Singapore’s success was founded on the opposite of what we are hearing from our politicians, writes Bruce Cotterill. Photo / Getty Images
I’m sick of our politics.
Like many people, I’m deeply interested in it. But if you have even an average level of aspiration for what this country could be, you’d be right to be frustrated by the current campaign.
The politicking. The half-truths. The mistruths. The mealy mouthed words andphrases designed to mean one thing or something else. Members of a party making a comment, only for another member of the same party to say something different.
And then there are the outright dumb ideas, which for the most part won’t make it past the cutting room floor of any post-election negotiation process. We’ve heard a few of those already. The trouble with MMP is that political parties can promise anything they like, and later blame coalition negotiations for the failure of their ideas.
I want to hear something better. Something clearer. More honest. More open.
New Zealand is at a massive crossroads in the course of its history and this election is more important than any other. Of course, we said that last time, but we haven’t achieved enough in the interim to change the outlook. So the same position remains.
As you’ve heard me saying in this column before, I’m yet to see a cohesive long-term plan or something that says we can be better.
This week’s policy announcements give us some insight into the problem. National’s programme to provide greater assistance to first home buyers is a nice to have, but it’s not going to move the dial for a troubled country. Meanwhile, the Labour Party announced that, if elected, all government servants will be paid the living wage. It’s a nice thing to do, but it’s nothing more than an expensive election bribe with little long-term benefit.
The Greens won the stupidity contest for the week with their announcement that they will nationalise 120 supermarkets and a couple of distribution centres to create a government-controlled supermarket chain. Like plenty of other Green Party announcements in this campaign, the numbers don’t stack up and even if the Greens end up in a coalition negotiation, the idea is likely headed for the scrapheap.
The election campaign has instead turned into a major conversation about tax.
On the left side of the political divide we have a massive amount of talk about new and permanent taxes. The various policies of the political left include capital gains tax, land tax, wealth tax, property tax and even a return to inheritance taxes. Considering what is being asked of the voting taxpayer, there is not much accompanying talk about why such taxes are needed, nor any real detail on what the money will be spent on.
Most of us know that, if even half of the taxes being proposed are allowed to be implemented, it will do more serious long-term damage to the country, and relegate us back to the pathway that the last Labour-led government once had us on. Except this time it will be irreversible.
So my question to Labour, the Greens, Top and Te Pāti Māori is this. Why do we need so many new taxes? Are you really so desperate to rob from the rich and give to the poor that you are prepared to wreck the country for your ideological goal? And please, if that is the objective, please be honest enough to say so.
Next question. What on earth are you planning to do with all the new tax income you’re planning on plundering from hard-working Kiwis? If it’s another waste-fest like your last time in charge, nothing will be achieved except the creation of a poorer country.
So, some honesty please.
Over the past couple of weeks Labour have been at great pains to define who will pay their proposed capital gains tax. At 28% on capital gains it will instantly become one of the highest such taxes in the world. And that’s before you add the tax wish list of their coalition partners.
But they’re clearly having trouble explaining things. In fact, it seems that they’re not even clear on what their new tax will apply to. For example, both the Labour leader and their finance spokesperson say that their capital gains tax policy won’t impact business owners. But according to the policy, if the business comprises a property, which many do, they will be affected. So why not say so?
The reality is that for many small and medium-sized businesses, the land and buildings occupied as business premises are inextricable from the business itself, and often the value of the property is higher than the value of the business.
In fact, a quick search across the businesses for sale websites will deliver a list of campgrounds, country pubs, motels, cafes, tyre shops, rural service stations and the like, where the business is the premises and vice versa. In many of these cases the business is worthless. It’s simply an owner buying themselves a job from which most pay themselves less than a good wage. The only value in these businesses is the property they own.
And according to the wording in Labour’s policy, those properties will attract the capital gains tax.
So, Mr Hipkins, why don’t you say so? Why fudge the language? Either the property owned and occupied by businesses is subject to your capital gains tax proposals, or it isn’t. Which one is it?
Voters should remember that these tax policies, if implemented, are not some temporary thing that will go away in the future. This is a permanent grab for your wallet and your family’s wealth, built up over generations in some cases. Tens of thousands of dollars per year for many households. Hundreds of thousands for others. Not one-offs. Every year. Permanent.
Remember, these are the same politicians who wasted hundreds of millions of dollars the last time they were in charge. Consulting reports, plans for bridges and railway lines that were never built. Warehouses full of covid defences that a country of our size was never going to use. So, if people with this track record want more of our money, we should be asking them to explain themselves a lot more clearly.
At the very least, let’s have an accurate detail of what the taxes comprise, why they are necessary and what they are intended to pay for. Not to ask for that as a minimum is to hand over more money to ineffective government ministers without asking for any accountability in return. Why would we do that?
The fact that we’re even having a tax debate in this country at present is nuts. We already pay plenty of tax. We don’t need more tax. What we need is better spending.
And that criticism applies to every political party, on both sides of the political hue.
Let me repeat that again. We don’t need more tax. We need better spending.
National is campaigning on Helen Clark-era superannuation, the Greens want to revamp and tax system, and Labour seems bent on extravagantly giving away free stuff. Photos / Getty Images; illustration / NZ Listener
We often talk about emulating countries like Singapore, but we are as far from emulating Singapore as possible. The maximum personal tax rate in Singapore is 24%. The corporate rate is 17%. There is no capital gains tax.
But Singapore’s success was founded on the opposite of what we are hearing from our politicians. Big thinking, big ideas, core values and a relentless passion for execution, which saw a small island economy, in an inconvenient location, transformed into a major trading and financial hub.
We could do the same. But we have to change the rhetoric. The conversation needs to be elevated. The focus needs to be narrowed. We need every action supporting a few big aspirational objectives.
If you think that’s wishful thinking, think again.
Most readers will recall the state of our education system just a few short years back, when the aforementioned Chris Hipkins was the Education Minister. And yet today, a good policy plan, a focused minister and the right levels of commitment are generating results inside the first three-year term. Reading, maths and science are improving at pre-secondary school levels, attendance is up, and this week we’ve heard of unanticipated improvements in Pisa tests for 15-year-olds. Improvement is particularly noticeable among the less privileged students. It can be done.
Education is hard. These results are being achieved despite an entire left-wing organisation chart working against the current government. Teachers’ unions in particular have pushed back on the changes. But the results don’t lie. And amazing results are being achieved inside three years. That’s what we have to pursue.
That’s what Singapore would do.
Despite the earlier talk of our Education Minister becoming PM, the greatest service she could do for our country over the next 10 years would be to see through a plan for the country to run a world-class education system from top to bottom. You want to give the country the best chance of success? Let’s educate our people to the highest standard possible.
That’s what Singapore would do.
But we shouldn’t limit it to education. We should be taking the same aspiration, planning, focus and leadership to our other big priorities. Think a world-class health system to add to our world-class education system.
Our economic growth engines have a head start on anything Singapore ever had. Agriculture, tourism, technology and electricity generation are all in demand around the world and we’re good at it. Place a world-class education system alongside those capabilities and we’d be a tough juggernaut to stop.
The list goes on. Immigration for our reasons, not others. An infrastructure plan that’s affordable, planned, and that doesn’t waste money on pipe dreams. An approach to law and order that sees gangs and drugs and their associated crime waves become a dark part of our past rather than a continued theme of our future. And let’s stop pretending that we can solve the climate crisis and wait for those who can make a difference to take the leadership role.
We don’t need more taxes. And we surely don’t need to buy supermarkets.
There’s a lesson in our education success. Let’s pick some major themes. Let’s develop a good plan and make good ministers and good executives responsible for delivering successful outcomes.
That’s what Singapore would do.
Bruce Cotterill is a professional director, speaker and adviser to business leaders. He is the author of the book, The Best Leaders Don’t Shout, and host of the podcast, Leaders Getting Coffee. www.brucecotterill.com
Leaders Getting Coffee with Bruce Cotterill | iHeart
Episode 70: Founder and CEO of Martelli Buyers Agents, Alex Martelli • iHeart
Leaders Getting Coffee with Bruce Cotterill
Episode 70: Founder and CEO of Martelli Buyers Agents, Alex Martelli
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