In the same week that food banks have been forced to close for lack of government support, Auditor-General John Ryan has slammed the process by which $24 million of taxpayer funds got handed out to the “I am Hope” foundation, in order to finance Mike King’s dubiously effective Gumboot Friday approach to mental health:

Several aspects of the process are unusual and inconsistent with good practice," [Ryan]writes. Ministry of Health officials were "put in a difficult position" by the coalition agreement to fund 'I Am Hope', but they should have provided better advice on the rules to the minister, he said. “the analysis appeared designed to retrospectively justify an outcome that had already been decided." ([My emphasis.]

Moreover, Ryan concluded with this incredible litany:

• The selection of the supplier and the amount of funding was decided without an open and transparent process
• There was no opportunity for a fair, open or competitive procurement process
• The funding for the new initiative was specific to a supplier, rather than to a broad policy initiative or to achieve a policy outcome
• The limited analysis on whether it was appropriate to directly contract the supplier or whether the supplier was best placed to deliver the policy objective was done only after the decision to provide funding to the supplier had been made
• The decision to opt-out of the rules took place after the decision to engage the supplier and without clear justification of why an opt-out was appropriate

As Werewolf had reported back in May:

The I am Hope charity whose chair donated $27,000 to the National Party over two elections has seen its Gumboot Friday initiative awarded a $24 million contract to provide mental health services. Going by the LinkedIn page of the I am Hope Foundation, and other online evidence, former National MP and National Party leader Todd Muller is listed as an employee, and has been a board trustee.

Also, keep in mind that previously, three Cabinet Ministers had taken at face value information about highly positive outcomes that the charity itself had generated, via a firm owned by former National Party leader Bill English. With this government, Casey Costello and Nicole McKee may be just the tip of the iceberg.

Success breeding excess

Ever tried pulling yourself up by your bootstraps? Its really hard to do. Stephen Colbert saw someone do it once on Cirque de Soleil and was very impressed. Patting yourself on the back is easier, and PM Christopher Luxon (“I get it: I’m wealthy, I’m sorted”) seems to have a real gift for it.

To no-one’s surprise, Luxon’s latest bout of self-congratulation was entirely irrelevant to the actual point at issue. Which was: shouldn’t New Zealand tax the income earned from capital gains, for the same reason that we tax the income earned from wages? As a bonus, a capital gains tax would also channel some investment away from housing speculation and into productive investment. That would be a good thing, right?

Not according to the PM. Embarassingly, Luxon went on to clam that a capital gains tax would “deter wealth creators.” Hmm. This self-delusion is rife among property speculators and currency traders. In reality though, flipping houses and doing currency trades creates wealth only for the individauls concerned. None of that activity improves anyone else’s life, let alone benefits society as a whole.

To an overwhelming degree, the people who oppose a CGT are not creators of social wealth. They’re much more like predators, feeding on the value that has been created earlier, by other people. All the more reason to tax capital gains, if only “pour encourager des autres.”

The fact that so many wealthy people are willing to attribute social value to their self-enrichment is an interesting psychological phenomenon. When not patting themselves on the back, many of the financially successful expect the rest of us to be gazing admiringly in their direction. It has been that way for quite some time. Since the dawn of neo-liberalism here in the mid 1980s, the likes of Michael Fay have complained that they don’t get enough respect and admiration for their insipirational labours of self-enrichment. It is gravely suggested by their friends in the media that New Zealand, as a nation, is problematically prone to envy and resent the wealthy and successful.

Hardly. Far from resenting success, New Zealanders are prone to claim any wealthy celebrity as our own, no matter how tenuous their links to this country may be. Regardless, why on earth do some of our boardroom chieftains feel so widely...unloved? Sad face emoji.

IMO it has something a lot to do with the normal human life cycle. In many cases, a serious level of monomania is required to get to the top of the corporate ladder. Once climbed, the pinnacles of material success can be emottionally arid places. Not only have rivals been sacrificed along the way, but friends, relatives, wives and children have also tended to be reduced to supporting roles. By the late 40s, a corrosive feeling of “is that all there is?” can seep into even the least complicated mind of the most driven person on the rich list.

To such individuals, politics can be a useful diversion from dark and destructive thoughts. Politics offers a new arena of applause, emotional highs and lows, and fresh problems to be bent to one’s will. The fact that the hierarchical, silo-ed, entirely self-serving nature of business success is the worst possible training ground for running a country in a way that ensures no-one gets left behind...well, that rarely seems to be a consideration.

Unfortunately, this process may go some way to explaining how we’ve ended up with a Prime Minister who seems to be utterly bemused by the very existence of poor people, or by any suggestion that the socio-economic settings that served him so well may no longer exist, or may not be the ideal platform for others to succeed and flourish. If anything, the Luxon government seems intent on putting downward mobility pressure on the lower middle class.

As a result...

According to Luxon’s recent and highly selective personal account

As I said from my first day in politics, I'm a kid whose parents left school at 16, I went to university, did well in the world, successful, I get it. And I've chosen to come into politics because I want to add back to New Zealand. If we're going to criticise people for being successful, let's be clear - I'm wealthy."

To repeat: last week, Luxon wasn’t being criticised for being wealthy. The point was whether it is fair that a pensioner or a minimum wage worker gets taxed on their meagre incomes, while millionaires get to pocket hundreds of thousands of dollars from property speculation, and yet pay nary a cent of tax on those capital gains. To a spectacular extent, they don’t “add back.”

Arguably, the ability of Luxon’s parents to leave school at 16, and achieve upward mobility into the upper reaches of the middle class was evidence of an egalitarian New Zealand that no longer exists, and that the coalition government led by their son shows absolutely no interest in re-creating.

Much as Luxon might like to portray his success as a due reward for diligence, it really wasn’t that hard. Back in the day, young Christopher would cycle to school at Christchurch Boys High (the South Island’s equivalent of Auckland Grammar) where he won blazers in squash and debating.

Among his parental homes were 12 Strathean Avenue in Avonhead – now listed as a four bedroom, three bathroom, triple garage home currently valued at $1.07 million – situated just around the corner from the bowling club in a charmingly leafy suburb in west Christchurch. Next, Luxon says: “I went to university.” Luckily for him, this would have been during the last days of free tertiary education or when – at worst – tertiary fees were minimal.

No one begrudges Luxon his fortunate upbringing. The point is that relatively few people start their careers blessed with such advantages. Yet the government that Luxon now leads actively rejects making similar opportunities available to those born into greater hardship than anything our current PM has ever had to face. Quite the reverse. Luxon seems more keen on offering handouts to those already on high incomes, than he is on extending a hand-up to those genuinely in need, often thanks to the accidents of birth,.

In sum, it seems entirely valid to object to Luxon pruning away the details of privilege from his origin story, in order to promote a parable of doughty personal achievement. His success is not one of those “pulled myself up by the bootstraps” inspirational fables. At best, Luxon’s origin story makes him seem more like the Rich Man’s John Key.

Footnote: So...why on earth did Luxon choose, in his 40s, to go into politics. To give the man his due: ascending the career ladder to become Unilever’s “Global Deodorants and Grooming Category” Director must have been no mean feat. In all likelihood, Luxon’s success at Unilever was far more difficult than running Air New Zealand during an era of cheap fuel costs and a global boom in tourism. (Luxon got out of Air New Zealand just as both of those factors changed for the worse.)

Lets close with the PM’s claim to Heather Du Plessis-Allan that “I want to add back to New Zealand.” They all say that, don’t they? Still, one tangible way Luxon – and his fellow property magnates – could “add back” to this country, would be by paying a fair share of tax on the income they derive from capital gains. That would be admirable, and inspirational. But alas, highly unlikely.

Down the mean streets of privilege

Luxon and ACT Party leader David Seymour both seem implacably opposed to the very idea that privilege even exists...and that’s despite what the Beatles had to say on the subject:

Since we’re talking about politicians who lack even a primary school grasp of the subject, this video does a pretty good job of explaining (with a song!) what privilege is, and why we all have to do try to counter the tendency to deny the existence of the barriers faced by others:

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