By Peter Dunne*
New Zealand’s collective smugness at apparently beating Covid-19 earlier than most took quite a hit when new [imported] cases started to appear at the very time separate questions were arising about the efficacy of current border control and quarantine practices.
Some of the national sense of relief felt when the country moved to Alert Level 1 a couple of weeks ago dissipated suddenly, harming the restoration of confidence that was becoming a critical part of the economic and social recovery needed to restore a sense of the normality so many have been yearning for.
Now, there are fresh challenges to be met. Amongst the most dramatic of these is the likelihood of even stricter measures to control who is coming into the country. Rather than looking forward to a relaxation of border controls and the possible establishment of travel bubbles with other countries or regions, it now appears we are going to have to put up with a much longer period of international isolation than was previously considered reasonable or desirable.
And this brings us hard up against a hitherto unquestioned reality. New Zealand citizens and residents, wherever they may be in the world at present, have an inalienable right to return to the country they call home. Just as we accept the international obligation to support those who hold a New Zealand passport, whatever political or legal strife they may be in and wherever they are, so too do we have an obligation to ensure those citizens and residents who wish to return here are able to do so.
Now that we require all those coming to New Zealand, including citizens and permanent residents, to go through a period of managed isolation or quarantine before being released to their homes, families and friends, a serious issue has arisen regarding the costs of managed isolation and quarantine. As these escalate, and show no signs of reducing any time soon, it is being suggested that the price of managed isolation and quarantine should shift to a user pays basis. Cabinet is to consider the proposition within the next few weeks.
It is time to draw a line in the sand here. Any New Zealand citizen or permanent resident returning to this country and being required to enter a period of managed isolation or quarantine because of government policy on the management of Covid-19 should not be required to pay for the costs of that period of effective detention, under any circumstances. The commitment New Zealand makes to protecting those to whom it accords citizenship or permanent residence cannot be compromised in this way, and it is intolerable that the issue is even being considered. Making New Zealanders pay in such circumstances would be the start of a very slippery slope.
However, given the nature of the current national emergency it would not be unreasonable for the government and authorities to expect there to be full co-operation from all those returning, and for some sanctions to be applicable when that co-operation is not forthcoming. But that is quite different from charging citizens and residents directly for being quarantined upon arrival.
While the rights of citizens and residents are virtually inalienable in these circumstances, the same does not necessarily apply in the case of other people coming here, especially those whose visits are for private reasons, not directly related in some way to New Zealand’s national interests. In such circumstances, it may be quite appropriate to consider some form of payment to help defray the costs of their isolation or quarantine, although even then full cost-recovery is unlikely to be entirely appropriate.
But a measure of reciprocity would need to be considered. Many countries are presently facing similar questions. At the very least, it would be prudent for us to be keeping an eye on what they are contemplating and then making sure any actions we take on this score are at least consistent with those being taken elsewhere. The last thing we would want is for costs to be imposed on a retaliatory basis – if you impose these costs on our people entering New Zealand, then we will do likewise to your people entering our country. That would be a very silly and short-sighted approach on the part of both countries, and one we would be best to avoid.
As with so much of Covid-19 the question of what to do about the costs of managed isolation and quarantine sounds easy. The complexities become more apparent when it comes to actually doing something. It appears we fell into that trap originally regarding managing the border, and now we have to extricate ourselves from what has become a messy, inconsistent and generally unsatisfactory situation. We should learn from that when it comes to the questions of the costs of managed isolation and quarantine and avoid populist solutions likely to bite us very hard a little later on.
*Peter Dunne is the former leader of UnitedFuture, an ex-Labour Party MP, and a former cabinet minister. This article first ran here and is used with permission.
119 Comments
NZ citizens and permanent residents absolutely have the right to return, but should they choose to exercise that right then they must pay for the costs of doing so, just as we always have (flights, airport taxes etc.). It just happens that in the covid19 world there is an additional cost required for travel.
We should make every effort ensure we keep on top of the coronavirus considering the long term medical costs involved if this virus is allowed to run out of control like they have done in places like the US.
Though at some stage, those taking a big risks of traveling out of NZ and especially to high risk countries should take extra insurance to cover their return quarantine isolation costs.
Remember Covid-19 is a very costly disease, that damages far more then just the lungs. It can also wreak havoc on the brain, kidneys, liver, heart, and just about every organ system in the body.
BBC article: Some scientists suspect that Covid-19 causes respiratory failure and death not through damage to the lungs, but the brain – and other symptoms include headaches, strokes and seizures.
https://www.bbc.com/future/article/20200622-the-long-term-effects-of-co…
Yes I read it. The point is that such damage is common to most viruses, and can vary widely in its severity. When I see a study that says harmful neurological damage is found in X% of people who catch the virus, I will freak out for those who are yet to catch it. But unquantified anecdotal evidence is the scientific equivalent of clickbait.
"And this brings us hard up against a hitherto unquestioned reality. New Zealand citizens and residents, wherever they may be in the world at present, have an inalienable right to return to the country they call home."
Disagree. Citizens have the right to return to "their" own country. Residents are just that, resident. i.e. if they are not here, they are not resident.
We need to stop treating Residents as Citizens. We are one of the few, if not the only country where a permanent resident has the benefit of:
a) Their Children born on NZ Soil are automatically granted citizenship (Jus soli). Contradicting our actual citizenship policy of Jus sanguinis.
b) They can vote.
c) They can collect welfare/super.
d) They have access to free healthcare, education, etc...
Maybe someone can enlighten me as to the benefit of transisioning to NZ Citizenship, as far as I see, it is the right to enter Australia.
Interestingly enough, were we to follow the logic than Permanent Residents are allowed in, then by all rights, we should already be open for business with Australia, as by default the second they land they become permanent residents if they declare the intention to stay.
Yes, you are right. User pays is the way forward. I paid tax in Australia, Ireland, and the UK. I should have way more rights there, particularly given the amount of long term beneficeries they have that have never paid a dollar in their lives.
Same here. Those migrant fruit pickers who pay a coupla dollars in tax should definitely have more rights than the five year old kid who is hungry and abused at thome.
But seriously:
You choose to work here knowing the tax implications.
You choose to stay here 30 years and not become a citizen.
You choose to leave NZ when the pandemic hits because you want to go back home.
Grow up and take some responsibility for your own actions.
I find it rather hilarious when Kiwis believe that, because a majority of people here have the same ancestry as people in the UK, US or Australia, we somehow are quite similar when it comes to economy and skilled migration.
High-skilled migrants residing in those countries choose to do so despite fewer rights they enjoy as non-citizens because of high pay, high quality of life and great career prospects. Unfortunately, we don't have the luxury to do that down here; a significant proportion of skilled workers here are those who spend several years working in the UK, Australia etc. but couldn't gain permanency for whatever reason.
Arguably we have a higher quality of life here compared to those countries in many respects.
I enjoy taking my kids to a real sandy beach in 5 minutes rather than getting onto a god-awful train to some crowded, pebbly abomination called a 'beach'.
I also enjoy gardening in my own backyard rather than getting on said god-awful train. again, to travel past the scenic god-awful industrial outskirts of a huge metropolis to tend to my 10 square metre 'allotment'.
Returnees should have to pay for a significant portion of the cost of accommodation food drink and services (plus of course they ABSOLUTELY should pay the full cost of their airfare. More importantly though, it is about time we have a debate about the open ended granting of permanent residency - apparently we are one of the few if not only country that grants P.R. that does not require the holder to return to the country within x period of time (I lost my UK residency by not returning every 2 years). People are simply creating a bolt hole here - come back for your expensive medical treatment and when the world starts to crumble, but otherwise live elsewhere and make no contribution to NZ. How many P.R.s have been granted in the last 10 and 20 years? What is the population of NZ if all come back?
NZ citizens and residents should return but instead of tottaly free quarantine, should be charged at subsidise rate to cover some cost.
Also those travelling now (After the event) and are aware that when they return will be qurantine should be charged more as travelling despite knowing the situation and cost.
For many politican who are out of power or in opposistion, it is easy for them to shout FREE FREE as they too are aware of difficulties and want to corner government / play dirty politics.
I think those returning should be paying a reasonable contribution towards the costs, somewhere in the range of 33-50%. It's a little tricky how to get the money off someone will couldn't afford it, though. Perhaps with the costs waived for anyone who tested positive.
And perhaps on a second or subsequent use of quarantine, you'd have to pay the full costs.
But if you don't agree with that, then I think people should be paying for the full costs of food and drink at the least. Consider if you were coming to NZ, maybe to stay in your own house or with friends or relatives, then being forced to pay for accommodation in isolation is a tad unfair. But you'd have to be paying for food regardless, so you should be paying for the isolation food - perhaps it's not food you'd normally choose for yourself, but it is nevertheless a cost that you'd be otherwise paying.
A fair point. Perhaps once antibody tests are more available and more scientific data is available to quantify what level of antibodies ensures immunity and for how long, then people coming going in to isolation who know or suspect they have had the virus, can apply for antibody testing and if it meets the required threshold, be let out of it.
But that scientific evidence is not yet available to safely make those determinations.
There was ample opportunity to return to New Zealand before the imposition of quarantine measures. Unless there is an emergency reason to leave the country (e.g. death in immediate family elsewhere in the world) I think people should be covering the costs associated with quarantine.
On a related note, I think we should be opening up the country for high end tourism. Managed isolation would be in one of the high end lodges, e.g. Huka Lodge or similar. But make them pass a Covid test before even entering the high end isolation.
And of course charge like a wounded bull. At least $2000USD/night. Still peanuts to the truly rich, and a good way of injecting money into the country.
Or a handful of cruise liners - ought to be cheap to hire - arrive in NZ - straight to a cruise liner and even visit a few unihabited locations. Good for our unemployed hospitality workers. Of course it would require some careful segregation and social distancing while on board.
Covid costs. Free lunches never are, never were.
Unbridled "free"entitlement without personal nor government accountability is lunch theft.
If I had quarantine on return, it would not be in such expensive hotels. Cumulatively unaffordable..........
"Any New Zealand citizen or permanent resident returning to this country and being required to enter a period of managed isolation or quarantine because of government policy on the management of Covid-19 should not be required to pay for the costs "
Out of touch. All travel is elective, people choose to leave, people choose to come back. Dunnes "slippery slope" argument seems to be slanted one way, I suggest it's both. Airlines are charging more than normal for flights, should we be subsidising those too? How about we just pay everyone's flight? You also can't get insurance, should the NZ government be providing insurance too?
We should absolutely be charging, I think for the full cost - 4k per person. People had 2 months to come back when flights were relatively normal from Jan-Feb when it looked like it was blowing up. They chose not to then, pay for it now. Add onto flight costs.
Dunne's proposition is that some bio security protection costs in respect of incoming travellers and their luggage should be payable in the form of transit taxes and direct levies but selected others not. C19 quarantine costs should apparently for unexplained reasons (other than it is supposedly a 'slippery slope' to do so) be treated differently. 'Returning' NZrs have no special entitlement to avoid paying transit costs incurred by their decision to come back to the country that many of them turned their backs on decades ago.
If COVID does become a proper scary epidemic where lots of people are genuinely fearful and it is spreading rapidly, and if NZ can keep its COVID free status, a lot of NZ citizens/residents could return. And a lot of them will come to Auckland. It could actually give a massive boost to the economy, but that of course would encourage more to return if the rest of the world is struggling. but god knows where we would house them all. Imagine if say 3 million people returned, half of them to Auckland! The government now has even more reason to build houses. It may not happen, but I reckon some kind of population increase is almost guaranteed unless COVID dies off or a vaccine is found.
I think someone will need to build the houses. What solution do you propose? The people returning will probably have money, so it’s the existing poorer nzers that will suffer.
I don’t think the government should be paying any expenses. If the expenses were to put people off coming back that sounds like a great thing.
NZ is now witnessing the benefit of dual-citizenship, plus an NZ Passport. How many of these "returnees" originated elsewhere, came to NZ on a Residency Visa, rolled it over after 2 years, then turned it into a Permanent Residency Visa, then obtained Citizenship, then left, to go back to where they came from, or off to Australia. It is called Passport Shopping
Many of the longer term expats will own houses but what's the bet that will not be apparent be in the stream of media hard luck stories about families losing their jobs overseas and arriving back here penniless. Among them will of course be genuine cases of deprivation caused by circumstances beyond the control of genuine grafters and our welfare system should be immediately available to support them. But how many of us know of people who gave NZ the bird decades ago, have paid nothing in taxes here and have property in exotic places tucked safely away behind trusts.
In fairness, we only had affordable housing for today's older generations because in big part of government efforts. So they've received enough welfare they should not complain.
That said, I don't see why we should sponsor hotel stays. Perhaps a flat rate cost would be ideal (probably not fair to charge someone a high price if you force them to stay in a 5 star hotel vs. a 3 star).
Many of whom for some strange reason don't want to go back to C19 infected shitholeseville. These people are going to have to be levered out of the country. Cinders will have to quickly work on her understanding of 'fairer and kinder', sometimes those concepts also require you to be tough.
Why would young people return to NZ? Covid is not a threat to them, and they would struggle to get a job on their return, and even if they did it wouldnt be highly paid. Young people are far better off staying overseas so long as they still have, or can get employment. They would also be free to travel to other countries, unlike being stuck in the New North Korea aka NZ. The only people I foresee wanting to return to NZ are the elderly, who won't contribute anything productive to the NZ economy but simply be another taxpayer drain on it in terms of claiming the pension and utilising healthcare.
With the economic situation we should be making it as difficult as possible for people to come into NZ whether they are citizens or residents. If they have paid tax in the last 12 months then the quarantine is subsidised. If they haven’t it should be a full charge
Election are near so government too will be in favour of FREE.
Infact being election, government will announce another bonanza / Freebies for all to win votes despite many doing well insteadof concentrating now only on business/regions worst hit by border closures and travel resfriction and are forced to go in hibernation.
Government has got an opportunity of excuse under coronavirus to print and distribute and are and will grab it by both hands.
Look at Ireland who would have thought
https://www.irishtimes.com/news/politics/miche%C3%A1l-martin-elected-ta…
Well somebody somewhere has to pay for this quarantine. With so many permanent residents and so many taxpayers economically stressed by the worldwide effect of the pandemic it would be fair to tax those who despite being fairly wealthy but receiving generaous govt handouts. So cut ex-MPs govt pensions; if a retired MP feels hard done by they can always earn income by paid articles.
"Returning New Zealand citizens and permanent residents, do have a right to re-enter NZ"
While the border is closed to non-New Zealanders, there are special exemptions.
Those exemptions include:-
People can apply to travel here on humanitarian grounds OR
If they are the partner OR they are the child of a NZ citizen OR an NZ RESIDENT.
Employers can apply to bring in critical workers.
Employers importing "critical" workers should pay full costs
Kiwis in NZ want this, on the whole. Kiwis overseas, I presume, do not. But don't forget that the latter is very large and a major voting bloc. So my prediction is the govt will make noises about this, and get the exemptions to pay their way, but quarantine will continue to be free to citizen users at least until the election.
Easy answer.
Just give all returnees; however, they qualify for entry, $5,000 at the border as a 'one-off' payment to be applied against any quarantine costs. If they leave again, they don't get it next time around.
Oh, and stimulate the domestic economy by giving every New Zealand Citizen and Resident who is already here that same $5,000 - fairs, fair, after all.
Just add the cost to the Government Bill (the Government being a body totally divorced from the populace, of course) and have them pass-the-parcel between other Statutory Bodies. I mean, it's not as if the debt ever has to be repaid or anything, and we'll still be able to say "But our Debt/GDP is still way lower than everyone else's", so what's the problem?
How absolutely disappointing to see the underlying thread running through the posts here. CHARGE CHARGE GRRR GRRR get our pound of flesh!!! All of the returning NZ citizens are someone's family or partners. These people are KIWI's and deserve NZ's support. Talk of charging them for a Govt mandated isolation is reprehensible. As for PR's they have paid their taxes previously, often with little or no claim for handouts. These returnees are not making the decision to return lightly and often have little or no choice. Try putting yourselves in their shoes.
They are NZ citizens by virtue of birth which entitles them to certain legal rights, but this does not include an inalienable right to have entry costs waived. Emotive arguments can be made for waiving border transit costs for multiple categories of people but that is a real, not Dunne hyperbolic, slippery slope.
That's true huh! Actually flights are now dramatically more expensive, so we should pay for that too, after all these are NZ citizens that are someone's family or partners. In fact, once they arrive they will be faced with a housing shortage, so we should also build a house for each of them, because they are NZ citizens and someone's family or partner. Also they will need some startup costs for their house etc, so how about we give each of them a 10k grant, because after all, they are NZ citizens and someone's family or partner. Experiencing the slippery slope yet?
With rights and freedoms come responsibilities. If people want the freedom to live overseas for as long as they wish and pay (or not pay tax) to another country, but still demand the right to return to NZ whenever they wish, we should be demanding that they pay some form of tax for that freedom while they are overseas. Why should those tax payers who remain in NZ pick up the tag. It is not unusual for these NZer's living overseas to
- Send their kids back to NZ to be educated at our expense
- Come back for medical treatment at our expense
- Come back to retire at our expense
- Come back when they loose their jobs and receive a benefit at our expense
- Come back home when any thing falls apart for them overseas and our tax payers will pick up the pieces
No this is not fair on the people who commit and remain in NZ, contribute to the country and pay their taxes.
What about the people who leave their families in NZ while they work overseas. Often these people pay little or no tax where they are working, either as that is the tax structure in that country or a special arrangement for foreign workers. They also pay no tax in NZ while their families remain behind using all the services. These might be born here Kiwis working on foreign projects or quite commonly Asian families parked in NZ while hubby works back in Asia.
Anybody claiming rights and freedoms in NZ should be required to contribute to the costs of these rights and pay tax here also.
While we are about it, I hope that the NZ boarder officials are capturing the free loaders who thought that they could skip the country and ignore their student loans. (prison)
Yep. Would be interesting to analyse the travel patterns of returnees to identify the freeloading cohort you outline. Once we admit to ourselves that our quarantine capacity is limited and inbound traffic has to be rationed, genuine travellers caught out should receive first priority followed by calculating periods of time lived overseas since residency approved. The longer you've been out of the country in total the lower your priority for getting a ticket to NZ.
"Anybody claiming rights and freedoms in NZ should be required to contribute to the costs of these rights" Here's a thought.. It's your right and you have the freedom to play sport. Should you be compelled to pay for the full costs of medical treatment post an injury?? ACC's costs ballooned when they started meeting the costs of sporting injuries and the resultant lost time off work. There are many instances of people (the taxpayer) paying for services they will never use, Local body rates springs to mind as an example. It's just life so "suck it up buttercup"
You miss the point bud, people are advocating returnees pay the costs individually. I'm saying nonprofessional playing sports people should also pay the costs individually. For a serious sporting injury the levies paid by most people wouldn't come close to covering the costs. Yes the levies are a nationalised insurance policy but so too is general taxation a type of insurance policy or maybe an endowment policy. Most NZ expats and PRs will have paid their taxes in some form at some time.
We literally pay ACC in this country for what you describe, everyone with a job, within our borders. Therefore it IS a user pays arrangement because at some point in your life, you will likely need it, particularly as you age. Those overseas are NOT paying ACC, that's the important piece you are missing.
You might think ACCs has an inability to pay, but I suggest you check ACC's fund, which sits at over $43b.
I think that the real point is that ACC is wherever possible a user pay insurance scheme. OK MY sports injuries are paid for by MY taxes. It is just that the cake is cut up a bit differently in the case of personal injuries. The important thing is that the cost of injuries within NZ uncured by people in NZ are paid for the people living in NZ. What you want is more like injuries incurred by NZr's overseas should be paid for by ACC. I don't think that is the case.
Here's how it works.
My partner is from WA, an AU citizen, the daughter of an Australian-Italian immigrant. On arrival here in NZ she obtained a Residency Visa. Unwittingly she flew to Melbourne for 8 days to attend a classical music concert. Unknown to her, the minute she left, her Residency Visa automatically lapsed and had to be renewed on her return. She now has Permanent Residency and will probably apply for citizenship. Her daughter, my step-daughter, is married to an American and living in California. California where Covid is exploding. We are encouraging them to get out and come to NZ. We can get both of them in as the children of a permanent resident. Once they are in they can then bring in his parents. Once they are in the parents can then bring in his sister and her partner.. Once they are in they can bring out his parents ...... its never ending
Haha, lot of assumptions there. I'm picking your partner had a Visitors Visa or a temporary Residents visa. Permanent Residency Visas don't expire after 8 days.. that's why they're called Permanent. Her daughter MAY get through on the "child of a Permanent Resident" proviso, her partner and his parents might be much more problematic. You also assume the parents will be granted Permanent status which is far from guaranteed given the recent tightening last year on that type of "gravytrain" However I'm not an Immigration professional and with Lees-Galloway in charge anything is possible.
Read it again. On arrival, as an Australian Citizen she obtained a "Residency Visa" automatically, as of right, which lapsed the minute she left . Don't bother challenging me. That's what happened. All it did was delay the PR application. "Residence Visa" have travel conditions attached to them. PR visas dont. Holders can travel in and out of NZ at will
True. Killed in an arbitrary decision by INZ mid-2016 - suddenly all family reunion visas stopped and then recently they were reopened in another arbitrary decision (no parliamentry debate) where the obstacle became residents annual income - from memory one parent > $110,000pa and two parents double that. Unlike canabis and euthanasia there is never a public debate about immigration. Agreed that restrictions were desperately long overdue but it would be good to have them discussed.
Hard to know how old you are, but assuming these children are under 50 and don’t have any severe medical conditions then there is very little chance that Covid will cause them much harm. It’s possible that the increased risk of skin cancer and road fatality in NZ is actually higher than the Covid risk in the US.
I'm going to ask what some here might consider a naive question. There appears to be various shades of 'make them pay' positions - but why is user pays so self-apparently fair?
A lot of people on this forum make various claims about their rights to increase their wealth either through share markets or property prices. Any additional labour involved does not equate to the same amount of labour hours required to generate proportional wealth. To some then, this form of wealth creation is manifestly unfair - the 'users' of this increased wealth are in no way 'paying' for it.
One thing Peter Dunne also makes clear is this isn't just about some petty accountancy at the border as if NZ exists in its own little bubble cut off from the world. How we treat others has consequences treat us. And that includes tax-paying residents/ migrants, who have for years been enticed here to provide the skills and jobs we either don't have or want to do. It is shortsighted to suggest that now Kiwis have a hard border and need jobs, new arrivals now have to pay their own quanratine costs. We still need those skills and there are always jobs Kiwis don't want to do - usually because the pay and/or conditions make it uneconomic to do so.
Well said JP. You just missed one small salient point.... many (roughly 200K or so) are just too damn bone idle regardless of the pay. Often the people who complain about wealth creation via means other than labour fail to correlate the risk factor with the wealth creation factor. "Working for the man" carries little risk hence minimal reward (comparatively) investing via equities or real estate = more risk/more return
I've heard this argument and similar ones like it most of my life. What's almost never acknowledged are the structural inequities and, if I'm absolutely honest about it, a fair degree of underlying racism or cultural assumptions about what being 'productive' is.
And am I lazy because I don't have the wherewithal to understand the markets or can't afford to get on the property ladder?
Actually JP my 'bone idle' comment was tilted at your final bit about the economics (or lack thereof) regarding jobs not investments. The simple irrefutable fact of life is that there will always be some who have and some who have not. This fact holds true whether you live in a capitalist or communist society. Right or wrong.. I don't know. It just IS
From a pragmatic perspective I don't dispute that there are inequities in life. But it's when those inequities are so extreme that I have a problem. There will always be those who attempt to evade their taxes or rort the dole - this too is part of life. What I've seen over the last 30 years is an increased polarisation of wealth disparities - this isn't 'life' but a gross imbalance between asset holders and everyone else.
bw, I have to confess I've been perplexed by many of your comments. It's very clear that you have a vast knowledge and as we start to chart these perpetual debt seas, I'd be interesting in knowing whether or not you think a great 'reset' will actually happen or be forever deferred? Or something else?
I don't subscribe to a great reset if that is a return to some historical 'norm'. Something new will come along - it always does. It's just a matter of what it is and whether we are each ready for it.
Right now? Flexibility and options might come in mighty handy in the future.
I wrote on here some time back; when all this lot got going (December?) "What we've had for the last 70 years is over". I still hold that view.
(Example: late 1983, the A$ was under huge pressure to devalue; it had done before to 'solve' crushing trade imbalances and the market was convinced it would devalue again. Everyone (except I'd like to think me!) was short to the gills. What happened? The A$ was floated, and the scramble for players to 'square up' before trading opened on a Monday morning was one of my most profitable Sundays. Like as not, something similar is in the offing again. Perhaps reregualtion? We'll see.)
Thanks for your thoughts. And at risk of asking too much, what might re-regulation look like? A return to a standard? Something else?
Also, what do you mean by flexibility and options? Recently, many have interpreted similar comments as shares...
I also appreciate crystal ball gazing is notoriously tricky...
For what it's worth, I'll suggest it depends on how much of the 'private' market the public balance sheet assumes.
Once it's all Public (Ultra Japan if you like) then re-regulation has occurred by stealth. Perhaps Marx's writings will prove true after all!
Globalisation has probably run its course, so to try to answer your question: all countries are likely to put up whatever appropriate barriers they can to suit their specific needs. For us? We'll have to join a Bloc.
Beyond that? Uh.oh...that ball's gone a bit cloudy!
Yes I've been thinking about a return to protectionism, but nationalisation.. there's an argument that suggests such moves haven't worked so well in places like Zimbabwe because of external destabilisation and resource structures that promote primary / extractive monopolies effectively taking wealth off-shore.
If as you suggest, such globalisation strategies have run their course, then bloc collectivism does seem likely.. which raises a much older question regarding the independence of sovereign states. NZ is in a rather unique position geographically - perhaps like Switzerland we should become bankers?! Speculation on my part...
The risk/return argument.. what other exchange in our society allows for many more times the value of labour to be exchanged for risk - in perpertuity/ until exchanged?
It seems to me that people shout 'equality' and 'fair' without considering 'equity' or.. fair for all?
JP. Nope definitely not fair for all but most attempts to level that playing field have ended in tears. Adam Smiths maxim of enlightened self interest remains the least worst system for delivering societal wellbeing despite inherent inequality in its outcomes. Risk and knowledge must be rewarded more than labour if enterprise is to survive and prosper.
This is the same Adam Smith who argued against slavery on the grounds that it's cheaper to use free men?
I can certainly see how enlightened self interest is attractive to those who promote individual responsibility, but it no way addresses the fundamental inequities of groups, nor does it consider collectivism particularly valid. Why must wealth belong only to 'enlightened' individuals (corporate or otherwise)? And how relevant is 18th century eurocentric thinking in 21st century Aotearoa-New Zealand?
JP. Mr Smith was right on the money. (excuse the pun) Free men are/were cheaper to use because:
a) they were more productive due to them actually wanting to work and doing a better job
b) they housed and fed themselves at their cost not his
c) they didn't need the same level of oversight by costly guards
There were no doubt other reasons included in his calculations.
MM is correct when he says risk and knowledge should be rewarded otherwise why bother. If we were all employees who would we work for??.. the State? That hasn't gone well anywhere in the world it's been tried - especially not for the workers! Mao's China, Kim's Korea and Stalin's Russia spring to mind
Hook. Had Smith advocated that slaves delivered a better economic outcome, such a view in early mid 18th century would not have been considered especially controversial. It wasn't until 1807 that the phasing out of slave owning began. Abolitionists were starting to become active during Smiths heyday but slavery was not completely abolished in the UK until 1833. JP obliquely questions Smiths morality simply because he carried out a cost benefit analysis of slave vs freeman labour but in doing so JP is guilty of presentism - judging yesteryear behaviour by the moral standards of today. The tiresome arguments over the appropriateness of statues are often distorted by presentism, with examples including the ludicrous reaction that Te Rauparaha should not be depicted in statuary because he was by modern standards a plundering, raping, slave owning cannibal; behaviours that for the time would have been considered entirely acceptable and expected.
MM. The charge of presentism ignores one crucial fact - the slaves themselves did not subscribe to the values of the time. Also, I was careful to identify who had those values - slave owners! Abolitionists came from all stripes and although I agree with you that it is not possible to clearly understand the mores of yesteryear through the lens of today, I can understand political pragmatism. Smith's views held sway not because they were morally right as others of the time argued, but because his main opponents argued purely from economic rationalism. And as I've pointed out before, neither humans or markets are entirely rational.
JP. I'm a private equity investor. I sweat the risk, sometimes take the losses. On others I cream it. Would I invest my money if the potential returns were only a modest margin over what I can ( and do) earn on direct labour ? - not a chance. It is only the significant yield gap between the two that keeps me investing my time, effort and money. Would those businesses and jobs exist without venture capital - nah.
Well said MM. I think you and I are in the same boat. I'm also a private (retail) investor and a self employed contractor. I work to be able to invest surplus funds. No yield, why bother?... may as well just spend it, just like the majority of people who lament the prices of housing. It's hard to save a deposit when you have to buy the latest IPhone and stream the Netflix blockbusters. Funny how the people who told me "ya gotta have a life" when I was paying 3 mortgages now say "oh it's alright for you" now I'm only working a couple of days a week and my partner stays at home with her feet up. ( gotta work on that last bit.. lol)
I'm an educationalist and I see inequity everyday. Regarding Adam Smith - his views were shaped by Newton's ideas that the universe operates like a giant machine i.e. the market is subject to laws that are universal. But alien to both these enlightenment thinkers are ideas that consider the irrationality of humans, the agency of nonhumans e.g. the market itself, and that humans can be anything other than individualistic and selfish (perhaps true for enlightenment era wealthy men, less so for the Tolpuddle martyrs or Pasifica).
Regarding the reward for risk taken argument. This is not an 'either/or' thing - why is it when criticism is made of inequitable structures that responses seem to fall into 'well what's the alternative? Would your prefer (historically specific) communism etc? But when is enough, actually enough?
I think what a lot of folks on this forum forget is that unless we have some reform, those who have the most inequitable existence will act in a populist manner.
Simply writing off those people who can't afford a house because they have Netflix or whatever ignores the fundamental reasons why people choose to have those consumer items. Firstly, we live in an era where commodification of desire is the most heavily marketed than at any other time, and secondly, when such goals like home ownership feels unachievable then commodities become substitutes.
So you're both investors. I'm not anti-investment - far from it - but just because you've done well out of life doesn't mean that everybody has the same opportunities, education, or ability. I fail to see how insisting on selfish individualism achieves better outcomes for everybody.
I agree that not everyone has the same opportunity. I grew up in a state house, hungry poor - I used to eat the other kids leftover lunches, had chilblains all winter from leaky shoes and was cold much of the time. Not a poor me bleat at all; just to explain that I know poverty. Intimately. It's why I'm a believer in redistribution, state support for those who genuinely can't and governments moderating the reach of corporates. But I also strongly believe in the power of individual aspiration. It is a wonder of the world, delivering so much to society. But too often this aspiration is automatically conflated with ostentatious displays of wealth, blatant greed and your 'selfish individualism' when for many owners of capital such behaviour and imagery is anathema.
Interesting comments MM. I can appreciate how your journey in life has shaped your thinking. I too agree with the power of individual agency, but I question several aspects of it (not saying this of you, just in general). Individualism is culturally specific, and doesn't account for cultural perspectives that are collectivist in nature. Also, the story of self-made wealth often neglects to tell the bigger picture - that for every 'success' there are many, many more who haven't. To place the burden of such inequities upon the shoulders of those who have the least is manifestly unjust as it doesn't acknowledge the structural inequities of systems and opportunities.
So I'm not conflating my criticism of investment vs labour with ostentatious displays of wealth, I'm trying to address the mechanisms themselves. And when those historically informed mechanisms have produced such huge wealth disparities - then it's time to make changes to them, or risk a populist backlash which may ironically result in new disparities.
You go overseas for big money because the wages here are so low and your student debt is so high. You return here will skills that our current labour market desperately needs, and ideas from outside our parochial echo chamber. You've got the international connections we need for diversification...
Guess it all depends on your perspective..
Actually only citizens have an inalienable right to return home. Everyone else is merely here on a visa, which can be revoked at any time. Japan is only allowing entry to citizens, and those with residency visas have had to stay overseas. It bears remembering that permanent residents are citizens of another country, and its that country they should look to in shouldering the burden of providing for them. Residency in NZ is a priviledge, not a right.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.