Beatup on MP Superannuation
September 30th, 2007 at 9:27 am by David FarrarThe Sunday Star-Times has a beat-up article on MPs superannuaton scheme but it fails to mention the most crucial fact.
The Remuneration Authority when setting MPs salaries, does so on the basis of taking into account the total cost of an MP – including superannuation subsidies.
So the superannuation scheme is not an additional cost. If there was not such a scheme, then MPs base salaries would be up around $150,000 intead of the $122,500 they are. The cost of the super scheme is now effectively deducted from their base salary (both employer and employee contribution).
Now one can debate whether or not a backbench MP is worth $150,000, and that is a legitimate debate (I would point out this is a pay drop for most National MPs), but the issue of how much goes into superannuation vs salary is a red herring as both are set as part of a total remuneration calculation (which is the only sensible way to do it).
No tag for this post.
September 30th, 2007 at 9:50 am
Now one can debate whether or not a backbench MP is worth $150,000… (I would point out this is a pay drop for most National MPs)
Wow. Only 12% of people earn more than $60,000 a year, so what small minority of the population must most National MPs be in? And how does that reflect their ability to understand the issues affecting ordinary New Zealanders?
Casts a whole new light onto Tony Ryall’s comments that the cost of GP visits isn’t a big issue for most New Zealanders, doesn’t it?
Vote:September 30th, 2007 at 9:57 am
Only 12% earn more than $60K. Get real Tane.
During the budget this year (some months ago) the figure was 14%. Since then hundreds of thousands of people have crept into the “rich” classification.
If you know much about bell curves just watch as the percentage starts to climb really quickly. It may have taken several years to get from 5% to 14% but we are now reaching the steep part of the curve.
If the distribution of income follows the bell curve (and it almost certainly will) then by budget 2008 there could easily be 20% of the working population paying the “rich tax”. Go Labour – tax em hard, keep em poor and they will vote for more welfare…. Corrupt policies of envy.
DPF.
The issue is not really should MP’s be paid $150K – The issue is why are most people in NZ not earning more?
Vote:September 30th, 2007 at 10:05 am
Tane
A GP visit still normally costs a lot less than a visit to the Vet. I know it’s rough to compare the cost of pets to children but there is no WFA (Working for Animals) policy so imagine if somebody had 7 dogs… who would pay for their choice to keep that many expensive animals? It’s not their responsibility if they choose – Rich animal-less bastards should pay.
Vote:September 30th, 2007 at 10:15 am
DPF
The other issue that should be discussed: Why do senior MP’s get circa 9% pay rises every year while they call for moderation in wage increases.
The lefties cry foul when corporate CEO’s get 9% and the workers get 2% but when the senior MP’s get 9% and the general public service get 2% they all cheer the union and praise their dear leaders for looking after the workers.
Hopeless double standards that can only continue as long as partisan supporters don’t actually use their brains and question their dear leaders actions.
Vote:September 30th, 2007 at 10:35 am
Burt, you’re comparing the children of working families to dogs. Absurd.
And if you want people in New Zealand to earn more then you’re shilling for the wrong party, because wages are an issue on which National has no answers.
Remember, last time National were in power the average Kiwi’s wages stagnated or declined in real terms, and they want to do exactly the same thing again if they win in 2008.
It’s okay though – your wages might go backwards but you’ll get that $10 a week tax cut you’ve been whining about for the last three years. Who cares if it costs twice as much to go to the doctor and you have to pay road tolls to get to work?
Vote:September 30th, 2007 at 10:39 am
Tane
Please explain how my (or anybodies) would be $10/week. This is a tired old line for a waste of space ideologically blind has been.
If we introduced a blanket tax free bottom end to the tax scales of $10K then ever working person (irrespective of how much they earn) would get $37.5/week.
Justify the $10 quip (because your masters can’t) or find a better insult.
Vote:September 30th, 2007 at 10:45 am
If we introduced a blanket tax free bottom end to the tax scales of $10K
Is that National’s tax policy? It sure wasn’t last election. Now you’re just making things up.
Vote:September 30th, 2007 at 10:54 am
I know Tane, it hard isn’t it when the some common sense and facts blow holes in the ideological idea that tax cuts can only benefit the rich.
Notice you didn’t make any comment about the 14+% of people now paying the rich tax and how it could easily be 20% by budget 2008. That a little to hard to take as well ?
Vote:September 30th, 2007 at 10:55 am
Tane
I’m not a National supporter, I haven’t voted for them since 1997 to try and displace the Labour Govt that started the failed policies of the past.
Now can you tell me what years wages wend down under National, can you also tell me what percentage inflation was running at prior to that drastic action that was required?
Vote:September 30th, 2007 at 10:56 am
Ooops make that 1987….. typo sorry.
Vote:September 30th, 2007 at 12:15 pm
Tane,
According to Treasury 15% of income tax payers earn over $60,000. (And given they pay 53% of all income tax collected it’s a bit churlish to complain about their contribution to the public purse). But you forget that that’s just the PAYE payers. There’s also a lot of tax-payers whose income comes from other sources (like farmers or owners of small businesses for example) who don’t appear in that Treasury statistic.
So although DPF indicated that many-but-not-all of National’s MP’s are taking a paydrop that’s not to say they’re drawn from that small a portion of the population.
Heck, what portion of the population do university lecturers, teachers & union officials represent???? I’d suggest National’s MPs can draw on a lot broader range of life experiences than Labour’s can.
Vote:September 30th, 2007 at 12:22 pm
virtualmark
It was reported the other day that 75% of secondary school teachers now pay the “rich bastard” tax.
Wow. Who would have guessed that if you set an income threshold in 1999 and don’t change it for 9 years that the intention (promise) of the policy would be completely corrupted.
Guess that was too much forward thinking for the policies of envy Govt. Having shown this little forethough (or was it deliberate deception) how can we possibly trust Labour with the future direction of NZ fiscal policies.
Vote:September 30th, 2007 at 12:30 pm
Burt said “During the budget this year (some months ago) the figure was 14% [the Treasury handout with the budget said 12% over 60, 20% over 50]. Since then hundreds of thousands of people have crept into the “rich” classification.” and “If the distribution of income follows the bell curve (and it almost certainly will)”
stunning how ignorant you are:
12% of the working age population is only around 370,000 – the budget was only 6 months ago, its simply stupid and a failure of basic mathemtaics to think hundreds of thousands more people have crossed the $60,000 mark in those 6 months IF you think the percent above $60k will be 20% by BGudget 2008 you’re bascially assuming everyone earning between 50 and 60 (8% of wap, that’s about 250,000) went over 60 in a year months. Do you think people are getting 20% pa wage rises?
and of course incomes are a bell curve (a truncated bell curve to be precise, as income, except in expectional cases, can’t be less than zero) that you don’t even know that and you’re trying to debate income issues is staggering. btw, where is the peak of that curve? around $25,000.
Burt you’re obviously yourself on a very substantial wage, and totally disconnected by the experience of most New Zealanders. I had the experience, of choice, to work on minimum wage not long ago… until you’ve worked beside the people who are stuck on in low-wage, insecure work, gotten to know htem, walked a mile in their shoes you have no idea how tough life is for the majority of people (that 50% of adults on less than $25,000 a year) – so don’t going bitching about a little bit of tax for the richest of us.. you’ve no idea how good you’ve got it.
Vote:September 30th, 2007 at 12:33 pm
virtualmark – 15% is a small portion of the population.
Moreover, even if 15% of the population is earning over $60,000 only a very small portion of them are earning over $150,000 (its a truncated bellcurve, remember) – i dont have the precise number but its something like 1% earning over $100,000 (and agian, only a small number of them will be over $150,000)
Vote:September 30th, 2007 at 12:36 pm
“If we introduced a blanket tax free bottom end to the tax scales of $10K then ever working person (irrespective of how much they earn) would get $37.5/week.”
Burt, that’s Green Party policy, and a good one, guess you know who you should vote for then (it would cost $4 billion a year if you went straight to $10K though)
Vote:September 30th, 2007 at 12:40 pm
Family income Labour National Better package
Vote:$20,000 $50 $1 Labour by $49
$30,000 $89 $9 Labour by $80
$40,000 $128 $13 Labour by $115
$50,000 $141 $16 Labour by $125
$60,000 $103 $20 Labour by $83
$70,000 $64 $24 Labour by $40
$80,000 $26 $28 National by $2
$90,000 $0 $32 National by $32
$100,000 $0 $36 National by $36
$150,000 $0 $70 National by $70
$200,000 $0 $128 National by $128
September 30th, 2007 at 12:45 pm
table above compares 2005 election labour and national offerings (working for families and tax cuts) in terms of weekly impact on net family income – note, most families earn less than $40,000 a year – Nat’s cut at that level was worth $13, most people its less – therefore, the $10 a week comment is correct.
- note if you’re in one of less than 1% of NZ families who already earn the incredible amount of $150,000 plus a year, National rewarded you 10 times more than a family trying to get by on $40K
Vote:September 30th, 2007 at 12:49 pm
i agree that some NZers have no idea about this. so is the solution to tax the ‘rich’ more, or to raise standards of education and productivity so that the bar is raised?
my contention is that NZ has been conned into thinking that there is only so much wealth and it’s the government’s job to spread it around ‘more equitably’. this is bollocks, but of couse this tax-more-and-redistribute strategy help creates voter dependence which is a nice little sweetner for the government
Vote:September 30th, 2007 at 12:52 pm
Sam Dixon
Nobody told me about that… is there a massive chunk of money sitting around somewhere I didn’t know I was getting ? Perhaps you know more than I do about my financial situation – please tell me more.
Family income… Oh that’s the bit I forgot – I forgot that almost all NZ people have families and the “very few” who don’t are just greedy and should be punished to support the vast majority that do.
Have you got the same table for ALL earners – or is that classified information ?
Oh one more thing. Why are we talking about 2005 policies? I thought you guys on the left said National had no policies?
Vote:September 30th, 2007 at 12:53 pm
I would prefer MPs get paid a higher salary, which is out in the open, and receive the same super scheme that they expect the market and kiwisaver to provide. They need to live by the rules they make for all other NZ’ers.
Vote:September 30th, 2007 at 12:55 pm
oh sam, i’m in the 1% category… and i’m not unhappy the level of tax i pay.
what guts me completely is to see my tax money used for re-election scheming, on social engineering and on policies that lock people dependence of state welfare.
the cost of this dependence, in terms of wasted human potential is incalculable.
Vote:September 30th, 2007 at 12:58 pm
Sam
Can you possibly explain why people are rich at $60K and should be taxed to support others who are not yet people are poor enough at $120K to require assistance from others ?
This is a genuine question. I don’t understand the policies of envy driving such a bizare situation where the rich threshold is half the poor threshold?
Vote:September 30th, 2007 at 1:01 pm
Sam, to be exact – Green policy is to have a tax free threshold of $5K IN RETURN for adding more eco-taxes. The net effect will not necessarily benefit the low income earners in the same way a completely new tax policy might do.
Personally, I think the 5K offer by the Greens in light of the additional eco-taxes they propose to be a little wimpy. I’d like to see it much higher. But that is another post for DPF to run with.
Also, I thought the 5K tax free threshold was costed at under a billion, so a $10K threshold would be under 2 billion? Have you had updated figures from somewhere I could review?
Vote:September 30th, 2007 at 1:07 pm
Sam
According to the table you supplied there are no WFF benefits paid above $80K
Is this the table as it was before the last round of election sweeteners were thrown in and the WFF threshold was lifted to gain the extra few % of voters required to give NZ it’s first retrospectively validated PM?
Vote:September 30th, 2007 at 1:16 pm
ZenTiger – yeah, its 5K, but tax-free bottom is Green and only (as far as I know, maybe UF too?) Green policy. I think their idea is that eco-taxes would be balanced by tax cuts bottom-up to be fiscally neutral, while discouraging unsustaianble economic choices, and not f*cking over the poor.
Burt – to get any WfF assistance over $100K, you need to have like 7 kids and you only get a few bucks – its a small amount for a very unusual situation (be intersting to see if there are in fact any families on over $100K getting WfF, just because its mathematically possible doens’t mean there are any)…
I know that table compares family incomes, the reason being its easier if you are comparing WfF to tax cuts.. you asked where the $10 a week in 2005 comments came from, I found a table for you (off Frogblog) that included that info, and some extrenious info – the point is made though, for most people National was offering around $10 a week, or less, in tax cuts.
Vote:September 30th, 2007 at 1:38 pm
Sam
My spin detector is going off quite strongly now.
The WFF benefits apply up to $120K – but you say you doubt there are more than a few in this situation. (This is your opinion)
The table you supplied shows Labour not paying benefits above $80K – when under the policy (irrespective of your opinion) they are.
“Only a few dollars.. not worth showing” what was the motivation behind hiding the fact that labour pay benefits to very high income levels?
It’s only showing families because it’s easier to compare WFF to tax cuts… but tax cuts are not only for families so such a comparison is nonsensical.
It’s all a bit too convenient to the argument that it’s valid to pay welfare to people earning twice the rich threshold. Sorry but some of the numbers in that table may be valid but it’s just not showing the picture like it is. NZ has got families with 7+ kids and it also has childless couples earning high and low incomes.
If only the economics of National VS Labour were as simple as that table !
Vote:September 30th, 2007 at 2:13 pm
Going back to DPF’s original post, and how MPs’ remuneraion is set by the Remuneration Authority and debating whether or not a backbench MP is worth $150,000pa …
I’d prefer that all MP’s remuneration was set on the basis of being paid the average wage plus a (potentially hefty) bonus driven by a basket of economic & social measures. It’s basic human nature that you get the behaviours that you reward. I’d much prefer if MPs had a lot of their income at risk based on, for example, GDP growth, the CPI rate, hospital waiting lists, the total number of beneficiaries etc etc.
I think the Remuneration Authority could be more gainfully employed putting their heads together to arrive a simple basket of measures.
And I’d be completely at ease if backbench MPs got an income of several times their curent levels if they exceeded every measure.
Vote:September 30th, 2007 at 2:57 pm
Sam
(firstly: I agree my comment ‘hundred’s of thousands’ was a little sloppy)
I have done some more maths and it’s quite interesting.
IF $37.5/Week tax cut would cost $4b as you said then we must have circa 2.1m tax payers.
Recent figures released by Heather Roy show that there were 352,000 people paying the top tax rate 2005/2006 (well before the budget we are talking about)
That’s 16.7% – Makes the numbers published with the budget look a little dodgy ! I’m still picking that by budget 2008 there will be 20%-25% of tax payers classified as rich.. It’s also not unconceivable that we already have that percentage – if it was 16.7% as at end of the 2006 tax year – which is technically one year before the budget where the figure of 12% was quoted.
Vote:September 30th, 2007 at 3:03 pm
virtualmark, if MP’s pay was based on performance… most would need to pay us!! But seriously… would trust our law makers to establish any kind of performance measures and/or oversee statistics that governed their pay?
Vote:September 30th, 2007 at 3:45 pm
My heart bleeds for poor Marilyn Hobbs,. She is only collecting a lump sum of $360,000…She used to be able to supplement her meagre Ministerial Salary by renting out her house while living in a Ministerial penthouse, but was deprived of that little number by her jealous leader under the pretext of anti corruption. No instead of eking out a living from her accumulated savings she has to go to England in order to get a teaching job, one can only assume she was unable to find a vacancy in the teaching profession in NZ. Thats tough as the new Education policy of her Goverment doesn’t require pupils to actually learn content, only to know how to click google or wikipedia. In England she may have to actually educate. No doubt given her ideology she will seek out a low decile school in one of the poorer darker parts of London. Still the lavish travel perks she gets as a former minister mean she can come an go as she pleases without worrying about travel costs or carbon taxes.
Vote:September 30th, 2007 at 4:21 pm
burt – you’re not comparing apples with apples – the 12% figure goes to the working age population – the other calucation is based on taxpayers – not all adults are taxpayers, some 30% of adults are not in the workforce, and a large portion of those have no personal income at all, hence are not taxpayers
Vote:September 30th, 2007 at 4:39 pm
Sam
Yes I know that is how we manage to get the discrepancy between the official “nice” figures and the “ugly” brutal reality.
So what we are saying is that when we are costing a tax cut we take the number of tax payers and when we are justifying the ridiculous 1999 definition of rich we take the number of working age people. Hell – why not take the entire population then we can crank that figure down even further. (approx 8.3% of the total population of NZ are paying the rich tax)
The policy was originally sold as “only the top 5% of earners will pay this tax” so it seems appropriate to use the number of “earners” when looking at how well labour have kept their 1999 election winning policies of envy promise.
I like the 16.7% as at 18 months ago – but I’ll agree that by manipulating the definition of “who’s a worker” we can bring that number down to stop Labour looking so brutal.
Vote:September 30th, 2007 at 4:50 pm
burt – its not manipulation, you just misunderstood which figures you were looking at – go back and look at what we and tane are discussing – the 12% figure is for wap, not taxpayers, i never claimed anything else…
i missed your thing about WfF earlier: the figures in that table (which i got off frogblog- don’t know where they got it) are for a family with two children, because the payments under WfF are quite complicated they are usually expressed for a two parent family with two kids, that’ what the table (which isn’t mine) shows…
like i said, if you have 7 kids you can get payments up to family incomes of $120K – but look at the requirements, 7 kids (within the age frame) and income of $120K, not going to look it up and calculate it but you must realise there will be very few families who have enough children to be getting WfF payments when their incomes are over $100K
Vote:September 30th, 2007 at 4:59 pm
Just to clear up the confusion over the proportion of Kiwis on the top rate of tax (i.e earning over $60k)…
For the 2005/2006 financial year (the latest information the Minister of Revenue can provide me) 10.6% of NZers were on the top rate of tax. Inland Revenue does not hold information on whether NZers are working full-time so it is difficult to acquire an accurate figure.
If we’re looking at numbers, 352,000 NZers paid the top rate of tax in the 2005/2006 financial year. As ACT Deputy Leader Heather Roy has noted, had Dr Cullen kept the top rate of tax to only those in the top 5% (as per his statement in 1999), the figure would have only been 165,000 kiwis on the top rate (those earning over $79,000).
More information here-
http://www.parliament.nz/en-NZ/PB/Debates/QWA/Default.htm?search=-1632418283
Sometimes I love working in Parliament
Vote:September 30th, 2007 at 5:28 pm
cheers andrew, just a further point of clarifation that 352,000 is 10.6% of adult population.
anyway,, tane’s orginal point that anyone taking a paycut to be an MP on $150,000 is proven by your numbers. only 5% of adults are earning more than $79,000, and income is distribted on a truncated bell curve, so only a minute fraction of those 5% are going to be on more than $150,000.
it also proves my point that very few families are going to have incomes over $100K and have enouh children in the age brackets to get WfF payments.
Vote:September 30th, 2007 at 5:52 pm
How is 5% of adults relevant? Labour are telling more and more NZers that they are wealthy enough to pay premium tax while poor enough to need welfare. this is simply evidence that our socialist government regards our money as theirs, to collect and re-distribute as they see fit.
Vote:September 30th, 2007 at 6:07 pm
Sam
I just need to check what figures we are working with given the opportunistic use of numbers to suit political purposes. (Not that I’m blaming you personally Sam)
The question: When you are talking about numbers of families are you talking about numbers of families or the number of people who are of child baring age ?
Vote:September 30th, 2007 at 6:30 pm
Sorry to read that Bob the Builder was leaving too. Hes the type of member we need more of in the house. No bullshit, says what he means and means what he says. Successful in life, trouble is nobody listens, too pre-occupied with bullshit and spin.
Vote:September 30th, 2007 at 7:18 pm
krazykiwi
Simple answer: It’s not. It’s politically expedient to divide the number of people paying the rich tax by the number of people who have potential to pay tax rather than the number of people who actually pay tax.
So if we assume that this basis was used from the start, the top 5% was actually the top 7.5% right from the policy announcement. Either that of Labour are so embarrassed they have changed the basis of the calculation to hide the gouging of the people who actually pay tax.
Now back to this MP salary/super tax payer funded perk bizzo.
RE: Their income – Good on them, they deserve every cent they earn. It is a pity they are one of the few groups in NZ that have reasonable pay increases every year and it’s a pity that their super scheme makes KiwiSlaver look so anemic.
Vote:September 30th, 2007 at 7:33 pm
Seeing as how this discussion has spilled into Working For Families … sure Sam, very few families with income of over, say, $100,000 are going to qualify for WFF. Just like there’s also a few families who are pulling down benefits with a total value of around $100,000 too.
But frankly I can’t see the justification for giving such as substantial tax break to people just because they happened to breed. Sure they’ve got extra mouths to feed, and extra costs to bear – that’s part and parcel of having a family. But that was their choice. No one forced them to have kids, and no one forced them to take on those extra costs.
Why should I pay for their life choices? I have no problems contributing to a safety net for people who’ve hit hard times through no reason of their own. But, given that families are already into the taxpayer for a larger amount of education, health etc etc why should we also say to these families “Don’t worry, you won’t even have to contribute towards providing those services”.
People without families are citizens too, with supposedly the same rights as any other taxpayer. But they’re being gouged to pay out for WFF.
Vote:September 30th, 2007 at 7:43 pm
mr sam dixon,
way back in your first post you said something like “.. blah blah blah… until you’ve walked along side thr poor … blah blah dont degrduge paying so much tax to help them out … blah “.
You illuminate perfectly the divide between so-called right and so-called left. Your belief that the current tax and welfare system actually helps the poor out is completely and totally wrong. It does not help, it only hinders (except at the far far end of the spectrum of course).
You know, when it comes to increasing incomes and wealth for whichever group of people wouldn’t it make sense to ask those that have actually done it, how to go about it? That would mean of course showing a little respect for the efforts and abilities of business people generally – something that the ‘left’ just cannot bring itself to do – hence their generally poorer existence – and the rising of envy politics.
am i missing something?
Vote:September 30th, 2007 at 7:46 pm
vto
Just to help Sam out, are you talking about the people who are poor or the people who have the potential to be poor. One is a smaller group than the other but depending on which angle we are looking at this from seems to determine which group we use.
Vote:September 30th, 2007 at 8:03 pm
vto – you’re essentially ascribing moral good to the wealthy (they are wealthy because they deserve it – work hard are good people etc, in contrast to the poor), that’s a starting premise of right wing thought. The left tends to think that relative wealth is an outcome of the postion that a person is forunate or unfortnate enough to be born into in a society (yes, we ahve some social mobility but, in fact, there’s not a lot – the vast bulk of people occupy the same socio-economic status their parents had).
virtualmark – i actually agree, if for slightly different reasons, i’m not a big fan of policies that may encourage higher fertility. but I don’t think the argument that ‘its people’s choice how many kids they have, they pay the price’ because you’re dooming children who are unfortunate enough to be born into families that can’t afford to give thm advantages in life that they would have had from been born into a richer family – its a terrilbe thing to punih the children for their parents’ poor choices, and its a waste of their potential (economic, social etc)
Vote:September 30th, 2007 at 8:08 pm
what a tragic tragic waste of human potential… to be pre-destined to be no greater, no lesser than ones parents, to be trapped by something over which one has no control.
Vote:September 30th, 2007 at 8:14 pm
Sam, I suspect the common ground we have is recognising that we need to do what we can to help all kids reach their potential (economic, social etc). And for that reason I have some sympathy for Government programmes to help families.
But unfortunately I can’t help but be sceptical that just giving handouts to (umm, picks words carefully) … disadvantaged families … is going to achieve that aim.
I agree with you that social mobility is “stickier” than we’d like it to be. And that there’s a lot of latent human talent that never gets a chance to fulfil its potential. But I can’t help thinking that the reason “the vast bulk of people occupy the same socio-economic status their parents had” is because social/economic position is driven by attitudes & behaviours people learn from their parents … not by their parents getting WFF payments from Aunty Helen.
Frankly, I think WFF was mainly about bribing a susceptible group of voters to save Labours arse. Frankly I think it’s immoral to go into an election saying “Vote for us cause we’ll give you a handout and we’ll make the people who vote for the other guy pay for it”.
Vote:September 30th, 2007 at 8:25 pm
I stated my life in a state house in Taita. Hard working but very lowly paid parents. Now here is the difference between welfareism and work ethic. Growing up as the son of a manual labourer teaches you – work brings reward and higer paid work brings more reward. Hard work at school increases the chances of higher paid work.
This stuff is not rocket science, it’s pretty basic and this message is everywhere around us.
Vote:September 30th, 2007 at 8:32 pm
And this is the problem with Labour. they have lost their original calling, their raison d’être. instead they exploit the very people they claim to represent, for no reason other than securing votes. tell them they’re destined for little, but less still if they vote for anyone else.
Vote:September 30th, 2007 at 8:53 pm
Sam
And if that is not “poor” then what business is it of the Govt to F-with it?
Any MP that can justify to me why we should aspire to flatten our socioeconomic circumstances via aggressive taxation and redistribution would also need to explain to me why they don’t like being called a social engineering Govt to earn their $150K/year.
Vote:October 1st, 2007 at 7:58 am
mr sam dixon
right wing thought does not ascribe ‘moral good’ to rich ‘in conttrast to the poor’. most people work hard, are good people etc whether they are rich or poor. You miss my point.
and the fact that the left wing tends to think that wealth is a result of the position people are born into sums it up in a nutshell. Think like that, stay like that.
Why dont the left wing actually try what I suggested – when it comes to raising incomes and general wealth simply ask those that have done it how to go about it. It is quite simple. No need to complicate things. Perhaps Helen Clark, being apparently a leader, could lead the way?
Vote:October 1st, 2007 at 11:26 am
Sam Dixon: The left tends to think that relative wealth is an outcome of the postion that a person is forunate or unfortnate enough to be born into in a society (yes, we ahve some social mobility but, in fact, there’s not a lot – the vast bulk of people occupy the same socio-economic status their parents had).
And that’s bullshit. I’m in a good position because my great grandfather dug ditches, because my grandfather drove trains and because my dad became a mechanical engineer. Over the last 100 years or so our family has slowly provided more and more to subsequent generations. So no, my relative is not an outcome of my birth, it’s an outcome of a lot of hard work. As, hopefully, my daughter will have a better chance than I had. And her children after her.
Maybe it’s time the lefties started thinking in longer terms than just their immediate gains?
Vote:October 1st, 2007 at 11:36 am
VTO
“Your belief that the current tax and welfare system actually helps the poor out is completely and totally wrong. It does not help, it only hinders (except at the far far end of the spectrum of course). ”
Yes, as J K Galbraith wrote, “The wealthy need the incentive of greatern wealth while the poor need the spur of their own povery”.
“You know, when it comes to increasing incomes and wealth for whichever group of people wouldn’t it make sense to ask those that have actually done it, how to go about it?
am i missing something?”
Um, yes, yes you are. Funny really, you seem to think that everyone can be wealthy. But to be wealthy is to be better off than most (just as to be poor is to be worse off than most). Now there is not much serious argument that income inequality has increased markedly in the last 20 years or so. That being the case feelings of poverty and of wealth have increased.
Also I think you need to do a little reading on just how meritocratic or unmeritocratic society really is. Meritocracy is a great idea, it is without doubt the Capitalist opiate for the masses. “Work hard and you will get ahead”. I think we all know that that is simply a very small part of the equation. Whether or not you personally believe that wealth correlates to greater morality (and I am quite prepared to believe that you don’t) our society unashamedly exults and glorifies wealth. I admire anyone who has taken a minimum wage job, particularly if they didn’t have to. My personal experience of National Party supporters has been that the ones who would reduce or eliminate minimum wage are the same ones who would never work for such a piddling rate anyway and yet somehow it is still good enough for some other poor soul who doesn’t perhaps have the resources which enable one to be picky and impose one’s own de facto minimum. The same is normally true of resisting penal rates for making people work on stat. holidays or complete trading restrictions. One person’s ability to shop or consume services on a stat. holiday is another’s obligation to go into work. Something that never seems to concern a right wing thinker who sees the world as one in which they would be able to make the choice to work or not to work without fear or favour. So naive.
Vote:October 1st, 2007 at 12:02 pm
Sheesh RossK you have attributed a lot of stuff to me that I did not say.
1. I referred to raising incomes and wealth, not being more wealthy than anyone else.
2. I have serious argument with the gap between the rich and poor growing. That is patent nonsense. Take a realistic look at the gap 20 years ago, 50 years ago, 100 years ago, 200 years ago, 1,000 years ago etc. It is in fact closing. by way of just one example – JP Getty was more wealthy than Gates and the poor then were seriously poorer than today. Fact.
3. What is all this obsession with equating wealth and morality. God knows where that comes from.
4. What on earth did I have to say about minimum wage etc? Nothing. That is a whole different issue. In fact Ford had the right idea when he voluntarily put his workers wages up and helped to create a middle class. Similar thing.
You miss my point and unnecessarily complicate things. So typical.
I will try once more – if the aim is to increase a person’s income and wealth then why not ask those who have actually done it how to go about it? Come on, answer it. Why not ask them?
A lot of you eggs seem to have too much intelligence and not enough brains.
Vote:October 1st, 2007 at 7:31 pm
vto
That is an excellent question. From my perspective the ideology of Labour falls flat on it’s face at this point. Labour claim they want to lift wages and have a well paid economy yet as soon as anybody appears to have more than a beneficiary they are denigrated.
Couple this with the continued application of the 1999 definition of rich that extracts as much tax as possible from working people completely ignoring rising living costs for 8 years and it’s almost impossible to believe that Labour want anybody earning more than the point where the 19.5% threshold ends (IE $38K)
Labour thrives on a “business bad – Govt good” mentality. So when did Govt make a profit that wasn’t made via extracting more tax than was required – IE: The massive surplus (see 1999 definition of rich above)
I also agree that the gap between the richest and the poorest person is possibly a little smaller now than 1,000 years ago. However I won’t agree that Labour policies are good for poor people. Right here right now giving poor people money might give them the means to survive. But it’s teaching them nothing about how to survive. If we extend that sort of welfare into the middle classes (which we have under Labour) then all we are doing is encouraging more people to rely on the state. Wealth is not only measured in terms of bank balance. Sure Labour policies might pump the bank balance of middle-high income families – but they will be poorer in the long run when they have forgotten that money isn’t something that grows on trees (or is given out to win elections).
Vote:October 1st, 2007 at 10:34 pm
VTO
Because the way many of the wealthy of today have made their money is detrimental to society. A wealthy person buys some land and then onsells it three weeks later, with no improvement, and makes a substantial profit. Or they trade in financial markets where the values bandied about are hundreds of times the value of actual products. The truth is that relative returns to labour as opposed to capital have declined like hell and they make a working man’s efforts seem pitiful and worthless. This leads me to my main problem with “ask those who have actually done it how to go about it” which is that we all know your answer. It is “work hard”, “save”, “invest” but that is bosh. I know plenty of people who work hard but can’t get ahead because they simply don’t get paid enough. National is the natural party of business and land owners – that is why anytime there is rising wages pressure we hear all about how bad it is for businesses but not a peep about how good it is for workers and all we hear about soaring property values is how much wealthier that makes us but not a peep about what that does to the morale of people who don’t already own.
Vote:October 2nd, 2007 at 12:14 pm
RossK
” …. National is the natural party of business and land owners – …. ”
Nice try but no prize. I know that it is tempting to paint National as the diametric opposite of the traditional cloth cap archetypical Labour caricature. In fact it has a much wider appeal among people from all strata of society as can be seen by the size of its declared membership.
Plenty of “workers” are property owners and investors these days so you really need to dig a bit deeper. For example Owen Glenn who donated $500K to Labour is outside the classic Labour mould and many people who subscribe to National and donate their $10 are on lower incomes and rent.
However if it spins your wheels to afix such labels then go for it.
Vote:October 2nd, 2007 at 9:22 pm
We hear all about how bad it is for businesses but not a peep about how good it is for workers
And as an increasing number of businesses move off shore then we start to figure out that businesses were paying tax by hiring workers, but they aren’t anymore. 300 jobs in Mangere disappeared when F&P closed down. Joining a long list of businesses going overseas.
Labour financial policy and left wing rhetoric is sounding rather hollow lately. After 8 years at the reigns, quick blame National or Right Wing Christian Fundamentalists….
Vote:October 3rd, 2007 at 9:51 am
ZenTiger
The point is that the employees and the employer are a team though surely? Or is there no such thing as too low a wage rate? In absolute terms? Relative to the profitability of the business? It is all very well to say that the employer provides jobs but the employees provide labour. The employer takes the “risk” but the employee gives up their time (also, albeit in a very small way, taking a “risk”).
I am well aware that you can not legislate directly for wealth or success. My perception though is that the returns to labour throughout the 1st world economies have fallen while the returns to capital have risen. Am I mistaken? If I am correct is this something that should be redressed? Is there an optimum balance point (from a society wide point of view)?
Vote:October 3rd, 2007 at 1:41 pm
rossk
you and i have completely different understandings of the human character and the world around us.
“A wealthy person buys land and on-sells it for substantial profit”? What planet are you on? That may happen but is uncommon actually. I am a developer myself and I KNOW that there are times when values drop as well. And anyway, hopw on earth is that detrimental? If someone is elling land nobody at all is being forced to buy it! Its called a free world.
And ‘trading in financial markets’?? You really have little understanding of the way money works. If you did you would realise that the financial markets and its various permutations have actually contributed to our society through, by way of example, lowering the cost of capital! Capital was far more expensive and harder to get in the past. Today it is much easier. For everyone, rich and poor. In fact arguably too easy.
Look, the poor are richer today than they have been in the past. Do an accurate comparison – compare home sizes, compare the number, quality and reliability of cars, compare the cost of clothing, compare the number of home appliances, etc, etc.
as for the answer to my question being ‘work hard’, ‘save’, invest’ is that really the answer? Not quite actually. See, you have never seriously considered it. You clearly are a rich-hater.
I’ll bet that you are and have always been an employee. And a bitter one. With your attitude and approach you will never rise to any sort of wealth, if that is what you ever wish for.
Vote:October 4th, 2007 at 5:33 am
VTO
I am not a rich hater though I may be guilty of generalising (hard not too in a blog if you want to be heard). I will confess that I am judgemental about the way some people make their money and I am much more positive about people who make their fortunes in the the primary or secondary markets than in the tertiary markets.
I don’t like the application of nearly unfettered free markets to labour, land, or money, because I subscribe to the theory that these things are different from other commodities because:
1 There is a limited supply of land and it is not a substitutable good;
2 Labour comes from people and therefore human rights, human dignity etc should always be considerations when dealing with questions of labour;
3 Money is the system of exchange and value for all other commodities and it has no intrinsic value in any event.
I am well aware that the poor are better off nowadays than they have ever been. I would never seek to say otherwise. I guess from that point it follows that the distinction, in absolute terms, between the wealthy and the poor is falling (the difference between owning a ferrari and a ford seems less to me than between owning a car and not owning a car) . In relative terms however I think the gap between rich and poor is increasing and human nature being what it is people get status anxiety i.e. most peoples’ concern (once they have food, water and shelter sorted) is with their relative position and status.
I am an employee. I do an honest day’s work for an honest day’s pay. What is wrong with that? Would I be a better person if I went into business for myself?
I take issue with the comment about the availability of capital. It is debt, not capital, that is too freely available these days. I believe that monetary inflation is rife and a natural consequence of the excessive availability of debt.
I take issue with the whole “its a free world” comment too. Perhaps it is but I don’t know that that is much consolation to people with nil financial literacy and a need for instant gratification who get hooked on hp contracts and end up paying a 30% finance rate for things they don’t really need. I think the freedom of people like you and me to buy something on hp (when we can probably save up for it pretty quick anway if we need to) is not worth the harm it does to the financially illiterate types I refer to (their harm of course if offset by the benefit of the credit provider – where do you think my sympathy lies).
I have a pretty good understanding of the financial markets thank you but let me ask you this – is there any conceivable circumstance under which you could concede that too much value is being traded in paper compared to the value of actual goods and services to which a market is supposed to relate. Does it benefit us to have the whole world betting on what the price of coffee will be next year?
Vote:October 5th, 2007 at 7:42 am
Thanks RossK, sorry if my previous post came across as a bit heavy. I appreciate the gist of what you are saying anbd I thknk we probably only disagree as to degree.
Re capital/debt you’re not wrong. In fact, I have been saying for a while that people should dump all their debnt because there will be a massive implosion in the next handful of years. The world is built on debt at the moment and that is very risky. This current wave of finance company problems is the first breeze of the coming storm.
I also tend to agree re land also to a small degree. It is essential to the health of a community that the people that lve there own the land. A teant community is a weak community. And slightly off the topic – I resent the fact that foreigners can own property in NZ. If you want to own land you must live here. The influx of foreigner land owners in recent years is in my opinion a slow building weakness and disaster. And I am a property developer!
Anyway, must fly.
Vote:October 5th, 2007 at 8:47 am
Actually RossK just thinking a bit more. What does annoy me is when people generalise about business and the types of people that do it and claim they rip people off and they should be taxed more and more abnd more.
I am in business and it is so ridiculously tough and our whole family’s livelihood is on the line. Completely. And the govt takes 45% of our effort. And people (some) hate businesses. But you know, 100% consistently, of people that have those negative views on business have never been in business themselves and simply have no understanding of what is involved.
And no understanding of the fact that it is business that keeps the country turning. There is simply a huge amount of ignorance out there – and that ignirance is exploited by this govt (since before 1999 too) and especially by that nasty little Cullen man. That makes me hate them.
I tell you a truth – I have the ability to crank up my business quite considerably but I choose not to and in fact will wind it down somewhat over the next 12 months. The reason? It is simply not worth it. Now multiply that by many many business people across the country and caculate what the country is missing out on. sad, very sad. now I’m going surfing for the day.
Vote:October 5th, 2007 at 10:00 am
Well we can agree on the land question. The overseas investment rules on land ownership are ridicuously light – but then New Zealand is very relaxed about overseas ownership (and control!) of both land and key New Zealand institutions (such as Banks, telecommunications companies).
A few (and only a few) property developers do not really add much value and are over compensated for what they do (well, they have been in the property market as it has been in the last few years). Most take on significant financial risks, by making big investments in money and time.
“Give a man a piece of land and he’ll turn it into a garden. Lease a man a piece of land and he’ll turn it into a desert.”
Vote:October 5th, 2007 at 10:09 am
like your last sentence. see you round
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