A Quick Essay on New Zealand Today

How would you describe New Zealand if you have lived here for some time?

New Zealand, the land of my birth and my home,  is a wonderful country, but why do we have third world problems here. Why are our crime statistics and suicide rates so high?

Here is a quick essay on how I see it.  I hope other Kiwi’s living here or abroad will comment on how they see things.

What will happen if we do have a Labour/Green coalition after the next election this December?

Is it really important, as I heard on the news today (13/3/2014) that parents should be discouraged from driving their children to school? This was from the Green co-leader, the aim being to decrease congestion on the roads and presumably to aid in preserving the planet.

I know why my daughter was always driven to school. Could it have been a string of terrible criminal offences on children early in those years that like me affected parents confidence in their children’s safety?

Our economy on paper looks in reasonable shapehttp://www.tradingeconomics.com/new-zealand/government-debt-to-gdpwith a debt gdp ratio of 35.9% last year which I believe is better than the US right now which I understand is about 73%.

However, putting this in context, NZ is naturally a very wealthy country with a fertile soil, benign climate, abundant natural resources and an educated skilled populace. We should be the most wealthy country in the world. However poverty statistics are basically 3rd world with, for example, 20% of children in poverty according to the OECD.http://www.3news.co.nz/OECD-One-in-five-Kiwi-kids-lives-in-poverty/tabid/423/articleID/250874/Default.aspx .

Housing is expensive to purchase-build-rent mainly because of socialist national and local government policies on land zoning and minimum standards for new housing. I needn’t talk about the cost of housing too much as its in the media just about every day. And it is true, it is very difficult to make that jump to home ownership nowadays.

Gerry Brownlee once wrote to me explaining that his aim as Minister of Housing was to improve the housing stock in New Zealand.  Well having lived in a few un-insulated homes in Christchurch, made even less tenable by the banning of wood or coal burning open fires and and coal ranges (where there is so much inexpensive spare heat, that one is always trying to get rid of it), myself, he does have a point. However the problem is in his method. Specifying continually higher specs for new homes, (and I know a lot about that), and having to only use electricity, (which is likely to fail when you need it most like it did last week), or approved heaters with special fuels is simply not only putting the price of purchasing a home out of reach for many, but is causing people to freeze through the winter because the cost of heating, combined with the continually rising rents, is too high.

The truth is, that My Brownlee’s policy can only lead to increasing homelessness for people at the bottom of the ladder. A good housing stock can only be attained by allowing people to become more wealthy and letting them build adequate houses themselves.  How can Mr Brownlee allow people to become more wealthy? Well fewer and much less tax of course. As I mention below, according to Friedman, according to my training and very likely according to Reserve Bank and Treasury advice to the government, substantial tax reduction not only will cause the employed to get more wealthy, the unemployed will also get substantially fewer as well.

I remember Helen Clark during a televised debate before an election, very clearly denigrating advice from the government advisers, calling it bumpkin or hogwash or some such name. (One must remember that a degree in Political Science will only help you get elected, there is precious little studied in that faculty that will help you actually run a country in a way that benefits its citizens).

The government here obviously then is overly large with intrusion into almost every walk of private life and effectively most people receive some relief from the taxpayer in some form or another. In my case, like many, I also have private health insurance because the government system is good on A&E but poor on routine non emergency but essential treatment. So for instance if you need a hip operation, you will most likely need to wait until it is an emergency.

I have observed personally on a number of occasions that our government and its agencies are prepared to exceed their statutory powers thus even the rule of law is being bent.

Taxes are correspondingly high and of course – for instance – there is no rebate for having your own health insurance or using private schools.

What is most concerning is our continual slide to the political left. Even our ‘conservative’ government at present uses minimum wages, ETS and refuses to tackle the key causes of the over expensive housing, such as removing city zoning, green type resource planning bureaucracy, and lessening the power of local governments.

Agenda 21 is of course rife in our legislation, local government and education. (I take it you have read my blog on this.)

Ironically, our current PM was in my university economics class, but he and his party appear to be definitely chasing the vote rather than anything else.

There is therefore little to stop UN Agenda 21 objectives in NZ.  If you wonder what I am talking about here, I thoroughly recommend that you get a copy of Ian Wishart’s book ‘Totalitaria” and have a good read. Of course you could also read the previous posts in this blog and also understand what I am on about.

In my experience, even educated people here believe that government can print money at will, and are ignorant that it is really only their own money, or a portion of it that the government will ever spend on their account.  It is important that when you read of a government project, such as the new Stadium intended for the CBD of Christchurch, (Yup its in the plan with a price tag of about NZ$1 Billion as I recall), who is actually paying for it. For the information of all the readers, the government, although it is physically simple to do, cannot print or create money without causing inflation and is actually constrained in this by the Reserve Bank Act. In fact, the Government has no money to spend but what it collects from us or what it has salted away in “public assets” such as Energy companies and the like. Consequently, the new stadium in Christchurch, (and this is simply a prominent example), being unlikely in the extreme to be able to pay for itself in hireage and gate receipts,  will simply be paid for by you and me out of our taxes. I suspect that if the citizens who “approved” the plan, may have thought twice if the cost of the stadium was expressed in a dollar amount of their personal taxes for x number of years.

In fact probably every day you will read of groups or individuals lobbying the government for some sort of “improvement” – using tax payers money of course where a local fund raiser from affected people would often be the most sensible thing to do. Just imagine a major cut in taxation which would enable people to look after themselves and according to the economist Milton Friedman whose policies have benefited NZ in a number of ways and I have the utmost respect for, these people would not only be able to look after themselves, but have money left over – and- the economy would be far more buoyant without the risk of inflation.

What would be beneficial, seeing as how the government is always moaning that Kiwi’s don’t save enough, would be to STOP TAXING SAVINGS. A very simple solution. Kiwi Saver takes a small step towards this with a government gift to get you going, but after that you pay tax as usual while your money is locked away for you.

I used to be on a superannuation scheme where my employer matched my contributions dollar for dollar. Yup you guessed it, my dollar from my salary was taxed and the dollar from my employer was taxed as well. I think I got about 65 cents instead.

Unfortunately we are very fertile ground for green initiatives which are of course touted by the government as being ‘free’ or ‘inexpensive’, which they would not be if the tax payer subsidy was disclosed. Of course this unfortunately intensifies negatively the effect I describe in the above paragraph.

So there you have it. How a beautiful wealthy country can be ruined by its own citizens with covert help from its unprincipled government.

I know we are not the only country in the world with these problems, but NZ always prides itself in being a world leader, ignoring how futile any effect must be from such a small country.

Maybe we just need to change our direction in becoming a world leader. A smaller, less expensive government, (take a look at how Switzerland does it) and a lot less tax.

Why we could even be the wealthiest country in the world, eclipsing our neighbors across the ditch, no starving children, everyone with a fair chance to find a house that meets their needs.

I think its OK to be wealthy, but some people are embarrassed about it. Well maybe thats where our problem really lies.

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18 Responses to A Quick Essay on New Zealand Today

  1. Simon says:

    thank you for your interesting personal account of the situation in Christchurch, I know that the information regarding the ‘legalised tax avoidance’ which is practised under John Key’s administration is wrong. $1.1 Billion was quoted in parliament yesterday by Russel Norman as the figure that is paid to the Wealthy each year instead of paying down our debt which is in the region of $58 billion since the Helen Clark Govt. There is nothing wrong with being wealthy, but the present prime minister is doing something that is very very wrong .. handing out hard earned taxpayer money to the wealthy just to buy votes.
    Speaking of Agenda 21, it is the agenda to cause a ‘gradual decline’ of the NZ dollar. as it is in USA and other western nations to control us and our economy and wealth as you will well know being an economist.
    As far as your comments regarding printing money, you may remember NZ borrowed money to pay the European Union a sum of $3 Billion that we do not have, this money borrowed from the IMF … perhaps we should also get started on the Fractional banking which some like to deny exists and in this ‘advantaged’ system for the banks NZers cannot compete.
    The most sensible solution to this problem of high rents and costs of living is to remove the burden of tax (GST) on essential items, the Govt has the audacity to talk about child poverty while they create the perfect environment for it. Parents struggle to keep or have a job and the cost of food / petrol skyrockets and those left to live on government money have to seek help from their families and Salvation Army and food parcels to get by. This is not the NZ way, one can only hope a real New Zealander leads NZ in the future, not like the present Internationalist Jewish PM John Key!

    • rogerthesurf says:

      Simon,
      I’m not familiar with the circumstances of the $3 billion loan, but it should be remembered that this is not the government’s debt but ours.
      Approx $750 for each woman man & child I suspect. Unfortunately my calculator does not handle billions well.

      Do you have any sources for ‘$1.1 Billion was quoted in parliament yesterday by Russel Norman as the figure that is paid to the Wealthy each year instead of paying down our debt ‘. Norman himself is not a good source when it comes to economics unfortunately.

      Cheers
      Roger

  2. Simon says:

    It is also worth mentioning immigration is one of the reasons NZ’ers find it difficult to get work, the government has approved urgent work visa’s to immigrants with the specific purpose of employing ‘checkout operators’ … now if this is not an agenda what is!

  3. Simon says:

    a few links for you relating to the $3billion loan Bill English forced on us kiwis to then lend to the Eurozone

    http://neweconomics.net.nz/index.php/2012/06/nz-borrowing-to-lend-to-imf-and-other-absurdities/

    http://www.stuff.co.nz/national/politics/7128380/New-Zealand-pledges-1-26b-to-IMF

    https://www.interest.co.nz/news/59317/nz-lending-imf-eurozone-bailouts-jumps-2012-now-lending-nz125-mln-through-new-credit-line
    May 17, 2012 – English warns ‘anti-sprawl’ councils ….. NZ’s lending NZ$125 mln to Greece & Portugal via the IMF. … The IMF and EU have warned further tranches of Greece’s €130 billion bailout may be withheld until a new government is installed in the … They could ask for NZ$3 billion

    As for the source of Russel Norman’s speech I will get back to you on this re: Their irresponsible tax cuts to the top 10%, costing $1.1billion a year, have contributed to National’s record borrowing. In just six years, National has borrowed more than all prior governments combined.
    http://www.scoop.co.nz/stories/PA1401/S00167/russel-norman-opening-of-parliament-speech.htm

    • rogerthesurf says:

      Simon,
      Thanks for the links etc.
      I took a bit of read around the ‘New Economics’ website.
      To be honest, it does display a lot of ignorance about economics.
      The policies they are espousing are based on the now defunct Social Credit party, so I am familiar with them to some extent. The Social Credit party under Beetham was active when I was an economics student. S.C. actually held at least one seat at that time. I actually met Gary Knapp one time briefly. Anyway the conclusion at that time was that SC had no idea what money actually was or is. I’m sorry to say that the New Economics Party has absolutely no idea either.
      One particularly ignorant section is at http://neweconomics.net.nz/index.php/category/manifesto/the-economy/monetary-banking-business/democratisation-of-money-creation/ where the writer says she once worked for Barclays and had the job of ‘creating’ money by presumably debiting assets and crediting liabilities whenever a loan was issued. Well she most certainly was a very junior clerk, because otherwise she would know that another bank officer, more senior, would be also crediting the banks cash and debiting loans. The operations are normally done by different people for security reasons. While it is true that banks can collectively multiply credit to some extent, (for instance loan money is usually spent and the new owners re-bank it which gives the banking system more money to lend out), banks need the cash in their account before they can loan it out.
      In NZ the reserve bank buys and sells government bonds which soaks up the extra credit. In other words, in NZ, since the advent of the Reserve Bank Act, and most modern states, the money supply, (including credit), is controlled, since too much cash & credit causes inflation, and too little causes depression. This is nothing to do with left or right politics, this just how it is. So when the NZ Reserve Bank ‘alters’ interest rates, this not quite what they are doing, what they’re doing is adjusting the amount of cash and credit in circulation in order to keep inflation between zero and 3%. As the interest rate (the cost of money) floats and is not directly controlled, (Robert Muldoon used to try to though), as money gets a little more scarce, the cost (interest rate) goes up and vice versa. If you read Milton Freidman’s ‘Free to Choose’ you will see this process well described.
      Worse still the NE party seem to be particularly intent in getting UN Agenda 21 policies firmly established in NZ. Taking that fact into account I conclude that they are further left than the Green party. Did you read the ‘Principles’ page? If you read the ‘About’ page you will see how whacky these people are. Transition towns are usually associated with ICLEI http://www.iclei.org which is an off shoot of the UN and introduces Agenda 21 through local governments and I suspect the introductions include some sort of materiel support, although they are very quiet about that. My city used to be a member of ICLEI and of course ‘Transition towns’ are linked from there as well.
      Simply put these foolish or otherwise malignant people at the ‘New Economics Part’, have complete economic destruction on their agenda.
      http://www.ccc.govt.nz/Content/Search/SearchResults.aspx?query=transition+towns&btnG=Search
      http://www.un.org/esa/agenda21/natlinfo/countr/newzea/inst.htm

      I could write on, but I trust you get the gist of what I am saying.

      Cheers

      Roger

  4. Simon says:

    Hi Roger, thanks again for the interesting info, I just remembered to get back to you on the 1.1 billion tax break to the rich, the accusation by Dr Russel Norman in parliament. He has now uploaded specifically upon my request to his facebook page the details on the figures are provided. He has also referred to the Parliamentary Library for the statistics

    • rogerthesurf says:

      Cool, look forward to seeing them if you care to relay them here.

      Sorry I don’t patronise Facebook.

      Cheers

      Roger

    • rogerthesurf says:

      Simon,

      I read up a little on Ross Norman’s claims.

      He seems to rely on the tax cuts of 2010 as his base data. See this Chch Press article. http://thedemiseofchristchurch.files.wordpress.com/2014/04/tax-cuts-2010.pdf
      If he says the rich got more tax cuts than everyone else, its hard to see that here.
      Sure people over $70,000 got 5% reduction while the rest got about a 2% cut, but Norman neglects to mention that people under $70,000 are likely to be taking advantage of “Working for Families” which the higher salaries do not get to take advantage of. Neither does Norman take into account the changes in property taxes mentioned in the article.
      One should also remember that these are percentages of income, so the higher salary earners will be paying considerable more in dollar terms per annum than people further down the scale.

      To be honest, I have a very low opinion of Ross Norman and his party. They know or pretend to know very little about real economics.
      You may be surprised to learn that taxation depresses economies and the less tax everyone pays the better. Of course should taxes be actually cut substantially, so everyone can pay and choose for themselves the services etc that the government currently monopolises, there will be a sector of the population who will be uncomfortable having to make decisions for themselves.
      Ross Norman may wish to have a 100% tax rate for everyone and then pay everyone a benefit according to what the party thinks is fair. This is known as Communism. To get an idea of how well it works, just talk to any Chinese citizen of 50 yrs or over.

      It is absolutely erroneous to refer to tax cuts as “expensive”. One has to remember who is actually paying the money. Taxation is very expensive for the people paying it and, as I said above, in aggregate, taxation makes us all poorer

      Cheers

      Roger

      • Simon says:

        $1.1 Billion = Legalised Tax avoidance

      • rogerthesurf says:

        Simon,

        Do you think it would have been OK if everyone got the 3%, working for families and property tax changes notwithstanding?

        Cheers

        Roger

      • Simon says:

        The sale of the State assets should not be going into the “Future Fund” .. If there is a sale of State owned assets the money should be paid back to the tax payer for their own discretion on how it is used in the future.

        Excess Tax should be paid back.

        If we are now discussing Working for families .. then no it is not right that a benefit be paid to families. Instead GST should be removed for essential items and infact GST should be removed.

        NZ should charge Duty on all imported goods so that NZ industry can compete and generate wealth back into our community.

        As too many medium income level people find themselves in the high income level bracket the high income level should be increased to 200k. the $1.1 Billion in legal tax avoidance should be targeted and netted back into the NZ economy.

        And lastly the Government should stop borrowing on our behalf. 58 Billion Debt is surely enough to have a vote of no confidence in this Government. they cant live within their means!

      • rogerthesurf says:

        Simon,

        When it comes to taxation, I am in absolute agreement with you. As I have said previously, taxation is the most economic deflationary thing that a government can do. And I agree that surplus tax should be refunded to the tax payers. I said that very clearly when Michael Cullen was Minister of Finance and they had a surplus to play with, but all we got was the Kiwi Saver scheme which in my opinion will not only not keep up with inflation, (that means that your retirement fund is likely to be worthless at the time you need it), but the $1,000 “kickstart” was a pretty feeble tax refund. However if the government has a debt on our account, it makes more sense to pay off this debt before refunding tax.

        I found some data on the extent of NZ’s public debt which is fairly average by world standards it seems, although I agree that no debt would be better.
        http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

        However I would not altogether blame the current government for the current increase in debt.
        You see when ever a government introduces an economic policy, the effect on the economy overall is generally not felt or not able to be measured until roughly 10 years or so. In the case of the Helen Clark government, they inherited some reasonably sound policies that came from the Lange government (Roger Douglas) and the Bolger/Shipley administrations. The fact that the Helen Clark government ran at a surplus was most certainly not of their doing. However instead of returning surplus tax to the tax payer as you rightly suggest is the correct thing to do, as you can see from this graph, http://thedemiseofchristchurch.files.wordpress.com/2014/04/www-tradingeconomics-com_new-zealand_government-spending.pdf ,the Helen Clark embarked on a program of big spending and essentially blew the surplus.
        It is difficult for a government to reduce spending because typically there are people who are relying on receiving that spending and they tend to become vociferous when their money is taken away.
        Realistically spending can only be reduced slowly
        So the current government was faced with a 40% increase in spending to service in a time of international economic recession. Note spending rose form 4500 million to 6500 million during the Helen Clark years.
        http://thedemiseofchristchurch.files.wordpress.com/2014/04/tax-cuts-2010.pdf

        However Russel Norman is probably only vaguely aware of these figures and so long as he continues to promise prosperity by using “Smart” technology (read “tax payer funded” technology) and especially whilst condemning the use of oil, coal, fracking, natural gas and new hydro projects and continues to call for Carbon Tax and/ Emissions Trading scheme, you may be quite sure that government spending, govrnment debt and taxation will be rising enough to outshine Labour if friend Russel ever has his way.

        As for imposing import tarrifs and quota I assure you that I have been through times when this was used in NZ. It dosn’t help in the least and we were all much poorer off during the years before tarrifs were largely reduced and abolished. Effectively normal people pay twice for this privilige. 1. Pay the higher prices for the imported items (Cash goes to government – another tax). 2. Pay higher prices for the local items as well.
        Might be simpler just to tax everyone.

        Cheers

        Roger

  5. Simon says:

    an urgent law should be passed through parliament, for the ability of the ‘people’ to sue a politician for bad policy (even years down the track). given that a politician is also a ‘beneficiary’ on the tax payer they should be made to be responsible for their actions as others are. This could result in a more careful and considered politician?… but I should really consult with some big time expensive ‘advisors’ and ‘statistics organisations’ (taxpayer funded naturally) just to make sure what the facts and figures are in front of me before making this kind of statement, and well before listening to the ‘people’ (what would they know ) or using any kind of ‘commonsense’.

    • rogerthesurf says:

      Simon,
      You have just stumbled on the basic weakness of democratically elected governments. The Westminster system recognises that humans, even with the best intentions, will very likely sucumb to the power of being elected to a top position. This is recognised by the requirement that after 3 or 4 years, each elected leader must face the polls again. Another normal requirement of the Westminster system is to have another house of elected officials whose job it is to police the lower house. In Australia and the US, these people are known as the Senate and in the UK the House of Lords.
      You may notice/realise that this part of the Westminster system is missing in
      New Zealand. Although no system will be perfect, in my view this is the cause of the deficiencies that you outline. Our House of Representatives simply has too much power and little responsibility. This is made very clear by the way the government here is acting with respect to the Christchurch Earthquake “recovery”.
      Parliamentary power has been callously abused here, (I know this because I sat through the High Court hearings here which came exactly to that conclusion), and another example is that a few years ago we had Helen Clark and her government pass legislation which made her illegally elected government, legal. This is amongst the worst abuse of power – akin to how Adolf Hitler came to power without a majority.
      My suggestion has always been to get rid of the unelected representatives that we currently endure under MMP and democratically elect a senate (which will cost no more than the current list MP’s), who will have the power – exactly as you describe – to review all legislation and throw out bad policy etc. http://www.aph.gov.au/About_Parliament/Senate/About_the_Senate
      Unfortunately there are no government in this world, that I have heard of, who will voluntarily do anything to allow their power to be devolved.

      Cheers

      Roger

  6. Jack O'Neil says:

    Dear Simon
    Thank you for your initiative to discuss critical issues concerning the demise of New Zealand. As a supporter of Muldoon back in the late seventies and an investor in Ron Brierley in the mid-eighties, was deeply saddened when I read the Opal File. [The Financial takeover of Australia and New Zealand.] http://www.bibliotecapleyades.net/esp_sociopol_opalfile.htm
    In fact, one has come to learn through research, that what we have, and are presently lead to believe as reality by our media and politicians is more often the opposite or a diversion from the truth. As in Australia, all major political parties are governed by the same external source. While flying a different flags they are obedient to their masters.
    Yes beautiful New Zealand and her wonderful people have been betrayed by those we have trusted.
    An option to consider for the reclamation of the NZ parliament is:
    To follow the example of Dr Ron Paul recently retired US Congressman, Chairman of the Banking Committee and two time runner up Republican Candidate for Presidency.
    https://www.google.com.au/webhp?hl=en&tab=ww&gws_rd=ssl#hl=en&q=dr+ron+paul
    Dr Paul having witnessed the erosion of the American Constitution and the failure of Independent Candidates to become elected representatives at all levels of government began the Campaign for Liberty. Dr Paul has recruited and trained many to join the Republican Party and successfully be elected to include his son Senator Dr Rand Paul. Campaign for Liberty trains potential candidates for all levels of Government as Republican Candidates. Please see link for details. http://www.campaignforliberty.org/about/
    New Zealand could either follow the example of Dr Paul or request his assistance to establish a Campaign for Liberty in NZ. Action is urgently required as the attack against New Zealand and her people have be accelerated to new heights. Nothing is what it seems.
    Please take time to watch these historical documentaries below:

    Kindest regards

    Jack O’Neil

    The Power Principle: (Full Length Documentary) http://www.youtube.com/watch?v=RDZwHUlIiLI

    Rothschild Cartel behind the rise of Hitler also funding communism socialism and world war : http://www.youtube.com/watch?v=DilIn9ffRFA

    Christchurch targeted:
    Earthquake triggered by High Frequency. HAARP in Christchurch- prelude to Fukushima: http://www.youtube.com/watch?v=BYL4ly4uUbM
    HOLES IN HEAVEN HD – SECRET TESLA TECHNOLOGY HD Movie
    http://www.youtube.com/watch?v=naYsTN-D7qA

    Climate Change Fraud: Lord Monckton on Climate Change. http://www.youtube.com/watch?v=ppQl6KYyMqA

    • rogerthesurf says:

      Jack,

      Thanks for your comment.
      Not too sure about the evidence that HAARP had any influence on the earthquakes, The IPCC relies on a shonky correlation as “proof” for AGW but I hope we are all one step better than them and take on theories only when there is good empirical evidence available.

      Cheers

      Roger

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