Posts Tagged ‘Brian Easton’

Brian Easton on what politics in NZ is really about

August 18, 2008

In his column just posted, Brian Easton argues what I have long thought; that politics as we know it in NZ is largely a zero-sum game. He says that:

“Although the rhetoric of economic debate is about accelerating economic growth, the reality of politics is mainly about redistributing income.”

He gives a couple of examples. Assuming an economic gain of $50m from privatising ACC (ignoring PricewaterhouseCoopers, who say no gain), and Merrill Lynch gains $200m as they think, then the rest of us would be $150m worse off. But Merrill Lynch and the recipients of their donations are happy.

Likewise Rogernomics/Ruthanasia set NZ back 15% compared to the rest of the world in lost growth, but the top-bracket tax payers were still better off. Who could blame them for wanting more of the same?

He cites a recent Ministry of Social Development report which finds that the real incomes of the wealthy rose in most years between 1984 and 2007, but that those for the bottom deciles rose hardly at all. There’s a neat little graph in the report that shows how the deciles did in terms of real income over the period 1988-2007:

Note that this is despite the bottom 5 deciles doing much better than the top five under Labour-led governments of the last nine years. For example, Real equivalised household incomes (BHC): changes for top of deciles 1-9, 2004 to 2007:


Easton concludes, “In New Zealand, the economic rhetoric in elections is about improving the economy; the economic dog whistles are about what is in it for the voters.” It’s hard to disagree.

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