THE ENVIRONMENT IS NOT AN EXTERNALITY: THE CIRCULAR ECONOMY AND THE TAX WORKING GROUP

Abstract

The final report of New Zealand’s Tax Working Group (‘TWG’) is unusual for this type of inquiry. Rather than restricting its consideration to equity, efficiency and other usual tax criteria in the context of the existing economy, the TWG final report signalled aspirations for a paradigmatic shift in the way the economy is constituted and functions. As well as seeking to incorporate Te Ao Māori (a Māori worldview) and Treasury’s Living Standards Framework, the TWG embraced the radical environmentalism of the circular economy model. As the 2030 achievement target for the United Nations Sustainable Development Goals (‘SDGs’) draws closer, it is increasingly pertinent for policy advisors to ensure their proposals and recommendations align with the SDG ethos. Tax policy is no exception, and the TWG’s explicit consideration of sustainability, wellbeing and the circular economy may suggest an attempt to take New Zealand’s commitment to the SDGs seriously. However, despite its espousal of these features, the TWG’s recommendations for the greening of taxation were modest.

This article considers what the key features of a tax system for a circular economy might be, and assesses the TWG’s recommendations against that model. Particular attention is paid to the New Zealand context, including an economy that is currently greatly dependent on the export of primary products, notably dairy.

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STRIVING FOR INTERGENERATIONAL WELLBEING

Abstract

New Zealand’s most recent Tax Working Group (‘the TWG’) differs from previous tax review groups due to the unique frameworks upon which they based their assessments. The final report of the TWG used Treasury’s Living Standards Framework (‘LSF’), with its goal of ‘intergenerational wellbeing’, alongside both a traditional tax assessment framework and Te Ao Māori principles.

This article seeks to explore whether and how the frameworks used by tax review groups in New Zealand have influenced the conclusions they have reached and the recommendations they have made. In particular, this article considers how the LSF influenced the TWG to reach conclusions that previous groups considered but did not get ‘over the line’. The conclusion is that the LSF was highly influential upon the outcomes of the TWG. The TWG placed greater weight upon equity, the environment and distributional outcomes. The result of this change in emphasis was recommendations that are weighted in favour of social and environmental issues over economic growth.

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THE TREATY AND THE TAX WORKING GROUP: TIKANGA OR TOKENISTIC GESTURES?

Abstract

This paper engages with the Māori perspectives in the Tax Working Group Future of Tax report. It is argued that a Māori worldview can contribute to a more equitable and sustainable tax system, and that engaging with Māori people and worldviews beyond tokenistic and obligatory gestures has the potential to alter/disrupt prevailing systems of public policy in subtle yet commanding ways. Two frameworks informed by Māori knowledge within the report are introduced and evaluated for their ability to inform and enhance policy development. One aspect of these frameworks is explored in detail and it is argued that while this can provide a profound shift in thinking, rights must be acknowledged and addressed to avoid tokenism. We conclude that achievement of genuine government–Māori partnership in policy development requires clear strategies that communicate to the public why Māori engagement in developing tax policy is not only an obligation on the government of New Zealand under the Treaty of Waitangi, but will result in positive outcomes for all New Zealanders.

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