Jack Tame began by reminding viewers that Henry had said he was standing because he wanted his grandchildren to enjoy the same opportunities to grow up in the paradise he experienced as a child. Tame then challenged him on the top income tax rate in the 1960s and the cost of university, arguing that the New Zealand Henry was nostalgic for was the product of a high-taxing government, an extensive welfare state, and a large state house building programme.
Tame's central question was how Henry could advocate for a party committed to lower taxes and smaller government while wanting to recreate what Tame described as a product of high taxes and big government.
Henry did not challenge the factual basis of Tame's argument. Instead, he responded that it was the country's culture and aspirations he wanted to see again. He said that when he was growing up, no one handed him excuses for failure before he had even tried. It was, he argued, a society that expected people to strive and succeed.
It was a strong response from an experienced communicator. However, Tame repeatedly returned to his assertion that New Zealand had a huge welfare state, a massive state housing programme, and tax rates above 60%, suggesting these were the defining characteristics of the era Henry was describing.
I lived through the 1960s and 1970s. Jack Tame did not. His description of New Zealand as having a "huge welfare state" simply did not ring true to me, so I decided to check the figures using ChatGPT.
Disclaimer: I am not an economist, and while I have not independently verified every figure, the data below was compiled by AI from official historical statistics.
Taxation
In today's dollars, the New Zealand Government collected approximately $9,000 of tax per person each year during the 1960s and 1970s.
Today it collects around $31,000 per person.
That means New Zealanders now contribute more than three times as much tax per person in real terms as they did during the period Tame was describing.
Yes, the top marginal tax rate was much higher, but a high-top tax rate does not mean the Government collected more tax overall. On the available figures, it did not.
Welfare
Government cash welfare spending was approximately $3,000 per person (in today's dollars) during the 1960s. Today it is approximately $10,000 to $12,000 per person.
As a share of GDP, welfare spending has increased from around 3–4% to approximately 11–12%.
If spending around $3,000 per person constituted a "huge welfare state", then spending more than three times that amount today raises an obvious question: what would we call today's welfare system?
Housing
There is one area where Tame's argument has some merit.
New Zealand did have a substantial state house building programme during the 1960s, with around 30 state houses per 1,000 people, compared with about 15 per 1,000 people today.
However, in making this comparison, Tame overlooks an important policy change. Since the introduction of the Accommodation Supplement in 1993, governments have increasingly provided housing assistance through the private rental market rather than solely through state housing. Today, around 300,000 to 350,000 households receive the Accommodation Supplement at a cost of around $2–2.5 billion each year.
When this is considered, the picture changes considerably.
During the 1960s and 1970s, around 22–30 households per 1,000 people received government housing assistance through a state house.
Today, approximately 81 households per 1,000 people receive housing assistance through either public housing or the Accommodation Supplement.
Measure | 1960s | Late 1970s | Today |
Population | ~2.5–2.8 million | ~3.1 million | ~5.3 million |
Government expenditure per person (today's dollars) | ~$15,000–17,000 | ~$22,000–25,000 | ~$35,000–38,000 |
Government expenditure (% of GDP) | ~28–30% | ~33–35% | ~42–43% |
Cash welfare spending per person (today's dollars) | ~$3,000–4,000 | ~$6,000–8,000 | ~$10,000–12,000 |
Housing assistance model | State houses | Mainly state houses | State houses plus Accommodation Supplement |
Public/state houses per 1,000 people | ~28–30 | ~22 | ~15 |
Accommodation Supplement households per 1,000 people | 0 | 0 | ~66 |
Total households receiving housing assistance per 1,000 people | ~28–30 | ~22 | ~81 |
Conclusion
If these figures are broadly correct, then Jack Tame's portrayal of the New Zealand of the 1960s and 1970s was not accurate.
It is true that the top income tax rate was much higher than it is today, but that does not reflect the reality of taxation at the time. It is also true that New Zealand built more state houses relative to its population, but that similarly hides the fact that the Government provides housing assistance to three times as many households per 1,000 people today as it did back then.
It is not true that the Government collected more tax overall than it does today. Nor is it true that the welfare state was larger than it is today. By almost every broad measure of government size - tax collected, total government spending, welfare expenditure, and housing assistance - the modern New Zealand state is substantially larger than the one that existed in the 1960s. New Zealanders are far more reliant on the state to provide for them today than they were then.
Jack Tame's attempts to portray the "good old days" as the product of a much larger government than exists today are difficult to reconcile with the historical figures.
Henry's answer may ultimately have been the more insightful one. He was not arguing that New Zealand should recreate policies of the 1960s. New Zealand was a very different country then. It was a closed economy, with imports strictly controlled. Many things were very expensive as a result. More importantly, the recipe for the life Henry describes as a paradise cannot be summarised by looking at a few factors such as the top tax rate or university costs. Tame was naïve to think it could.
Henry's response - that New Zealand should recover something less tangible: a culture that valued aspiration, personal responsibility, and the belief that success was achievable - was something that those of us who lived in those times can readily relate to.
Robin Grieve, a tutor, orchardist and retired farmer, is Chairman of Pastural Farming Climate Research HERE.
4 comments:
Your article & Paul Henry interview I watched only prove that he has not one clue about economics. He was only hired by ACT to do comms, PR & marketing. I know ACT well, having once helped the party survive. But today it stands for nothing on economics = certainly not more opportunity & prosperity for low & middle earners which its founder Sir Roger Douglas & myself jointly tried to make part of its plans. Those plans were personally rejected by David. He changed ACT into his own student-who-studied-philosophy image. Its now a party for the rich (and those with rich wives). Neither of us have anything to do with David anymore. The party is all about him, and the wealthy, not ordinary Kiwis. It has achieved nothing on non economic issues like The Treaty; added a few more charter schools that never changed education, and deregulated hair salons. Rog and I wanted ACT to transform NZ into a high savings, high wage, fiscally responsible, prosperous nation where Kiwis were independent from the State. David angrily threw out our practical vision and kept his rejection from public view.
Brilliant!
Perhaps you might also have compared the unemployment rates.
Not only was there a common acceptance of the responsibility to work but if you didn't like the job you had, any number equally as good or better were available just down the road.
I regard those years as the closest we came as a nation to being the true egalitarian society.
Sadly, l doubt we will ever see those golden years again.
Certainly not with people like Tame influencing public aspirations.
I have parents from the era Paul Henry speaks of. The fact was that school leavers had their choice of jobs. My uncle got accepted by 3 different employers so he had the choice as to what career he would accept. My parents got married at 22 and had built their own house in Bucklands Beach Auckland for 16k by aged 24.. Once mum had kids, they could survive paying all their bills on one income. They said no one paid rent, as it was cheaper to buy. If your kids got sick, your family doctor would drive to your home and do a check-up that way. If you needed a doctor you could ring in the morning and get an appointment that same morning. The strrets were safe enough that your kids could get on their bikes and ride to the school park by themselves without adult supervision which taught kids skills in self reliance. Every school had a school pool. Children all walked to school from age 5 by themselves. Schools were all really good in those days, so you could safely send your child to the school which was local to you and know they would get a good education. Everyone was equal in those days, you were all kiwis, your dna was of no relevance or ever discussed in school lessons. No one ever discussed the Treaty of Waitangi .I don't care how Tame frames or spins it. Was that generation better off? Henry speaks the truth.
“so I decided to check the figures using ChatGPT”
Is this the best we can get these days? It is ironic that people hark for the olden days, when people weren’t afraid of a bit of hard yakka, while at the same time not being bothered to read to and do the number crunch g ourselves but instead resort to non determinist reckons from an LLM.
Robin’s hypocrisy is so delicious I could sell it at the Sunday market.
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