Kerre Woodham: The country we want costs more than we're willing to pay

The topic of tax has been in the news recently and it will stay in the news. It’s set to become an election issue with one of the few policies that Labour's actually committed to being a Capital Gains Tax – possibly more taxation/revenue measures. Watch the politicians dance on the head of a pin in the lead up to the election. The Fitch report, which looks at New Zealand's ability to pay its bills, said that a Labour Party coalition with the Greens and Te Pāti Māori would emphasise revenue measures as a means of making ends meet. The authors of the report said the National Party-led coalition would focus on expenditure constraint. There's been all sorts of argy bargy and we can go into that a little bit later, but already, even when we start talking about tax and about Labour introducing a Capital Gains Tax and more tax, it's said like it's a bad thing. Like it's a dreadful thing to contemplate more tax. 

And yet, how else are we going to pay for the sort of country that we want, that we used to have, that we hear mythical stories about around the fireside from our forebears? Liam Dann has a column in the New Zealand Herald, Inside Economics, and in the column this morning, a correspondent writes that on a tax per capita basis, New Zealand is running materially behind Australia – roughly $13.6 billion annually. Now obviously, Aussies earn more, so their governments are going to take more tax. If you earn more, there's more to take on a percentage basis. But the correspondent writes that even closing a fraction of the tax would meaningfully shift the balance of our books into a positive light and it would change the way we talk about infrastructure and services. Even a tiny bit of that $13.6 billion would make a huge difference.  

The correspondent is a blogger and, in his blog, he also writes that one of the reasons why Aussies are prepared to pay more in tax is that they have accepted a basic truth: the country they want costs more to run. And I don't know that we are willing to accept that basic truth. We are still living like some crusty old goat on our former glory. Like the Bruce Springsteen song of 'Glory Days'. We used to be somebody. We used to have a great country. We used to have a country where Jack was as good as his master, where there were no huge extremes between wealth and poverty, where if you worked reasonably hard, if you lived a good life, if you obeyed the rules, you had a great life. You could be assured of a future; your children could be assured of a future. And we're still living on the glory days. 

Now obviously not everything that has happened in New Zealand is as a result of what New Zealand has done. We're a global economy now and the winds of change and fortune affect us without our politicians having to do anything at all. But over the years, successive governments have failed to invest in basic infrastructure, and the chickens are coming home to roost – Wellington's Moa Point is a metaphor for the entire country. Our politicians are to blame for a lack of political courage and a lack of political foresight, and we as voters are to blame because as soon as anybody mentions tax, we throw up our aprons and run for the hills. Never! I work hard for my money! I've paid my way, I pay more than enough, have a look at those bludging people on the dole, sort them out first! You can make all the excuses in the world, but are we willing to accept a basic truth that the country we want costs more to run than we're willing to pay. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerry Wood and Morning's podcast from
News Talks.

Speaker 2 (00:10):
He'd be The topic of tax has been in the
news recently and it will stay in the news, set
to become an election issue, with one of the few
policies that Labour's actually committed to being a capital gains tax,
possibly more taxations slash revenue measure. Watch the politicians dance

(00:31):
on the head of a pen as they in the
lead up to the election. The Fitch Report, which looks
at New Zealand's ability to pay its bills, said that
a Labor Party coalition with the Greens and to Party
Maori would emphasize revenue measures as a means of making

(00:54):
ends meet. The authors of the report said the National
Party lad coalition would focus on expenditure construct So there's
been all sorts of argie bargie, and we can go
onto that a little bit later. Already, even when we
start talking about tax and about Labor introducing a capital
gains tax and more tax, it said it like it's

(01:18):
a bad thing, like it's a dreadful thing to contemplate
more tax. And yet how ELSEO are we going to
pay for this sort of country that we want that
we used to have. That we hear mythical stories around
the fireside that used to be from our forebears. There

(01:43):
was a column in Liam Dan has a column in
the New Zealand Herald inside Economics. It's paywalls and not
everybody can see it. But in the column this morning,
a correspondent writes that on a tax per capita basis,
New Zealand is running materially behind Australia roughly what thirteen
points six billion dollars annually. Now. Obviously ossies earn more,

(02:11):
so their governments are going to take more tax. If
you earn more, there's more to take on a percentage basis.
But the correspondent writes that even closing a fraction of
the tax would meaningfully shift the balance of our books
into a positive light, and it would change the way

(02:33):
we talk about infrastructure and services. Even a tidy bit
of that thirteen point six billion would make a huge difference.
The correspondent as a blogger, and in his blog he
also writes that the reason one of the reasons why
OSSI's are prepared to pay more in tax is that

(02:54):
they have accepted a basic truth. The country they want
costs more to run when I don't know that we
are willing to accept that basic truth. We are still
living like some crusty old goat on our former glory

(03:16):
you know, like the Bruce Springsteen song of glory days.
We used to be somebody. We used to have a
great country. We used to have a country where Jack
was as good as his master, where there were no
huge extremes between wealth and poverty, Where if you worked

(03:39):
reasonably hard, if you lived a good life, if you
obeyed the rules, you had a great life. You could
be assured of a future, your children could be assured
of a future. And we're still living on the glory
days now. Obviously not everything that has happened in New
Zealand is as a result of what New Zealand has

(04:00):
done and a global we're a global economy now and
the winds of change and fortune affect us without our
politicians having to do anything at all. But over the years,
successive governments have failed to invest in basic infrastructure, and

(04:23):
the chickens are coming home to roost. I mean, Wellington's
more point is a metaphor for the entire country, and
our politicians are a blame for a lack of political
courage and a lack of political foresight. And we as
voters are to blame because as soon as anybody mentions tax,
we throw up our aprons and run for the hills.

(04:45):
Never I work hard for my money, I've paid my way,
I pay more than enough. Have a look at those
bloodging people on that ole. Sort them out first. You
can make all the excuses in the world, but are
we willing to accept a basic truth that the country
we want costs more to run than we're willing.

Speaker 1 (05:08):
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