NBR Rich List backlash the canary in the coal mine, pointing to an ‘anti-wealth’ election: commentator

This year there has been a bigger backlash than usual against the NBR Rich List.

Some elements are familiar.

It’s no surprise that Nicky Hager's sister, Mandy, re-tweeted that it was the “list of shame.”

And NBR’s stock rebuttal will come as no surprise to readers.

Rich Listers like Rod Drury, Ian McCrae, Brendan Lindsay and the McPhail family (to name just a handful) have created thousands of jobs in areas from software to manufacturing to horticulture.

New entrants like Chris Heaslip and Eliot Crowther (Pushpay) and Murray Holdaway (Vista) have created weightless exports in whole new markets, bringing in export receipts and high-value employment. 

And the likes of Sir Stephen Tindall, Sam Morgan and John Holdsworth are prolific investors in startups, helping to create new companies or even new sectors of the country's economy.

While the Rich Listers are getting richer, NZ Initiative head of research Eric Crampton points out that many of them have made their fortune by creating value for others, as opposed to the monopolists or crony capitalists who can dominate rich lists overseas. When the Mowbrays burst onto the Rich List by selling innovative toys, it doesn’t detract from others’ wealth.

On a similar theme, Prime Minister Bill English – who could be relied on for a dry rather than inspiring defence of the Rich List – suggests a lot of wealth disparity in New Zealand can be linked to interest rates, which have been historically low since the 2008 global financial crisis, saying: “Much lower interest rates drive up capital values. That wouldn’t be surprising to people who hold assets, who are going to find those assets to be more valuable. If interest rates rise, then on that measure of inequality, inequality will drop – but they will still have the same assets.”

Rodney Hide weighs in that “The great thing about capitalism is that it generates wealth on a phenomenal scale, so the very definition of poverty changes every generation.”

I could go on, but you know the drill.

Lining up to give the Rich List the bash
What has been a surprise this year is the ferocity of critics and, more, the New Zealand Herald, Stuff, RadioLive and NewsTalk ZB enthusiastically providing a platform for the bashers (see links on our Rich List home page).

Auckland University sociologist Dr Ron Kramer, with his theory that the Rich List was a “representation of underlying inequality” became the King of All Media as he hopped between interviews.

Does it mean New Zealand is catching some of the populist fever that has recently gripped the US and the UK?

“The NBR Rich List in 2017 might be seen as some sort of canary in the mine – the reaction to it this year has been more negative than usual,” says political commentator Bryce Edwards.

 “This year’s election might yet be influenced by this rising anti-rich feeling. It’s not yet clear how this might be represented – New Zealand’s parliamentary parties haven’t traditionally railed strongly against the rich,” he says.

“New Zealand First is the most likely to push an anti-wealth programme, and already Winston Peters is even using the word ‘capitalism’ in disparaging terms during the campaign. He’s the one to watch. His version of populism is somewhat more left-wing than usual, and he’s clearly hoping to pick up on the more anti-establishment feeling out there.”

He adds, “Sometimes it’s even the wealthy here that are doing the politicising. Witness The Opportunities Party’s Gareth Morgan railing against wealth and against the lack of taxes on wealth.

“Ever since the global financial crisis there has been much more public and media discussion of poverty and economy issues," Mr Edwards says.

"The Roy Morgan poll out last month showed the single biggest concerns of voters are poverty and inequality. In addition, voters in the survey cited other economic issues of housing affordability, homelessness, cost of living, inflation and unemployment as their top concerns."

Increasingly, the debate or concern about inequality is shifting from a focus on the problems of those at the bottom to a focus on the other end of the spectrum – the wealthy. So previously the problem was framed simply in “the poor not having enough,” whereas now there’s a greater discussion about “the rich having too much.”

Dr Crampton says the economic data shows income inequality has been relatively flat over the past two decades. But the fact that house prices and rents have increased has made conveying that a hard sell.

“I get uncomfortable when people see high levels of wealth, don’t understand the value-creation that underlies it and think it’s somehow unfair that this person who’s created a lot of value for others has a lot more money in his pocket as a consequence and they don’t – and then they want to redistribute all of it. “

NBR ran a Rich Lister philanthropy special last year. Would it have helped soften the backlash if we’d done the same this year?

“No. I don’t think there’s any way of winning on that one,” Dr Crampton says.

“When Mark Dunajtschik put a whole pile of money up to build a new hospital for Wellington, you still had the Twitter left railing against the fact he had that wealth to spend in the first place – and that it should have been taxed away from him so the government could have built the hospital."

He adds, “It’s impossible to satisfy some of these critics. They have no understanding of the process by which wealth is created, no understanding that creating value for consumers is what allows you to build that wealth. They don’t appreciate the market process that underlies that; they think it can all be done by government redistribution instead. And when you build an economy on that kind of a basis, you wind up in terrible situations.”

Foot-shufflers
The release of the Rich List 2017 has also seen the familiar theme of Kiwi reticence.

Journalist Bill Bennett, who worked for NBR back in the 1990s, remembers: “My job meant getting short interviews of Rich Listers and checking details about their wealth. It didn’t take long, for one thing, to become clear, New Zealand’s rich did not like talking about their wealth and went out of the way to downplay their success. Many tried to persuade me they didn’t belong on the Rich List. One hired a publicist to persuade me he didn’t belong on the Rich List.”

He adds, “Compare this with the big noters in Australia or the US who pay publicists to get their names on local equivalents of the Rich List.”

Things haven’t changed. One Rich Lister went as far as getting a QC to issue a last-minute threat of legal action if his profile wasn’t dropped from the NBR Rich List this year (it stayed in).

And Rich Lister and National MP Ian McKelvie told Fairfax that people named on the list were uncomfortable about being singled out.

"I just don't think [the Rich List's] is in anyone's best interest,” he said.

New Zealanders love to celebrate success when it comes to sport.

Business, not so much.

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