Saturday 3 December 2016

Banana Split: David Seymour’s Latest Declaration of Intergenerational War.

Millennials Of The World Unite! Act Leader, David Seymour, has issued yet another call for the Millennials to take up arms against the rapacity of the Baby Boomer Generation. As if all the young people of today will not themselves grow old and be succeeded by a new generation of New Zealanders. As if the whole experience of human existence is not a constant process of paying forward and paying back.
THAT DAVID SEYMOUR’S latest effusion of political bile is being hosted by The Spinoff is entirely fitting. The ACT leader and his hipster enablers cannot wait to get into the political engine-room, and their chosen path to the centre of power is via fomenting an intergenerational war. The headline attached to Seymour’s piece says it all: “NZ Baby Boomers are Building a Banana Republic, and No One Gives a Shit.”
Except that “banana republics” are characterised by obscene extremes of wealth and poverty, authoritarian modes of governance, ruinous levels of corruption, and the irretrievable loss of national sovereignty. In other words, states that have dispensed altogether with democratic politics. That this continues to be Act’s and Seymour’s endgame should surprise no one. But for those who still regard The Spinoff as a platform for serious journalism, its tacit support for Seymour’s plans to incite young citizens to use their votes as weapons against the old may come as a bit of a shock.
Seymour’s latest excuse for fanning the flames of Millennial discontent is the Treasury’s most recent Long-Term Fiscal Outlook (LTFO). And, when the Treasury boffins say “long-term” they’re not kidding. Their latest LTFO purports to describe the fiscal position of the New Zealand government in 2056!
To put their heroic prognostications into some sort of perspective, ask yourself how much luck someone living in 1916 would have had describing the world of 1956. As Peter Drucker quipped: “Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.” Which is why the only way to produce a half-way credible LTFO is to proceed on the assumption that current government policy settings remain unchanged for 40 years. If you’re thinking that this reduces the LTFO to a simple exercise in linear extrapolation, then take a bow. That’s pretty much all it is.
So, what are the fiscal implications of the current policy settings remaining unchanged for 40 years? Well, not surprisingly, they’re pretty dire. As Seymour, rather breathlessly, puts it:
“If no policy changes are made, by 2060, when current students reach retirement age, government debt will be 206 per cent of GDP. In other words national debt will equal two years’ income, worse than the current debt of countries world famous for being fiscally screwed such as Zimbabwe (203 per cent) Greece (179 per cent), Italy (133 per cent) and Portugal (121 per cent). No matter how well you prepare for retirement, you’ll be living in a banana republic.”
Unless, of course, we, the voters of New Zealand, taking serious and principled thought for our nation’s future, decide to change the current policy settings.
The most obvious way pay for the dramatic increase in human longevity would be to restore a much larger degree of progressivity to New Zealand’s taxation system. Additional measures to improve our future fiscal position might include re-starting government contributions to the Superannuation Fund and making Kiwisaver compulsory. Getting rid of the commercial imperatives currently driving New Zealand’s universities and research institutes into the ground would also help. Neoliberalism is deadening our national imagination.
That’s why a thorough-going “deliberalisation” of the whole of New Zealand society would be so helpful. Modelled on the “denazification” of post-war Germany, such an exercise would unleash precisely the sort of pent-up social energy and creativity that the LTFO itself identifies as a the best way of avoiding the long-term fiscal difficulties it is projecting.
Not that David Seymour wants a bar of anything even remotely resembling these solutions. He dismisses the option of raising taxes with characteristic venom by presenting it as yet another dastardly imposition by the Baby Boom Generation:
“The first way of absorbing [the projected demographic changes] is to raise taxes by about a quarter, so GST becomes nearly 20 per cent and the top tax rate goes over 40 per cent, along with every other rate being increased by the same proportion. People embarking on their careers now would pay a 25 per cent extra “boomer tax” for being born at the wrong time.”
As if all the young people of today will not themselves grow old and be succeeded by a new generation of New Zealanders. As if the whole experience of human existence is not a constant process of paying forward and paying back.
Utterly dependent when we are born; utterly dependent as we drift inexorably toward death. Isn’t this the universal fate of humanity? As applicable to the richest people in the world as it is to the poorest – and just as inescapable? The true measure of our equality.
And isn’t this the dreadful reality that all the pathologically ambitious are running from: that not all the power in the world, nor all the money, can save them from the grave? And isn’t it the true measure of wisdom that, in the end, we come to recognise that we are defined by what makes our fellow human beings’ similar to ourselves – not by what makes them different?
As President John F. Kennedy told the students of Washington’s American University in his celebrated commencement address of June 1963 – delivered just six months before his assassination in Dallas:
“For in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children’s futures. And we are all mortal.”
This essay was originally posted on The Daily Blog of Tuesday, 29 November 2016.


Guerilla Surgeon said...

Is this the Treasury that continually gets things wrong? Or is there another Treasury somewhere that gets things correct? Considering the influence they have had on policy since the 1980s, perhaps they should be disbanded. Their record is abysmal.

Blatter said...

'Neoliberalism is deadening our national imagination.'

You are correct, Chris.

Gerrit said...

Having just turned 65 and still full of beans, there is a quandary for the millenniums.

In 30 years time I will still be full of beans and a voter.

Now I think it is on the nose that the state slips a lazy 30K into our joint account per annum whilst we both work (and will continue to do so for another 3 years till we have reached our goal of a 200K nest egg (and mortgage free home) to retire on.

jh said...

Of course bringing in migrants to pay for super doesn't work however Seymour/Spinoff/Prperty Council are all for that.

Jens Meder said...

Chris, I would like to elaborate on your practical policy hints on the NZ Super Fund and Kiwi Saving so as to help generate more debate on them, and clarify -

to what extent they might become leading election issues on immediately accelerated economic growth generation, and long term, permanent universal prosperity creation and maintenance.

Let me open this with a statement of reality in a "Trumpist" style:

"Because any wealth creation above "hand-to-mouth" consumption is physically impossible without someone saving (contributing) something at the expense of consumption (potential) - we can make New Zealand greater than ever by resuming the NZ Super Fund wealth creative contributions rate through the taxation system, and an unconditional $1000.- Kiwi Saving kick-start allocation to all who have not received it yet, "from cradle to grave" !!!

The Grey Power Federation AGM 2016 has already voted in favor of resuming contributions into a PERMANENT NZSF as a priority over freely consumable tax reductions -
and raise taxation revenue through an FTT (Financial Transactions Tax -
and resume the $1000.- kick-starts.

Despite universal auto-enrolment, personal Kiwi Saving "nest egg" savings should not be compulsory, because NZSF contributions through taxation revenue are a compulsory savings rate already to help keeping a good rate of NZ Super from age 65 sustainable also for generations after the baby boomer bulge, and compulsory Kiwi Saving would make creative personal enterprise so much harder for those believing they could do better with their money than Kiwi Saving.

KS capital is available for investment in 1st home ownership already, and a certain proportion of NZSF capital can increasingly reduce the need to borrow foreign capital, and enable more domestically financed home mortgages and jobs in new infrastructure construction.

Would that "make NZ greater" or not, and why or why not ?
What other policy proposition (not just a theoretical dream) is there for comparison, so far ?

Nick J said...

You rarely find socially deprived or poor folk stating opinions akin to Seymour. ACT seems to be the home of priveleged entitled tosspots who loudly proclaim their superior ability to "make it". Never any mention of better schools, daddies money and contacts, paid for law degree or whatever. No they always climbed Everest and seem hell bent on lecturing we loathsome lazybones.

For the record I had good schooling, paid university and some good opportunites. So perhaps I should be in Seymours camp. But like most adults I am not. Unlike Seymour I had tbe good fortune to grow up into a real adult with qualities like humility and circumspect. It takes so little to do this which is why I find the childlike ideas of ACT followers so unreasonably selfish and rather pathetic.

Jack Scrivano said...

I think it was the late Robert Chapman who observed that the first rule of political life is to do whatever it takes to get elected. And, once elected, the second rule is to do whatever it takes to get re-elected.

I can't help feeling that Mr Seymour is just trying to find some supporters who might be around for rather longer than those of us who have already used up our three score years and ten.

jh said...

Just for a moment compare Seymour sense of injustice and solutions with Gareth Morgan's.
Seymour are tailor made for property investors.

Victor said...

Nick J

"For the record I had good schooling, paid university and some good opportunites. So perhaps I should be in Seymours camp. But like most adults I am not."


Neo-liberals conceive of humankind as a voluntary assemblage of sovereign individuals, each rationally calculating his or her own maximum economic advantage.

It's a quintessentially eighteenth century notion that defies almost all we now know of psychology, anthropology, zoology, history and economics. Moreover, its philosophic basis is wholly a priori and devoid of almost all empirical basis.

For the last forty years, I've been flabbergasted by the way this quaint and long discredited creed has again acquired not just "purchase" but ideological dominance.

Yet the worst of it may well be the global reaction it's now engendered. Instead of Social Democracy, we seem once more to be heading towards facism.

Fooled once: shame on them! Fooled twice: shame on us!

Nick J said...

I fear the over reaction as well Victor. This whole malaise was fed by false propaganda. Now the field is littered with false prophets calling out the false God. Populism based on reaction to real issues but holding no answers. Woe is us Victor.