Former Revenue Minister David Parker replies to our Blog referencing capital taxes, which will likely dominate debate at the next election.

A few days ago we ran a column headed, "(One of) Kamala Harris' Big Mistakes: Taking Rubbish Advice from former NZ PM Jacinda Ardern". Since writing that Blog, Harris gave her Concession Speech at Howard University, telling Americans "kindness" was the answer to making the country a better place. This Blog observed that it is belief in the "American Dream" which is behind taxes being set quite low in that country, and inequality being high, since Americans want to be well rewarded in the market place for their efforts. Harris herself hit that button in her speech, saying "Hard work is good work". Americans have what may considered rather unkind beliefs about the poor - 60% believe the poor are lazy and don't deserve higher welfare funded by taxation. It was that group who voted for Trump. As such, Americans tend to look up to the wealthy, to the extent they're viewed as deserving of their wealth. On that note, we also said, "At a recent conference on capital taxes, I listened to Ardern's former colleague, David Parker, get stuck into Elon Musk - it seemed for being too rich." The Honourable David Parker disagrees He says:

"You are, with respect, a bit loose in your blog sometimes. You misrepresented me this week as follows:

1. I was not speaking about capital taxes. You said on the day that was what I meant, even if I didn't say it, when I countered your incorrect statement to that effect.

2. I did not (and don't) criticize him for being rich. I did criticize emissions from the super wealthy privatizing space and causing climate change emissions. It was one of a number of examples, including private jets and super yachts. You fairly rejoined that through Tesla he's done more to reduce emissions than me.

3. I did criticize the fact that he and / or Bezos and Bloomberg paid no federal taxes some years.

David

I do admire how David Parker reads a lot, thinks about issues and debates them - I know of no other MP who's willing to talk about economics for more than about a minute without getting bored. And he's putting National under pressure. Since health-care, education and infrastructure are in need of vast increases in funding, and so far Finance Minister Willis and PM Luxon's only plan, as far as I can see is, "Let's cross our fingers and hope that economic growth picks up next year". Higher long-term growth (and greater productivity) will only happen if incentive structures are changed in NZ & I struggle to see how the government has changed any of them so far. Parachuting in semi-retired Lester Levy to kick around some middle managers does not constitute a new design of the health-care system

ACT Leader Seymour's Department of Regulation is Stalling. Elon Musk has advice: re-purpose it & rename it "The Commission for Government Efficiency"

Subjecting government regulation to cost-benefit analysis (CBA) is important and a long-held crusade of ours here at this Blog. However, given how technical it is, the best way to implement CBA is through a dedicated office within the NZ Treasury. Our Treasury already has staffers assigned to this task. That group should simply be greatly expanded. As for Seymour's new Ministry, which was created out of the defunct Productivity Commission, it should be re-purposed, re-tooled and called something like, "The Commission for Government Efficiency", a name that Elon Musk has been promoting in the US (which he may now lead). Its purpose will be to "conduct a complete financial and performance audit of the entire federal government and make recommendations for drastic reforms.” That's just what we need in NZ. The problem with Seymour's slow Regulation Ministry start-up is that regulation usually only refers to government rules that constrain private businesses.

Sure there is too much of that kind of "red tape" in NZ - and Treasury should be tasked with identifying it so Parliament can strike it out when its costs to business are greater than its societal benefits. But who's going to address the problem that there are thousands of people working in the likes of the Department of Education, and none of us have any idea what they do? They're not passing regulations - they are not interfering with private business - the problem is that they're just not doing much of anything. For example, the Education Department has had several hundred employees working on the NZ Curriculum for many years. I read those documents. They typically amount to nothing more than a few dozen pages for each subjects. A small handful of people could have done that job in less than a week. Instead the Education Department spent several hundred millions on it. The ACT Leader would be best suited to sorting out this kind of government waste - and it aligns closely with PM Luxon's corporate background of trying to find efficiencies in organizations. My fear is that going down the regulation path - and getting drawn into very technical cost-benefit debates - may have been a mistake for ACT and David Seymour. It is very important, but it should have been sorted out using existing structures & expertise within the Treasury.

Sources:

https://www.theverge.com/2024/9/6/24237429/donald-trump-elon-musk-government-efficiency-commission