
I've taken a fair bit of time to reflect on Don Brash's announcements from the 2025 Taskforce Report because the adult document was bloody boring. Go on admit it. I am not a reader of executive summaries or cut pasting the points with "Agree", "Absolutely", "Seems sensible" as does David Farrar, I want the whole of the moon and the moon was dull and not that radical.
To suggest that Alan Gibbs or ACT people wrote it is insulting to the ACT Party and its supporter in Chief. This is
reform-lite.
As a backdrop I read a column at the weekend that was much more logical than the entire 2025 Taskforce Report. Strangely enough it written by
Deborah Coddington. The country air is doing her some good. Coddington argues coherently that New Zealanders do not actually want to be better than average.
We really don't want to be uber-rich. We'd rather knock off at 6pm and enjoy a drink with our mates, play a game of beach cricket with the kids, or finish that deck we've been promising the wife for years. This is not good, say the bean-counters, who call it New Zealand's "bach, boat and BMW" mentality, and "we settle for the good life rather than grow our businesses to their full potential".
She is dead on the money. Not saying many of you who read my blog will feel this way, but you are over achievers to even use a computer to find a blog through all the available porn sites. Yes, I believe most New Zealanders are bloody happy being average. So many of my otherwise sensible friends have "lifestyle plots" they do without to afford, "baches" and second hand BMW's or Mercedes. And think that's all there is out there for them.
John Key and Bill English's instant dismissal of the 2025 Taskforce Report before they could have even read it, kind of says they are happy with that as well and must have better ideas to catch Australia by 2025 which is their own goal. Considering Key's only idea seems to be build a cycleway and get boys faster porn, there must be a huge announcement package around the corner....or this is another diversion on his "Do-Nothing" Train to somewhere. Coddington says:
So we're not motivated by money, we avoid conflict, and we lack confidence in ourselves. I'd put a different spin on that. I'd say we have a generosity of spirit, we're peacemakers, and we don't brag.
Again she is right. But not about John Key personally, what we have as a PM is really John Key Business-Lite.
I guess that's why I moved overseas. Because I know that this Kiwi lifestyle is unsustainable at a personal level. I either have my foot right on the throttle and are gloriously making a truckload of cash enjoying each moment of it with poor sleeping patterns, excessive stress and massive amounts of expressive blogging, or with my foot off it completely on holiday, no blogging, or motivation where things usually turn pear-shaped and I have to spend the next month fixing what went wrong when I was away a week. There is no happy-medium.
There is no happy-medium for New Zealand either for while the foot comes off that throttle, other countries are competing and beating New Zealand.
And I am not talking about Australia.
New Zealand doesn't need a taskforce to beat Australia, it actually needs a taskforce to fend off India, China and much more motivated races of people who are climbing out of poverty with more motivation than any New Zealander would ever dream of possessing while remaining in New Zealand. The South Americans and Uruguayans who know how to farm and have cheaper labour, land and more motivation to succeed. The Chinese (and Russians) want to basically buy Fonterra and make New Zealanders their domestic servants.
They are our competition in the world. Forget Australia.
Because New Zealanders are not shocked enough by coming second to Australia, it's like coming second to your much bigger brother in an arm wrestle and we are all used to it on the sporting field in sports that actually matter. New Zealanders with their third world snobbery would be shocked if they could actually see that China, India and other supposed "emerging Nations" are about to kick New Zealand's arse. Brash uses the example of South Korea and Slovenia at pg 41 of the report.
New Zealanders fear failure much more than they are driven to succeed. They don't like looking stupid. But don't wish to stand out from the pack. That is New Zealanders would rather not lose than gloriously win and rub noses in success. Brash uses Coddington's "Boat, Bach, BMW" example at pg 45 of the report. Then dismisses it. Clearly he doesn't go to Coromandel during the holidays. It is also clear that Brash after dissing the Broadband plan at pg 117, doesn't surf the net and require faster porn.
For me the most radical part of the report is at pg 135 where the taskforce recommends ending the Zespri monopoly/monopsony. Brash being head of the former NZ Kiwifruit Authority.
With this all in mind, the 2025 Taskforce was disappointing from my viewpoint. There was nothing nearly radical enough to let us compete with the emerging Nations and keep our place as a first world nation. Such broad concepts as:
Welfare: Emerging Nations have no welfare. They have a huge amount of "working poor". People who will never own their own home, let alone get a mortgage. They let their own people live in poverty. No matter how wealthy China and India get, they will never be able to afford a comprehensive welfare state and they cannot afford these people to do something like vote for fear they will vote themselves an income. Neither can New Zealand however. New Zealand will have to get used to not being able to afford welfare for the middle and middle-lower classes. Welfare should only be allowed for genuine cases where people cannot work due to being intellectual handicapped or genuinely disabled. The "entitlement" mentality has to go. From politicians downwards (or upwards considering most are no better than expensive beneficiaries anyway).
New Zealanders think they are "better" than these Nations because we have an extensive welfare state. This is laughable when talking to Chinese people. They can't believe a country would be so stupid to pay people to not contribute.
State Housing: Emerging Nations do not let State House tenants live on their most expensive pieces of real estate. All New Zealand's current state housing stock sitting in prime real estate areas should be sold. All new State Housing should be built as far away from the central CBD as possible. There is no excuse for any State Housing for example in Auckland to be closer to the CBD than say Auckland Airport. Few of these people actually work so it is not like they have to get to jobs in the CBD at rush hour, and if they do there is no reason why they should live closer than someone who has to buy a house and cannot afford to live closer.
DPB: This needs to be abolished. Unless there are safety concerns ALL fathers should be named and levied directly for child support for their individual child. Any mother under the age of 25 should have her parents means tested for eligibility for the dole should the father not be able to pay. This would incorporate a true whanau concept to child-rearing and make parents responsible for their children's decisions where they could not afford the child themselves.
Taxes: Brash believes in taxes between 20-25%. This is a nonsense goal and kind of like Shane Bond being happy playing just one test this summer or the All Blacks beating the Wallabies once next year. In Hong Kong we pay half those rates after lovely deductions and sourcing of income. Chinese tax rates may look high but in reality very little is collected of those percentages. You tell a Hong Kong person they would be paying those rates and they would spit in your face. Lower all company, personal and trust tax rates towards 10%. Make individual rents paid tax deductible for those who do not own their own home.
Company Taxes: Abolish company tax for all new businesses set up in New Zealand employing more than 10 New Zealanders for 2 years including overseas companies that wish to move to New Zealand.
GST: Raise GST to 15%.
Minimum Wage: Emerging Nations have no minimum wage. Don Brash's report at page 128 and 129 failed to mention what New Zealand should be lowering the minimum wage for - so 400,000 Filipino male and female workers could be imported to do jobs that New Zealanders will not do, such as domestic servants, farm labourers and cleaners. There is no reason for a New Zealand woman in the year 2025 to be doing housework when a Filipina can do it better and for next to nothing. The New Zealand woman should be left to engage in gainful higher paid employment or enjoy her leisure time. A great happiness in my life is having a maid and cheaper domestic services than back in New Zealand. In fact, when all else is failing it is the maid concept that stops me from getting a one-way ticket home.
Superannuation: If I am not going to be receiving Superannuation then why the hell am I having to pay for it for the next 30 years? Superannuation needs to be abolished which will give people the clearest indication yet to take responsibility for their own savings. This in conjunction with a whopping tax cut makes it easier. For example try saving in Hong Kong where you have a large income and pay 6-7% real tax rate vs New Zealand where you are paying 38% + GST. Easy. But New Zealanders have no savings culture because a) they are taxed the bejesus out of interest through RWT and b) they have always relied on superannuation. Cut it.
Health: The world will soon have to face facts that it cannot afford to pay for treatments to assist in prolonging life. Cut all taxes on cigarettes and alcohol and make health a fault based scheme. If you smoke, drink your liver dry and are a fatty you have to wait behind everyone else for public healthcare. ACC should be abolished for a fault based system and everyone who can afford it should be told to get private insurance to pay for their healthcare. They can afford it with the tax cut given. Those who cannot would use the current public health system based on need with a priority given for healthy living, economically viable persons and those who could not help themselves such as the intellectually handicapped and genuine cases of disability.
Free G.P Visits - no they are not. How many unnecessary trips to the Doctor are made by people who receive the trips for free and have all day to sit around and wait? To the detriment of thoe working who have to pay and haven't all day to wait? Is there any evidence that New Zealanders health is improving with free GP visits? Or is it a warm fluffy that makes the middle classes sleep at night? You cannot give away for free a trip to a Doctor. There will always be excessive demand when anything is free. Surcharges need to be reintroduced.
Education: What halfwit system lets 17 and 18 year olds have interest free student loans? And tells Universities what fees they can charge for each course? Well, and offers students classes that will never assist them in making one more dollar of income? Full fee paying University with scholarships available to the top performers from High School. Public funding for Universities misalloactes resources from those who will never need to go, towards those as professionals who need to go. Never fear, as a professional you will quickly earn back all your full fee paying monies with limited taxation.
Government Spending: Why benchmark this to GDP? The more GDP this gives politicians the signal they can spend more. All unnecessary spending needs to be cut.
Mining: Yes please. Tell the Greens that mining is the price of their silly ETS.
Land, Stamp and Capital Tax: No capital gains tax, encourage the market to produce natural boom and bust outcomes as Brash notes, capital gains tax doesn't prevent housing from becoming unaffordable (Australia the best example). Land tax can be levied as in Hong Kong, farm land included. Stamp Duty on property and share sales levied. I worry about land tax however as it is an incentive for silly governments (ie. naturally New Zealand ones elected by the wider electorate) to keep the price and values of land high, therefore distorting the market.
But of course the "Do Nothing" option is far easier for John Key on the basis he doesn't wish to break election promises. Perhaps the first politician in history we WANT to break his election promises. Funny thing is that Key hasn't got as far in life as he has by doing nothing. It makes you wonder what the man wishes to achieve in Parliament. He doesn't look like a "lifer", so what's his game? Seriously. What is his point? He's making a right meal thus far from tax reform.
So Far.........
We have Brash's 2025 Taskforce and its extensive recommendations. We have seen the World's Luckiest Father - Mad Gareth Morgan explode lacking any discipline through the press and on TV3 with his Capital Tax proposal before the Tax Working Group of which he is a member of has even formally reported back. Stealing the entire thunder of the TWG Conference with his idea and self-interested platform. Speedo Weldon who is also on the Tax Working Group, state New Zealand needs to lower its corporate tax rate. Every fund manager and NZX related person in sight supporting taxing land and listings of SOE's.
It all reeks of each individual member soaking in their own area of self-interest to make their business grow faster.
So in all the mess and pulling in every direction, can Bill English and John Key mesh it all together in a coherent direction?
The answer is of course "hell no". Piecemeal reform doesn't work it has to be an "all in" or nothing approach. The Taskforce 2025 Report reads like that. You cannot cherry pick 10 ideas and use them effectively, you need the whole package.
Which is why the report is ultimately a failure. Even if the best 10 ideas were picked up and used, the net effect would be Unfinished Business II and the Pinkos blaming us when it all failed, which it will without the whole package of reform ideas.
In the meantime, for those of us wishing to get ahead of Australia by 2025 we need to forget the macro and focus on the micro, ourselves. Forget New Zealand and compete one on one with Australians for yourself. Even Bill English has come out and stated that it is "aspirational".
New Zealand politicians will have enough on their hands with the likes of China, Russia, India, Brazil and Uruguay.