Ending poverty is easy

Rodney Hide

HIDESIGHT

I vividly remember the first hour or two of my first end-of-year Parliamentary Press Gallery party.

A senior and respected political reporter bowled up to me. She was puzzled, she slurred. Why was the ACT Party so against Maori?

I was nonplussed. I had just walked in. I naively explained that nothing could be further from the truth.

I realise now that my reply would have just proved for her that I was both a liar and a fake.

“Of course, you are,” she blurted. “You guys don’t want Maori doctors!”

I was more confused than ever – I still hadn’t got a drink. I declared confidently that no one from ACT had ever said such a thing.

Oh but she, said, you are against quotas for Maori getting into medical school.

I realised then that I had led a sheltered life before Parliament. I had never before come face-to-face with such mind-numbing stupidity.

I didn’t know what to say. I didn’t know how to begin to discuss affirmative action with someone adult and so manifestly stupid.

I explained why quotas don’t work, why they don’t address the problem of under-achievement, why they are counter-productive and why, actually, anyone supporting quotas was racist. 

The ACT Party, I said, was gloriously the only party in Parliament that wasn’t racist and fervently believed that the law should be applied fairly and equally to all.

It was only the ACT Party that demonstrably believed that Maori were every bit as capable as everyone else. She clearly did not.

But her eyes had glazed completely over and her mind had left the party as soon as I started to reason and to explain. It was too tough for her.

So lacking any cause-and-effect thinking how do reporters make sense of politics? They evaluate intentions.  The impact of the policy is neither here nor there. It’s what’s intended that matters.

And that’s why the media don’t like business. Business is about a profit. Employers only employ people to make money. They don’t do things to help the world. Unlike governments. And action groups.

Another journalist was incredulous that I was against Jim Anderton squandering millions on his much vaunted “Jobs Machine” policy.

Mr Anderton at the time was flying about the country handing out taxpayer cash to lucky businesses. 

How could I possibly be against that, the journalist asked.

ACT was supposed to be pro-business. 

Aaah,  I explained, politics.

Ending poverty is easy: abolish income tax, remove all controls on foreign investment, eliminate welfare, get rid of the minimum wage and make employing someone simple contract law – ie, no employment legislation, no Employment Court and no personal grievances.

The country would boom and there would be jobs for Africa.

Productivity would go through the roof. 

Wages would skyrocket.

The majority of parliamentarians know that’s true. 

But they don’t do anything positive to assist the poor or to reverse New Zealand’s relative economic decline. Aaah, they explain, politics.

I could never figure out what that meant. I was missing something. And I spent a great deal of time finding out what it was.

It’s this: there’s no cause-and-effect thinking in politics.

Deducing policy consequences requires a chain of reasoning that political reporters and most voters can’t be bothered with. It requires thought and it’s hard.

I forgive the voters. Their vote won’t make a difference to the world. So why waste time thinking about policy impacts?

But reporters are a different kettle of fish. 

They spend their lives reporting politics. It’s their job. You would think they would have a basic grasp of the difference between good policy and bad policy, and some understanding of how policies impact society. 

They talk and write as if they do. Turns out they don’t. 

They don’t have a clue.

 

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71 Comments & Questions

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And these folk lead public opinion. It will only get worse. Newspapers are on their knees. Theur budgets have been diminished, because at least their boards understand simple economics, and the $40k a year reporters they hire just want to proselytise their socialist values.

That Rodney Hide is a racist is an easy sound bite or headline, bugger the reasoned debate.

I need say; oh well, thank God for the NBR!

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Sometimes poor analysis is worse than no analysis. NBR has its own mix of poor research and prejudices. It's five-page attack on Dick Hubbard when he stood against John Banks is onje of the worst example of 'journalism' I have seen.

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Could not agree with you more. The Dick Hubbard attack in the NBR was the worst journalism I've seen in any publication in NZ.

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Rodney there is three points in your article that I have pondered for years as to their effect:

1) Quotas for Maori getting into medical school. This was operating when I was at Uni back in 1982. All it made my friends and I think is that you wouldn’t go to a Maori doctor as you could never be sure if they qualified based on their ability or a quota so why risk your health visiting a doctor who could be substandard. Not that that may even the slightest bit true but it created a dangerous negative perception from day one. You are either qualified to be admitted to the medical course or not.

2) Maori were every bit as capable as everyone else. Again this is true, to assume otherwise is viewing us as a substandard race. I am quarter Maori, have a successful business, a family, travel the world and have a good lifestyle - and achieving all this is for only one reason; plain and simple, my parents valued education and ensured that I got one.

3) The media don’t like business. Business is about a profit. Employers only employ people to make money. They don’t do things to help the world, unlike governments and action groups. - I challenge any one in the non-productive sector i.e. where the entity does not have to earn a profit to figure out where the money that ultimately funds them comes from. It’s by taxing profitable businesses; it’s simply the form of taxation that varies whether it is income tax, dividend tax, GST, PAYE etc: The starting point for generating all these taxes is from a profitable business. I love this segment taken from a businessman invited to present to a graduation class in the USA explains the problem that people and the media have with profitable business.

Two out of three of you want to work for non-profit organizations. Why is that? Because your whole distorted worldview…has been corroded by your education. You think business is greedy…selfish…and stupid. But where the hell do you think non-profit organisations get their money? Where does the government get its money?

All of this money has to come from the productive sector of the economy.

You think you can do good by working for the government or a non-profit organization? Well, I’ve got news. You’ll be a parasite, just like the rest of them. A leech, sucking the life out of the real, productive economy. That’s another reason it’s so hard for you to find a job. The more people who fantasize about getting paid for doing good…for trying to make a better world…the worse the real world gets. Because that leaves fewer people actually doing the kind of real world work that makes the world richer and more prosperous…and better organized…safer and healthier.

So, forget about making the world a better place. Forget about leading anybody anywhere. Forget about thinking you know something. You don’t know enough to lead yourself, let alone anyone else. And most of what you think you know is worthless claptrap. Pseudo-knowledge, in other words.

Finally, don’t try to be a leader. The world doesn’t need any more leaders. It’s got too many already.Instead, try to find a real job in the real world and do it well

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I think that Metiria Turei will hate you for saying these things that most NZers hold true.

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Cheers, and right there in your comment lies the reason for the problem. The inability for a certain sector of society to face up and constructively address the truth.

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Businesses do not pay GST.

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What planet do you live on? As a profitable business we pay GST every 2-months on our profits i.e. the positive difference between our revenue and expediture during that 2-month period. Why do you think IRD expects businesses to fill out GST returns either 2-monthly or 6-monthly; simply for the sheer hell of it?

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Actually you are worng - Kolin is correct.

Businesses normally do not pay GST - they collect GST from consumers and pay GST to other businesses then pay the difference to IRD. They COLLECT GST - GST normally only affects consumers, everyone else (mainly) gets a credit for any GST

The GST you are paying 2 monthly is the net collected not actually out of your own pocket (though it may not feel like that)

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Actually by constantly developing and selling new innnovative products which our company does, we generate GST that would not otherwise form part of the tax pool. We pay GST to the government on the additional value we have created but also happen to be burdened with the role of a collector.

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No Beanie. You're obviously not an accountant, and clearly don't own your own business. If you <i>do</i> have your own business, then you owe NZ a lot of back taxes!

Imagine I had a simple home business, buying books for $115 incl GST from a supplier, and selling them for $230 to the general public. I sell ten books in a two-month period. My gross income is $2300 - I collected $300 in GST, and because I had to buy the books I have $150 in credits. On my GST101 return I have to pay $150.

Take a look at the example cashbook on the IRD website. It'll help you more than whatever manifesto you're getting your facts from at the moment!

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Actually GST is a consumption tax paid by the final consumer. Businesses do not pay it, they just act as unpaid tax collectors by adding it on to the cost of their products and then paying it on to the IRD.

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Businesses that are not going broke pay GST ALL THE TIME.

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Rubbish! Businesses collect GST on their sales, deduct from that the GST they've already paid and remit the balance to the Gummint.
And now you'll say that the businesses don't pay it, that it's the customers. Fact is, that volume of goods would sell for the same price, so the firm's income is depressed by the quantum of GST.

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As GST reduces the quantity of goods that could be sold relative to what would be sold if it was not levied, in the aggregate the burden is shared jointly between consumers and producers. This is the distributional consequence of taxation from ECON101!. ACCY101 simply deals with how the tax is collected after governments have decided the tax must be paid. In practice, it looks like it is a tax on consumption of each item produced and consumed.

So both arguments are correct (as far as each goes).

The main point is though that the pursuit of profits (gains from activity exceeding the costs of that activity) is the modus operandi of all firms. Its what you do with the profits that matters. Save the Children certainly needs the profits from selling cards at way above the cost of production to subsidise its welfare activities. Its no different for NZ Inc. Get rid of the profits, and you get rid of welfare too.

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Well said Rodders…

Totally agree – and yet, it’s an even simpler equation than what you’ve mentioned.

One only needs to look back and see how the MSM media treated the ACT party and National around election time versus the “soft & gentle” manner the politicians on the left were treated by the so called “unbiased media”

Goof was always nothing greater than a “caretaker leader” for Labour, after being landed with the hospital pass / poisoned chalice leadership mantle as Comrade Auntie scurried away as quickly as possible, abandoning the floundering SS Titanic Labour Party ship. The MSM barely mentioned Goof’s outside chances, but instead attempted to portray him and Labour as having a half reasonable shot at the PM role. Unbiased MSM indeed! Propaganda churnalists at best more likely… This is the media tide right leaning political parties have to swim against with any “story”.

TV3 & the Horrid eagerly swallowed spoon-fed propaganda fed to them by the unions on behalf of the Labour Party – regurgitating the populist rhetoric for the masses at the 6 O’Clock showing. Fortunately for NZ, the union story of the poor hard done by stevedore Mr. Cecil Walker that MUNZ attempted to spin to NZ via the media was quickly shot down in a flaming ball of union-created cluster-f*ck by an independent, honest blogger – whale oil – who told the complete, honest and entire story. The complete truth – which was completely opposite to the MUNZ / union manufactured story they shopped to the MSM – catching the likes of TV3 and the Horrid with their lazy investigative hands in the cookie jar of cut and paste churnalism.

Ironically and hypocritically, the unions and Labour are now trying to claim this same individual has had his privacy breached – but only because the full story, the entire truth made the unions and Labour out to be ungrateful, lying swindlers attempting many slight’s of hands with the public via the tame, lapdog sympathetic churnalists.

The pup reporters find themselves lacking the intellectual capacity to fully comprehend the entire political landscape and the eb’s and flow’s of policy impacts and consequences – probably as a result of the same kind of “teachings” our teachers are indoctrinated with who in turn then go on to infest the young child’s mind with. Compound that with the MSM having very strong unions and anyone not a “leftie” political party cops politically slanted articles against them all the time. Labour’s hypocrisy is almost as large as the corruption in their midst. $15K citizenship anyone? (Rodders could you also please find out for NZ Inc exactly how much the previous 9 years of Labour government gave to various unions for “training”? Exactly what was achieved and delivered to ACC for these millions? How much did the Labour Party give to the unions during these 9 years? Results? Accountability? Would “Related party” systemic corruption be possible in this situation?

Labour & the unions have all manner of “related party” funding / loans / donations all very murky and provided by highly complex financial structures and instruments that they don’t even make public to their members like they legally have to. These “incorporated societies” have gone years without proper financial reporting and accountability – but where are the MSM investigating the highly questionable financial reporting / accountability on these issues? Unbiased media – yeah right!

The Labour Party rely on access to tax payer funds so they can offer all manner of election bribes, un-costed, hair-brain policies that the tax payer has to fund. Anyone can do that – write cheques that someone else has to pay for – but ask Labour for even just one half decent fiscal policy and you’d have greater success at asking the tide not to come in. Labour needs people on welfare – their policies are designed to keep and attract even more people to hand outs of someone else’s monies. Inter-generational beneficiaries anyone?

NZ doesn’t have a poverty issue though – only adults with poor decision making abilities. Talk to me about poverty from the slums of India and Bangladesh and I’ll listen. Talk to me about poverty here in NZ with all the pax-payer funded welfare benefits people have access to – and I’ll almost bet the farm these same people crying “poverty” have Sky TV, drink, smoke, know the inside of a TAB office and often have shopping trolley’s full of processed and manufactured chips, fizzy drinks, and endless junk food. Poverty indeed – que Tui Billboard…

Some even prefer to drink and get drunk over feeding their kids before school. That’s a decision making priority issue – not a poverty issue. But Labour don’t want the story painted that way – they would prefer to say there’s a poverty issue in NZ so it plays nicely into their agenda of handing out more tax payer money in return for votes – especially as things like “Personal responsibility” are completely alien to them.

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Big yawn.

Politicians like Rodney offer insights without conviction. Just like the perk buster become perk master.

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Is that all you can input on the bigger subject matter?

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Ask Rodney about Auckland Big City benefits.

Big fat zero.

So what's the point of him spouting more nonsense?

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So you have evidence that your rates would not have gone up anyway?
Let's see it .

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A lot of Auckland Big City benefits have not materialised because of the monkey in charge. If Aucklanders vote for someone with something between the ears.....

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I gotta agree with M Ross regarding Hide.

He's had ages in parliament to do something, and what does he do? Some stupid Super City which increases the size and power of local government!

He was a politician, and he helped to do nothing. He just swanned off with his young wife. He writes about this stuff, but he had the opportunity to fix it. He just squandered it.

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Okay Rodney, you have identified correctly and intelligently elucidated a problem in society. It is an age old one, one that has been around, identified and elucidated during all my adult life, and I'll wager, since Socrates.
My question is; What is your solution?

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He said it in his opening statement - work towards abolish income tax, remove all controls on foreign investment, eliminate welfare, get rid of the minimum wage and make employing someone simple contract law, i.e. no employment legislation, no Employment Court and no personal grievances.

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Sorry that question should've have been; What is your achievable solution?
Didn't mean to make it too easy :-)

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Working towards these objectives is a long term strategy but it has to be done. Delaying will only result in a dramatic jolt. The unaffordability of our current social policies will see us inevitably drowning as the productive sector can no longer support the non-productive sector. Those with mobile capital will move it around to more favourable jurisdictions as we accelerate towards this unsustainable outcome.

It was only 100 years ago that ones family provided the moral, financial and social support that the state is now expected to provide. Unfortunately left-wing policies that shifted this responsibility to the state has created a sector of society that is now dependent upon the state for the basic needs of life. Perhaps as this crisis draws nearer, the family may be forced back 100 years to again take on its moral responsibility.

Its very interesting to see the increasing number of wealthy Americans relinquishing their US citizenship as this 'drowning scenario" becomes more and more apparent in the US.

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None of that is practical in your view? The obstacle is the politicians , as you know. What should be done with them?
How can we change the political process to prevent the scum rising to the top?

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I've had a gutsful of them FB. You must've observed "excellent upstanding citizens" elected to council/Gov. only to see them (NOT slowly) turned completely around by council/beehive staff into peppermint chewing nodding donkeys?
Dare you to post here that you have not?

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You are not the only one to have had a gutsful, which is why I asked ; what do we do.
Let the tumbrils roll? Surely something less damaging can be envisioned. What is it?

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We can change the bias of government by passing legislation that prevents people who have claimed a benefit from the state (other than the GRI) for more than a 2-year period from voting. The right to vote comes with contribution to the ecomomy. This prevents the non-productives who outnumber the productives from electing those to office who simply promise them the biggest handout.

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This started out innocently enough in the 30's and 40's with the Labour Party promise ; "we'll look after you Jack ; just give us your vote" .
Turning the temporarily disadvantaged into permanent victims voting for more benefits is where it stands presently.
But your partial solution seems to imply that there is no way to prevent the venal and corrupt from holding office. Or is it that , as John Morrison suggests above , that the entrenched "public servants" have their feet so firmly planted in the trough that the decent politician can hold out for no more than a few minutes , before he too, unable to beat them , must join them ?

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I'd go one step further and state that you should get one vote for every dollar of tax you pay over the previous election cycle. While not a perfect measure of what you contribute to society, its reasonably objective and would knock out both the dole-bludgers at the bottom and the tax avoiders at the top end.

And before you all start pointing out all the little technical issues with this - its a statement of principle only!

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does that include all the over 65s claiming a non-means tested super benefit?

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can you say elucidate?

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You set up the Super City and recently said its mayor was doing a great job.

My rates - taxes - have gone up.

So have most people's.

Explain what's so fantastic about that.

Were complaining Maoris to blame?

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No, this time we can point the blame squarely on the shoulders of the politicians - central and local.

And the politician who would be the first to jump up and take credit if things went well? Rodney, of course.

Let him write about how easy it is and how he will fix the mess which is Big City Auckland Council.

Just try getting a planning approval and get a property built these days, Rodney. Layers and layers of bureaucrats and exhorbitant contractors to get through.

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Talk is cheap and easy, Rodney.

Please give us an easy solution to skyrocketing rates and house prices in Auckland.

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There isnt a solution so long as demand exceeds supply and those living within the city demand better resources and infrastructure. The financial efficiencies that could have been gained by amalgamation are miniscule compared to the finances needed to provide the resources and infrastructure demanded by Auckland city residents.

The only strategy for reducing rates is to go back 100 years and have a crap each morning in the back garden, reuse what was once precious that we now consider disposable rubbish, catch the water off the roof for drinking, washing etc, trade the BMW for a horse to cope with the rutted and unsealed roads, take the flagon to the pub for refilling and grow your own veges. The only alternative is to move somewhere more affordable.

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Wait till Auckland can no longer discharge sewage to waterways; then you'll see some rates increases.
Unless of course the city councils take a knife to non-essential spending.
We live in hope.
Farmer Brown pays $10,000 in rates for no water, no sewage , no lighting or footpaths , and no rubbish collection.
What are you moaning about?
Then there's the same amount again paid to the Regional Council.

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The big costs for local council are infrastructure and central government dictated regulation and compliance. It's in the latter where savings can be made. But kiwis then jump and down when something goes wrong and always want government to do something about it. So we can't hold our breath.

As a by-product of the reforms in Auckland the savings were considerable. Further savings are possible. That's now up to the new council and the voters.

I think the media issue will be solved in short time. The costs of entry are now next to zero!

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The proof of any reform is better and more efficient cost-effective services.

I cannot think of one thing which has improved under the Big City Auckland Council.

Heck, cannot even organize a train service for RWC!

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It doesn't matter where you look; most of the councils are dysfunctional when it comes to the provision of core services.
If Farmer Brown pays $10,000/annum in rates and receives no core services then where is it all going?

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Building costs would be vastly reduced by legislating Councils be liable only for health and safety thereby removing 90% of the building bureaucracy.

Land costs would be vastly reduced by legislating tradeable property rights for neighbour infringements of "quiet enjoyment of your property" and then abolishing all the planning bureaucracy.

Infrastructure should be privatized.

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Where are the savings, Rodney?

Shifting costs from the Council to ratepayers via heavy user-charges ain't savings - it's called cooking the books!

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Hyde dont judge the reporter by your own stupidity. You are a slave to the Roman system When Rome through itsmany front agents speak, you come to attention and bow and grovel at Romes feet... or else.......

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Are you high on acid?

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It does not surprise me my previous comment rejected. Truth is a two-edged sword.

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Your previous comment is indecipherable.

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It does not surprise me my previous comment rejected. Truth is a two-edged sword.

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Like the farmer said, your previous comment is indecipherable.

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