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Insights 4: 10 February 2017
The New New Zealanders: Why migrants make good Kiwis
 
Dr Oliver Hartwich: Sharing New Zealand's progress
 
Jason Krupp discusses immigration and house prices
What should it take to become a Kiwi?
Roger Partridge | Chairman | roger.partridge@nzinitiative.org.nz
I am married to an immigrant. It is not something I often need to confront. Sure, there are the annual visits by my much-loved mother-in-law, but you don’t need to wed a foreigner to enjoy that privilege. And as a young English lawyer, my wife seemed to assimilate easily enough with the locals. She quickly became one of us.
 
Yet shortly before Christmas my beloved’s alien origins took centre-stage. Literally. After a quarter of a century as a foreigner, she bit the bullet and became a New Zealand citizen.
 
It was a heart-warming occasion. Auckland’s Town Hall was the perfect backdrop for the pomp and ceremony of citizenship. And with prospective new Kiwis from no fewer than 48 nationalities, it felt like our own Olympics, but with everyone a winner.
 
Yet there was something profoundly strange about the ceremony. It wasn’t the setting. Nor the charming Maori elder from Ngāti Whātua, whose stamina in hongi-ing more than 400 new Kiwis was remarkable.
 
No, the problem was the oath (or the affirmation for the irreligious). It is the centerpiece of the ceremony, and applicants do not become citizens until they have taken it.
 
An oath to what, you might ask? Well, that’s what was odd. It was of allegiance to the Queen. Now that is hardly objectionable. And it was no burden at all for my English wife.
 
But there was something missing. The citizenship ceremony is the perfect opportunity to tell aspiring Kiwis what we stand for as New Zealanders, and what we expect of them.
 
Of course there is no exhaustive set of Kiwi values. Not everyone supports the All Blacks. Nor are all New Zealanders members of Greenpeace - or even interested in the outdoors.
 
But some values run so deep few could disagree with them. Respect for gender and racial equality, freedom of religion and expression, and respect for the rule of law and the democratic process. Surely, at least these we can all agree on?
 
Now, you might say an oath of allegiance to something as ethereal as Kiwi values would be meaningless. But it would be more meaningful than asking our new New Zealanders to swear their allegiance to a sovereign on the other side of the world.

It should take more than that to become a Kiwi.

Time for another tax switch?
Dr Eric Crampton | Head of Research | eric.crampton@nzinitiative.org.nz
National’s 2010 budget provided substantial tax cuts. But it also implemented an important tax switch at the same time. The government increased the GST while simultaneously cutting income taxes and increasing benefits to compensate. It is perhaps time to consider doing it again.

Oliver Hartwich’s column in this week’s NBR argued that growing government surpluses should be divided between tax cuts, debt repayment, and investment in infrastructure. So it is worth thinking through what tax changes would make the most sense in 2017.

2010’s tax cuts focused on reducing the top income tax rate. Future efforts might aim to reduce effective marginal tax rates. Taxpayers receiving Working for Families and combinations of other benefit programmes can wind up taking home less than $2 for every $10 earned from additional hours worked.

Putting in an extra ten hours per week but keeping the pay from less than two of them is not a particularly attractive proposition. There is room in the budget for tax cuts. Focusing on these kinds of cases is worthwhile, but is also fraught with difficult trade-offs.

2010’s tax changes provided other important lessons. The tax shift from income tax to GST left no one with lower after-tax incomes by design. The shift seems to have been effective. Simulation work by Treasury’s John Creedy and Penny Mok suggests that the switch helped encourage work. And the Tax Working Group had previously deemed the GST a more efficient way of raising taxes as well.

Shifting the tax base to rely a bit more heavily on GST then promotes efficiency. And, contrary to common critique, a GST increase does not make the tax system less progressive when it is combined with offsetting changes to income taxes and benefits.

Perhaps surprisingly, GST increases are really taxes on wealth. Those who had saved during times of higher income taxes find themselves subject to higher taxes when consuming the fruits of their investment.

But it also represented a tax on tourism from overseas. Tourists pay GST but do not pay NZ income tax.

Renewing 2010’s tax shift is worth considering. And if the government won’t consider charging fees to cover tourists’ costs in the national parks, a GST hike putting a greater share of the tax burden on tourists is not really a strike against it.

Constitutional experimentalism
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
One of the most refreshing developments in New Zealand politics is the sudden appearance of Gareth Morgan’s Opportunities Party. No matter whether you love or loathe Morgan, it is uplifting to have a party that defines itself as an ideas and policy movement.

Having said that, not every novel idea necessarily makes much sense. A case in point is the Opportunities Party’s proposal to grant “the right of our endemic ecosystems to exist and thrive” in a written constitution.

As if the concept of a written constitution were not provocative enough (just ask Sir Geoffrey Palmer about it), Morgan also wants to break with millennia of jurisprudence and grant rights to something other than humans.

If you are only a little familiar with legal history, the concept of rights has traditionally been linked to people. It is people who have all sorts of rights: to their own bodies, to life, liberty, and their property. The purpose of the law, well the purpose of all law really, is to protect people’s rights.

There are just few extensions to this principle, and some of them make sense. Since the times of Roman Law, for example, the unborn child was considered as a person able to have rights. That matters not least for the right of unborn children to inherit property.

Another extension is the creation of legal persons. So companies can have rights even though they are really just a legal fiction. They derive their status of persons from the persons of their owners or shareholders.

Some other extensions are less sensible. For example, in Iceland elves do have rights. Their rights need to be considered when making planning and construction decisions. A few years ago, the New York Times ran an article explaining that Icelandic elves have even halted road building.

The problem is, of course, that elves do not exist. But try telling that to an Icelander.

And now Mr Morgan wants to give nature a right to exist unspoilt. It is a noble thought, and unlike Icelandic elves at least nature does exist.

But it does not change the fact that nature lacks the capacity to act in a legal sense. If nature had rights, it would need someone to speak on its behalf. Someone, for example, to defend New Zealand’s nature’s right against the invasion of non-native species – like cats.

Oh well. But maybe that’s what this policy was really about?

 
On The Record
 
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