Having watched Qiulae Wong, the Opportunity Party leader, being interviewed by Jack Tame, it is clear that she, and presumably those who advise her, have no idea when it comes to the two key planks of their manifesto. What will be the effect of their increased tax and land tax impositions and the Universal Basic Income, with all of the costs thereto attached?
If we look at three different aspects of the interview its easy to see where facts end and ‘Opportunities’ begin.
Public Service Job Cuts.
When pressed on this Wong equivocated for a while but finally agreed that the job cuts would number 2,000 and these would come from the Ministry of Social Development staff who would not be required to “Tick boxes on benefit eligibility” because the UBI would substitute for these benefits.
However TOP’s claimed annual savings in addition to the NZ$977 million at MSD also include a further NZ$770 million from savings in IRD, MBIE, Oranga Tamariki and Justice.
This total saving of NZ$1747 billion, necessary to balance TOP’s books, even assuming an average, fully loaded employee salary of NZ$150,000 translates into headcount cuts approaching 12,000.
Clearly not all of the savings would necessarily come from headcount cuts, but, equally, the 2,000 figure Wong quoted to Jack Tame is under-called by several orders of magnitude.
A mistake then? Or a deliberate lie? Or just an example of the pie in the sky figures TOP are bandying around with no basis in reality?
Fiscal Holes.
Tame started with a simple calculation based on NZ population stats that suggested the UBI would cost NZ$80 billion per year. Wong corrected him, saying that not all members of the population would qualify, claiming 500,000 would not and the actual cost was therefore NZ$69 billion.(Based, as she said, on 2024 figures.)
However, there is one glaring example that neither Tame nor Wong touched on and that is the amount of land tax that would be deferred by pensioners unable to pay the $10,000 plus per year from their existing pensions (said pensions would not increase because the UBI just rolls into the current pension: it does not add to it).
Logic suggests that pretty much every pensioner would opt for the deferral out of fiscal necessity and the subsequent result is a likely deferral in the vicinity of NZ$6 billion per annum.
Set against TOP’s estimated UBI cost of NZ$69 billion, that’s a 10 per cent fiscal hole that would have to be plugged by more borrowing or greater tax payments made elsewhere.
Tax and Be Damned.
And so we come to the key statements made by Wong, for which the technical term, I believe, is ‘Wishful Thinking Waffle’.
Tame pressed for answers on two fronts. First, the fact that 500,000 existing Kiwi residents would, for various reasons, not be eligible for the UBI but would, under TOP’s increased tax rates, be faced with “thousands, or tens of thousands of incremental taxes”. Using an example of a professional couple, earning between them $250,000 per year and owner occupiers of an average Kiwi property, Tame, using TOP’S own tax calculator showed the couple’s incremental tax bill to be NZ$27,000 per year.
Second, regarding the 1.5 million of our best and brightest currently living overseas who would not qualify for the UBI for five years if they returned, but would similarly be hit with incremental taxes in the same $20,000 to $30,000 per year ballpark...Why, Tame logically asked, would the 500,000 existing non-eligible residents facing these huge tax increases not simply emigrate to Australia or further afield?
And, similarly, why would the 1.5 million Kiwis already overseas, and faced with a similar tax bill, not simply stay overseas rather than voluntarily coming back to pay extra taxes to fund the UBI for people already here?
And that’s when Wong’s answers entered the realm of Wishful Thinking Waffle.
They would, said Wong, look through the massive incremental tax costs associated with staying or returning and instead adopt the altruistic stance of realising that NZ would become “more attractive in the long run” because of reduced housing costs, student loan forgiveness and more investment in Innovation, thus making the country a better place to live, even though the extra taxes will be kicking them back down the ladder for the first five years.
No facts or cost analysis of these ideas, just the blind assurance that Nirvana would eventually arrive and all would benefit, even those who had paid tens or hundreds of thousands of dollars in extra taxes whilst they wait the mandatory five years for their UBI eligibility to arrive.
In 1766 – Adam Smith, in The Wealth of Nations – said this:
Qiulae Wong and TOP seem to think they have invented a brave new world where self-interest no longer holds sway. To which the only answer would seem to be – good luck with that.
However, I should add one rider, the eight per cent of the electorate currently saying they will vote for TOP will probably never see or consider any of the problems, fiscal holes and costs associated with their policies. The only thing on their minds will be Free Money, Free Money, Free Money and damn the consequences as the country sinks even deeper into the slough of redistributive dependency.
Public Service Job Cuts.
When pressed on this Wong equivocated for a while but finally agreed that the job cuts would number 2,000 and these would come from the Ministry of Social Development staff who would not be required to “Tick boxes on benefit eligibility” because the UBI would substitute for these benefits.
However TOP’s claimed annual savings in addition to the NZ$977 million at MSD also include a further NZ$770 million from savings in IRD, MBIE, Oranga Tamariki and Justice.
This total saving of NZ$1747 billion, necessary to balance TOP’s books, even assuming an average, fully loaded employee salary of NZ$150,000 translates into headcount cuts approaching 12,000.
Clearly not all of the savings would necessarily come from headcount cuts, but, equally, the 2,000 figure Wong quoted to Jack Tame is under-called by several orders of magnitude.
A mistake then? Or a deliberate lie? Or just an example of the pie in the sky figures TOP are bandying around with no basis in reality?
Fiscal Holes.
Tame started with a simple calculation based on NZ population stats that suggested the UBI would cost NZ$80 billion per year. Wong corrected him, saying that not all members of the population would qualify, claiming 500,000 would not and the actual cost was therefore NZ$69 billion.(Based, as she said, on 2024 figures.)
However, there is one glaring example that neither Tame nor Wong touched on and that is the amount of land tax that would be deferred by pensioners unable to pay the $10,000 plus per year from their existing pensions (said pensions would not increase because the UBI just rolls into the current pension: it does not add to it).
Logic suggests that pretty much every pensioner would opt for the deferral out of fiscal necessity and the subsequent result is a likely deferral in the vicinity of NZ$6 billion per annum.
Set against TOP’s estimated UBI cost of NZ$69 billion, that’s a 10 per cent fiscal hole that would have to be plugged by more borrowing or greater tax payments made elsewhere.
Tax and Be Damned.
And so we come to the key statements made by Wong, for which the technical term, I believe, is ‘Wishful Thinking Waffle’.
Tame pressed for answers on two fronts. First, the fact that 500,000 existing Kiwi residents would, for various reasons, not be eligible for the UBI but would, under TOP’s increased tax rates, be faced with “thousands, or tens of thousands of incremental taxes”. Using an example of a professional couple, earning between them $250,000 per year and owner occupiers of an average Kiwi property, Tame, using TOP’S own tax calculator showed the couple’s incremental tax bill to be NZ$27,000 per year.
Second, regarding the 1.5 million of our best and brightest currently living overseas who would not qualify for the UBI for five years if they returned, but would similarly be hit with incremental taxes in the same $20,000 to $30,000 per year ballpark...Why, Tame logically asked, would the 500,000 existing non-eligible residents facing these huge tax increases not simply emigrate to Australia or further afield?
And, similarly, why would the 1.5 million Kiwis already overseas, and faced with a similar tax bill, not simply stay overseas rather than voluntarily coming back to pay extra taxes to fund the UBI for people already here?
And that’s when Wong’s answers entered the realm of Wishful Thinking Waffle.
They would, said Wong, look through the massive incremental tax costs associated with staying or returning and instead adopt the altruistic stance of realising that NZ would become “more attractive in the long run” because of reduced housing costs, student loan forgiveness and more investment in Innovation, thus making the country a better place to live, even though the extra taxes will be kicking them back down the ladder for the first five years.
No facts or cost analysis of these ideas, just the blind assurance that Nirvana would eventually arrive and all would benefit, even those who had paid tens or hundreds of thousands of dollars in extra taxes whilst they wait the mandatory five years for their UBI eligibility to arrive.
In 1766 – Adam Smith, in The Wealth of Nations – said this:
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
Qiulae Wong and TOP seem to think they have invented a brave new world where self-interest no longer holds sway. To which the only answer would seem to be – good luck with that.
However, I should add one rider, the eight per cent of the electorate currently saying they will vote for TOP will probably never see or consider any of the problems, fiscal holes and costs associated with their policies. The only thing on their minds will be Free Money, Free Money, Free Money and damn the consequences as the country sinks even deeper into the slough of redistributive dependency.
14 comments:
Every day, Qiulae Wong appears to be more and more of a clone of Ardern. And, of course, the media thought Ardern was the bees knees and promoted her to stardom, the closest being to saints or even higher. It took a few years before she was exposed as a fraud but look at the damage she achieved in that time. New Zealand cannot afford another "saviour", especially one with a plan to make the successful among us pay for the the many who failed to take responsibility for themselves through education and hard work. It sounds like Communist Welfare, and we definitley do not want or need that.
Qiulae Wong and TOP have invented a brave new world where self-interest is for them and theirs and the rest can 'eat cake'!
New Zealanders wallow in self-interest. Most of the TOP "supporters" commentary was about how much extra they themselves would get. Some on over $125,000 pa wrote they would collect an extra $300 pw. No doubt younger dependents on the state would benefit as well.
Why should superannuitants be paying for these peoples lifestyles?
You would have to be pretty silly if you are over 65 and vote for TOP. Superannuitants are not all as financially secure as Gareth Morgan.
What is their policy on cats?
The book 1984 by George Orwell was meant to be a warning not an instruction manual.
To anon 7.31am
Isn’t that precisely what MMP is about? Factionalism of interests - every interest group free to vote in the party which represents their self interest? TOP is no different to NZF or the Maori Party.
The old story about a wolf in sheep's clothing - kiwi suckers fell for it with Ardern, and here we go again with her clone.
Wake up NZ.
Seems TOP would need to build thousands of retirement complexes and rest homes to provide housing for pensioners unable to pay stiff land taxes.
To anon 9.03am. I dispute people have voted traditionally mainly for self interest. This is a new phenomenon brought about by circumstances. NZF appealed to older people because they were being neglected. The Greens originally appealed to voters because the environment was being neglected. Workers might well have felt neglected and thus voted for Labour.
There is no reason why a party should promote policies based on race. Likewise, there is no reason to further punish superannuitants. I maintain the older generation worked hard for their rewards. They have no more influence over any government than anybody else. Otherwise, NZF would be in power. TOP is basically robbing Peter to pay Paul.
Another article I read on a tax website says the TOP policies will reduce house prices by 15%. So not only will superannuitants probably have to defer their land tax payments, their property value will be reduced as well. It is indeed a "lemon" dressed up as a "bright, shiny bauble" with cash payments up front to entice voters.
Supposedly, young people are bitching that they can't afford to buy a house, with TOP's land tax to pay every year on top of rates, why would they want to own a house? 1/2 of their "free" $ would go to pay the land tax. How absurd/crazy, yet many of these so-called smart kids can't do the simple math.
TOP living rent-free in some folks heads, it seems! Keep going , TOP, you’re clearly hitting the mark with your anti-corruption policies to be drawing all this attention.
Yeah, when they can afford a house, Qiulae Wong will request that they put a teddy bear on the window, and be kind to passersby.
Be aware of the wolf.
Precisely anon@6.31. House prices will most assuredly fall if TOP get their way, but that will NOT make housing more affordable. What might be saved on any deposit and mortgage repayments will go out the door in land tax. In fact housing may become a wider issue, as it will become very unattractive to landlords, more especially if Labour introduce Capital Gains Tax, and even moreso if they don't adjust for everyday inflation and the reduced buying power of the dollar. If the left get hold of the Treasury benches, look out - and best be ready for an exit strategy. New Zimbabwe in more ways than one.
Anon 631: it is because they will be better off in the short term and the long term. Did you not learn logic at school?
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