Home > Social Issues > Greed is good?

Greed is good?

.

.

As we look back on the last 25 years of neo-liberal “reforms”, including User Pays; the canning of “Labour’s” superannuation savings plan in 1975 (by Muldoon – after being elected into office with his infamous “Dancing Cossacks”  TV ad); and National’s continuing high popularity in the polls, despite their avowed proposal to sell-down 49% of several State assets,  – it seems abundantly clear who has been  pulling the “strings”.

No, it’s not Washington. Nor the Bilderbergers. Nor the UN/New World Order/Illuminati.

The answer is mind-numbingly far more prosaic:  it’s us – the Baby Boomer generation. The 1960s and 1970s rebellious youth  weren’t just an “aberration” – they were a clear signal that the Baby Boomers had arrived; could be inclined to  incredible selfishness (hence the term the “Me Generation”); and we voted individually for personal gain – on a collective basis.

Yep. We have seen the “enemy” – and it’s us; graying; self-centered; resentful of the young (who we’ve well and truly shafted);  and looking back at ourselves in the mirror, wondering where it all went wrong.

The case of  Surgeons Ian Penny and Gary Hooper, who tried to rort the tax system using Trusts  and companies – even though they had graduated BEFORE student loans and fees were implemented in 1992 – is the clearest example ever of our collective unbridled selfishness.

To re-cap;

.

A court battle is over for two surgeons who challenged Inland Revenue over claims they tried to avoid tax bills worth tens of thousands of dollars.

The Supreme Court has ruled unanimously against Ian Penny and Gary Hooper, saying they underpaid themselves from their own businesses to avoid the top personal tax rate.

The issue arose after the previous Labour-led Government raised the top personal tax rate to 39%, compared to the company rate which was then 33%.

The orthopaedic surgeons openly paid themselves a lower salary than the market rate, arguing that they had a choice about how they operated their business.

They tried to challenge a Court of Appeal decision that found in favour of Inland Revenue, which said the surgeons had paid themselves salaries too small to be commercially realistic.

It said they were therefore able to avoid paying the top tax rate, while the balance of their businesses’ profits went as dividends to family trusts.

The trusts funded items such as a loan for one surgeon, and a holiday home for the other.

Inland Revenue said using those business structures to create artificially low salaries amounted to tax avoidance, saving each man between $20,000 and $30,000 a year for three years, beginning in 2002.

Supreme Court Justice Blanchard on Wednesday delivered a judgement supporting that argument, ordering Mr Penny and Mr Hooper to pay Inland Revenue $25,000 in court costs.

Mr Hooper told [Radio New Zealand ]Checkpoint the court has created a salary benchmark that is higher than the one countless private practitioners have been using.

He says they have been following Inland Revenue advice and calculating their salaries based on public hospital rates.

An Inland Revenue deputy commissioner welcomed the ruling, telling Checkpoint it clearly states and reaffirms what the department’s commissioner felt was the case all along. Carolyn Tremain says IRD has yet to fully absorb the implications and consequences of the ruling.

PricewaterhouseCoopers John Shewan, who appeared as a witness for the surgeons, said the case is important for individuals and firms. He said tens of millions of dollars may now be claimed by Inland Revenue from cases it still has open on this matter.

Source:  Radio New Zealand

.

Specifically,

Surgeons Ian Penny and Gary Hooper set up companies, owned indirectly through trusts, to buy their surgical services and paid themselves artificially low salaries.

After 2000, Hooper’s personal income fell from $650,000 to $120,000 a year. Penny’s dropped from $302,000 to $125,000, and then to $100,000, while the income of their companies grew.

Source:  Dominion Post

.

What makes this case of case of tax avoidance stand out is that none of it was ever necessary in the first place.

Dr Ian Penny received his Bachelor of Medicine Bachelor (MB ChB) of Surgery from Otago University in 1981.  He became a Fellow of the Royal Australasian College of Surgeons in 1990.

Dr Gary Hooper received his Bachelor of Medicine Bachelor (MB ChB) of Surgery  from Otago University in 1978 and became a Fellow of the Royal Australasian College of Surgeons in 1985.

In simple terms, they graduated as doctors in the late ’70s and early ’80s. Tertiary education then was still nominally free. Plus,  student allowances were available to most students,

“Up until 1992, nearly every student (86.4 percent) studying at a public tertiary education institution in New Zealand received a living allowance or grant while they studied.

 Prior to the mid 1970s, student support was based on a system of bursaries and scholarships. In 1976, a new system of government-funded tertiary bursaries was introduced. This included a study or living costs grant that was available to most students.”

Source: NZUSA

.

Student fees and student loans came into effect in 1992, during the Bolger-led National Government, when Ruth Richardson was Minister of Finance (and coincidentally the same year that Shortland Street came on air).

In simpler terms, Dr Penny and Dr Hooper enjoyed the benefit of near-free tertiary education before fees were raised in 1992. They had no student loans to repay, as  medical students currently do, and may well have benefitted from receiving a Student Allowance.

Contrast their free tuition with that of medical students, in the 21st Century:  “on average medical students will graduate with around $80,000 of debt and nearly 90% will have a student loan“, according to the  New Zealand Medical Students’ Association in April, last year.

So with a free education; in receipt of student allowances; and no student loan; Dr’s Penny and Hooper were, as Revenue Minister Peter Dunne stated;

… the important thing about this decision is to bear in mind the scale of what was happening. This wasn’t people minimising their income because they were reinvesting in their business. This was people minimising their income because they were actually minimising their tax liability but still enjoying the full benefits of the income they were in reality earning.

.

So not only did these gentlemen benefit from a free education – but they were now minimising their income because they were actually minimising their tax liability [whilst] still enjoying the full benefits of the income they were in reality earning.”

God, you’ve no idea how sick this incident has  made me.  Let me explain why.

Prior to the introduction of “Rogernomics” in 1984 (and National’s addition from 1990 onward),  education in this country had been free (or as close as possible to free) to nearly all New Zealanders. Education whether at Primary School or University was funded by the previous generation; our Mums & Dads; Grandmothers & Grand dads. The idea was terribly simple; education was a right, and not to be determined by ability to pay.

In turn, as we graduated from schools and Universities, we – my generation, the “Baby Boomers” – were to fund our children through their education, through our taxes.

Except, it did not quite happen that way.

In 1984 we unknowingly elected a Labour Government that had been taken over by a secret cabal of neo-liberals, conservatives, and proponants of the Free Market. A raft of  radical changes were implemented throughout the economy and impacting directly on society.

Despite public objection; mass protests; and even vocal opposition from within the Government by some Labour MPs such as Jim Anderton, Labour was re-elected in 1987.  Curiously, they had increased their majority from 55 to 57.

During Labour’s two terms (1984 to 1990), they cut taxes twice, and implemented a new tax in 1986, called GST.

National followed, implementing User Pays in tertiary education whilst  cutting taxes in 1996 and 1998.

In 2008, despite evidence that the world was plunging into a global recession, John Key promised that National would again cut taxes. As New Zealand went into deep recession; unemployment rose; businesses closed down – National cut taxes in April 2009 and October last year.

Most of the public, it seems, will swallow User Pays if they stand to reap a benefit from tax cuts.

The social contract therefore, was well and truly broken between our (the Baby Boomers) generation, and our parents/grandparents.

We had taken their gift – that of free education which they had paid for – but we decided not to pass it on to our children. Instead, we accepted one tax cut after another. And social services were either cut or User Pays applied, to pay for those tax cuts.

To my generation of fellow Baby Boomers, I say this; we’ve well and truly  shafted our own children. We denied them the very same opportunities of a free education that our parents had bequeathed to us. Instead, we voted ourselves seven  hefty tax-cuts; instigated User Pays; and left our children saddled with $13.9 billion in student debt.

Is it any wonder that our children our leaving New Zealand in greater and greater numbers? They’re not just emigrating to seek better paying jobs – they’re sticking it to us for our unmitigated greed. Whether consciously or sub-consciously, our children realise what our generation has wrought, and by god, they are not happy.

No doubt there are some folk who will cheer on Drs Penny and  Hooper. These people  feel that paying taxes is “unfair” and that it is unreasonable for the State to take the money that they have worked hard for.

Perhaps I should take a moment to remind these people what their taxes were, and in many cases  are still, used for…

.

Inter-island Ferry, Aramoana

Dams and other power generation projects

Our first television broadcast system

Roading and highways

Hospitals

University education

Dental care for our Children

Our Police and justice system

Railways and other public transport

Schools

State Housing

Infrastructure such as power transmission lines

Social welfare and superannuation

Bridges

Postal and telecommunications systems

.

Many of these assets no longer reside in public ownership – but they were originally built and maintained by previous generations of taxpayers; our parents, grandparents, et al.

As the Baby Boomer generation, what have we built and left our children?

$13.9 billion in student debt?

No wonder they are departing our shores…

.

.

But I leave the last word to this expat Kiwi, now living in Australia,

A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.

The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.

“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.

“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.”

Source: Dominion Post

***

.

Further Reading

Greed of boomers led us to a total bust

New Zealand’s wealth gap widens

Over-55s own most of NZ’s wealth

 

.

.

.

.

  1. Jum
    29 August 2011 at 11:44 am

    This is brilliant, Frank. Keep it up

  2. Gosman
    6 September 2011 at 8:14 am

    You never really adequately addressed my point about why should I as a Generation X’er be righteously angry that I have to pay a proportion of my tertiuary education costs via a subsidised and generous loan scheme and that your generation wasn’t forced to save for it’s retirement.

    Do you really think those are more than minor issues. I was expecting a lot more in examples.

  3. 6 September 2011 at 9:55 pm

    You never really adequately addressed my point about why should I as a Generation X’er be righteously angry that I have to pay a proportion of my tertiuary education costs via a subsidised and generous loan scheme and that your generation wasn’t forced to save for it’s retirement.

    I’m sorry, but – ??? You haven’t left any comment here to that effect.

    • Gosman
      7 September 2011 at 8:14 am

      Come on Frank, you know I’m meaning the comments I made on your strawman argument thread trying to tie Somalia with Libertarianism.

      Essentially your argument of justifiable generational rage boils down to getting upset about having to get subsidised student loans to pay for part of the tertiary education doesn’t it? Do you think of all the problems in the world I should be getting righteously indignent about that?

      • 7 September 2011 at 9:27 am

        “Come on Frank, you know I’m meaning the comments I made on your strawman argument thread trying to tie Somalia with Libertarianism.”

        Ok, I understand your reference now. It was regarding comments left on another page.

        “Do you think of all the problems in the world I should be getting righteously indignent about that?”

        That’s entirely up to you.

        “You never really adequately addressed my point about why should I as a Generation X’er be righteously angry that I have to pay a proportion of my tertiuary education costs via a subsidised and generous loan scheme and that your generation wasn’t forced to save for it’s retirement.”

        I think I’ve expressed my views on the issue fairly clearly and at length. As I pointed out in my article above;

        …Let me explain why.

        Prior to the introduction of “Rogernomics” in 1984 (and National’s addition from 1990 onward), education in this country had been free (or as close as possible to free) to nearly all New Zealanders. Education whether at Primary School or University was funded by the previous generation; our Mums & Dads; Grandmothers & Grand dads. The idea was terribly simple; education was a right, and not to be determined by ability to pay.

        In turn, as we graduated from schools and Universities, we – my generation, the “Baby Boomers” – were to fund our children through their education, through our taxes.

        Except, it did not quite happen that way…

        …We had taken their gift – that of free education which they had paid for – but we decided not to pass it on to our children. Instead, we accepted one tax cut after another. And social services were either cut or User Pays applied, to pay for those tax cuts.”

        I think that’s fairly clear.

        If that doesn’t cause you outrage at a broken social contract – then that’s up to you.

        I certainly believe these are “ more than minor issues“.

  4. Gosman
    7 September 2011 at 9:44 am

    But education is still free at primary and secondary level. As for the social contract, what exactly has been broken here – A guarranteed job for life in an over bloated ineffcient State sector? I’m grateful that I now can work for and get the benefit of well run businesses that are still owned or were formally owned by the State.

    • 7 September 2011 at 10:10 am

      Gosman :

      But education is still free at primary and secondary level. As for the social contract, what exactly has been broken here – A guarranteed job for life in an over bloated ineffcient State sector? I’m grateful that I now can work for and get the benefit of well run businesses that are still owned or were formally owned by the State.

      ‘Scuse me?!

      You’ve complained on several occassions where you deemed that I did not answer your questions/points raised.

      Your post (9.44am) makes no attempt to to address any of the points I raised.

      • Gosman
        7 September 2011 at 10:19 am

        Your big issue seems to be that Tertiary education is no longer 100 percent subsidised by the state. And my point is so what? It is a minor issue in the big scheme of things.

        Also when Tertiary education was free do you know what the actual participation rate at Tertiary level was? I can assure you it was a lot lower than today. So how come your generation had this amazing opportunity to get a free tertiary education and you didn’t take advantage of it?

  5. Gosman
    7 September 2011 at 10:12 am

    You know what I’m also pleased about? I’m pleased that I no longer have to virtually beg anytime I want to get foreign currency for an overseas trip and that I don’t have to rely on those lucky enough to be able to go overseas bringing back stuff that we never got to buy in New Zealand because the NZ Government decided they weren’t an economic priority.

  6. Gosman
    7 September 2011 at 11:25 am

    ““Do you think of all the problems in the world I should be getting righteously indignent about that?”

    That’s entirely up to you.”

    Ummmmmm…. the whole point of this post seems to be for you to expouse why YOU think my generation should be, or is, upset with what your generation did. Now you seem to be backing away from this position.

  7. Who Gnu
    7 September 2011 at 10:10 pm

    Gosman says: “Your big issue seems to be that Tertiary education is no longer 100 percent subsidised by the state. And my point is so what? It is a minor issue in the big scheme of things.”

    It’s not a “minor issue” to those saddled with big student debt. But that doesn’t seem to worry you much does it, Gosman?? Try paying more attention to human needs instead of your right wing dogma.

  8. 7 September 2011 at 11:06 pm

    Gosman :

    ““Do you think of all the problems in the world I should be getting righteously indignent about that?”

    That’s entirely up to you.”

    Ummmmmm…. the whole point of this post seems to be for you to expouse why YOU think my generation should be, or is, upset with what your generation did. Now you seem to be backing away from this position.

    Actually, I’m not backing away from anything. I don’t understand why you think that. Wishful thinking?

    It’s obvious that you cannot address the issues I’ve raised, and are skirting them instead. Perhaps you should take a moment to consider what I’ve written here, and perhaps think about the issues I’ve raised.

    To address some of your comments;

    “Your big issue seems to be that Tertiary education is no longer 100 percent subsidised by the state. And my point is so what? It is a minor issue in the big scheme of things. “

    $13.9 billion in student debt is hardly a “minor issue”.

    “So how come your generation had this amazing opportunity to get a free tertiary education and you didn’t take advantage of it?”

    For one thing, unemployment was lower in my day, and a tertiary education was not required for most jobs. Jobs were not only easier to come by, but on-the-job training was usually offered.

    And actually, we did take advantage of it. Where do you think our doctors, architects, engineers, nurses, airline pilots, etc, came from? Mars?

    “You know what I’m also pleased about? I’m pleased that I no longer have to virtually beg anytime I want to get foreign currency for an overseas trip…”

    You’re exaggerating. Reserve Bank currency restrictions did not operate in such a manner if you were going overseas. Reserve Bank permission was required only if you were taking large sums overseas and were intending to emigrate.

    “…that I don’t have to rely on those lucky enough to be able to go overseas bringing back stuff that we never got to buy in New Zealand because the NZ Government decided they weren’t an economic priority.”

    Perhaps. But you know what else we had? A healthy Balance of Payments; cheaper housing; less unemployment; less people in prison; and a whole lot more positive social and economic indicators. Some things, money cannot buy.

    I also answered your question,

    “You never really adequately addressed my point about why should I as a Generation X’er be righteously angry that I have to pay a proportion of my tertiuary education costs via a subsidised and generous loan scheme and that your generation wasn’t forced to save for it’s retirement.”

    My response;

    “…Let me explain why.

    Prior to the introduction of “Rogernomics” in 1984 (and National’s addition from 1990 onward), education in this country had been free (or as close as possible to free) to nearly all New Zealanders. Education whether at Primary School or University was funded by the previous generation; our Mums & Dads; Grandmothers & Grand dads. The idea was terribly simple; education was a right, and not to be determined by ability to pay.

    In turn, as we graduated from schools and Universities, we – my generation, the “Baby Boomers” – were to fund our children through their education, through our taxes.

    Except, it did not quite happen that way…

    …We had taken their gift – that of free education which they had paid for – but we decided not to pass it on to our children. Instead, we accepted one tax cut after another. And social services were either cut or User Pays applied, to pay for those tax cuts.”

    Your response please?

    • Gosman
      20 September 2011 at 2:11 pm

      My response is that you are so focused on Tertiary education as if not fully funding it is somehow a massive kick in the teeth to the younger generation yet you have yet you seem to have blinded yourself to the fact that Tertiar education in NZ is still handsomely subsidised by the State and that more people are attending Tertiary education than when you were younger. If your theory about low unemployment was correct how come Tertiary education levels didn’t drop significantly when the unemployment rate dropped in the late 1990’s?

  9. Nic the NZer
    10 September 2011 at 9:51 am

    I can’t agree with a lot of the sentiments of this blog Frank. It is irrational to blame any one generation for the debt problems that New Zealand or any other country faces at the moment. About as rational as blaming the unemployed for not having jobs or the youth for being unskilled.

    Germany is a good example of a country with an ageing population, but has fewer problems because the German economy is still functional. The real issue is the ponzi economics which have been flooding into the economy. In a ponzi economic system which can only function with increasing debt and a growing economy (or inflation) it should hardly be a surprise that every system (even the government ones) will only function with perpetual economic growth.

    As the financial crash in 1934 showed even an economic system with low levels of government debt and high tax rates can collapse. Very floored economic thinking is to blame. Greed and selfishness is far from a generational trait.

  10. 10 September 2011 at 4:32 pm

    Nic, I concur with you that the current economic system (or the regulations that govern it) are pretty well a major problem. Having our economies damaged by the excesses of private corporations and their dodgy activities is simply unnacceptable. For one thing, we, the people, end up paying to sort out the mess by bailing out failed corporations and banks; losing our jobs; losing state assets to pay for the costs of bail-outs and cut-backs; etc.

    However, with regards to your comment;

    “It is irrational to blame any one generation for the debt problems that New Zealand or any other country faces at the moment. About as rational as blaming the unemployed for not having jobs or the youth for being unskilled.”

    Except: that the unemployed did not vote to become unemployed. Nor did 16 and 17 year olds vote for a system that leaves (some of) them behind.

    Baby Boomers, however,

    * Voted to end the Labour government’s compulsory superannuation scheme, by electing National, with Muldoon as Prime Minister, in 1975. That was a conscious decision of the electorate to support one policy (to end compulsory super) as opposed to another (the superannuation savings scheme).

    * Voted for six tax cuts in the 1980s; 1990s; and 2000s. We especially could not afford the latest two tax cuts – and yet the electorate still voted for National that was promising those cuts.

    * and despite an incredibly high level of borrowings (partly to sustain the last two tax cuts), public opinion polls still support the incumbent government.

    Essentially, we’ve voted for tax-cuts and deferred saving for our collective retirements until it was practically too late.

    Contrast all this to Australia, which has A$1 trillion saved in their compulsory super scheme, and which has been going since the early 1990s.

    With regards to Germany’s superannuation, their system appears to be similar to ours, pre-Kiwisaver;

    “…retirement income in Germany is mainly provided by government-run pay-as-you-go schemes, financed by employers, workers and government.

    You and your employer each contribute 9.75 per cent of your wage to the pension fund. But, unlike Australia’s superannuation funds, that money is not invested for your retirement. Rather, it pays the pension cheques for people who are retired now.

    What it gives you is an entitlement to a pension when your turn comes to retire. The amount you will receive in retirement depends on how much you have put in, and is indexed to wage rises. In Germany, it ranges from E400 ($A640) a month to a maximum of just over E5000 ($A8000). But the money you get will come from the workers of the future.”http://www.theage.com.au/articles/2004/04/09/1081326922168.html

    Hence, it appears they will be facing similar problems to us.

    As for not “blaming any one generation”; Baby Boomers (of which I am one) make up a hefty percentage of the population (http://www.stats.govt.nz/browse_for_stats/people_and_communities/older_people/pop-ageing-in-nz.aspx) so I think it’s fair to say that it’s not unreasonable to take responsibility for the governments (and their policies) that we have elected into power – especially since the 1970s.

    • cirianz
      14 April 2013 at 8:04 pm

      Ahhhh, i see, you are saying that no one since the baby boomers has voted? Because, as a generation X’er I recall voting in every single election since I became old enough & I can’t say that I’m seeing that the voting choices of my generation or the current one are any more, or less ‘wise’ than those of your generation. So, yeah, we’re as responsible for our current situation as you.
      And I’m sorry if it ruins your little self flagellation, but you cannot hold an entire generation responsible for the actions of a corrupt government such as Muldoon’s any more than you can hold all members of the current or my generation responsible for the actions of John Key. I heard as many of my mother’s generation protesting against and voting against Muldoon and his policies as I see today in those battling against the actions of the current national government. It is simply that modern technology gives us access to more information and a louder, further reaching voice. Yet despite those advantages Key was still re-elected.
      Yes bad things were done while your generation was ‘young & up coming’ just as they are being done today. We all do what we can to stop it, but none of us are all powerful and none of us immune to either stupidity or the will to believe some, if not all, of the lies politicians feed us (and to be honest I actually believe that the latter often has more to do with a desperate desire to believe in some sort of ‘goodness’ in humanity than the oversimplification of greed, as can be seen by the numbers of Key voters who are now appalled as they see John carrying out the policies that we warned them about before the election).
      It is true that ‘we’ vote them in or out, but I have never yet heard of a politician gaining 100% of the vote. And ultimately responsibility must always lie with the actual individuals who make and carry out the decisions once they are in power.

  11. 20 September 2011 at 2:47 pm

    Gosman :

    My response is that you are so focused on Tertiary education as if not fully funding it is somehow a massive kick in the teeth to the younger generation yet you have yet you seem to have blinded yourself to the fact that Tertiar education in NZ is still handsomely subsidised by the State and that more people are attending Tertiary education than when you were younger. If your theory about low unemployment was correct how come Tertiary education levels didn’t drop significantly when the unemployment rate dropped in the late 1990′s?

    You are still missing the point, Gosman. Or ignoring it – not sure which.

    Prior to 1992, Tertiary Education was free. On top of that, students could be eligible for a Student’s Allowance.

    Baby Boomers (generally) benefitted from that system.

    Post 1992, the next generation had to pay student fees and incur huge debts – now totalling over $13.6 billion dollars.

    That is a debt which we Baby Boomers did not have to incur pre-1992.

    Whether teriary education is still currently subsidised or not is a side-issue: student debt now exists where previously it did not. There has been a transfer of costs from tax-payers to students. And Baby Boomers voted themselves six generous tax cuts.

    “If your theory about low unemployment was correct how come Tertiary education levels didn’t drop significantly when the unemployment rate dropped in the late 1990′s?”

    What “theory” are you referring to? I don’t even get your question.

  12. Gosman
    20 September 2011 at 5:33 pm

    Baby boomers didn’t benefit from the system because they hardly took advantage of it. We had one of the lowest uptakes of Tertiary education in the OECD prior to the 1990’s.

    Your theory that you have stated here is that your generation didn’t take up this wonderful opportunity because of the low unemployment rate. However that theory falls flat on it’s arse because New Zealand enjoyed one of the lowest rates of unemployment amongst the developed nations from the late 1990’s onwards yet funnily enough Tertiary education levels didn’t fall significantly (see http://socialreport.msd.govt.nz/knowledge-skills/participation-tertiary-education.html)

    In fact if you look at these figures tertiary education participation rates INCREASED while unemployment was falling and flattened off AFTER the Labour Government introduced Interest free student loans.

    • 22 September 2011 at 11:11 pm

      “Baby boomers didn’t benefit from the system because they hardly took advantage of it. We had one of the lowest uptakes of Tertiary education in the OECD prior to the 1990′s.”

      Because, as I explained to you, the 1970s and ’80s did not require tertiary education in most fields. You get that, don’t you?

      “In fact if you look at these figures tertiary education participation rates INCREASED while unemployment was falling and flattened off AFTER the Labour Government introduced Interest free student loans.

      Yes – because tertiary education became a requirement in the 1990s and onwards.

      Society had changed considerably from the ’70s/’80s onwards.

      I’m not sure why you’re labouring points about recent history – especially when you seem to have certain aspects mixed up. As I’ve pointed out in my “Welcome” page, I actually lived through tose periods. As a Gen Xer, your experience would be limited.

      And you still skirt the main issues; that Baby Boomers had free tertiary education; then enjoyed six tax cuts; and denied following generations the same benefits they themselves enjoyed. You don’t seem to understand that central issue, and fixate on side-issues, as if in the hope that they will re-write history and validate your own interpretation of events.

      • Gosman
        23 September 2011 at 9:34 am

        It is you who seem to be fixated on certain aspects.

        I have told you that your big issue about Students now being required to fund a part of the cost of their Teritary education via a very generous interest free loans scheme is a non-issue.

        However even if we focus on that issue, I would much prefer to have the freedom to decide whether to take on the debt with the knowledge that more of my likely increased earnings as a result will stay with me rather than be taken by the State to reallocate them

      • Gosman
        23 September 2011 at 9:36 am

        By the way which jobs really need a tertiary qualification that didn’t in the past?

        Even IT jobs don’t need a tertiary qualification. I work in IT and while I have a Tertiary qualification it certainly isn’t IT related.

  13. Gosman
    20 September 2011 at 5:35 pm

    Just because you seem to have forgotton what you have written here –

    “So how come your generation had this amazing opportunity to get a free tertiary education and you didn’t take advantage of it?”

    For one thing, unemployment was lower in my day, and a tertiary education was not required for most jobs. Jobs were not only easier to come by, but on-the-job training was usually offered.

  14. Cameron Q.
    20 September 2011 at 7:10 pm

    “Baby boomers didn’t benefit from the system because they hardly took advantage of it. We had one of the lowest uptakes of Tertiary education in the OECD prior to the 1990′s.”

    Gosman, baby boomers benefitted Big Time from free University education. Then they voted tax cuts for themselves and made their kids pay for it through User Pays. So your neo-liberal-inspired sophistry falls flat on it’s face. This was a rort from the beginning of Rogernomics and you’re trying to justify it? Yeah right.

  15. Jack
    21 September 2011 at 10:28 pm

    “Baby boomers didn’t benefit from the system because they hardly took advantage of it. We had one of the lowest uptakes of Tertiary education in the OECD prior to the 1990′s.”

    That’s because tertiary education wasn’t necessary and jobs were much easier to come by, without the need for university qualifications. Unemployment was low and we produced more of our our goods. It may’ve been a bit more expensive but wee had people in work instead of paying billions on welfare for people to do nothing.

    Your free market system has failed Gosman. You can keep explaining it away as much as you like, but it doesn’t changing a single thing.

  16. 24 September 2011 at 4:29 pm

    Gosman :

    It is you who seem to be fixated on certain aspects.

    I have told you that your big issue about Students now being required to fund a part of the cost of their Teritary education via a very generous interest free loans scheme is a non-issue.

    I think the government might have 13.9 billion reasons to disagree with you on that point.

  17. seth
    6 December 2011 at 2:05 pm

    Lol – Frank, Frank, Frank – there are several orders of magnitude more people in tertiary education now than there were “back in the day”. How is the government supposed to fund that fully, without putting the tax rate back to 66%?

    Additionally, the government now has an annual bill of 2.5 billion to cover the Working For Families benefit, 1.5 billion on the Sickness and DPB benefits, and an $8 billion super annuation bill. In pre-Gen-X days the proportion of tax payers to super annuitants was massive.

    The fact that you pretend not to recognise any of these welfare problems blows all your other commentary out of the water. The government simply cannot afford to pay for free tertiary education.

    Your blog is poor because it is just another of the many that does nothing but criticise and leave bitter commentary and attacks. There are no solutions proposed here, just your poor strawman arguments time and time again. Gosman has put up many valid arguments, and you keep repeating “13.9 billion reasons…..” over and over like it is some kind of trump argument – it is just a lame strawman, because you have no valid position, no valid arguments and most importantly, no solutions.

    Time to give up the blogging game I’m afraid…..

    • 6 December 2011 at 3:15 pm

      And yet, Seth, I notice you don’t offer solutions either?

      I’m glad you and your fellow libertarian Gosman, agree with each other – but it doesn’t address the real problems caused by failed neo-lib ideology, does it?

      Neither have you even referred to the issues I raised above, except in a negative way. For example, why is there an “$8 billion” superannuation bill? The answer is clearly defined above, in my piece.

      … and welcome to my blog. :-) (Which I shan’t be closing down any day soon… )

  18. Priss
    6 December 2011 at 6:25 pm

    Have you got a problem with criticism, Seth? Are you trying to tell us you never criticised Labor when they were in office? Oh I’m sure you had plenty to say about them.

  19. cirianz
    14 April 2013 at 8:33 pm

    I also have a gripe with the whole ‘poor us/them’ (depending who it’s coming from.) with their huge student debt’ vs ‘evil baby boomers with their free education stiffed the young-uns.” Which might be good for stirring the haters and encouraging the self-flagellators, but isn’t quite as true as it seems. In the last days of free tertiary education the average price of a university paper was $80-$100. Sounds great aye. Until you stop & think about actual purchasing power. An example, at the time $80-$100 was enough to purchase a ‘first car’ type car. You’d have to save of course, & hunt a bit, but yeah, that would do it. Nowadays the same level of car would cost about $800-$1000. And that’s allowing for the fact that cars are much more freely available now and the effect that has on prices. There is a lot of variations across products of course and this example is not, & cannot be, fully representative but I’m sure that you can see the reason that I chose it. At the time $80-$100 was NOT a trivial price. I don’t argue that education was, overall, cheaper than today. Just that the concept of it being free is largely based on how little such an amount of money is worth now, rather than how much it was worth then. In addition, without student loans, students were required to come up with all the money to pay for all of their papers upfront. They were not give long, income based, interest free pay-off opportunities as we are today. The biggest gripe i have is not with having to pay a still heavily subsidised) fee for our education, but that the reductions in funding to universities have forced many to have to cap the numbers of New Zealanders they can accept (foreign students are not given the easy ride we are. they are not subsidised and are required to pay all upfront so are not capped) so that tertiary education is no longer available to all. And once again that is a decision of the governments that we, the gen X’ers etc have voted in. Can’t blame the baby boomers for that f*ck up either.

  20. darren
    25 October 2013 at 11:47 am

    Of course you forget that we plunged into recession a good 6 months before anyone else in 2008, the writing was on the wall, tax and spending your way out of a situation doesn’t work. Best you leave the choice with the individual to decide, too much govt.

  21. Priss
    26 October 2013 at 7:07 am

    “Best you leave the choice with the individual to decide, too much govt.”

    Oh and hasn’t that worked out so well since the global financial cock-up?

    Funny how you neo-libs want more of the same even though it’s making increasing inequality, poverty, indebtedness, etc. No thanks, darren, thirty years of this failed experiment is enough for me.

  22. Theodore
    26 October 2013 at 8:02 pm

    @ Darren “6 months before anyone else in 2008″???

    That’s outright bullshit. Is that the sort of re-writing of history we can expect from National supporters like you, Gosman, Seth, etc?? Repeat a lie enough times and it becomes the truth, is that it??? You rightwing nutjobs constantly resort to lies because the truth makes your ideology even crazier.

  23. Doc
    1 November 2013 at 2:17 pm

    Yeah Darren, because your precious Act Party has won so much support with that “minimal government” approach. Fact is that New Zealanders want free healthcare and education and your free market types will never change that. Not now, not ever.

    By the way, the recession started early overseas as well. You just weren’t paying attention. Focus Darren, focus.

  24. Tomboy
    15 April 2014 at 12:14 pm

    I see you’ve attracted the local nutters from the Young Nats, Frank?

    Take Darren for example, his line that “we plunged into recession a good 6 months before anyone else in 2008″ is the same crap that a NACT supporter at the Daily Blog is spouting. Typical right wing bullshit lies of course. No doubt we’ll see more of it as the election looms closer!

  25. IAN PENNY
    25 May 2014 at 4:35 pm

    HI FRANK,
    I just read your blog about me (2011) which features high on the list for anyone who might “Google” my name.
    Your comments indicate that you have some limitation in understanding of my case.
    I, in 1997, acted upon what was then deemed to be prudent advice for medical professionals by setting up a family trust. I then became an employee of the trust via a company. At that time there was NO TAX RATE DIFFERENTIAL between individuals and companies nor was a future differential contemplated. I took further advice as to what was an appropriate salary to be paid and acted accordingly. (the rate of a full time public hospital salary.)
    I received some bonuses to clear personal debt and carried on with that base salary.
    When the tax laws changed in year 2000 I changed nothing but because of a marital break up at the same time I no longer received (or needed) the bonuses.
    The IRD latterly contended that that change amounted to or provided evidence of tax avoidance behaviour.
    They approached me in 2004 or thereabouts with a tax debt notice including 100% penalties.
    Gary Hooper and I challenged their decision acting upon very learned accountancy and legal advice.
    It appeared to us unfair that the IRD had changed the rules in year 2000 (despite having been advised by senior tax advisors including John Sherwin that their changes would cause ambiguity)had not clarified conflicts arising from trusts such as mine and were using us as scapegoats without due consultation and notification in a punitive manner.
    A high court judge agreed completely with our stance as did one judge in the Court of Appeal. Ultimately the Supreme Court ruled against our appeal perhaps from a ‘greater good’ stance.
    Your rhetoric is inappropriate. Gary Hooper and I pay tax and have always done so. The financial rewards of our endeavours have not been concealed.
    We took a stance against what we deemed to be procedural unfairness and were prepared to put our heads up to make a stand. Ultimately, whilst we lost the case, that stance has help clarify tax law application in this country.

    [Note: This post was moved from the front page - G’day & Kia ora! - to the comments section of the relevant blogpost, "Greed is Good". Dr Penny's comments are re-posted here, verbatim, without any alterations, deletions, or additions. - Frank Macskasy]

  1. 7 September 2011 at 2:47 pm
  2. 28 September 2011 at 12:45 am
  3. 1 November 2011 at 10:53 am
  4. 19 November 2011 at 10:20 am
  5. 5 January 2012 at 3:36 pm
  6. 2 April 2012 at 4:45 pm
  7. 10 September 2012 at 10:52 pm
  8. 16 January 2013 at 12:11 am
  9. 8 March 2013 at 2:34 pm
  10. 11 May 2013 at 7:21 pm
  11. 16 June 2013 at 5:44 am
  12. 28 June 2013 at 11:16 pm
  13. 10 February 2014 at 1:36 pm
  14. 17 February 2014 at 8:01 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 794 other followers

%d bloggers like this: