The Ardern government’s recently-announced housing and punitive tax policies will have a significant impact on New Zealand’s seniors and are clearly ageist in their outcomes.
Anyone over the age of 70 years in New Zealand today (especially if you are male and of European descent), can be forgiven for feeling that somehow, after a lifetime of struggle, commitment to, and hard work in the interests of our country, New Zealand, we have suddenly become “the enemy”!
Green Party MPs, almost to a person, condemn “old white men” as somehow being responsible for all of the ills of modern-day New Zealand society. Julie-Ann Genter’s infamous statement to a class of school children in Christchurch (aged around 10 years) that “old white men” needed to move aside from their domination of boards (she did not specify which boards-charities, SOEs, closely- held family companies, Stock Exchange listings), as some kind of cleansing process after which organisations would be refreshed and renewed.
Her colleague, a young Mexican gay chap, (who recently distinguished himself by trying to bring his gay partner into New Zealand claiming priority over other Covid 19 victims) is also on record as condemning the photographs of all the “old white men” lining the walls of Parliament, again as some sort of accusation that these historical figures caused all of today’s socio-economic ills.
Those of us old enough to remember, well recall the explanations of successive governments that they were taxing us, via “Social Security “deductions from our pay packets, in order to ensure we would be “looked after” in our retirement years. Having deducted Social Security payments from our earnings, on top of income taxes as high as 67%, by the way, we were then exhorted to “save for our retirement”, with ominous statements that unless we did so, we could not expect, nor depend upon, governments, to do it for us. Nothing was ever heard, subsequently, about where this “Social Security” money ended up.
Many of us will remember those days of 67% tax on incomes, as well as paying up to 24% interest on borrowings, such as mortgages, for housing. It was common for young couples trying to afford to buy or build a house, to take on second, or in some cases, third mortgages at ever exponential rates of interest. It was also common for young couples attempting to raise finance for housing, to be summoned by their bank manager to an” interview” where one had to convince said manager that one was indeed worthy of a bank loan and would be in a position to meet the mortgage repayments. Humiliating!
Young couples starting families would gift each other packets of milk tokens - a valuable method of ensuring babies at least had supplementary diets. If one was lucky, the couple might qualify for a State Advances Corporation loan to start, usually, to build a new home. If all of this failed one might (stress the might) be fortunate enough to be offered a state house for rent - but the fortunate applicants were required to ensure the state house was kept in good condition and the grounds kept tidy, lawns mowed, vege gardens attended. After all, state houses were deliberately “pepper-potted” amongst privately built homes to emphasise the socialist desirability of equality in housing. And some of us grew up in “Railway” houses provided by NZ Railways, usually in remote areas, with tank water, outside dunny and coal range cooking.
Fast-forward some 50 years, with many of us in our seventies or eighties. Most political and social commentators keep insisting our age group, we boomers and war-babies “had it easy”.
Unless you were fortunate enough to inherit something from your parents, most of us scrimped and saved to give our children a home and a good education, going without holidays, cars and other “luxury” goods, bearing in mind always to “save for your retirement”. Overseas trips? A bach? Boat? Beamer? Impossible in those days for the vast majority of ordinary kiwis.
Well, that is what most of us seventies-something did. Built a family home, at great cost and sacrifice; kids grew up and moved out; Mum and Dad decide to “downsize”; sell the family home; buy a smaller house; and invest the remainder - you know, to “save for your retirement”.
Only, that was all a great load of codswallop.
Seeking advice on how to invest the proceeds of the family home sale to supplement one’s income to the much-vaunted Government Superannuation benefit (except that the GS is insufficient to cover even basic living costs) we were variously advised to invest in a varied “portfolio” - shares, term deposits, perhaps a rental property, to provide additional income? For a short while, all of these were options, until interest rates manipulated by government through the Reserve Bank, began to rocket down towards zero. This alone caused many of us oldies to revisit what we had left after downsizing. How do you hang on to that very modest nest egg they kept telling us would be needed for the “rainy day”?
Here we are in 2021. If fortunate enough to still be living in a debt-free home, we are made to feel guilty that many in our society cannot afford to do likewise. So, how best to utilise the proceeds from selling the family home? I know, let’s put it on term deposit at the bank - the one we had to almost beg a loan from all those years ago. At least the term deposit will return some interest, after tax and accounting fees? Really? Just 1% or less if you are lucky. I know, lets invest in a modest rental property. At least rental income, after tax, accounting fees, property management fees, repairs and maintenance and legal fees in many cases, there must be a return in that surely? Uh-uh. The Ardern government clearly detests landlords to the extent that new laws including tenant rights negate almost all the advantages of owning a rental property. But at least we would get the capital gain, eh? Not so. Extension of the Bright-Line capital gains tax, from 5 to ten years effectively squashes that advantage too. And that is after Ardern and Robertson campaigned on a policy NOT to introduce a Capital Gains Tax. The outright lies of successive governments continue to plague us oldies.
I know! Yes! Let’s do what the Reserve Bank Governor exhorts us to do - spend, spend, spend. The only problem with that scenario is that oldies are increasingly prone to ill-health and ultimately the need to seek medical interventions and possibly rest home care. Good though our health system is (it is NOT racist, but is it ageist?), it is stretched beyond limits for less-dire health care such as elective surgery, cataract operations, hip/joint replacement and so on. The alternative is to pay through the nose and have these procedures done privately. After all, most of us would be long gone by the time our health system was able to accommodate these lesser afflictions. You need a hell of a lot of money to afford private health care outcomes. So, spending one’s savings is not a prudent option.
Then there is the prospect of one of us or both needing rest home care. Rest home fees for individual patients needing full time care can exceed $1500 per week - that’s $78,000 per year per person.
The government subsidy is not available to patients until their joint assets decrease to $236,000 - includes the family home and car - in2021? Get real!
So here we are in 2021, having, in my case, worked for our government for virtually all my life, facing a future which, if I become ill, will result in virtually all of my life-time earnings and assets being dissipated. I am castigated for being an old, white man; hated if owning a rental property ( I do not); having savings (already taxed when earned) subject to tax and various other fees; owning a very modest house when others have difficulty getting onto the property ladder, which is SO unfair to them, eh?; being a burden on society by being paid government super plus a war pension; oh, and being of European descent, I am also guilty, apparently, of condemning our Maori people to poverty and ill- health because Europeans “colonised” New Zealand two hundred years ago. My ancestors arrived here long after this so-called colonisation, so I can hardly be blamed for that one, eh? And did not the treaty of Waitangi establish a new nation where Maori and others share equal rights? How does the Treaty morph suddenly into “colonisation” when 500 chiefs signed it with equal rights for all? Hmmmmm.
Here I am, staring the Grim Reaper in the face, being treated with loathing and contempt for being responsible for all of the inequities and inequalities in our society.
Why the hell did I bother being a good citizen, good parent, frugal saver, obedient employee, caring of others, law-abiding, community minded, when at the end of life’s journey, I am treated like a bloody pariah? I should not have even bothered.
Thank you, Jacinda, I really feel valued.
Henry Armstrong is retired, follows politics, and writes.