Inquest: Will gun control trump capital gains tax?

Support for industry training reform – but should it slow down?

In a week that Parliament passed a tough new law banning semi-automatic weapons and assault rifles, the government continued to face criticism of its plans to revamp industry training.

Not everyone opposes Education Minister Chris Hipkins’ proposal but many are saying he should take more time.

The Auditor-General’s office agrees reform of the sector is needed but warns there are risks in rushing the merger of the 16 institutes of technology and polytechnics (ITPs) into a single organisation.

As well, industry training organisations continue to raise worries about the plan to take responsibility for on-the-job training away from them and hand it to the proposed organisation responsible for running the ITPs.

Inquest examines the proposal, as well as looking again at the politics of a proposed capital gains tax and the urgency with which Parliament toughened gun laws.

The chief executive of the country’s largest ITO, the Skills Organisation, told NBR this week his organisation has real doubts about the industry training proposal promoted by Mr Hipkins.

Garry Fissenden says ITOs know their industries best and should continue to provide on-the-job training.

Mr Fissenden also worries about the magnitude of the change being proposed.

“Sixteen organisations into one is a big risk; a single point of failure; a very long period of implementation. If you’re adding in the 11 ITO core functions, that’s 27 organisations into one very high-risk profile. We think there are some very strong players in the polytech sector. Some reduced number of polytechs leveraging off the strong, and actually fixing up some of the weaker parts, is the answer to that,” he says.

Iron Duke Partners managing director Phil O’Reilly is careful to point out he is a board member of the Tertiary Education Commission but he does have a personal view of the proposed reforms.

Change inevitable

Mr O’Reilly says there is no question that change is needed. Some polytechnics have faced financial problems but all of them are at risk.

“It’s clear that there’s too much duplication in the system, so should 16 polytechnics all be developing their own courses and going out to sell them? Well, no, I don’t think that’s the case.”

Mr O’Reilly says the challenge for the minister is that his position on reform is aggressive. It is not very clear, and he is proposing to make changes quickly while the industry is saying "let’s slow down."

“Some parts of what he’s saying, I think are absolutely right. The idea that the ITOs should do much more of a skills leadership position; looking forward; thinking what the skills needs are of their sector out over the next five to 10 years is exactly what [they] should be doing. Nobody is doing that in the system right now, so aspects of what the minister’s talking about are correct. But I do agree with those voices who say, ‘gee it’s high risk and it’s happening quite fast and it’s not really clear what we’re after here’. That’s, I think, what the minister needs to solve.”

But Mr O’Reilly says the government cannot keep bailing out the polytechnics, and it is not good enough to say some of them – and some of the ITOs – are doing a good job. There is a problem with the system that needs to be fixed.

At the same time, Mr Hipkins wants to avoid creating too much uncertainty in the sector when New Zealand is in desperate need of good skills training.

Meanwhile, the deadline for the government to announce its response to the Tax Working Group’s report is getting nearer. It says it will make that clear this month, including whether it is going to adopt the recommendation to introduce a comprehensive capital gains tax.

National’s leader, Simon Bridges, thinks it will back off and instead extend the current five-year bright-line test on investment property.

Phil O’Reilly agrees and says he would be very surprised if the tax were applied to small businesses and farmers.

The prime minister's challenge

He says responding to the report will be quite challenging for Prime Minister Jacinda Ardern.

“I think the government’s lost the debate." He says it was "an extraordinary mistake" to release the report, which they knew was coming, without having a prepared response.

Mr O’Reilly believes the government will have learned its lesson and when it releases reports from other working groups it will be ready with a clear response to any recommendations they make.

On capital gains tax, though, he suggests the government might take a cautious approach, particularly given New Zealand First’s lack of enthusiasm. However, Ms Ardern might signal that Labour will go into the 2020 election campaign with a bolder policy.

This week, just one party with one MP voted against tougher controls on semi-automatic weapons and assault rifles.

ACT’s David Seymour was the lone voice opposing the law based on the principle it was being rushed too quickly through Parliament. ACT though has in the past voted for legislation passed under urgency with no select committee consideration at all.

Mr O’Reilly says people should worry about the speed with which legislation is passed but, on this occasion, the government and Parliament have done the right thing. Gun control is not new and it has been debated many times before.

Ms Ardern was correct to seize the moment and NZ First leader Winston Peters, Greens co-leader James Shaw and National leader Simon Bridges were all right to support her.

For Ms Ardern, her response to the March 15 terror attacks has drawn a lot of praise not just in New Zealand but overseas as well.

At present she’s got "an awful lot of political capital", he says, just as John Key had immediately after the Christchurch earthquakes, and John Howard did after the massacres of Port Arthur. "So you have these things and you decide what to do with them but they leak away, I think, in the face of day-to-day politics and I think it will with the prime minister as well over time."

He says over the next month the prime minister will have to explain her position on a capital gains tax, welfare reform, mental health reform, DHB funding and teachers strikes and these are the things that tend to influence how people vote.

Political editor