On fiscal policy, the kids are all Right

“Why should the taxes of a hard-working Treasury analyst pay for the health care of a multimillionaire like Kim Dotcom?”

The question was asked in the Treasury’s hallowed, if somewhat sepulchral, precincts on Thursday afternoon.

It was not asked – as you might at first think – by one of the Treasury’s few remaining, legendary, “Austrian” economists.

Instead, the question came as part of a presentation from high school pupils on the country’s long-term fiscal problems and how to solve them.

In what could be another example of outsourcing of public sector work, Treasury earlier this year, along with Victoria University, invited the country’s year 12 and 13 students to study the long-term fiscal issues facing the country and come up with solutions.

The three top entries – winner James Hargest High, Christchurch Girls High and Otago Boys – gave their presentations to Treasury this week. 

It wasn’t quite like the Treasury’s own briefings to incoming ministers.

No, these kids made some of the Treasury bods look like wringingly wet 1970s social democrats.

Raising the age of entitlement for superannuation to at least 67 featured in all three and seemed to be something of a given, so far as these kids were concerned.

All three also proposed making KiwiSaver compulsory, but in different ways. Christchurch Girls proposed making it compulsory at the age of 35, with increased employer and employee contributions.

Otago Boys suggested something similar, though without the 35 starting point, and increasing it gradually to 10% of income.

A health tax was also proposed by two of the schools – Otago Boys calculated a $15 a month flat levy would be a useful sum.

Another option put up by at least two of the schools was a tax break for health insurance to encourage people to make provisions for their own healthcare.

Some of the ideas were quite radical. Otago Boys’ most comprehensive solution to the crime rate is to put the prisoners on an island in which they will have to become economically self-sufficient.

That has its attractions. But, of course, the last time anyone did this on a large scale the result was Australia.

All the three top schools were from the South Island and Finance Minister Bill English, who presented the prizes, noted a wider trend here: the finance portfolio has been held by South Islanders for all but six of the last 24 years.

“So there must be something in the, ahh, swedes down there,” he quipped.

It was also noted that the winning school was from his Southland electorate.

He was, though, a bit more circumspect about some of the solutions being proposed by three schools.

“Some of the solutions,” he said – and was there a hint of wistfulness? – “are simple even if we are not going to implement them as a government.”