Cake Them With Tar and Feathers

New Zealand's Fifth Column

Politically smart, morally invidious.  The Labour and the Green parties are starting to flirt with ideas of a Universal Income in New Zealand.  This is incredibly smart politics.  It will prove popular with so many.  After all, Robert Muldoon rocketed to electoral success by promising a pay-as-you-go universal tax funded pension.  The folk loved the idea.  And so one of the biggest liabilities upon the public exchequer under which we all now bend was born.

Labour and the Greens have learnt the lesson.  Struggling for political survival.  Lusting for husting success they are thinking of expanding the idea of universal superannuation to a guaranteed, state funded, basic income for every adult in the country.

All adult New Zealanders could be given a Government handout of at least $200 a week under a new policy being considered by the Labour Party.  The co-leader of a global network promoting a "universal basic income", British professor Guy Standing, will be a keynote speaker at a Labour conference on "the future of work" in Auckland next week.  He said yesterday that a system "where every legal resident of New Zealand should be entitled to a modest monthly basic income" would reduce inequality and give some security to people who increasingly have to earn a living from insecure casual and short-term work. [NZ Herald]

At this juncture we will don the robes of the prophets and make some modest predictions if this were ever to come to pass:

Prediction #1: immigration numbers to New Zealand will explode many times beyond what they are today.

Prediction #2: what is considered a "modest" universal  income today will be substantially increased within 15 years.

Prediction #3: Within 15 years, New Zealand will be running huge, structural fiscal deficits that it will never be able to repay.

Prediction #4: the Universal "modest" income will never decline below the last announced increase, regardless of economic calamity.

Prediction #5: New Zealand's long term, structural unemployment rate will be locked into double digits forever within 15 years.

Prediction #6: New Zealand will have one of the higher marginal tax rates in the world.

We have used the time period of 15 years in which all these calamities will irrevocably emerge.  Sound a long time away?  Let us pose a question: do you remember back to the millennial parties and celebrations back in 2,000.  Seem like yesterday?  That is a measure of how quickly the calamities will fall upon us.

The most effective bribe political parties will be able to offer the electorate will be to increase the universal basic income.  Electoral success will depend upon it.  Today you can almost guarantee significant electoral votes if you promise to maintain or increase the generous universal state-funded superannuation entitlement.  But we will have seen nothing like the electoral bribery about to be unleashed if the country accepts the bribe of a universal income of every adult in the country.

The current PM looks for all money that he will win a fourth electoral term--a level of success significantly related to his promise to maintain the current rate of universal superannuation.  This malfeasance is just the beginning of what would be unleashed upon New Zealand if we are granted a "modest" universal income by our political masters-of-the-bribe.

Do we really think it possible that  New Zealand will end up competing for the honour of the highest rate of marginal tax in the world?  Read between the lines:

A discussion paper on the idea, due to be published by Labour today, suggests paying an $11,000 universal income to everyone aged 18 or over to replace all existing welfare benefits except for "supplementary transfers for disadvantaged groups".  . . . (T)he paper acknowledges that "there may need to be some changes to taxation policy to mobilise revenue.  The top tax rate could be increased or further revenue might be gathered from other forms of taxation," it says.

Don't you just love the phrase "mobilise revenue"--a euphemistic gloss for rampant, relentless tax increases.  And then the gentle genuflection to the fiscal headsman waiting in the wings: the "top tax rate could be increased.  Further revenue might be gathered . . . "

We never cease to be astounded at the fundamental ignorance of politicians in general, and of the Left in particular.  They are relentlessly, myopically naive when it comes to human motivation.  They have little or no conception that human beings are constitutionally self-interested.  They are unable to recognize that voters are self-centred and maximise their own utility--always.  Otherwise politicians would be found selflessly giving up their grand entitlements for the greater good.  Always.

Of course they don't--and never will.  This serves as a powerful illustration of the perverse ignorance of your average pollie.  On they one hand, he makes grand assumptions about people being bound to the collective good (as he defines it); on the other, his is unable or unwilling to live up as an individual to his grand assumptions.  Politicians are dishonest brokers.  If they are left to their own self-interested devices, they will be the ruination of this country.  Of that prophecy there can be no doubt.