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.
Being super-rich and not sharing that good fortune with everyone else is wrong.
They got super-rich in the first place by not sharing. 'It's a feature, not a bug'.
Simon Bridges complains that it is so hard to raise capital in New Zealand.
Simon Bridges needs to have a heart to heart with the super-rich of New Zealand, because they, not the workers, are the key to productivity and capital raising here.
https://www.nzherald.co.nz/nz/tell-me-who-in-the-western-world-is-less-ambitious-at-raising-capital-than-nz-simon-bridges/premium/XMGH3FE4WREF3GTBKBUXQNY6UA/
I can't read that link, and can't be bothered either paying for the Herald or the effort in hacking a read. There has been a dearth of useful content in granny for quite some time.
For all that he is a complete pain, Hooten's crew at The Post produces more concentrated local reads. I don't have to waste my time hacking through the stuff from offshore that I have already read in The Economist, NYT, WP, BBC, and the host of better news that I either subscribe to or read by various means.
But have spent the last 30 years bouncing between development teams as a software engineer in startups and corporate in NZ, you certainly notice that it was hard to get startup capital. Most of the corporate were offshore owned as well, usually after taking over a one or more local organisations. 3 decades ago it was pretty much mortgage any property you had. These days you can get capital, most of which comes from offshore, either directly or from people who have settled here.
It is pretty hard to start IP export companies here and to keep them here.
You could have plugged some relevant topical Labour policies in your Post, which would be prudent, but you haven’t!?
If you are not aware of Kiwisaver or NZSuperFund then it is likely you have been living under a rock for quite some time.
If I get two hours of headspace I will do a post comparing the economic development policies of Labour and Greens, where we can put policy links as a head to head.
Interesting post.
can you please explain this a bit more?
If you've been contributing to Kiwisaver for 20 yours and aren't in the super-conservative funds, you will have sevaral hundreds thousands in the bank by now.
Back when I was a teenager the only way to even think of that kind of money was throwing it at the stockmarket, and that all changed in 1987.
The innovation of Kiwisaver for NZ is twofold: it will soften your retirement landing at 65 when the fund can be drawn down to you, and second:
it can be invested in New Zealand companies and projects. Some of which have direct social benefits. An example is the build-to-rent developments from Simplicity. There's one of their projects already done in Mt Albert and a really huge one in Queenstown underway. NZ members are putting about $5 million every week into Simplicity and all of that has to find a very sound home, every single week.
Multiply that by every other saver and every other active fund, and you have a really big financial motor thrumming in New Zelaand that we have never had before.
In my thirties when NZSuperFund started with an initial contiribution from the government of $2.4 billion. 20 years later it's just shy of $100 billion.
Now they own Sofitel, Rydges, a couple of Sheratons, Kaingaroa Tipu which is about 190,000 hectares of forest, over $1 billion of farms in dairy and horticulature including NZGourmet, Awanui Labs, Datacom, a big solar company, and some long term things like toll roads (I think they sold Sofitel this year). Granted they also own a chink of AirNZ which is a dog.
They also own and run their own venture Capital fund called Elevate who take the bold risks I wouldn't dare to take. They are all in tech companies.
https://www.nzgcp.co.nz/funding/elevate-venture-fund
The two savings streams are already transforming New Zealand. While we won't ever catch up with Australia's superfinds, we are on the way now and making great progress.
This is the policy-driven riches I was talking about. Brought to you by Labour. Voted against by National every single time.
Now you’ve mentioned it:
https://www.labour.org.nz/news/release-labour-s-plan-to-grow-the-economy-from-the-grassroots-up/
Once again, the silliness of not distinguishing between the morality of individuals (billionaires) and the morality of systems (economies), leads to more heat than light. Tamatha Paul was the only one to get close to the right answer.
Charity is proof of failed leaders, nothing of importance should be left to charity. I don't care if they're moral or not tax enough so everyone gets a great start to life, the important services during their life, exceptional education in what suits them , and a dignified exit.
It will not take too long before New Zealanders can see they get far greater returns out of an active Kiwisaver fund than putting money into a mortgage.
And at that point, we get to see New Zealanders hunting high and low for starups to take a risk in. and they don't have to list.
Simon Bridges just needs to make a few fund manager connections and stop the damn whinging.
National still likes to pedal the Milon Friedman trickle down theory to entice people to vote for them even though it has been thoroughly disproved .