Ten ways to beat our snowballing debt
Fran O’Sullivan wrote a controversial column in this week’s Sunday Herald. It’s attracted lots of heartfelt support from the economically literate and some equally enthusiastic vitriol from the usual suspects.
You can read the full text here. 90% of what she writes is gospel truth, some of it is a bit outrageous. I’m wondering that she may be being a wee bit provocative for effect.
I have a couple of caveats, but if we adopted her recommendations tomorrow we would be well on the way to turning this country around. We wouldn’t fix everything but it would be a good start for setting up a climate for growth and its resultant prosperity.
Fran’s 10 suggestions in a nutshell
A précis follows, but her original article is a must-read and if you have a half-hour to spare also read the article’s reader comments. Very revealing. Some people get it. Some don’t. Some are just plain “What about me?” selfish and short-sighted. Not unlike our politicians.
1. Mastermind a real tax switch
Increased GST to 20%. 20% tax rate for small businesses. Encourages growth and employment. Introduce a high-earner surtax at $250,000. Promote the tax regime overseas and incentivise exporters.
Amen to that. However, she also suggests that it would be easy to scrap GST on essential food items. I’m absolutely against that, as I’ve explained here. I’m open-minded and I’d like to hear her arguments for it (or yours). Maybe she thinks it would be worth the cost in order to shut the uninformed up.
2. Revamp super
Means-test New Zealand Superannuation and move the qualifying age for the able-bodied to 67 by 2017. Axe KiwiSaver incentives.
Right on Fran.
3. Slash most public sector pay rates by at least 10%
Handle with care. The bureaucrats, overpaid senior staff and the like yes. But not the lower paid and certainly not health workers, police, teachers and servicemen. Australia would be the beneficiary.
Remember your war on waste and inefficiency Mr Key?
4. Axe the ministry of economic development
5. Introduce a capital gains tax and/or land tax.
It is quite simply a nonsense to continue to run a system which protects the asset-rich .…. put an end to the “family trusts” rort that enables well-advised citizens to “live off the state” while many less fortunate pay too much of their fair share.
6. Means test government grants for creative industries
…… it is absurd that NZ on Air stumped up $50,000 for Annabel Fay (daughter of multi-millionaire Sir Michael Fay) to make an album ….. Axe all top-up student funding for topics such as “gender studies” and the like ….. produce more hard-headed graduates who are not risk-averse and don’t expect New Zealand to owe them a living.
7. Increases in taxes
Savagely increase excise taxes for alcohol and tobacco. Particularly, the obnoxious “RTD” products that are hurting too many teenagers who are sucked in by peer pressure and liquor advertising.
Definitely for tobacco. I’m not 100% convinced on alcohol. I’m not sure that it would do any good and it would certainly cause some harm. The RTD issue needs addressing but it’s alcohol related law that needs changing and enforcing. I don’t think you’re going to price alcohol abusers off their habit. It would just mean less food on the table for their kids.
8. Tell Len Brown to get the Auckland council to fund its own rail investments
9. Bring in a banking profits levy
….. Many New Zealanders think bankers are bastards…..with the Australian banks about to do rather nicely indeed out of their New Zealand customers it might be time to get more sportive. Step-up prudential supervision so banks can’t fund another era of excess.
10. Roll back Labour’s election bribes
….. already closed some of the Working for Families loopholes …… we can’t afford this scheme in its entirety. Nor can we afford interest-free student loans.
Bonus. And just one more:
Rebuild the Earthquake Fund. Let’s face it, Christchurch wasn’t even on an active faultline.
I’ve looked at the quake problem here. We haven’t appreciated the inevitable catastrophic costs to come.
Lang may yer lum reek Fran.