That said, what they have presented is more than just a Budget. It is their utopian vision for a different country.
Unfortunately, it is also based on ludicrous assumptions and bad economics.
The cornerstone of the Green revenue plan is a wealth tax raising $72.5 billion over four years.
That is, well, optimistic. Just ask Germany, France and Sweden why they abandoned similar taxes. The reasons were capital flight, tax avoidance and administrative nightmares.
Treasury has warned against rapidly implementing a wealth tax alone due to “high risk of unforeseen issues and unintended consequences.” Yet the Greens propose multiple complex reforms without addressing the public service’s capacity to design them. Good luck with that.
Then, there is the private jet tax at $5,000 per passenger. Would wealthy travellers pay this? No. They would simply switch to first-class commercial flights. Or they would not come here at all.
Their plans for universal dental care reveal startling ignorance. With just over 2,100 dentists nationwide, and a mere 3.7% of them in public service, who exactly will provide these services? Current public dental waiting lists already exceed 12 months. Adding millions more patients without dentists is magical thinking, not policy.
Their public housing plans also defy practical reality. The Green Budget promises to build 35,000 public homes over five years – that is 7,000 per year. Yet Kāinga Ora is currently struggling to deliver 1,500 homes annually.
Remember KiwiBuild’s promise of 100,000 homes? The Greens apparently do not. They offer no realistic plan for quadrupling construction capacity in a sector already facing severe workforce shortages and supply chain constraints.
Their $395 weekly Income Guarantee ignores inevitable market responses. When everyone suddenly has more money but no increase in housing or goods supply occurs, prices adjust upward.
Housing markets would tighten as more people compete for the same limited housing stock, driving rents higher. Retail prices would similarly rise with increased consumer spending power. Thus, we would quickly return to similar inequality but with vastly higher government spending.
The Greens have presented us with a textbook case of utopian thinking. And not coincidentally, “utopia” literally means “a place that does not exist.”
Good policy requires a realistic assessment of implementation challenges, behavioural responses and economic constraints. All are notably absent from the Green Budget. What we have instead is an ideological statement masquerading as fiscal planning.
It may sound appealing to the Greens’ supporters. But it cannot exist in reality.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE
That is, well, optimistic. Just ask Germany, France and Sweden why they abandoned similar taxes. The reasons were capital flight, tax avoidance and administrative nightmares.
Treasury has warned against rapidly implementing a wealth tax alone due to “high risk of unforeseen issues and unintended consequences.” Yet the Greens propose multiple complex reforms without addressing the public service’s capacity to design them. Good luck with that.
Then, there is the private jet tax at $5,000 per passenger. Would wealthy travellers pay this? No. They would simply switch to first-class commercial flights. Or they would not come here at all.
Their plans for universal dental care reveal startling ignorance. With just over 2,100 dentists nationwide, and a mere 3.7% of them in public service, who exactly will provide these services? Current public dental waiting lists already exceed 12 months. Adding millions more patients without dentists is magical thinking, not policy.
Their public housing plans also defy practical reality. The Green Budget promises to build 35,000 public homes over five years – that is 7,000 per year. Yet Kāinga Ora is currently struggling to deliver 1,500 homes annually.
Remember KiwiBuild’s promise of 100,000 homes? The Greens apparently do not. They offer no realistic plan for quadrupling construction capacity in a sector already facing severe workforce shortages and supply chain constraints.
Their $395 weekly Income Guarantee ignores inevitable market responses. When everyone suddenly has more money but no increase in housing or goods supply occurs, prices adjust upward.
Housing markets would tighten as more people compete for the same limited housing stock, driving rents higher. Retail prices would similarly rise with increased consumer spending power. Thus, we would quickly return to similar inequality but with vastly higher government spending.
The Greens have presented us with a textbook case of utopian thinking. And not coincidentally, “utopia” literally means “a place that does not exist.”
Good policy requires a realistic assessment of implementation challenges, behavioural responses and economic constraints. All are notably absent from the Green Budget. What we have instead is an ideological statement masquerading as fiscal planning.
It may sound appealing to the Greens’ supporters. But it cannot exist in reality.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank. This article was first published HERE
5 comments:
But such utopian "largesse " still appeals to the apathetic, the lazy and the financially/ economically illiterate - so, to many of the population. The" la la land" mentality of dependency is encouraged.
The Green's budget is completely bonkers, but as others have said in earlier posts, less bonkers than all the promises made by Labour on 2017 and embraced by the Nation. While a promise to build 35,000 homes is nuts (and dishonest) it is not as bad expectations to build 100,000. They must think that if it worked for Jacinda it will work for them.
"Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy." - Winston Churchill 1948
The Greens' budget provides textbook examples of each of these.
Socialists do not understand that if they strangle the goose that lays the golden eggs, there won't be any golden eggs.
Only a vibrant capitalist economy can raise the readies needed to enable the State to provide social services.
Would Mr Tamihere and Mr Jackson welcome these taxes on their ( considerable) assets?
Sad thing is an increasing proportion of our dumbed down and ignorant population will look at only one or two of the perceived benefits, a classic " what's in it for me mentality " free doctor visits , free dental, totally unaware and most likely don't care about the "how" feasibility and the effect on the economy. Like Labour just make fairytale, impossible promises with no plan or means to deliver, and you know what it works. Just look at the polling. Heaven help us.
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