Saturday, January 23, 2021

Louis Houlbrooke: Why We Won’t Stop Calling It ‘Taxpayer Money’

Jonathan Barrett, a taxation lecturer at Victoria University, wants New Zealanders and the media to stop talking about “taxpayer money”.

He makes the bland observation that when the government takes our money, that money legally becomes government property, and therefore the government can spend it however it likes. That’s all correct in a semantic kind of way, but pointless for policy debate – legality does not equal morality, and might does not make right.

There’s a reason Jacinda Ardern isn’t praised as the country’s greatest businessperson, despite the enormous wealth she controls. That wealth is produced by the rest of us, and taken from us under the threat of jail time.

So when we talk about “taxpayer money”, we do so as a reminder of who created that wealth, and of the government’s moral obligation to use its extraordinary tax-and-spend power responsibly.

Of course, tax isn’t the only way the government pads out its budget. For New Zealand’s COVID-19 response, the Finance Minister borrowed $50 billion on international markets. But this spending is still funded by taxpayers: specifically, future taxpayers, who will pay for it with interest.

The government can also just print its funds – think “quantitative easing”. That’s what the Reserve Bank is doing right now to the tune of $100 billion. The effect is still essentially that of a tax: money-printing erodes the value of the currency already held by taxpayers.

Regardless of whether the government’s money is taxed, borrowed, or freshly-minted, every dollar spent on theatre for the homeless or slides on the lawn of Parliament is a dollar that could have instead been spent by the taxpayers and ratepayers who keep this country afloat, on things they actually need and desire. The phrase ‘taxpayer money’ is shorthand for this inescapable trade-off.

When our representatives forget this, all New Zealanders have the right to doggedly challenge them on their abuse of our earnings.

It is not enough to simply cast a vote every three years and then suck it up, as Mr Barrett seems to believe. New Zealand’s democratic process is ongoing, and often informal. Politicians understand that when they’re caught squandering New Zealanders’ hard-earned wages they risk embarrassing headlines, social media backlash, or at least an earful at the farmers’ market.

Individual taxpayers, the media, and civil society groups like the Taxpayers’ Union are all vital participants in this dance of open democracy. When taxpayers organise into groups and highlight – for example – how the government gave $1 million from its COVID-19 response fund to a dance troupe, we are not “breaching the social contract”. Rather, we are providing information that will stick in taxpayers’ minds and hopefully still be there come ballot day. And we do this in competition with countless other groups, from Greenpeace to the Automobile Association, all with different visions of how (and how much) money should taxed and spent.

Left-wing academics like Mr Barrett are welcome to participate in this contest of ideas. But he should do so with some humility: unlike most of us, his salary is paid with taxpayer money.

Louis Houlbrooke is Campaigns Manager at the New Zealand Taxpayers’ Union.


Lindsay Mitchell said...

Sterling response. I hope you submitted it to the Dom Post after they also ran Barrett's piece on Wednesday Jan 20.

Max Ritchie said...

I’ve just read this academic’s article. I’m not even sure he’s technically right but even if he is, he is so far out of touch with reality that you’d have to wonder if his students shouldn’t choose a different course, and his university should look at ending his employment. Taxpayers’ money is money originating with taxpayers and extracted from them by a government. I suggest Dr Barrett try this simple test: persuade a politician - any politician- to state their belief in what he says and then await the reaction - not only from the public but also from the politician’s colleagues. I wager the politician will be looking for work at or before the next election. Fortunately some politicians actually believe that they are using taxpayers’ money on their behalf. David Seymour, for example, but there are others on both sides of the aisle. Even the rest at least pretend to.

DeeM said...

Barrett seems to overlook the fact that unlike a private company, the board of NZ Inc is elected every three years by the NZ public who are the only investors and who are effectively shareholders so are fully entitled to demand a say in how their company operates and who runs it.
It’s clear that Mr Barrett is an academic who has probably never run any form of business in his life but chows down at the public trough blissfully unaware of who is paying his salary.
I propose a motion at the next AGM of NZ Inc in 2023 to remove Mr Barrett from his position, All in favour,,,,,