My guest this week is Dame Diana Crossan. Diana was the first manager of the Equal Opportunities Unit at the State Services Commission but is perhaps best known for her ten-year stint as Retirement Commissioner between 2003 and 2013, a period which saw the launch of the New Zealand Superannuation Fund and KiwiSaver.
During her time as Retirement Commissioner, she also helped develop a national strategy for financial literacy that incorporated practical strategies such as the excellent sorted.org website, multimedia campaigns and education in schools.
More recently, Diana was the chief executive of the Wellington Free Ambulance and is presently chair of the Lifetime Retirement Income and several charities. She is also one of the initial 97 signatories of last month's Open Letter on Tax.
Ki Ora Diana, welcome to the podcast. Thank you for joining us.
Diana Crossan
Ki Ora Terry, thank you for having me.
TB
Oh, not at all. Enormous privilege and thank you. I'm really fascinated. You've got an incredibly distinguished career there. But I'm most fascinated by your time as Retirement Commissioner. Because when I was researching/writing Tax and Fairness and looking at the superannuation savings regime, as it was in 2002, prior to when you took over, it was pretty much ground zero. There was practically little or no incentives to save.
And we know that the numbers of superannuation schemes had basically collapsed from where the numbers that prior to the removal of insane tax incentives in 1988, they had fallen quite dramatically, to I think barely 13% of the workforce was covered about 2002.
So, you come onto the scene, you’re appointed Retirement Commissioner It must have been quite daunting. What were your thoughts when you volunteered for that?
Diana Crossan
You're right, it was a bit overwhelming initially. And I was the second Retirement Commissioner, the first one was Colin Blair, who was a tax specialist. So, when the government set up the retirement commission, they thought that they were helping the nation. Hopefully they were because we had a superannuation, or a retirement savings system that was very different from the rest of the world, or the OECD world really.
We had New Zealand super, which is of course brilliant, and should be protected and we had private saving. The Retirement Commissioner was supposed to be there to help people understand that they needed to save for their own retirement. That was why it was set up.
And what we discovered - the Retirement Commission was just on to this when I arrived - was that the advertisements and the encouragement and all of the messages they were sending out to people were getting to people who already were looking for it. It was preaching to the converted, really.
And the average age of people they were talking to at that point was about 45 to 50, and the Retirement Commission recognised that that wasn't going to work. That starting to save at that late stage in your career didn't work. So that's how it came about. The recognition that maybe in the 2000s at the beginning of this century, we had to do something very different.
So, they stopped all paper brochures and television interviews and things that focussed on brochures. And the team introduced Sorted https://sorted.org.nz/ and I came in just at that time. And so the focus on financial literacy and on getting to people earlier was the most important thing I picked up when I first arrived.
TB
And that's been a huge transformation there, I take.
Diana Crossan
Yes, absolutely. We started off by thinking, how do we do this? You know, this is new. I thought it was very brave of the group just before I arrived. You talked about the national strategy for Financial Literacy.
We were one of the first countries to do that because we recognised that if the government was (and we kept talking to government about other things as well) going to stick with this policy of having a New Zealand super, which was very basic as we know, somewhere between 30 and 40% of New Zealand population live on New Zealand super alone. So first of all, it was that and then it was up to you to say we needed to find ways of talking to people about what to save, how to save, how safe is it. All of the issues in our trustworthy financial services sector, we needed to talk about that. We need to talk about government policy that didn't get in the way.
So until KiwiSaver came along, we were different from the rest of the world. The countries that we tend to look up to like Australia, Canada, US - well, the US is unusual - the UK and parts of Europe because we didn't have the middle pillar which is about supported saving by government.
TB
Yes, some countries do that by means of very generous tax incentives which were abolished under the Roger Douglas in late 1988. So, you were closely involved in the development of KiwiSaver?
Diana Crossan
Yes, Michael Cullen approached me to join the team. So, it was an interesting group of people from a variety of government organisations and his statement was “We are going to have a savings scheme. I don’t want this group to come back and say it's not a good idea because we're going to have it while I'm in government. What I do want you to do is tell me how to develop that.”
And just before I came into the Retirement Commission role, I had been funded by a businessman and business family in Auckland who asked me to look at how we could help New Zealanders go to go to university and polytechnic, tertiary education. There were high fees and high interest rates for university students at that time.
So, we had done four years of work about a children's savings scheme. Therefore, when I was asked to join the KiwiSaver group by Michael Cullen, I was able to take all that work to that. So that included the kick start and included thinking about other ways of doing things.
TB
Yes, it's been enormously successful. Even the FMA Financial Market Authority's June 2022 report now says that we have $90 billion in KiwiSaver as of 30th June 2022 and over 3.17 million members. And that's not even 20 years. It's 15 years max. It's been transformative.
Diana Crossan
It is, however, there are issues with that. As you know, there are a lot of people who don't know where their money goes or know what kind of fund they’re in. And they might be young and in a fund that's quite conservative and they could do better to be in the balanced or growth funds, and they don't understand that.
So that's what the financial literacy was about. Also, many of them have very low savings in KiwiSaver. And while it will be helpful when they get to retirement, we want people to put more in now so that they have a better retirement when they retire.
TB
How do we achieve that? The Tax Working Group in 2018 made a number of recommendations around that. It was suggesting that perhaps we should increase for example, a KiwiSaver member on parental leave would receive a maximum member tax credit even if they didn't make the full $1042 contributions. And we saw something in the last month's Budget for that alongside that. But that's not enough, is it really?
Diana Crossan
No. And one of the recommendations I would have made, which was too bold, I think, is that if we want women to have children, and I think we do, and if we want women to have equal opportunity through their career and their retirement, that we do, then maybe we should be thinking about how we help women to keep their KiwiSaver going. We do it with ACC. We keep it going at 80%, so what about keeping KiwiSaver going?
You know, there's lots of ways of thinking about it, but I think we have to be quite bold in that area because not only are women having time out to have children, but they're also earning less on average. And so we need to find ways to reduce both of those things. And one would be while you're on parental leave, your KiwiSaver is put in by the government to even things out. And the other one would be let’s keep pushing for equal pay.
TB
Absolutely.
Diana Crossan
It makes a difference in retirement.
TB
Well, yes, because the thing about retirement is a dollar saved 20 years ago is worth exponentially much more than one saved with ten years to go to retirement. It's that sort of thing. It's just volume of savings steadily each year, year in, year out.
Diana Crossan
So we're not good at this, though, because we had a government - I think it closed in 1991 I think - a government savings scheme, a superannuation scheme for its staff. And what was interesting was of course women had unequal pay until the 1960s and some of those women who had unequal pay, when equal pay came in, there was no adjustment in the super.
So they lived out their lives on those savings that were made in relation to the pay at the time. And there was an attempt to tell government that this was completely unfair. Other countries, when they made equal pay rules and legislation, changed the super at the same time so that the women who’d retired by that stage got a better income.
TB
Yes, that is still a perennial problem, and it shouldn't be. As you say, equal pay is closing that gap, which is, what, 13% now?
Diana Crossan
Yes, about that.
TB
Give or take. Still, closing that gap is vitally important. And we all hear plenty of stories about the shortage of workers and experience. So I think, “Well, guys, we need to address those issues and retirement issues.” And looking at the Tax Working Group, what I liked about what it said in relation to proposal tax incentives, was they were focussed on the lower end.
Because to pick up your point earlier on when you became Retirement Commissioner, the people who should be saving knew they should be saving, were saving anyway. It was getting to those people who weren’t as aware as they needed to be about what they could do.
And so helping that group was what I liked about the Tax Working Group’s suggestions. For example, removing the employer superannuation tax charge on employer contributions below the $48,000 threshold at the moment. What do you think about the tax treatment of KiwiSaver and savings?
Diana Crossan
I’m not a tax expert as I said earlier I think. It's not something I have spent a lot of time on. I think my reason for signing up to the letter was much more about getting more tax, rather than tinkering with what we've got at the moment.
You might think, paying women when they're on parental leave is tinkering. But it’s dear to my heart.
TB
I don't think it's tinkering. I think it's something we should be doing.
Diana Crossan
In terms of why I signed up and why I'm interested in this issue, is I just don't think we've got enough money. And I know it's as basic as that. We have one of the lowest tax rates, as you know, in the OECD. Why do we do that? Why don't we tax? We want the same schools, the same health services. We want housing for everybody. We want the same services as they have in France or as they have in Germany or Canada or Australia. But we all pay less tax. That's just madness to me.
TB
As I heard someone put it “We want Scandinavian levels of ['free'] service, but American levels of tax” and the two are incompatible.
Diana Crossan
There is strong evidence that investing in health and education outcomes leads to productivity and economic well-being. There’s strong evidence that if you focus on health and education in a nation that there will be an increase in productivity and an increase in economic well-being. Why don't we do it?
TB
Well, yes, because the way I do see it as an economic issue. Because if we have poor outcomes for lower income groups and Pasifika and Māori etc., that's an economic anchor on the rest of us. We pay more for our health care.
And I know from my time when I was coaching rugby in South Auckland, players didn't get the ACC treatment that we wanted them to get to have the injuries looked after because they couldn't afford the little surcharge. That was only $5/$10. Some people, I think $5/ $10, that's nothing. When you're on minimum income, it's a lot. And so you could see players, you could see from their injuries, that had never been properly treated, that there's a shortage of funds there. And so longer-term health issues develop from that.
Diana Crossan
And you'll be aware that we've had underspend for a long time, so it is catch up time and that's why I signed this letter. Yes, let's get out there and say for those who can afford it, and we're not talking about the stinking rich, we're talking about people who could pay a little bit more. I mean, if we went to Australia, we'd be paying 45% and we're paying 39% at the top and mostly 33%.
TB
Yes, our tax rates are not high by world standards. To me, the big issue that we have in our tax system when we talk about income tax rates, is that low to middle income earners pay a lot more, the $48,000 threshold which it goes from 17% to 30% has not been lifted since 2010.
And how that's been allowed to develop - politicians then come along and like snake oil salesman said, ‘Oh, we're giving you a tax cut’. And I'm thinking, ‘No, you're just simply restoring a position that shouldn’t have existed in the first place.’
So, there's enormous pressure there, and then we’re on to the question of wealth. Last week, when I talked about how the Greens tax proposal for a wealth tax caused a lot of conniptions amongst people. So politically I think it's going to be a hard push. But we have this aversion, it seems, to taxing capital, which I'm not sure where that's developed. Is that something you've seen over time? Has it come up in discussions about broadening the tax base?
Diana Crossan
What I've seen, Terry, I think there's two things. One is people get nervous. It's almost NIMBY, isn't it? Let's find a way of doing it in somebody else's backyard but don't let me pay more, let others do it somehow.
And I think there's a lot of ignorance about what capital gains or wealth tax might be and that people are concerned they’re going to pay millions somehow. Yet not paying capital gains seems blatantly unfair. I would say if we could have a poll, I think we'd find more people would be for capital gains tax than those who are against it. And they were hoping that this government, when it had its huge mandate, would have done that. Maybe the ones against it are more vocal. But I think overall the people I meet, the ordinary people, understand that it's fairer.
TB
There's an awful lot of misinformation that goes on around this now and watching the debate at the time. It was certainly the squeaky wheel squeaking a lot back in 2018/2019, happened to be those that would have been most affected by it.
Naturally someone who sits on substantial unrealised capital gains and property or whatever, of course they're going to say, ‘Well, this is going to hurt, so I don't want it’. And I don't have a problem with people saying that. I know we need to look at the bigger picture.
Diana Crossan
If you have enough money to get into the property market and you manage it well, you can make quite a lot of money.
TB
On leveraging the gains, when you look at how generous our tax system was until this current Labour government came in, it was extraordinary generous. You could offset your losses against your other income, you're able to leverage it. And one of the key parts of the return, the capital gain was untaxed, until the changes around Brightline tested all yanked that scenario.
So now we have a de facto capital gains tax applicable to one asset class, a residential property. You know, for me I have great fun explaining to people who want to migrate here from overseas. “Yes, we've got about five different tax treatments because we don't have a general capital gains tax.” Now that keeps me in work, but I can hear the brains whirring away trying to understand the intricacies of the various regimes in place, thinking what is the problem here? Broadening the base means we can lower the tax rates. We may not need a 45% tax rate if we broaden the base.
Diana Crossan
I'm not suggesting a 45%. Even if we went to 40%. My understanding is that the tax take brings in $113 billion. And if we had another $20 to 30 billion, we would be able to do the things we need to do in housing and health. And I can also hear people who might be listening saying “We can be more efficient, we waste money”. Well, my understanding is that yes, we can be more efficient, but we can't make $20 to 30 billion out of efficiencies.
TB
Yes, that's the key issue. What was surprising, the Greens were proposing $10 to $12 billion of tax increase, a 10% tax increase to tackle it. That is a substantial tax increase. But it gives you an idea of the scale of the problem. But no one's really talking about that. They were focussed on this wealth tax, which was probably the most ambitious part of the proposal and the least likely to actually come into force. Because that would require a lot of political balls to drop in the right place for that to happen.
Diana Crossan
I think one of the things about the TOP party and the Green Party is their tax proposals didn't increase the tax take a lot because they also were dealing with supporting the low income. That was more about making it fairer. I'm all for making it fairer too. But I think, we need more money. I know we need more money.
TB
I keep harking on about the climate change costs. 700 properties were rendered unliveable by Cyclone Gabriel. That is probably the thick end of a billion dollare. And that’s just this year. 400 are in Auckland. Another 300 are along the Hastings, Napier, Tairawhiti-Gisborne and Wairoa districts, none of whom by the way have the funds. You can see from their rating base. So, it's a communal responsibility.
Climate change doesn't distinguish between postcodes. It's coming and we're dealing with it right now. And I think the crunch point will be the insurers. They're already starting to say, “Well, we're not going to insure you if you build there. We're not going to give you that.”
Last week I got a call from someone who was down in Christchurch and they're still arguing with the insurers over the earthquakes. We don't want that scenario repeated across the whole of the country in relation to climate change.
Diana Crossan
We certainly don't. And while I've focussed on housing, education, child poverty and health - the whole issue of being prepared for what's coming - we've had a taste of it and it's not going to go away quickly.
We need to work hard for ourselves, but we can’t stop it all, so we're going to have, I think we all agree, having weather we've never had before, and we're going to have more weather we've never had before. And so we need more money. I just keep saying we need more money.
TB
And a little a lot goes a long way.
Diana Crossan
And people have asked why the signatories of the letter don't just put their hands in their pockets and pay up and give more to education and health and poverty.
And what I know, of course, is that quite a few people I knew who signed the letter are already doing that. But some of them, of course, rightly said, “I'd be much happier if everybody was doing it and it was fairer across the board so that it wasn't just philanthropists. We weren't just relying on charity.”
TB
Yes, that was my philosophy as well. And we are actually a generous nation in that. And what's notable is often it is relatively low-income people are very generous, as a proportion of income given to charities.
Diana Crossan
When I was working at Wellington Free Ambulance, it was collecting in the street. It was always very interesting who gave money, and it was people who you would think wouldn't be able to afford to. But people are generous and that's good. But I think it's so much better for housing, health, even ambulance, I believe, should be part of our government funded services. And that's what we want. And we just need to pay more even if I sound like a broken record, Terry.
TB
Well, Dame Diana Crossan, that seems to be a very good place to leave it, broken record or not. I think it's something we need to be hearing.
Thank you so much for being part of this podcast. It has been fascinating to talk to you and hearing the story of your back involvement with the Retirement Commission and the changing landscape, which has changed considerably for the better. Thanks for your efforts. It's been a pleasure having you on the podcast. Thank you so much.
Diana Crossan
Sure. Thank you for having me.
TB
That’s all for this week. I’m Terry Baucher and you can find this podcast on my website www.baucher.tax or wherever you get your podcasts. Thank you for listening and please send me your feedback and tell your friends and clients. Until next time, kia pai to rā. Have a great day.
69 Comments
The tax take has increased 40% since Labour took office almost 6 years ago. There is sufficient money for government services. As well, the current government borrowed $100 billion. But Labour and the Greens have mismanaged that money, wasting much of it. Lets have a discussion about financial management prior to talking about new taxes.
Absolutely. And the first topic of discussion needs to be, "Why do we have so much Private Debt tied up in Residential Property prices?". Fix that, and a whole world of opportunity for the reallocation of gross national debt opens up.
The day we read that Mr Luxon has had the political and social sense to tell us, "Look. I'm selling all my investment properties, not because I think prices are going to keep falling, (NB: They are, and this would give him a personal, apolitical 'out') but because I want to remove any perception of a conflict of interest on the subject, and free up those properties for fellow Kiwi homeowners as their own home" is the day that we might see that necessary Change is coming. And you know what the chances of that happening are? Nil. So the hard yards we are all walking, will have to keep being trodden.
And back on topic - Why does Mr Luxon have investment property in the first place? Because that's what our taxation system encouraged him to have.
Spot on. There's always the talk about taxing more (but only the most productive people who already pay more than their fair share) while no one acknowledges the fact the largest portion of national debt has been shifted from the government's books to householders over the last 40 years. Nowadays, the government enjoys a strong balance sheet while householders' income to debt ratio has gradually deteriorated.
Correct, all the while undoing the quality and access to services that the people it has handed the bill to are actually getting.
If the government was offering Scandinavian levels of services for the suggested Scandinavian levels of taxes some people seem to want here (on the basis that "other people have higher rates, so we should too!") then many would quite happily take that deal - myself included. But if the deal is more tax cost of the population while services go even further backwards than they are now, just at a slower rate, then the answer has to be no - overwhelmingly because of the high levels of household debt they have managed to completely normalise that is my problem, not theirs.
To then help yourselves to even more of people's net wages is verging on criminal.
It's inevitable. For all the gnashing of teeth over housing, it's just a bit player in the irreversible tendency for capital to consolidate in a capitalist system.
The base assumption for many seems to be if we just fixed housing there'd be prosperous jobs for all but you'd still end up with increasing economic polarity - the only way to counter that is with increasing state intervention into wealth distribution.
if we just fixed housing there'd be prosperous jobs for all
Agreed but housing is a great place to start. Lee Kuan Yew gave equal priority to both education and housing during the formative years of Singapore's brief economic history.
This success was then broadened out to good urban planning and brilliant public transportation.
The city-state certainly did other things quite well and the housing success has been there to support prosperity throughout.
You don't have to tell me. I spent a few of my high school years in Singapore when my father worked there.
For one, NZ has an obsession with free capital flows, much of which ends up in housing while Singapore uses a generous subsidy regime to maintain capital flow into certain productive sectors.
Singapore, with zero natural resources, refines more oil than its next door oil-rich neighbour Malaysia that also has cheaper labour!
Singapore also makes quite a killing off producing and exporting oil drilling equipment.
Sri Lanka is also arguably in a strategically important geographical location and started off much wealthier and more educated than Singapore back in the 60s. How do they compare in 2023?
Tax take has only increased by 29%, and inflation has been 21%. So a real increase, but not by that much.
Sources:
We have one of the lowest tax rates in the OECD. We want the same schools, the same health services. We want housing for everybody. We want the same services as they have in France or as they have in Germany or Canada or Australia. But we all pay less tax. That's just madness to me.
Yes it is and it does. You only have to look at our low top tax rate and lack of wealth etc. taxes. And we swamped the health system and tax kitty with Boomers while National repealed the Labour contributory Superannuation scheme in the 70s. Anyone with a brain could see this coming. There's no easy fix. You get what you pay for so more tax revenue it is including a higher income top tax rate and other new taxes.
https://www.oecd.org/tax/revenue-statistics-new-zealand.pdf
This suggests our tax take overall is close to the average in the OECD. Looking at headline tax rates is misleading, got to look at the bigger picture.
Ok, now consider these further things:
1. The age of this country and comparative levels of infrastructure. Most OECD countries have existed for hundreds, perhaps thousands of years, and so have a whole lot of infrastructure built up over that time that NZ simply doesn't have.
2. Geography and population density. NZ has a smaller population than the bay area of San Francisco, spread across a country roughly the same size as Japan. We simply need more infrastructure per person than most OECD countries (which again, have had hundreds if not thousands of years to build it up).
NZ needs to get its self together.
1) Run cost/benefit on all government departments and equalise the B/C ratio across all.
2) Run proportionate business case assessments on each individual govt projects
3) Set the tax level so the B/C is roughly 1 for all government spending
4) Sort the tax system out so that it’s fair, treats all income the same (including capital gains) and adds environmental taxes - our current system is BS and does not reward productivity
5) educate our idiotic politicians so the level of debate is raised.
People who advocate for the government to spend less and tax less don't understand how the governments finances operate. We wouldn't end up any better off financially or have more money to save as the government is the source of the money that it spends and taxes and borrows. When the government runs a budget deficit this means that it has put more of its money into our bank accounts that it has removed through taxation and this leaves a surplus for us to add to our savings and these savings are represented by the governments debt.
Borrowing money from banks to invest in housing creates a net loss of savings for the country as a whole when banks repatriate their profits offshore and our large current account deficits are also a loss of potential savings and so this only leaves government budget deficits as a source of savings for us.
https://theconversation.com/how-government-deficits-fund-private-saving…
I suggest that you study sectoral balances, All financial flows between the sectors of the economy must net to zero.
This article gives a good explanation. https://gimms.org.uk/fact-sheets/sectoral-balances/
Or there is Wikipedia https://en.wikipedia.org/wiki/Sectoral_balances
How much money has been spent on idealistic restructuring?
We definitely need more money in services like health and education, but I think the better question is how much are we wasting and can we use what we have more efficiently.
Get the machine running efficiently and then see if we need more tax. Sounds like a pipe dream.
There's 15,000 more civil servants than there were before Labour took office. Have you noticed any improvement in services?
Many years ago under Piggy Muldoon it wasn't even worth going to work if you had a decent income the taxes were so extortionate, so I spent less time being employed and more time renovating properties. It set me on the road to riches.
More likely gone backwards..
The health reforms and tertiary restructuring just a couple of examples.
Expect more similar articles in the bought and paid for msm in the coming weeks to soften up the electorate for a 40% plus top tax rate to be introduced by Labor should they be reelected.
Isn't it more like ~60k? 15.7% increase to 395k over 5 years.
The public sector employed around 448,200 people in 2022, 18.7% of New Zealand’s total workforce (2,393,400), as measured by Stats NZ’s Business Demography data. The majority (88%) work in central government (395,000) and 12% in local government (53,200).
Over the last 5 years, the overall public sector workforce increased by 15.3% (with central government up 15.7% and local government up 12.5%). This compares with an 9.4% growth in the private sector over the same period.
https://www.publicservice.govt.nz/research-and-data/workforce-data-publ…
The science involved is more Political science than anything else.
I prefer Mathematics.
If all the gases in the atmosphere were represented as the journey from Wellington to Auckland(approx 650km) then our Agricultural emissions would represent about 1.7 mm of that journey.(also ignoring any sequestration in the natural carbon cycle)
Yeah ..lets bankrupt our country on those numbers..
Climate change is about as real as oil running out, the ozone layer disappearing, the ice caps melting, the new ice age that was predicted a few decades back, acid rain, and 'irreversible' global warming.
Several years ago there was no rain for about 3 months, but no one said it was because of 'climate change' or 'global warming'.
As long as the government is running deficits then it is always giving us more of its currency than it is deducting. Ir's who ends up holding the majority of this money that is the issue. The NZ Dollar is a public utility and it doesn't exist just for the wealthy to exploit and hoard. People think that the government should run surpluses without understanding the consequences. Cutting government spending won't make us better off but it would make our minor recession far worse and lead to increased unemployment.
I want other people to use less of Government services and hence spending.
Example 1. Fred McGut. Obese smoker, sickness beneficiary now on renal dialysis costing more than $50k/annum.
Example 2. Rita Rabbit, 24yrs. Never worked but popping out kid 4 whilst living in the same KO house as her mother, Mary Maggot has for 29 years.
Fix the above and we have cash a plenty.
Apologies to any Europeans offended by my overtly Euro names.
Dont need more taxes. Bloody thieves
Because the people balancing their own budgets have to work with their own net incomes, because the taxes they pay are being hoovered up by the state to give to people, who in some cases, genuinely could not care whether their kids eat or not.
Meanwhile, back in the world of people and parents who do care and who try to balance budgets, daycare runs about $350+ per kid so that you can keep a two-income household earning enough to pay the very bottom end of a 30 year mortgage.
That's the bit people don't get. Shit parents will have kids no matter what. If you make life impossible for the ones who want to be good ones more than anything else on earth, then they just decide they can't afford to have kids and don't have them.
Because people who just produce children as a career breed are far more likely to have children that produce more children as a career. Not hard workers that actually produce anything. Its called generational poverty.The main thing stopping people succeeding in New Zealand is their attitude which is in large part taught to them by their parents.
I don't know Fred or Rita, but I do know Brian Boomer who lives in a 2 million dollar house (that he bought for peanuts), has plenty of passive income and uses his National Super for pocket money. He's also starting to cost the public health system large amounts.
Guess it's time I re-posted this:
But 'Brian Boomer' will have worked and paid taxes, which many in this country don't. I'll give you an example. My late sister used to tell her kids, "you don't worry about getting an education, you just go on the dole".
Check what's happening in South Auck. Loads of obese over-eaters now have diabetes. One of them was so fat they couldn't get him through the doors at the hospital. And you're paying for it.
Could have borrowed against it to buy shares, gold, hookers or blow. I’d advise against all of them. Good luck on them for an inheritance. Good on them for adhering to local tax laws and making a return.
Cue all the whiners wanting an inheritance tax. Jealous miserable pricks.
Disclaimer- I will inherit sweet F A. Wish I had wealthy parents but wouldn’t swap them for quids.
As a self confessed boomer I've been paying tax in NZ for 51 years and I continue to do so. In 2021 the top 21.2 % of income earners paid 68.5 % of all income tax , rich-paying-their-fair-share-of-tax-study-concludes. No thanks for supporting our welfare system though. Just tax them more is the solution.
I don't get a parade every time I go to work to pay the grossly inflated mortgage I have to cover for my own home, in addition to paying for boomers to get a prize every week for turning a certain age that will almost certainly not be on offer when I finish my working life.
Wait until Mike Hoskings hears about this absolute injustice.
We have one of the lowest tax rates, as you know, in the OECD.
Actually we have one of the highest but don't let facts get in the way of a good argument:
https://data.worldbank.org/share/widget?indicators=GC.TAX.TOTL.GD.ZS&lo…
And also one of the lowest Labour compensation share as % of GDP.
So our tax is up there, but people aren't getting the same share of the economic gains.
Data from 2016, too lazy to find anything more recent. https://figure.nz/chart/OvV5PWC5ZfjxxC5B-wWdcJy7ahtkTSPxn
Hi Terry,
Thanks for the interview.
It seems remarkable that after 10 years as the head of the Retirement Commission Ms Crossan can still say she is not a tax expert. This is either false modesty, or a terrible oversight. It is a fact that NZ has the most unusual tax system for funding public retirement incomes (i.e. NZ Superannuation) in the OECD, and we have one of the most unusual tax systems for the funding private savings. Our tax choices are generally agreed to be inefficient; we have some of the lowest taxes on labour incomes in the OECD (only Chile has lower) and one of the highest tax rates on interest, dividends, and profits in the OECD. Moreover, we tax real income earned by the simplest savings products (bank deposits) at the highest rate of any form of income in New Zealand. Surely she would have investigated the economic effects of these extremely unusual choices, particularly since the international literature and almost all international practice suggests that far more efficient tax systems are not only possible but in place in most countries in the world.
NZ is now unique in the OECD in adopting a welfare rather than contributary basis for government pensions. Since the rate is low for average income workers, this means New Zealanders on average incomes are responsible for managing their own retirements more than most people in the OECD . This is fine if you are fancy tax lawyer or accountant, or an extremely well paid CEO in charge of a Government agency, but it presupposes an enormous amount of investment sophistication, particularly if you want to avoid investing the simplest but most highly taxed saving product (bank deposits). It is not for nothing that some authors accuse successive NZ governments for imposing a widow's tax - a tax surcharge on the savings of elderly women - because of their failure to adopt a welfare enhancing tax system. In this sense the 2018 Tax Working Group was a failure; it failed to properly analyse or describe the welfare consequences of NZ's unique approach to the provision of retirement incomes, and it failed adopt standard approaches to the taxation of interest income. Indeed, it spent one page out of nearly 300 describing the single biggest difference between NZ's tax system and the tax systems of the rest of the world.
It is pleasing that Ms Crossan is interested in welfare and housing. It is apoity she didn't do more when she had the opportunity to recommend reforms to NZ's highly unusual tax and retirement income systems, systems that have been rejected by almost all other countries in the world.
Andrew Coleman
The most articulate comment I have read on this platform to date. A+ for critical reasoning and building a case. Whether your intention or not, you picked apart the interviewee to the point it’s quite clear she leaves little in the way of legacy and we still have much work to do.
As a person who had a seven figure tax bill last year, the question isn't "we don't pay all pay more tax" - it is why half the country and select groups pay zero tax.
Enough crushing the higher paid workers and if you want more tax it should come from the half that don't contribute
Sorry, rant over
The Greens' wealth tax is a power grab to obtain more seats in parliament. Those of us who have worked hard and saved may ultimately (maybe not this electoral cycle) face the option of shifting overseas to avoid paying a wealth tax on top of income tax. Then any future Left-wing government will crush the middle class to obtain revenue for those who pay no tax.
I know people currently in Australia, who have already shifted their considerable capital there, looking around for property so they can leave NZ quickly if a wealth tax appears imminent.
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