Regardless of their party, politicians in general rarely impress me, in fact just the opposite. Typically unusual people with more ambition than talent, the most dangerous being those rabid idealists (some of whom have never earned an honest dollar outside the cloistered halls of academia) determined to change the world, providing of course that others pay. Every modern society works on the basis that everyone (well, nearly everyone – hmmm, perhaps most) contributes towards those things society as a whole requires, by way of tax – healthcare, education, justice, roads, etc. The politicians of every country fiddle with the tax rate, some raising, some lowering, but inevitably with the view of extracting more from those who contribute (and this number is surprising few). Most Kiwis are raised in an environment where every dollar is both hard earned, and needs to be accounted for – few have the benefit of unlimited income and the ability to live without a budget. We know that to spend more than we earn today is to “borrow” from our future earnings, and the interest we pay is the “cost”, perhaps 5-6% for a mortgage, or 22- 30% on credit cards. We know that to take the family to Fiji on holiday by invoking credit card debt, comes at a high price – whilst the benefit is short lived, the cost tends to linger long into the future, typically at the expense of things we can’t afford because of the debt incurred. As a household, we have a combined household income, and usually divide this total into segments (like cutting a pizza) – if you make the “rent or Mortgage” slice bigger, the rest of the slices have to get smaller. Just because we want to spend more, unless we earn more, our pizza does not get bigger. My issue is that Governments (and I’m not being political here) have a different view. The previous government “underspent”, prudently leaving several billion in the kitty, whereas the new coalition acknowledges they’ll be spending closer to $20 billion more than they “earn” through tax – so where does this come from (think credit card debt)? Every time a politician makes a promise exceeding the existing tax take (the countries pizza) that benefits someone (the elderly, the poor, the sick, the justice system, education) , someone else has to pay. So – to fulfil a promise made to appease the Greens, we need find several billion dollars to pay for “light rail from the city to the airport” (how is that going to benefit anyone in Manurewa or Papakura, Pakuranga or Albany, Silverdale or Henderson?) – and the intelligentsia have decided the answer is to increase the tax on petrol… “Working class” people of far flung suburbs who will never get any benefit from “light rail”, and whom are reliant on their cars to drive to their jobs in East Tamaki and the Airport Oaks will have to find an extra $10-$20 each week to fund the fantasies of the intellectual greenies. These same working class people have been deprived of the $2000-$3000 tax cuts that had been legislated into law, but will be repealed under urgency when Parliament sits. Talk about beat the down trodden with a big stick. Neither of these things affect me to much – I don’t spend much on petrol, and am fortunate enough that $2-$3,000 is not life changing to me. Whilst raising the minimum wage and abolishing the “90 day trial” is great in theory, in practice it hurts those who should benefit most – whereas many employers will take a risk on a kid if there is not a lot at stake, they won’t if the cost is too high. Politicians who have never worked in the private sector, who’ve never had their house on the line to fund their business and who have never employed people simply don’t know that good staff can usually “write their own ticket” – if they are skilled and undervalued, they’ll leave and find an employer who recognises their worth. Legislating “protection” may benefit the lazy, the unreliable or the uncommitted employee, but does nothing for those worth keeping. Raising the minimum wage also makes the cost of automation more beneficial, more quickly – been to a McDonalds and seen how they’re replacing people with machines lately? Staff costs typically exceed 50% for most employers, so any increase provides motivation to shed those lower skilled people in favour of a machine. Regards home ownership - those people who have extended themselves in recent years to buy a home also face the prospect of being severely punished, many stretching themselves to their financial limits to get on the property ladder. Homeowners will no longer be permitted to sell to the highest bidder, instead the relying on the whim of Politicians to approve those who can and can’t bid. The joint effects of increasing interest rates (which exceeded 11% both previous times Winston was in a coalition), and a depressed property market must inevitably evaporate the equity of home owners, with long term owners being less affected than recent entrants to the market. Comments are closed.
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Don MalcolmA perfect day involves being on my Harley with a long ride ahead.
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