Dear New Zealanders, your victory is pyrrhic’
Dear home-owning older voter,
You have successfully blocked the taxation of capital gains on leveraged residential land values for nearly 15 years and now both major political parties are so afraid of you doing it again they won’t even talk about changing the core nature of our political economy, which is now a broken, unhealthy, expensive housing market with starved public services and a stagnant real economy tacked on.
So now…
What. Is. The. Point.
What’s the point of ‘winning’ and keeping those capital gains if your kids have to migrate to be able to afford a family, and will raise your grandkids there, rather than here?
What’s the point of living in a million dollar asset with maybe a few others rented out or just sitting empty elsewhere if it means you only get to see your grandkids a few times a year?
What’s the point of feeling rich and believing everyone can (or should) get on the ladder under your own steam like you did, when we all know we’re way past that point, and your kids know it because they often have to ask for help with house deposits, loan repayments and free rent?
What’s the point of pretending that this ‘housing-market-with-bits-tacked-on’ way of running our economy and society works for everyone and can be sustained with economic growth if it means most of the kids you see on the streets are living here in poverty because:
- their parents can barely afford the rent you charge them and can’t afford to leave; or,
- they’re still living here because their parents are waiting for residency so they can get in to Australia through the back door; or,
- they’re living here because their parents prefer to live in a New Zealand-style of poverty, rather than the one they grew up in India, the Philippines or China, without the nice views, the free(ish) healthcare and education systems and the NZ Superannuation for everyone at 65?
What’s the point of raking over the same old stale arguments about everyone-being-able-to-get-on-the-ladder-if-only-they-just-tried-a-bit-harder when the economic and social results of the last 30 years have shown it just does not work?
Who do you think you are still kidding?
Who do you think still believes this situation is sustainable?
The economy?
We’re now into a third year of a per-capita GDP recession because we:
- haven’t invested enough in infrastructure for transport, housing, water, health and education to cope with the last decade’s strong population growth, which we decided we needed to keep the seams from bursting and the wheels of GDP rolling (because we know they’re so rickety they may be hard to start rolling again if they stop);
- have decided (again) that starving public infrastructure of investment and staff is the best way to keep public debt and deficits low enough to afford more income tax cuts, which are needed to grow the disposable income so crucial for the banks’ lenders when they make decisions about how much leverage to pump into limited amounts of residential zoned land; and,
- have chosen to replace locally-trained expensive workers with migrants with temporary visas, who we don’t need to train, keep healthy, educate or pay well, and we can exploit to lower our costs and avoid investing in our businesses.
The rest of us?
You’re not even kidding your own kids any more. They are voting with their feet at a rate of 200 a day, mostly to Australia, which does:
- invest in infrastructure;
- has kept strong unions and protects higher wages with legislation;
- grew its productivity and those wages by forcing its workers to save and invest; and
- is now encouraging and helping its local state governments to invest.
Or are you kidding just yourselves?
Do you still believe it’s working for you and the rest of us in the long run?
If you say you do, then ask yourself one question in this poll
| POLL Have any of your children, nephews, nieces, grandchildren, employees, colleagues or neighbours migrated for a better life elsewhere because their wages aren’t high enough to pay the rent, buy the food and have a family in a healthy and stable home? Yes. They left me here. No. They’re sorted & stayed. |
If you find yourself answering ‘yes, they left me here’, then you know what to do.
So what should those home-owners left behind do?
Vote for a party advocating some form of capital gains or wealth tax and some sort of incentive to save and invest in real businesses. Vote for a party that doesn’t believe in magical thinking and doesn’t tell you this current model will work, if only we:
- cut taxes more;
- cut public debt more by cutting public services via hospitals and schools and transport;
- bring in more low-wage migrants to bid up rents and push down wages; and,
- keep starving public investment in water, transport and housing networks to keep the debt low and to avoid flooding the unaffordable market for land with new supply.
Thanks for reading this – Read it on line
Bernard Hickey
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