Gareth Morgan is a genius

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MikeB4

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#1686877 13-Dec-2016 09:45

MikeAqua:

Rikkitic:

In Holland accommodation supplements are quite normal. Many people are 'poor' and it doesn't destroy their souls. Holland would also be considered a socialist country by many people here and there is nothing wrong with that.

The Netherlands is a useful country to compare with, partly because it is right after us in alphabetised tables.

The Netherlands has the wealth to support a high level of social spending. Their tax take is only about 40% of GDP and ours is about 35% of GDP, not that big of difference in %. But .... the Netherlands' GDP per capita is five times NZ's GDP per capita (yet still have poverty). So it's 40% of a shed load more per person. They have the cash to do things well.

The Netherlands has a very large productive economy, high productivity and massive investment in innovation, with a very large market within the EU and substantial export markets as well: Food (dairy), electronics, oil, industrial products, expertise, financial services. Largely sectors a big chunk of kiwis love to hate ...

What interests me is how we could move NZ to a similarly productive economy that can afford a higher level social spending on a reasonable tax rate?

The Netherlands has a huge market right on their front door with minimal transportation costs and money costs. New Zealand pays a premium for our safe isolation, but we can forge much stronger trading ties with the huge markets

close to us, e.g China, India, Indonesia, Russia and South America.

Fred99

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#1686886 13-Dec-2016 09:55

Graphic from data from the Dunedin Study, not surprisingly showing that negative social statistics and costs follow the good old 80:20 rule, and that this group can be reasonably well predicted at an early age.

The article that graphic is from is here. Over 80% of social welfare costs (presumably excluding pension) are taken up by the same group which is only about 22% of the NZ population.

Note that there's a fundamental problem in attributing these awful statistics to social policy, it's a longitudinal study, the predictor identified at age 3 determining outcome ~40 years later, then you're possibly looking at the effect of social policy in the 1970s - not social policy now. That is a problem as our social welfare system (and many other things) have changed significantly since then. One thing I do know but don't have data at hand is that "generous" welfare doesn't correlate cross-country with some behaviours that you'd assume would contribute to negative social stats. Seeing as Holland was brought up, there's far better support for ie "solo mums/parents" than NZ, which by our "dry" economics-driven expectation should "incentivise" thus drive high teenage pregnancy rates. For some reason with cross-country comparison, there's a reverse correlation, teenage birth rates are much lower in Holland than NZ, and higher in the USA than NZ. But there may be a whole raft of other factors which explain that.

shk292

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#1686894 13-Dec-2016 10:07

MikeAqua:

The Netherlands has the wealth to support a high level of social spending. Their tax take is only about 40% of GDP and ours is about 35% of GDP, not that big of difference in %. But .... the Netherlands' GDP per capita is five times NZ's GDP per capita (yet still have poverty). So it's 40% of a shed load more per person. They have the cash to do things well.

Where do you get your figures from? According to the OECD (https://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV), Netherlands' GDP per capita is about 1.4 times that of NZ. That's still a significant difference, granted.

MikeAqua

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#1686942 13-Dec-2016 10:37

shk292:

MikeAqua:

The Netherlands has the wealth to support a high level of social spending. Their tax take is only about 40% of GDP and ours is about 35% of GDP, not that big of difference in %. But .... the Netherlands' GDP per capita is five times NZ's GDP per capita (yet still have poverty). So it's 40% of a shed load more per person. They have the cash to do things well.

Where do you get your figures from? According to the OECD (https://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV), Netherlands' GDP per capita is about 1.4 times that of NZ. That's still a significant difference, granted.

Ooops! I accidentally used the used PPP adjusted (IMF) figures.

You're correct the raw figure is about 1.5x.

Still .... wouldn't the government love to have twice as much tax revenue without raising total tax rates.

Mike

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#1686975 13-Dec-2016 11:32

MikeB4:

MikeAqua:

Rikkitic:

In Holland accommodation supplements are quite normal. Many people are 'poor' and it doesn't destroy their souls. Holland would also be considered a socialist country by many people here and there is nothing wrong with that.

The Netherlands is a useful country to compare with, partly because it is right after us in alphabetised tables.

The Netherlands has the wealth to support a high level of social spending. Their tax take is only about 40% of GDP and ours is about 35% of GDP, not that big of difference in %. But .... the Netherlands' GDP per capita is five times NZ's GDP per capita (yet still have poverty). So it's 40% of a shed load more per person. They have the cash to do things well.

The Netherlands has a very large productive economy, high productivity and massive investment in innovation, with a very large market within the EU and substantial export markets as well: Food (dairy), electronics, oil, industrial products, expertise, financial services. Largely sectors a big chunk of kiwis love to hate ...

What interests me is how we could move NZ to a similarly productive economy that can afford a higher level social spending on a reasonable tax rate?

The Netherlands has a huge market right on their front door with minimal transportation costs and money costs. New Zealand pays a premium for our safe isolation, but we can forge much stronger trading ties with the huge markets

close to us, e.g China, India, Indonesia, Russia and South America.

We should do far more with finance: money is moved electronically and thus we have no more or less disadvantage than anyone else.

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