, where hospitals are falling down and patients dying due to underfunding. Taxing these greedy corporations is one way of fixing that.

Of course, Labour is "meh" about the idea. Which has shades of Walter Nash's infamous "we are not for the waterside workers, and we are not against them", and shows you how much they care about people earning less than $296,007. But hopefully their voters will demand they step up. And if not, well, that's how governments become oppositions.