The Greens, partners in crime for a five-year decline in NZ education, health and transport services while raising the cost of living, are pinning this year’s election hopes on the introduction of a wealth tax. Spending money like there’s no tomorrow means New Zealand is drowning in debt so why not drag productive business people down too, or at least give them another reason to move offshore?
Chloe Swarbrick appeared on Newshub Nation with David Seymour to discuss the Greens’ wealth tax, an unfulfilled Green policy from the last election. Swarbrick hasn’t learned that it takes more than a winning smile and a pretty face to succeed in politics.
Seymour was stoically indifferent to Swarbrick’s hyper-excitement about the prospect of using the wealth tax to end poverty, an argument too close for comfort to Ardern’s failed campaign on ending child poverty.
What could possibly go wrong with the government commissioning the IRD to produce a report claiming that high-wealth New Zealanders are under-taxed? Huddled in the Beehive over gloomy cash flow forecasts you can imagine them seizing on the wealth tax as an opportunity to snatch more money from the tiny percentage of our population who know how to make it.
The April 2023 IRD report says 311 high-earning New Zealanders pay tax at an average rate of around 9% while middle-income New Zealanders pay at an average rate of around 20%.
The report drew on tax administration data, public records, and specifically-collected survey data from over 300 families with an average net worth of $276 million, between the years 2015 and 2021. Revenue Minister David Parker said the study found high-wealth individuals collected roughly 80% of their income from capital gains.
Coming up with the cash to pay tax on unrealised capital gains is problematic. Seymour recounted a previous conversation with a Green Party member who suggested a property owner accruing unrealised capital gains could always take out a reverse mortgage to pay the wealth tax.
According to the Household Economic Survey 2018 the top 2% wealthiest households own 25% of New Zealand’s total net worth and financial assets. Tax consultancy firm OliverShaw reviewed the IRD report and suggested high-wealth individuals pay more of the total tax take “than may previously have been thought”.
The Greens on a wealth tax to end poverty:
“Back in 2020 we knew, based on the data we had, we knew that there were approximately 6% of the population who had a net wealth individually of over a million dollars. So to play that out what we were looking at was a 1% wealth tax on those with a net wealth over a million dollars. In practice, that looks like if you’re a couple with two and a half million dollars in net wealth, well firstly congratulations you’re in the top 6% of the country, and again that’s with all debt kind of taken away against that your net wealth is approximately $1.25M, so over that $1M that’s $250k. A 1% tax on that is $2,500. So for an extra tax bill of $2,500 in the context of being an individual with $1.25M we can end poverty in this country. We can pay for a guaranteed minimum income and reform the ACC system.”
Chloe Swarbrick on Newshub Nation Sunday 30 April
The wealth tax would target between 2% and 6% of the population. Seymour stated the obvious (not obvious to Swarbrick) that spending money doesn’t guarantee the desired result. Seymour said we spend more as a percentage of GDP than Australia does but they get better results. Increased government spending here over the last five years was not accompanied by a proportional increase in public services. Seymour gave the example of healthcare expenditure rising from $18B to $28B: “That’s what, a 60-70% increase in the past five years and that’s after COVID’s over” and education expenditure rising from $14B to $18B for “fewer kids going to school learning less because the government got into a whole agendas of social engineering rather than checking if kids actually went to school”.
The Greens on education:
“Parental income is the major determinant of educational success in this country”
Chloe Swarbrick
This is as close to an honest admission that education hasn’t cured poverty as we are likely to get. The socialist mantra “Education is the pathway out of poverty” sounded good but didn’t work. Swarbrick has shifted the blame for education failure off the government and onto parents who don’t earn enough!
The Greens on transport:
Cycling to hospital to give birth made ideological sense to Julie Anne Genter but I doubt South Auckland mums in labour will cycle to Middlemore during rush hour, or at any time for that matter, to give birth.
The $44 million spent on a 2.9 kilometre long Auckland cycleway, the eye-watering $51M spent planning a cycling bridge across the Auckland harbour (scrapped in 2021) and the poorly patronised Te Huia Auckland-Hamilton train are Green-promoted transport failures.
“In Auckland $1.3B per year is lost in productivity by virtue of people sitting in traffic. We can make the requisite investment in infrastructure that makes all of our lives better, increases our wellbeing and makes all of us more productive….”
Chloe Swarbrick
Swarbrick resides in cloud cuckoo land if she thinks the Greens’ dedicated bicycle and bus lanes have done anything other than worsen Auckland’s congestion problems.
The Greens on health:
Despite an extra $10B spent on healthcare over the last five years, long hospital emergency wait times, exacerbated by staff shortages, are being blamed for an increase in violence, abuse and harassment in New Zealand hospitals. More than 6000 patients who have been approved for surgery have been waiting more than a year for their operation and 19,000 nurses have left New Zealand for employment overseas.
What Swarbrick and the Greens won’t admit is they spent money very badly.
The Greens are naive, simplistic, misguided and treacherous. Targeting the wealthy is a game they cannot win, nor should they be allowed to try. The stakes are too high.
Seymour was correct when he gestured toward Swarbrick, saying, “This is tall poppy syndrome.”
The question is whether 94% of the population, many below the poverty line, will agree with Swarbrick on election day. How many agree with Seymour’s assessment that a fairer tax system to encourage productivity and save money is lower, flatter taxes and more efficient government services?