Ele Ludemann: More tax for less

New Zealanders had the OECD’s second highest tax increase last year:

New Zealanders faced the second-biggest tax raises in the developed world last year, the Organisation for Economic Cooperation and Development (OECD) says.

The intergovernmental agency said the average change in personal income tax in New Zealand was 4.5 percent higher last year compared with 2022.

That was only behind Australia, where taxes rose 7.6 percent in the same period.

Single Kiwis earning the average wage were paying tax at a rate of 24.9 percent in 2023, up from 23.2 percent a year prior, according to the OECD data released on Thursday. . .

We paid all that more for less of what we need and more of what we don’t – poorer education, health, infrastructure and a bloated public sector – a public sector that a public servant says needs recalibrating:

I have worked in the public sector for around 12 years. My role is impacted by the staff reductions.

I don’t agree with the way it is happening in every agency. It’s horrible for those impacted & I sympathise with them.

I’m not a coalition voter. But I support the cuts. Why? – I have seen first hand unbelievable levels of waste & inefficiency in the public sector.

– I have seen first hand the lack of accountability for leaders, managers & staff failing to deliver (& worse, in many cases them being promoted).

– I have seen first hand agencies not performing (& in many cases not even able to properly measure performance) & little to nothing changing except their head-count going up.

– I have seen first hand consultancies get rich on the tax payers dime while delivering little value (& in some cases making things demonstrably worse), & agencies not instead investing in building the internal capability required so they wouldn’t need consultants.

– I have seen first hand good people coming into work every day & working hard because they genuinely care about our country & want to contribute

– despite working under poor cultures, poor systems, poor leadership, poor management, poor strategies, poor execution.

Yes, our agencies do deliver some great work we should all be very proud of. Yes, we do have some great leaders & managers in the public service.

Yes, there are many positives to celebrate.

But we are a long, long way from getting the return on investment we should from our public sector.

It doesn’t matter which party is in power, the public sector needs recalibrating, with a real & genuine focus on measurable performance so we can, in future, make informed, objective, defensible & transparent decisions about whether we increase or reduce their headcount.

A friend who works in the public service echoes this, giving examples of incompetence, waste and poor leadership.

Fixing that requires new and better leadership, and will result in more job losses.

That’s tough on those who will be affected.

But let’s keep the cuts in perspective – 10s of thousands of back room jobs were added between 2017 and 2023, so far only 3,000 have been cut and some of them were vacant positions.

Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.