Monday, November 30, 2009

Bankrupt ideas

The Kiwi dollar dropped slightly last week, and not a minute before time. It seems the financial world is finally starting to notice that our dollar is underpinned by an economy slightly smaller than Kansas, and our high interest rate is not a product of self-confidence, but a bloody liability.

Last week Don Brash, the charisma-less banker turned National politician who in 2005 led his party into its third successive election defeat, released the fruits of the deliberations of a "taskforce" he has chaired on how to catch up with Australia.

(Excuse me: "catch up with Australia"? Why would we want to do that? Given that we have a common labour market, when Kiwis envy the Oz way of life, there's nothing to stop them from moving there. And vice versa. Take away the difference between the countries, and that choice would be meaningless. Seriously, does Kansas spend its time producing reports on how it could "catch up" with, say, Illinois?)

But anyway. It's an article of faith for Mr Brash that the one thing we all want is more money in our pockets, and we will do or support anything to further that goal.

And his prescription for achieving it is all too depressingly familiar.

First, he says, we need to cut the top tax rate. Yeah, like every right-wing politician since Attilla the Hun has promised, just before they funnelled all the cash that should be going to the exchequer into their own pockets. Speaking as a top-rate taxpayer, personally I think it should be higher. 39% is not particularly rapacious by international standards. (It's lower than Australia, for one...)

Second, he wants congestion charging to pay for new roads. As a way of improving the budget, congestion charging remains one of the dumbest ideas ever. Petrol tax is cheap to collect, hard to evade, creates a broader tax base, and encourages exactly what we want to encourage (less pollution). The only downside is that it doesn't create the same scope for outright corruption and government patronage of private contractors...

Third, and my personal favourite, "to remove the temptation for future politicians to use the superannuation fund for political purposes", we should just do it now. Steal the whole bloody thing and use it to reduce taxes, i.e. to increase the amount of money going straight into Mr Brash's own pockets.

Memo to Don Brash: This is why you lost. Most Kiwis don't want their country to be a tax haven for obscenely rich Australians. They'd prefer not to see people, even strangers, starving in the streets. If that means we live slower and have less fancy toys than Australia, that's fine.

And if you don't like it, move to Oz. We won't miss you.


Cian said...

Excellent post as ever! But the Pièce de résistance has to be the Robert Muldoon quote. I hadn't heard that one before. Class...

vet said...

Yeah, that Muldoon was a class act. Once you start thinking like a Kiwi, anyways...