Tuesday, December 1, 2009

Why we must catch Australia

I keep reading comments on websites and hearing general chatter that question why we must catch Australia. Like, what's the big deal? Or, who cares?

Here's the answer in simple terms.

It's very easy to travel these days. So much so that tens of thousands find it easy to leap across the ditch for better weather or better life opportunities. If we keep losing people to the extent we are, our tax base reduces. It is reducing further as our population ages. In fact, not only does it reduce, as our population ages, and it is aging fast, greater stresses will be put on superannuation and health. That will require more tax revenue. If more people leave Godzone, fewer people and businesses will end up paying the bulk of the tax to maintain the aged, and/or taxes will be very high and punitive. Eventually the people and businesses that are here will get sick of working six months of the year to pay for other people's hospital visits so they will go too.

To counter this and to give us some tax revenue, we will have to liberate our migration policies. The 20,000 net migration we take in right now will have to at least double. That poses its own problems, not the least of which will be the skills, or lack thereof, these migrants will bring. If they're poorly skilled, wages will be low which will actually drain the economy rather than contribute to it. To balance this "draining" NZ will have to borrow. That is why you see the debt figures in 50 years time being absolutely horrendous. If we borrow lots and lots we will eventually go bankrupt and need bailouts by the IMF: a-la Iceland etc.

In simple terms, becuase it is so easy to move across the ditch, and because the old adage is people vote with their feet, unless we catch Australia, or get very close, we're stuffed. And I mean that.

14 comments:

Andrei said...

Why we wont catch Australia spelled out in three letters

E T S

Anonymous said...

"If we keep losing people to the extent we are, our tax base reduces."

We're not losing people. Our population is growing and net migration has been positive since 2001.

"The 20,000 net migration we take in right now will have to at least double."

This makes no sense whatsoever. You mean gross inward migration, and even then you're just making things up.

"If they're poorly skilled, wages will be low which will actually drain the economy rather than contribute to it."

That's why immigration policy is slanted towards skilled migrants, of which there's no shortage.

"If we borrow lots and lots we will eventually go bankrupt and need bailouts by the IMF: a-la Iceland etc."

But Iceland had a model that Brash loved, and it's proplems were not brought about by a brain drain but a cowboy unregulated financial sector. In short, dumb post.

Judge Holden

KG said...

Perhaps six letters, Andrei? ETS and WFF.

Lou Taylor said...

Now that the gutless wonders National have admitted that there is no way we will ever close the gap, because that would involve pulling the rug out from under a few left feet, we may as well dissolve our government, throw out our currency and beg the Aussies to take us a 7th State.

Peter said...

We can catch up with Australia, but to do so it would have to be the single priority for the next 20 years. People who want to advocate for social-democrat goals such as greater equality, social justice, assistance to women and minorities etc would have to fit in with this as and where they could. And we would have to choose which of those costly programmes we throw away and which we can afford to keep.

Basically the question is, how much do we really want to be more prosperous than we are now and what are we prepared to give up to achieve it.

muz said...

And three more letters I O U with we for you.

Anonymous said...

WFF?? That's right, because Australia doesn't have a generous system of tax credits for families with children. Oh, hang on...

Judge Holden

KG said...

Nobody said they didn't, Holden. ;-)
The crucial point though, is how much of the total tax take does it absorb?

kehua said...

Don`t forget DPB and TSD.

Anonymous said...

"The crucial point though, is how much of the total tax take does it absorb?"

Oh thaaaat's what's crucial. I see. Well I'm not an economist like you Cagey, so thanks. Ummm what's the answer BTW?

Judge Holden

KG said...

I'M not an economist and I have no idea.
But that doesn't mean it isn't important. Which is why it was posed as a question.
Or is that too subtle/complicated/difficult for you to grasp?

Anonymous said...

Well, it's too stupid to be comprehensible. Par for the course.

Judge Holden

KG said...

Not my fault you're such a fuckwit Holden you don't know what a question mark signifies.
I guess to a chimp 1+1=2 looks 'stupid' too.

Anonymous said...

40,000 immigrants a year? Why not just move to Singapore?