“You cannot legislate the poor into freedom”


Rigged to advantage the rich

I think it’s hard to judge how significant this is leading into the election.

Headlining this ‘Time for a change?’ makes it look like an election advertisement, not a good look for a poll report.


This was an online weighted survey of about 500 people, a relatively low sample size.

Stuff:  Over half of Kiwis think politics and the economy are rigged against them

A new poll shows that a majority of the country think the economic and political system are rigged against them.

The Ipsos poll, taken in May of 2017, shows that women and those earning less are even more likely to consider the system broken.

But Kiwis are less disenchanted than those in other countries and just a quarter think the country is in “decline”.

So relatively not bad here.

There is too little information to judge the  importance of the poll to the election.

It’s likely to have been normal for a very long time that poorer people tend to think the financial system is stacked against them

Fully 56 per cent of Kiwis questioned agree that traditional parties and politicians don’t care about people like them.

That doesn’t surprise me – most people have little or no direct contact with politics or politicians.

Just 16 per cent disagreed with that sentiment, and the unemployed were far more likely to think the system was rigged.

That’s hardly surprising either.

In other countries like Australia dissatisfaction was higher.

That’s why we have a lot of Kiwis leaving Australia and coming back to New Zealand.

“There definitely does seem to be some sense that there is a mood for change,” said Ipsos’s Nicola Legge.

Really? I don’t see that  being polled.

What if disenchantment levels have reduced?

“There is a sense that the economy is most benefiting those who need it least, with politicians having lost sight of the needs of everyday Kiwis. Low income households especially are feeling the strain.”

“There are also signs that as we prepare to go to the polls in September many are open to a leader that will break the mould and release us from more of the same.”

“While we are not alone in the world with these views, it would be wrong to assume we are primed for a sea-change such has that experienced in other countries in the past year.”

A pollster trying to link their limited poll result to elections in other parts of the world in very different circumstances.

Political scientist Bryce Edwards said everyone who was part of the “system” – left or right – should  heed the warning.

Politicians should always heed warnings of disenchantment.

“Until now, it has looked like New Zealand has been immune from the world-wide increase in radical politics and rebellion against the establishment. This poll shows that such political upheavals could yet come to New Zealand,” Edwards said.

I don’t see that in the poll at all. Without knowing trends I don’t think much can be deduced.

Edwards said how this might play out on an election might be hard to predict, as many of the disenchanted would simply not vote.

Yes, very hard to predict. And those who might feel disenchanted may have equal feelings for all parties, or different people may be more disenchanted with different parties.

“But there will be some looking for some sort of electoral outlet for their concerns. And the best positioned parties are going to be NZ FIrst with Winston Peters and Shane Jones, and TOP to some degree.”

What if a lot of people are disenchanted with Winston’s same old button pushing dog whistling rhetoric? And what if Shane Jones turns out not impressing voters?

It seems to me that some media want political turmoil to report on so look for reasons why it could happen.

“The fact that half of New Zealanders would appear to welcome an anti-democratic politician ruling the country should be a huge concern.

Where the hell does he see that?

One poll result was 50% wanted a strong leader willing to break the rules – but that is very vague and could mean many things.

I think that many people may be disillusioned with the same old politics and would like the mould broken, but Peters and Jones are political establishment who court controversy for media attention, not for doing anything much different.

“This suggests that politics really is in a very unhealthy state”.

Very unhealthy? It could be improved – I’d like to see some improvements for sure – but while our democracy may in ways be ailing it’s probably less unhealthy than most of the alternatives.

Many people have probably thought the system is rigged for the rich and against them.

Will National’s proposed tax cuts change that?

Oxfam: rich versus poor

Yesterday in New Zealand media ran a story from Oxfam that tried to compare a few rich people with a lot of poor people.

RNZ: Top 1% of NZers own 20% of wealth

The country’s two wealthiest people own the same amount as the poorest 30 percent in New Zealand.

And the richest 1 percent of New Zealanders own 20 percent of wealth, while 90 percent of the population owns less than half of the nation’s wealth.

Oxfam New Zealand executive director Rachael Le Mesurier said it was shocked to discover the wealth inequity in this country, saying it was trapping huge numbers of people in poverty and fracturing societies, citing the drop in home ownership rates as one example.

“New Zealanders love fairness, not inequality. The government should be tackling inequality here and globally, by cracking down on tax avoidance wherever it is, and using that money to make our country, and the global economy, a fairer place. This wouldn’t just be the right thing to do, a more fair economy would also be simple common sense and enormously popular with New Zealanders,” she said.

The Oxfam research highlighted the gap between the wealth of individuals, rather than disposable incomes.

There is an issue of concern about growing income and wealth disparities, and Oxfam succeeded in getting headlines, but they are making comparisons that are vague, and the solutions are more vague.

It is dog whistle type politics, trying to denegrate people with higher levels of wealth and higher earnings – ‘ rich peoeple bad’ sort of thing.

What do they propose? Taking all the wealth off the wealthy – and with the two they named here much of that wealth is probably not in New Zealand – and distribute it to all the poor babies who deserve it?

I have no idea whether Oxfam are comparing the wealth of fifty years olds to fifteen year olds or five year olds. Who are the poorest 30% here?

New Zealand should strive to improve life and opportunities for poorer people for sure, but I don’t know that Oxfam’s approach is going to help.

Oxfam said New Zealand’s findings were consistent with other countries where the gap between rich and poor was greater than previously thought.

It blamed big business and the extremely wealthy for the growing discrepancy, saying they fuelled the inequality crisis by avoiding taxes, driving down wages for their workers and the prices paid to producers and investing less in their businesses.

This sounds very much like big business bad – yes, there are issues that need addressing, but demonising all wealthy people and businesses makes no sense apart from populist appealing and squealing.

If businesses didn’t make profits they wouldn’t employ and pay people. Is that what Oxfam want?

As a charity Oxfam doesn’t pay tax, in New Zealand at least. Do they pay equal wages to all their employees?

This is a world wide campaign by Oxfam time to coincide with the annual meeting of the World Economic Forum in Davos, Switzerland.

The Times: Eight men are richer than half the globe

Only eight billionaires have as much combined wealth as the poorest half of the world, according to Oxfam.

Six Americans, a Mexican telecoms entrepreneur and the Spanish founder of the Zara clothing chain are between them worth more than the 3.6 billion people who form the poorest half of the world’s population.

Oxfam released its latest report into the scale of global inequality to coincide with the start tomorrow of the World Economic Forum in Davos, Switzerland, where about 3,000 of the global business and political elite, including Theresa May and Philip Hammond, will gather for the annual meeting.

The forum has put inclusive growth and inequality on the agenda, but Oxfam has latched on to the backlash against the status quo.

I presume that a significant proportion of donations to Oxfam comes from people with higher wealth and incomes.

I used to donate regularly (automatic payments) to Oxfam, but stopped when they became more political.

I think there are real issues with income and wealth disparities, and with international tax avoidance.

I don’t think that trying to shame the rich with apples and oranges wealth comparisons will achieve much.

Rich refuge in New Zealand

Bloomberg reports that The Mega Rich Have Found an Unlikely New Refuge and “New Zealand’s isolation is a virtue amid terror, U.S. election”.

In the seven years since, terror threats in Europe and political uncertainty from Britain to the U.S. have helped make the South Pacific nation — a day by air away from New York or London — a popular bolthole for the mega wealthy.

Isolation has long been considered New Zealand’s Achilles heel. That remoteness is turning into an advantage, however, with hedge-fund pioneer Julian Robertson to Russian steel titan Alexander Abramov and Hollywood director James Cameron establishing multi-million dollar hideaways in the New Zealand countryside.

“The thing that was always working against New Zealand — the tyranny of distance — is the very thing that becomes its strength as the world becomes more uncertain,” (Hong Kong-based financier Michael) Nock said by phone from Los Angeles during a recent business trip.

Twice the size of England, but with less than a tenth of its people, New Zealand ranks high on international surveys of desirable places to live, placing among the top 10 for democracy, lack of corruption, peace and satisfaction. With its NZ$250 billion ($180 billion) economy dominated by farming and tourism, the nation last week overtook Singapore as the best country in the world to do business and was rated second to the Southeast Asian nation as the top place to live for expatriates in a survey by HSBC Holdings Plc. in September.

Safe from terrorism and territorial wars, and good for business.

Key, a former currency trader, once described New Zealand as “England without the attitude.”

I don’t see New Zealand as being anything like England – but I’ve only seen England from a long distance.

It’s changed leaders just twice in almost 17 years and the last hint of terrorism came a generation ago, when French spies bombed a Greenpeace campaigning ship docked in Auckland harbor in 1985.

Brexit has prompted a surge in interest in the far side of the planet, a long way from the worst of the world’s problems.

It’s that kind of stability that’s attracting a wave of Brexit-inspired migration to the island nation that gained prominence as the otherworldly backdrop to the “Lord of the Rings” and “The Hobbit” films.

New Zealand received 998 registrations from U.K. nationals interested in moving to the country the day after the referendum on European Union membership, versus 109 the day before the vote, according to data from the immigration department. That grew to 10,647 registrations in the 49 days after June 23, more than double the same period a year earlier.

“If the world is going to go to hell in a hand basket, they’re in the best place they could possibly be,” said David Cooper, director of client services at Malcolm Pacific Immigration in Auckland, the country’s biggest migration agency. “People want to get the hell out of where they are and they feel that New Zealand is safe.”

And the perceived threats to the US by terrorism, Donald Trump and Hillary Clinton have worried some Americans.

Cooper has seen an uptick in inquiries from U.S. citizens over the past few months, he said, with the increasingly raucous presidential fight between Donald Trump and Hillary Clinton, as well as the recent spate of mass shootings, cited as reasons to flee.

And that’s before either Clinton or trump take over the White House.

Successful Kiwis who have worked in investment banking and other lucrative professions in New York and London are also returning home to raise their families, said Ollie Wall, a realtor with Auckland-based Graham Wall Real Estate Ltd.

“The world has got smaller,” Wall said in an e-mail. “You can run multinational corporations from paradise now. So why wouldn’t you?”

To an extent this is true. Most of my work yesterday was virtually in Cape Town, and on Wednesday I worked in Perth, remotely.

New Zealand has actively courted the wealthy. For an investment of NZ$10 million in local assets or funds over a three-year-period, migrants can qualify for residency provided they spent 44 days in New Zealand in each of the two latest years. These investors don’t have to speak English or live for a set amount of time in the country after the qualification period. They also don’t have to become tax residents.

Since the program started six years ago, 121 people have gained so-called Investor Plus visas, and more than 800 have secured a residency pass that requires a NZ$1.5 million investment over four years, government data show.

“It provides a bolthole, a place for ‘just in case’,” said Willy Sussman, a partner at Auckland law firm Bell Gully, which has worked with wealthy migrants from all over the world.

Some may not like money buying privileged refuge here, but it can be good for both business and tourism.

I am very happy to be living in one of the safest places in the world (natural disasters aside perhaps). And it has plenty of fantastic regions withi relatively short distances.

Left wing loopy, right wing rabid

Andrew Dickens writes about how reality is often far more complex than some commentators, journalists and politicians make out – Simple Answers, Complex Questions.

If there’s anything I’ve learnt in the years covering politics and economics it’s that not all left wing ideas are loopy and not all right wing neo-liberal thoughts are rabid.

The problem is both sides exaggerate both the benefits of their own ideology and the deficiencies in the opposite. In fact they exaggerate only their side of the argument and dismiss the rest out of hand meaning that both sides propose unbalanced and hence fundamentally flawed proposals. And then we call each other names. This is why talkback and parliament exists. Let’s face it. We’re tribal.

Forums like this often get tribal too. I don’t think tribalism should be suppressed, but it should be kept to a reasonable degree of jousting.

Politicians and the media give sound bite solutions to major problems while the people who actually have to fix them sit there in a world of grey. When it comes to health, education, law and order, the environment and the taxes to pay for it there are no simple answers no matter what some MP or media commentator tells you.

I agree that many political and social issues are complex and often with no simple solutions, but both media and politicians do their best to make it sound simple. However this often comes across as stupid.

Nowhere is this more evident than in the debate about poverty in New Zealand. One side screams there are 300 thousand kids in poverty. The other argues there are 100,00 people in hardship.

One side argues that the rich are deliberately creating the poor and uneducated and unemployed so they can become richer. The other argues there’s plenty of work and opportunity and free education out there and the poor are poor because they’re lazy and beneficiaries.

To me, there’s a little bit of truth in both those statements but it’s not one or other.

A common criticism of this sort of consideration is that it is fence sitting, beige, wishy washy. Considering the complexities of issues is none of those things.

Professor Gary Hawke, the author of the Hawke Report into tertiary education in the 80s, and I were talking about free universal tertiary education on the radio the other day and I said it was a simple political decision by the voters.

He’d love free universal tertiary education but it’s an inefficient use of taxpayers money. 50 per cent drop out so half the money is thrown away.

He favours spending more but targeting it to those people with ability and need. This is not the policy of either the left or right. But I think he’s probably right.

But targeted funding isn’t so easy for politicians to market as a policy. It’s sensible but more complex.

Nowhere is this more evident than in the debate about poverty in New Zealand.

One side screams there are 300 thousand kids in poverty. The other argues there are 100,00 people in hardship.

One side argues that the rich are deliberately creating the poor and uneducated and unemployed so they can become richer. The other argues there’s plenty of work and opportunity and free education out there and the poor are poor because they’re lazy and beneficiaries.

To me, there’s a little bit of truth in both those statements but it’s not one or other.

I disagree that “the rich are deliberately creating the poor and uneducated and unemployed so they can become richer”,  I think that’s nonsense. Most rich or well off people are decent people. And from a purely financial angle the less poor that people are the more money can be made off them.

O’Sullivan acknowledges this later:

I don’t mind the rich getting richer if along the way the poor get richer too. That’s the simple answer as long as you realise the questions are complex.

The loopy left and rabid right probably won’t agree but they are a small minority simple but unrealistic answers to complex questions.

“Inequality is a choice”

Anthony Robins writes at The Standard that Inequality is a choice.

Inequality is a choice. It isn’t a choice made by individuals, it is a choice made by governments.

‘Inequality’ far more complex than that. For a start it depends on how you define inequality.

I choose to make working for a living more of a priority than some, and I choose to put other priorities ahead of accumulating possessions and monetary wealth.

Having kids is costly on money terms but my children and step children and grand children are worth far more to me than a better bank balance.

There is no way a Government can impose and enforce equality. There will always be arguments over what is equal and what is not.

Even the Chinese Government has given up on trying to force equality of single child families, and they could never force women to have that one child anyway.

Robins doesn’t help his argument when he chooses to misrepresent facts.

The last Labour government chose to implement a higher top tax rate and Working For Families, these policies (though arguably too little too late) did reduce inequality. The current National government chose to cut the top tax rate, attack labour laws, and increase GST, these policies are increasing inequality.

Yes the current National Government chose to cut the top tax rate. And Robins chose to omit other pertinent facts, like the Government also cutting other tax rates and increasing benefits to compensate for the increase in GST.

This dishonesty is common from the left.

For facts see Budget 2010: Tax reductions in detail which includes:

Key tax changes
All personal income tax rates will be cut from October 1, 2010.
Income up to $14,000 will be taxed at 10.5%, down from 12.5%.
Income from $14,001 to $48,000 drops to 17.5% from 21%
Income from $48,001-$70,000 down to 30% from 33%
Income over $70,000 will be cut to 33% from 38%.

GST will increase from 12.5% to 15%. Income support and other payments will rise by 2.02% to compensate for the increase. This includes student allowances and supplementary benefits, superannauation, veterans pension and the Working for Families tax credit.

Company tax
The company tax rate will fall from 30% to 28% from the 2011/12 income year.

The sting
While higher income earners will benefit from the government slashing the top tax rate, there is a sting in the tail of the budget that will hit wealthy in the hip pocket beyond just an increase in GST, which is widely considered to adversely affect the less wealthy the most.

Building depreciation tax deductions will no longer be allowed from next year, providing the building has a useful life of 50 years or more. This would include most rental houses and offices.

Robins also doesn’t discuss what effect these tax changes had on employment and the economy that were severely stressed by the Global Financial Crisis.

Honesty is a choice.

There are some choices related to inequalities, both personal and by Government. And there are many aspects of inequality that none of us can do much if anything about.

Inequality is a vague ideal that as far as I’m aware has never be achieved. Perhaps Robins or someone else can point to examples of sustainable equality in any human society.

I think that equality is the wrong goal.

Cunliffe versus truth

From David Cunliffe Speech to 2013 Labour Party Conference – Building a future for all:

One for the rich and powerful, who don’t pay their fair share of tax because they have smart accountants to ensure they avoid it.

Families who pay tax on every dollar they earn, pick up the slack for the mega-rich and the foreign corporations who don’t.

Five years ago, John Key told New Zealanders, “wave goodbye to higher taxes, not your loved ones’’.

But he only meant it for the privileged few.

He gave massive tax cuts to the rich that they did not need while he put up GST on everyone.

Cunliffe is supposed to be intelligent and financially literate – if so this means he is telling deliberate distortions and lies.

The tax cuts “to the rich” were not massive. Damien Grant writes in NZ Herald:  Poverty isn’t fault of rich

Key to the inequality fantasy is that New Zealand is a neo-liberal rich-man’s paradise but the facts do not support this.

Bill English said the top 12 per cent of households, those earning over $150,000, pay over three-quarters of all tax. To balance this, half of all households take home less than $60,000 and pay $2.7 billion in tax; yet they receive $8.1 billion in transfer payments. Half the population are net beneficiaries.

The tax increases were partly balanced by the increase in GST which costs them more as the biggest spenders.

And GST increases were balanced for lower income earners with income tax cuts, and beneficiaries had compensating benefit increases.

Cunliffe is speaking to an audience which is receptive to his dishonesty. Time will tell whether enough voters buy his bull.

“Tax The Rich!”

There’s a lot of talk about the rich getting “unfair” tax cuts, that they should be taxed more to fund deficits and anything else that the critic might want. It’s illustrated in this picture:

Could this be paraphrased?  “I want to take other people’s money to make things easier for myself”.

From the same ones who criticise people for taking money off the poor so they can get rich.

  • Tax the rich, fund education
  • Tax the rich, fund poverty
  • Tax the rich, fund multi (non-contributing) father beneficiary families
  • Tax the rich, fund education…while I’m a student
  • Tax the rich, fund education while I’m poor
  • Tax the rich, fund me?

Greens play rich versus poor

Russell Norman is promoting a Capital Gains Tax in part by playing the rich versus poor card.

Capital gains tax would hit rich, not poor  (ODT)
Rich people benefit from not having to pay a capital gains tax, Green co-leader Russel Norman says.

Class politics like rich versus poor is dirty politics, and it often ignores complexities.

I think we should have a good look at the merits and drawbacks of a Capital Gains Tax, but rationally and not emotionally.

Dr Norman said the research highlighted those on lower incomes earned money from wages which were fully taxed while the largest proportion of capital gains was earned by those at the upper end of the income spectrum and this income was untaxed.

This ignores a number of things, including:

  • People on relatively low incomes also benefit from untaxed capital gains
  • Most people on high incomes pay much more tax than those on lower incomes already
  • Capital gains are often used to finance retirement, including health care and care of the elderly, which reduces costs to the state
  • “Rich” people benefiting from capital gains often use that money for a wider circle of people who aren’t “rich”, for example for children’s education, parent’s care

It’s far from being a simple rich versus poor argument. Argue for CGT on it’s merits, not by promoting rich envy.

Ironically Green voters tend to be reasonably well off people rather than poor people.