How To Celebrate Getting Really Rich

Pleading for more protection for the super-rich during an election is not going to land well for National.

Jack Tame’s throwaway line about whether the growing list of New Zealand billionaires were moral, is the worst of all distractions.

Neither Chris Hipkins nor Chris Luxon gave direct yes-or-no answers to the inherent immorality of billionaires.

But the following day Green Party MP Tamatha Paul sharply criticised extreme wealth, telling Guyon Espiner’s Midday Report that being a billionaire is indeed immoral because such fortunes rely heavily on public infrastructure, collective labour, and government support rather than individual effort alone. She might want to check with James Shaw on how much his Morrison-run funds need our infrastructure.

Sir John Key, worth a miserable $70 million, then got into it questioning why New Zealand celebrates athletes or artists but targets world-class entrepreneurs and business builders like Sir Peter Beck of Rocketlab and Graeme Hart of packaging.

In straight virtue the record of our super-rich is mixed. For every Beck, or a noble late Allan Hubbard trying to save his depositors with his own money, there’s a convicted Ron Brierley, or James Wallace, or basic assholes like Rod Drury or the Talleys.

Very hard to celebrate being super-rich as a whole.

But they have feelings. Billionaires are indeed sensitive to changing domiciled tax rates.

In London this year, lots of billionaires have left after the abolition of the ‘non-domiciled” tax system which allowed non-residents to avoid tax on overseas wealth. 

Those who have taken their money include: Lakshmi Mittal the founder of Arcelor Mittal, who flew off to Switzerland. David and Simon Reuben the property magnates left for Monaco. Nassif Sawiris the Egyptian billionaire and owner of Aston Villa decamped to Italy and the UAE. John Frederiksen the shipping magnate shifted his office to Dubai. Christopher Rokos the hedge fund manager shifted over to Greece. Several others popped over to Monaco.

We may simply assume billionaire mobility. Billionaires are always going to be the most internationally mobile of residents, because they always follow the next tax margin downwards. Those who wish to move to Dubai, Jeddah, or Abu Dhabi in the current circumstance are of course welcome to do so.

So no sympathy there.

We’re not talking about your average 1% scraping with $4 million. We’re talking proper money.

It would be great if we could celebrate the super-rich because they have formed a massive and bold startup culture of aspiration and innovation in New Zealand. What an amazing Silicon Valley-type scene we’d see stemming from entrepreneurship that shot people to fame, like Auckland Startup Week coming up.

But no. Outside the “angels” and NZVIF, we are commercial capital starved by the rich and by the banks.  Our super-rich do not generate world-beating companies, otherwise for each billionaire we would have at least one world-beating company listed and thriving. New Zealand doesn’t. We can name the counterfactuals like Gallaghers and Halter when true success would be a multitude.

Not feeling warmth for that one.

It would be great if we could celebrate the super-rich because they have formed in New Zealand a Carnegie-like culture of philanthropy.

But we haven’t. Those with real goodness are so rare that they can be named to include: The Tindalls, the Plowmans, the Nelsons, Ngai Tahu as a whole, Sir Mark Dunajscik and Dame Dorothy Spostwood, the Hugh Green family, and there’s a few giant movers of philanthropy like the late great Rosie Horton half of the family that owned Wilson and Horton. Sure there’s a few more. But that’s fingers-and-toes numbers out of 45,000 people in our top 1% or even the 3,000 with $45 million or more.

New Zealanders on average are very generous with a donation here or there, but a proper culture of structure-altering philanthropy would need a lot more than sponsoring an instrument at the NZSO.

Insufficient radiance out of that one.

About $400 billion of our mega-rich is in family trusts. For example the Todd family jealously guard intergenerational wealth and their trust instruments exist to control generational transfer. They aren’t there to push listed companies up the international food chain.  Much of this is in landed estates and shareholdings of land-locked assets like power companies, food companies, and other capital that is very hard to shift at all. Family trusts are a system to themselves as jealously controlled as any of Jane Austen’s dynasties.

Indeed the collective super-rich of New Zealand reside not in the individual or family billionaires but in our collective effort. Our collective wealth in the form of $140 billion saved in Kiwisaver and by end of 2027 $100 billion in NZSuperFund is formed by our collective savings and contributions and taxes, not by the super-rich. We did that, together, in just 25 years. That’s the counterfactual to celebrating our billionaires. With good policy we made ourselves rich.

(ACC manage about $51 billion as well).

It is Kiwisaver and NZSuperFund that are generating large scale investment good for New Zealanders. Both of which were brought to you by the Labour Party. National consistently voted against them, every year and every term.

If New Zealand’s super-rich want the rest of New Zealand to celebrate their existence then they will be able to justify their virtues to be superior or at least as good as Kiwisaver or NZSuperFund.

The riches we have built ourselves – designed through policy and democratic input – are the riches worth celebrating.