Important questions we’ve avoided this election

Business people standing with question mark on boards

Geoff Neal has seven questions.  I’ve answered the first three:

1.Why is our GDP per capita so low?

Our GDP is only about US $37,000 per person. Australia’s is $48,000, the United States is $57,000, and Ireland’s is $69,000.

If you want more wealth to go around, then you need strategies to increase GDP per capita, yet our political parties only seem capable of reactive redistribution measures like tax, tax credits, and welfare (the “ambulances at the bottom of the cliff”). Like all things in life, if you don’t fix the root cause, you don’t truly fix anything.

This is actually a very important question.  Especially when you realise that our economic success is mostly fuelled by immigration.  What happens when that stops?  Gulp.  

2. Why is our Government debt so high?

Sometimes it’s good to borrow, but $86 billion Government debt with $4 billion in interest penalties per year seems far too high. That’s $4 billion dollars of our money servicing loans rather than the people of New Zealand. I might be missing some smart thinking here, but like all of these questions, I’d still like an explanation from those making these decisions on our behalf.

Internationally that compares very well.  And just like nobody saves up for a house and buys the house with cash 38 years later, there is a benefit to borrowing so you can enjoy the benefit of the assets while you are paying for them.

3.Why do we let big foreign companies avoid tax?

A Herald report last year suggested that multinationals like ExxonMobil, Apple and Google are getting away with not paying $500 million of taxes each year. $500 million could fund a number of essential community projects (or reduce individual tax rates), so why hasn’t our Government closed this tax loophole like they have in Australia?

Do we?  We all have the impression they must be paying tax somewhere.  We certainly don’t complain about companies structuring their affairs so they get the best possible legal tax position.  The other side of the coin is if the taxation laws are not capable of catching these companies on a relatively fair level when compared to small companies and individual taxpayers.

Just to go after them because they look like they have deep pockets isn’t a good enough reason.  We need to see proof that they are rorting an international tax system that isn’t capable of making them pay a fair share.

If you’re interested in Geoff Neal’s remaining four questions, you can read them here.

 

– NZ Herald

 


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