Taxing the rich

And how Labour could lose the next election

Labour Party leader Chris Hipkins gave a clear and confident performance in an interview with Jack Tame on TVNZ’s Q+A on Sunday morning.

The principal theme was tax policy, on which Labour are reviewing their options. Hipkins ruled out new capital-gains or wealth taxes ahead of the 2023 election, but he and his party will review it all for 2026. Naturally, he was unable to get into policy details, as the party hasn’t announced any decisions yet, but Tame had to waste precious interview time trying to tease some out of Hipkins all the same

The very next day, billionaire Bruce Plested was quoted on RNZ saying he’s not against paying more tax, but: “The concern I think the wealthy have is that the government will squander it.” Fair point. What will they actually do with the money? For some people, taxing the rich may feel like a just end in itself, but the government’s revenues are only justified by valid social, environmental and economic goals.

Ahead of the election we can expect to see the major parties present fiscal plans for taxing and spending, and we can pass judgement then.

But Labour is positioning itself as the tax-and-spend party. National’s pre-election attack line could be something like: “Don’t trust them. They’ll only squander it – again”.

During the Q+A interview, Hipkins did try to introduce some other themes. He talked about a more productive economy with higher wages. That would be great, but he didn’t say how we’d achieve it. Taxation only helps if it’s not excessive and if the money is spent or invested wisely. I daresay Hipkins may have pointed to education as one such investment, as it plays an essential role in boosting economic productivity – but then, the government’s finance minister Nicola Willis says that too.

And, to be clear, I’m in favour of capital-gains taxes in principle. I’m just anticipating how the debate can backfire on Labour politically – considering how people could be encouraged to perceive it.

Hipkins briefly mentioned the “massive disruption of our economy” that will be caused by the AI revolution. He rightly said that the country has to move quickly on this or be “left behind”. But the interview quickly turned to Labour’s tax policy for the next election. At this rate, the country will be left behind, even though tax policy is an important matter.

So, here’s how Labour can lose the 2026 election: they get cornered about the finer details of taxation – a debate that they started – and National pummels them for that and for their “addiction to spending”. Sounds familiar?

Meanwhile, the AI revolution puts you out of a job.

To illustrate what’s happening, I randomly asked ChatGPT about Chopin’s Nocturne No. 16 in E-flat major, Op. 55, No. 2. Never mind why!

I instantly got a very informative reply. But the subsequent conversation (see screenshot below) surprised me. It asked my opinion. And then it flattered me. And it invited me into a wider conversation about my musical tastes. It’s not just informative; it’s now seductive.

It’s asking leading questions with a purpose: the acquisition and storage of more information about me. It now “knows” something about what I like. When I asked it about myself, it repeated the few facts that I’d shared with it.

When I asked it earlier if it knows what gender I am, it replied: “You haven't specifically mentioned your gender, so I don't have that information. If you'd like to share it, I can keep it in mind for future conversations, but it's entirely up to you!” Note that phrase: “keep it in mind”.

It adapts what it says based on what it knows about its audience – something that humans do. For example, it adjusts its language and content when responding to a child. Or, it told me, “if someone asks about health topics, I might include gender-specific information if it's relevant” – and, presumably, if it “knows” the person’s gender.

This AI device is now a strategic communicator, anticipating your needs, asking questions in order to elicit useful information about you – under the guise of polite conversation. It’s gone beyond just answering your questions for your information.

It can “tell” if you’re angry, furthermore, and respond accordingly.