NZ Herald on private sector

The NZ Herald editorial:

An economy does not work very well, many countries have found, if every worthy service is financed from taxation and none need to put some of their energy into raising independent sustenance. Many a worthy service is provided from the private sector for a profit. But some of those that cannot carry a charge and make profits can offer value to commercial sponsors and capitalise in other ways on their popular appeal, and it is economically healthy that they should rely on those sources as far as possible.

The misconception that any good and essential service deserves a government grant is not confined to those who are not seeking a profit. Commercial firms are no less susceptible to government hand-outs and no less reluctant to present a case for them.

A mixed economy prospers when as many as possible of its goods and services are financed by voluntary trade and the proceeds of taxation are reserved for those that are essential and could not otherwise survive.

Absolutely. I’ll happily donate money to good causes, so they need less taxpayer funding. We have a wonderful volunteer ethos in New Zealand.

The rescue helicopter gives good value to its name-sponsor, Westpac bank, and its well-publicised work is guaranteed to elicit a good response to any appeal for public donations. The same is true of the Starship children’s hospital and of some prestigious state schools that can command high parental donations. Consequent reductions in their public grants are socially and economically justifiable.

Far from complaining that they are being penalised for success, the fortunate should be quietly proud of their reduced dependence on public money. They should be praised and celebrated for the proof of value that voluntary finance provides, and for the public money their fund-raising success has left in the purse for the less fortunate.

I just hope the Herald remembers their own editorial when there is some controversy over government funding!

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