Friday, 16 May 2014

Friday Morning Ramble: Budget Week Edition

“[From the State's perspective], There is always good and sufficient reason for
more and more taxes. Solomon's temple, the roads of Rome, the rearing of 'infant
industries,' military preparedness, the regulation of morals, the improvement of
the 'general welfare'--all call for drafts on the marketplace, and the end-product
of each draft is an increase in the power of the State. Some of the appropriations
seep through to some members of Society, thus satisfying the something-for-nothing
urge, at least temporarily, and so stimulate a disposition to tolerate the institution
and to obliterate understanding of its predatory character. Until the State reaches
its ultimate objective, absolutism, its answer to tax-grumbling is that the 'other
fellow' pays all the levies and that seems to satisfy."

- Frank Chodorov, from his book The Rise and Fall of Society

The government’s budget is promised to be in black next year, meaning its promised spending of your money is less than they expect to take from your directly in tax. So, given the flurry of interest in inequality, I thought you might like to know which income-earners have the government’s hand deepest in their pockets.


The most relevant columns to correlate (above) are the second and the fourth. They show that, for example, the top 6% of income earners are required to pay for 37% of the government’s spending .  And, as you’ll see, this vastly understates the proportion they pay, since this table excludes doesn’t reflect everyone balancing off their tax bill by sucking in so much Welfare For Working Families they’re net tax takers, not givers. Which is most low- and middle-income earners.
Doesn’t that sound unequal to you?

“In the West the rise of the great masses to tolerable comfort has been the effect of
the general growth of wealth and has been merely slowed down by measures interfering
with the market mechanism. It has been this market mechanism which has created
the increase of aggregate income, which also has made it possible to provide outside
the market for the support of those unable to earn enough. But the attempts to ‘correct’
the results of the market in the direction of ‘social justice’ have probably produced more
injustice in the form of new privileges, obstacles to mobility and frustration of efforts
than they have contributed to the alleviation of the lot of the poor.
- Friedrich Hayek,  Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice

They’ve promised a surplus. They’ve also promised more spending.
... Government announces bigger new spending allowances ahead of election – INTEREST.CO.NZ

“While there’s a little bit of fat trimming here and there, overall its more of the same tax and spend. To fix our long term problems of an excessive tax burden, Bill English needed to wield an axe to superfluous spending. He’s failed to do so.”
Budget in Surplus But Little Else for Taxpayers to Crow About – TAXPAYERS’ UNION
Post-Budget Comments – TAXPAYERS’ UNION

“Budgets are essentially political documents, particularly in election year, and this year even more so because the Minister of Finance thinks the Government can have a bit of a spend up while proclaiming the need for restraint and praising themselves for the restraint they have shown.”
Analysis of Budget 2014 – John Bishop, TAXPAYERS’ UNION

Removing tariffs from imported building materials – long overdue and supposedly worth around $3,500 per house; politicised land releases – with all their noise about the issue these represent the government’s only plan for improved housing affordability.
Thank goodness folk like NZIER are continuing to pressure for real action.
NZIER calls for Auckland's Metropolitan Urban Limit to be pushed out ... – NZIER, INTEREST.CO.NZ
Special Housing Areas - Old Tricks at Play – WHALE OIL

“80 Billion Dollars in Dept for less than 2 million taxpayers. New Zealand, first country in history to go from a first world country to a third world country. ( Don't believe the hype).”
New Zealand National Debt Clock


Meanwhile … “David Cunliffe's pledge to get unemployment down to 4% should be viewed cynically.”
Rodney Dickens shows why targeting 4% unemployment is misguided and would backfire. He says it is political nonsense – Rodney Dickens, INTEREST.CO.NZ

And in case you’d missed the bankrupt Labour-Green bloc’s latest…
Surprise – Cunliffe wants Labour to be funded by taxpayers – KIWIBLOG

“They may well be in the majority.Conflicts of interest among such practitioners abound.”
On Shane Taurima, Linda Clark and Conflicts of Interest Left, Right and Centre – Brian Edwards, NBR

The biggest media bias? Supposedly “neutral” state radio, very consciously biased towards statism.
Sean Plunket Sticks it to State Radio – WHALE OIL

"Note to developers – never build anything distinctive from now on, shun imaginative architects, don’t buy ‘landmark’ assets. Boring is good."
Taking property by deceit (this is not a Treaty article) – STEPHEN FRANKS

Embedded image permalink

“Sniff it all”? WTF?

“Until this week, relatively little published from Edward Snowden's trove of NSA documents has concerned New Zealand and its specific role as a "Five Eyes" intelligence partner. … But yesterday, Snowden's journalistic ally Glenn Greenwald released another tranche of documents, alongside his new book on the Snowden story, No Place to Hide. And finally, we're in the picture [see above] …
   “How does "sniff it all" sit with this assurance last week from GCSB director Ian Fletcher?”
Snowden and New Zealand – Russell Brown, HARD NEWS
You Can't Opt Out: 10 NSA Myths Debunked – Peter Van Buren, HUFFINGTON POST

“The economics literature generally finds a positive, but small, gain in income to native-born populations from immigrants and potentially large gains in world incomes…”
Does Immigration Impact Economic Freedom? – CATO

“Tell your MP, Colorado is Calling!”
3 Months Since Legalizing Marijuana, Here's What Colorado Looks Like – Tom McKay, POLICY MIC

“As futile as the actions of these protestors are, they don't compare to the pathetic frivolousness of Michelle Obama's hashtag photo opportunity shown above. The US president's wife insults the victims of this horrible religious violence precisely because she is one of the few people in the world who has the ability to influence the outcome of this event.
    “There are only a handful of countries capable of rendering assistance to the kidnap victims. The United States, obviously, is one of these, but don't hold your breath waiting for President Obama to act. The President has shown himself to be a moral weakling where foreign policy is concerned.”
Michelle Obama's Pathetic Hashtag Photo Won't Help Kidnap Victims – KIWIWIT

“At the risk of damning Mrs Obama with faint praise, I have to acknowledge that the First Lady's is not quite the lamest Hashtag of Western Impotence pose. That honor belongs to the gentleman at right - the Rt Hon David Cameron, PC, MP. Michelle Obama is merely the wife of the head of government; Mr Cameron is an actual head of government. So who exactly is he calling on to do all this "bringing back" he's so in favor of? Activist celebrities pull these stunts to put pressure on government. Who are all these government celebrities meant to be pressurizing?”
#BringBackOurBalls (cont.)Mark Steyn, STEYN ONLINE

"Westerners who pretend that Boko Haram is motivated by anything other than its religion, Islam, are to that extent party to these crimes and should be condemned along with Boko Haram."
The Jihadist War Behind the Kidnapping of Nigerian Schoolgirls—and the Westerners Behind It – OBJECTIVE STANDARD

Obama Girl burns her Obama bridges. And her shirt.
The Stunning Metamorphosis Of An “Obama Girl” – TRUTH EAGLE

“Here's a more serious history of Russia and Ukraine and the role of the borderlands between Europe and Russia.”
Fascism Is Returning to the Continent it Once Destroyed – NEW REPUBLIC

“Putin telling his Russian agitators in Ukraine to stop being so agitate-y? What strangeness is this, comrade?”
Mr. Nice Putin – VODKA PUNDIT

“Will the Benghazi investigation turn into a 21st-century version of Watergate?”
Finding the Truth at Benghazi – REASON

"People such as Thomas Piketty & Krugman worry about accumulations
of material wealth. I worry about accumulations of power"
-Don Boudreaux

Piketty's paradise? A maximum wage of $20/month…
The Last Communist City: A visit to the dystopian Havana that tourists never see – Michael J. Totten, CITY JOURNAL

“Modi’s relentless campaign projects him as the Indian equivalent of bapak pembangunan, or the Father of Development … Indeed, Modi may potentially become India’s first leader in the East Asian, and not South Asian, mould. Those seeing a Reagan in Modi are, like Christopher Columbus, mistaken about the direction they are looking in. Modi’s approach and governance style are closer to China’s Deng Xiaoping or Indonesia’s Suharto.”
How some of India's brightest minds have bought into the Modi myth – Sali Tripathi, VANTAGE

Turns out hatred of capitalism isn’t the only superstition that advocate of mysticism Pope Francis supports. In the twenty-first fucking century, yet. “…Vatican officials talk about a resurgence of mystical rites in the church, including exorcism — or the alleged act of evicting demons from a living host. Cardinals in Milan; Turin, Italy; and Madrid, for instance, recently moved to expand the number of exorcists in their dioceses to cope with ... surging demand."
This story about the pope includes a visit to a real exorcism – WASHINGTON POST

My hero Frederic Bastiat is quoted in the European Parliament. Russel Norman should take a listen.

"Less-dishonest environmentalists now admit the 'problem' is not that we’re running out of fossil fuels, but that we’re not running out of them... "
Environmentalists: Peak Oil and No Peak Oil, Equally Bad – OBJECTIVE STANDARD

News from two hemispheres.
Antarctic Sea Ice At Record Levels – WATTS UP WITH THAT 
New paper finds Greenland ice accumulation has increased 10% over past 52 years – HOCKEY SCHTICK

“"The best response to climate change: Eliminate poverty. Instead of helping the poor deal with climate change, just make them all as wealthy as Americans—or better, make them as wealthy as we can be in a hundred years. That’s a lot easier than planetary engineering. And people will like the result a lot more. And it can be done ...”
Make Your World a Better Place: Ignore Climate Change – JOHN McCASKEY.COM

“Even as cases of whooping cough, polio, measles and mumps soar, vaccine deniers continue to leave children and babies unprotected. Stubbornness may be part of human nature—but the price is just too high.”
Anti-Vaxxers Just Won't Quit—Even as Diseases Spread – TIME

“Sure, those sprawling ugly wind farms blight the landscape, kill wildlife, and send electricity prices soaring, but so long as they reduce dependence on conventional ... oh. 

A rerun in honor of FA Hayek's birthday last week.
Why I am not a conservative. – By F.A. Hayek, An Important Essay For the Freedom Inclined

Having done a lot of research on the American Revolutionary era to write his excellent series of Sparrow Hawk novels (get them now!), Ed Cline takes an informed look at a modern historian's account of how the concept of property rights fared in the minds of the Founders.
The Guardian of Every Other Right: Part I – Ed Cline, RULE OF REASON
Property Rights: The Guardian of Every Other Right: Part II – Ed Cline, RULE OF REASON

“The institution of private property has arguably been the greatest tool in human history for pulling us out of poverty.”

 “Over time, general [price] inflation tends to mask changes in individual prices. … First, goods or services that have benefited from large productivity gains, thanks to technological improvements and mass production, have seen large price falls in real terms. … Second, for many goods, the figures overstate the true increase in unit price, because they do not take account of improvements in quality. … [Third], many goods that are popular today—television sets, say—did not exist 100 years ago. Nor the way of achieving some non-material goods…”
The price of age – ECONOMIST

Capital in the Twenty-First Century is a thoroughly uninspiring, data-heavy dirge.” Which is why most are getting their news about it from its conclusions, rather than its arguments. It’s our job then to point out his arguments are mostly bollocks.
Pricking the Piketty Bubble – Sean Collins, SPIKED

“…the pitfalls of “big data” analysis.”
Correlation still ain’t causation – AARON SCHIFF

“It’s a crazy thing. In most price systems or most parts of the economy, people understand that it’s wrong to plan prices. So here we are, we’ve had chaos in the credit markets, and the credit markets are centrally planned by a cooperating international network of central banks, committees of planners, who deliberately alter the height of interest rates. And we don’t make the connection that central planning causes chaos. And it’s just a really simple thing, and it’s true in money and banking and it’s true in everything else.”
Steve Baker on centrally planned interest rates: “It’s a crazy thing!” – SAMIZDATA

“Warren Buffett to Tim Geithner just after the Bear Sterns bailout: "I was sort of hoping you wouldn't do it, because then everything would have crashed and I would have been first in line to buy." Buffett continued, "It would have been terrible for the country, but I would've made a lot more money." Amen on number one. …Absolutely wrong on number 2, Mr. Buffett.”
In praise of bottom-feeders – GRUMPY ECONOMIST

Huzzah! to these students calling for a change in economics education – “to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation,” and for students to be exposed to “a variety of theoretical perspectives, from the commonly taught neoclassically-based approaches to the largely excluded classical, post-Keynesian, institutional, ecological, feminist, Marxist and Austrian traditions—among others. Most economics students graduate without ever encountering such diverse perspectives in the classroom.”
They should come along to the Auckland Uni Economics Group
Rebellious Econoimics Students Have a Point – John Cassidy, NEW YORKER
An international student call for pluralism in economics education – INTERNATIONAL STUDENT INTITIATIVE FOR PLURALISM IN EDUCATION

China pays tribute to Milton Friedman.
China scraps price caps on low-cost drugs – WALL STREET JOURNAL

“"The solution to the paradoxes of capitalism lies in recognizing that the altruist code is wrong and that its antithesis is right. Morality consists not in sacrificing values but in pursuing values in order to live and prosper."
Two Paradoxes of Capitalism, Resolved – OBJECTIVE STANDARD

““To the extent the process of education is undermined, the whole of civilisation must also be undermined, starting a generation later. These results will appear more and more striking as time goes on and more and more defectively educated people take the place of those whose education was better…”
Education and the Racist Road to Barbarism [pdf] – George Reisman, CAPITALISM.NET

Artist’s impression of Pacific Discovery

“Waterfront Auckland did not turn them down, but gave them an introduction to Auckland’s largest iwi, Ngati Whatua Orakei, which owns most of the land from west of Vector Arena eastwards to the Strand bridge over the railway lines.
    “Ngati Whatua are mana whenua, but they are not alone. There are 19 iwi who can claim that status in the greater city area, and 12 of them — including Ngati Whatua Orakei — are represented by the Tamaki Makaurau Collective, a body set up to negotiate with the Crown over Auckland’s maunga.”
Whose Queens Wharf? – Simon Wilson, METRO

“The proposed new Elliott St tower fills a hole in the ground, but does it fulfil the needs of the city?”
The tower of middling ambition – Chris Barton, METRO

An artist's view of what the finished cave hotel will look like.

This one way (above) to use an abandoned quarry. Could you see it in Three Kings?
Lavish £345million five-star CAVE hotel being built in an abandoned Chinese quarry – MAIL ONLINE

Pssst! Last few days to see the Architecture Film Festival in Auckland, Wellington and Dunedin. Top films on Frank Lloyd Wright, Richard Neutra, Tadao Ando, Paolo Soleri, The Latin Skyscraper … and it carries on next week for threee days: showing the “best of” films to those who would otherwise have missed out!
Resene Architecture and Design Film Festival –RESENE

“Sleepless nights for interns, tearful tantrums, and structures that resemble fossilised turds. A new documentary called The Competition exposes the world of iconic architecture at its worst.”
The Competition: a documentary that exposes how 'starchitects' really work – GUARDIAN

This is what disruptive technology looks like. So it’s bound to be regulated out of existence.
This Giant 3D Printer Built 10 Houses In Just 1 Day – AGAINST CRONY CAPITALISM

Heh, heh.
AFL has a new fan in Conrad Smith – AFL-NZ

The price of statist sport. "Some estimates put the number of people removed from their homes because of the World Cup at around 250,000. Virtually all of them are desperately poor."
Brazil's Bread and Circuses – Emma Elliott Freire, THE FREEMAN

You know, soccer is like archaeology …
How Football Sounds To People That Don't Care. – TICKLD

If We Talked About Architecture Like We Talk About Writing – THE TOAST

"I've missed more than 9,000 shots in my career. I've lost
almost 300 games. 26 times, I've been trusted to take the
game-winning shot and missed. I've failed over and over
and over again in my life. And that is why I succeed."

- Michael Jordan

Philosophy, who needs it? Comedians, and their audiences, that’s who.
How Post-Carlin Comedians Like Louis C.K. Have Become This Generation's True Philosophers – HUFFINGTON POST

Great news!
Bold expansion for three Kiwi craft breweries – BEER & BREWER

Thanks for reading,
Have a great weekend!

[Hat tips Andrew Falloon, Dakta Green, Tomas O'mongain-Mango, Robert Tracinski, TakingHayekSeriousl, Screwed by State ‏, Jeff Perren Novelist, Burgess Laughlin, Anthony Blomfield, James Stannard, Gena Davidovich, Against Crony Capitalism, Leonard Peikoff, Neil Miller, Lawrence Reed, HomePaddockSmall Dead Animals, Rudolf E. Havenstein, NDBnewswire, A Libertarian Rebel, Cathy, Justine Clark, Old Whig, Catotheyounger, Ifat Glassman]

PS: This weekend my drop is The Drop by Galbraith’s, a fresh-hopped beer produced for Auckland's Fresh Hop 2014 festival – and almost, almost, a session beer.


  1. That tax chart is excellent.

    I think it is disgusting that 10% of taxes are paid by 51% of the population - the losers, no hopers; the useless people who are lauded as "Kiwi battlers from struggle street". Excuse me whilst I vomit.

    Charts like this remind me why I pathologically hate poor people.

    If only the government ensured everyone paid their fair share....

  2. Would people here prefer tax cuts or the govt to run a surplus to pay down the debt?

  3. Interesting to see Peter C. put in the NZ National debt clock. The New Zealand debt has increased astronomically since the NZ Government took over from about $NZ 12 Billion dollars to now $74 billion. So much for the profit. I am not going to pay my part being $NZ17,000 for ewvery Citizen . I don't want it and I will avoid it.
    You need to do something shortly New Zealand the yellow peril is coming. I am not going to pay it, so that leaves you, or your children. Do you still think we are in surplus. Its Obama talk, good luck New Zealand .
    Hows your GST, Ok with 20% you think ?

  4. Sam

    The correct thing to do would be for the government to admit insolvency, go into liquidation and have the receiver let creditors know they are shit out of luck and will not get anything.


  5. I wonder how correct the Debt clock is. Where it states the National debt at 39% GDP, my understanding is that it is only 26%. Anyone able to inform us what the true figure is ?

  6. Peter Cresswell graph about direct income tax was clear and simple.
    We live in this ungenerous world where it is good to hate the rich pricks who pay for us.
    Like you know $150,000 income is a rich rich prick in New Zealand, they are even laughing in Thailand, and Vietnam already.
    I fit into the lower portion of the graph, and believe me I thank the better financially off thise brothers and sisters who support my lack of income. In many countries I would be dead already.
    Mr PC can you put up a link to your graph so I will download a good contrast clean copy.

  7. @Anonymous,

    Well, the CIA World Factbook as of December 6, 2013 estimates govt debt as of 2012 at 38% of GDP, and for 2011 was at 35.4% of GDP.

    And the Trading Economics data suggests "New Zealand recorded a Government Debt to GDP of 35.90 percent of the country's Gross Domestic Product in 2013. Government Debt To GDP in New Zealand averaged 41.03 Percent from 1985 until 2013, reaching an all time high of 71.60 Percent in 1986 and a record low of 17.40 Percent in 2007. Government Debt To GDP in New Zealand is reported by the New Zealand Treasury."

  8. @Paul Scott: The chart at the top of the page? Click the image, and you can download a larger copy.

  9. Amit - honestly, the government doesn't seem that insolvent. Certainly the market doesn't think so - surely our creditors would have revolted by now if the reality is that they won't get anything?

    Don't get me wrong, now that the recession is behind us we should probably start paying down the debt and restarting contributions to the Cullen fund. I'm just not sure we should try and compete with Greece for the title of pariah of the international credit market, which seems to be what you're suggesting.

  10. Sam - you mention 'we' and 'us' a lot in that post; when you talk about "we" who do you mean, exactly?

    Are you referring to:

    1. The 50% of the population comprising stupid, ignorant, indolent poor people who contribute nothing?
    2. The overtaxed, downtrodden, vilified rich minority who pay for it all against their will?

    The debts run up in the last 5 years precisely equals welfare spending during that period; had welfare been abolished in 2009 the NZ Government would have run a balanced budget (you check the figures and you will see).

    So considering every single dollar which was borrowed was given to stupid, ignorant, useless, poor people to buy drugs, booze and hamburgers how likely is it "we" (or "they") will now start working and contributing to pay it back? (now the recession - which actually ended in 2010 - is over)

    In 2008 I made the perfectly sensible observation (taking a leaf out of the Thomas Jefferson book) that poor people should be disenfranchised (for several reasons) and was strongly attacked by the unthinking 'usual suspects' and fellow travellers.

    Unsurprisingly I was correct because the only reason $60 billion was borrowed and given to poor people was because they can vote - no other reason.

    "We" didn't incur vast debts, and "we" won't be paying that money back - instead it will fall on the 10% of the population who are the hard working, the enterprising, the strong, the intelligent.

  11. Mr Lineberry - I have no doubt that NZs books would be balanced if we didn't have welfare. However, it seems pretty clear that the human suffering mitigated by maintaining transfers through a recession drastically outweighs the suffering created by the govt taking on debt to be mostly paid by rich taxpayers of the future.

    There's no need for the incredible vitriol you level at half the population. They may never change the world (for good or bad) like those at the top, but they clean your office, look after your kids and serve you food for very little pay, so lay off. I have no doubt most of the working poor work harder than me for a lot less.

    I'm going to assume you don't include yourself in the stupid, ignorant, poor half of the population. Here's what you and other Libertarians need to understand: it's all luck! Neither you nor I can take credit for our successes. Maybe you are hard working, but you didn't choose the genes and upbringing that made you hardworking. Maybe you had a crappy upbringing but nevertheless overcame hardship to rise to the top, but you can't take credit for having the genes that made the brain that meant you could do this. Here's a comedian to explain it to you. So show a little more compassion.

    Finally, you might be interested to read this article which suggests that, in the US at least, the poor have already been disenfranchised (in that their opinion has no effect on policy). Note the US is nonetheless extremely (although not critically) indebted.

  12. @Sam: I don't agree with you, and I'll post on that shortly. I don't agree with Tim Minchin either, but I'm bloody glad to see him awarded an honorary un-ironic doctorate. He is a genius, even if I don't agree it's all just luck. Thanks for the link.

  13. Sam

    "...the government doesn't seem to be that insolvent..."


    The present regime has been borrowing tens of millions of dollars per week for years and years to stay afloat. It has also presided over significant currency inflation.

    "the recession is behind us..."


    Conditions in NZ are in decline. That has not altered. Standard of living is falling. For a visitor it is easy to spot.


    You and government are separate. You are not the government. You are not the population of people living in New Zealand either.

    Homework: Consider the debt run up by Western national, state, municipal and local governments. Ask whether it is realistic to assume that these multi-generational debts can ever and will ever be repaid. Ask just how ruthlessly the common person is going to be persecuted for these debts to be serviced. Just how long would that state of affairs continue. Fact is it is more likely that the bulk is going to a default.

    It is best to be honest and admit to insolvency, default and get it over with.


  14. Amit - Yes tens of millions of dollars per week is a lot of money, but put that in the context of NZs ~$170b economy. Would you declare bankruptcy if you were earning $50k a year with debts of $20k? What if people were still willing to lend to you at a reasonable rate, and you could print your own money, and you had a practically infinite lifespan to pay off the debt (as the NZ economy has)?

    Obviously you're not happy with taxing and inflating away debts, but the market obviously is, as evidenced by the 10 year bond rate.

  15. Sam

    The government and the NZ economy are two separate entities. You make the error of conflating the pair.

    Question: Just how many years do you think you would be able to rack up debt at $20k per year on an income of $50k per year?

    In resepct of the financial markets there is the saying that the market is right except when it's wrong.



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