By Natalia Albert*
For the past 10 years the Greens have made tax their signature fight. Capital gains tax in 2017, a Green minimum income in 2020, and through it all, their love affair with a wealth tax. But it never mathed for me. The numbers didn't add up, and neither did the process of collecting them. How were they defining wealth? How would they find it? What about money in trusts? How much would it actually raise?
Why claim every business owner is greedy? Why the disdain for homeowners? Why criminalise wanting more money? I moved to New Zealand from Mexico precisely so I could make more of it. Something I will never apologize for. They kept framing the value of having financial goals and fighting for them as a character flaw. Being poor, or not wanting money, their moral high horse. I don’t subscribe, nor do I think it’s a noble political position.
This year, I think they've finally cracked it.
For three elections running, the Green Party drew the wealth line at $2 million. This year they drew it at $10 million. The policy has three themes and eight clauses. Of the eight, six seem solid to me. Two still don’t quite square for me: the fixation on landlords, and how on earth they plan to enforce a 5% withholding tax on big tech. But first let’s unpack what they announced.
What did they announce?
A 2.5% annual tax on net assets over $10 million, family home exempt. The Greens say this catches the wealthiest 0.3%, and is why Mārama Davidson keeps repeating that 99.7% of us won't pay it. Narrow, specific with solid exceptions.
A new inheritance and gift tax branded the Capital Acquisitions Tax: 33% on what you receive above a lifetime million, with family homes and family farms carved out. By their numbers it hits about 1,100 people a year.
A return to a 33% company tax rate, but only for the largest 0.7% of firms, the banks and supermarkets and energy companies. Everyone else stays at 28%. Finally excluding most companies which are small and medium, honest hard-working folk employing other folks, making our economy hum.
A bank levy modelled on Australia's, a crackdown on multinational profit-shifting, and a reversal of the landlord tax changes National brought in. Plus, income tax cuts the Greens say reach 96% of us, paid for by a new top rate of 45% on income over $160,000. To me 45% seems high, but I unpack that further down.
The $2 million line they held for six years
In 2020, the Greens wanted a wealth tax that started biting at $1 million. One percent over a million, two percent over two. In 2023 they simplified it to a flat 2.5% and set the threshold at $2 million. In their 2025 alternative Budget, the big swing-for-the-fences document, the threshold was still $2 million.
They defended it through two election campaigns and a full alternative Budget. The rate drifted up a little, from two percent to two and a half, and then held steady. This year, the rate stayed at 2.5%. The threshold jumped to $10 million. This is a party deciding, after six years, exactly who it was willing to pick a fight with, and who it wasn't. And I think that this is the right group to pick a fight with.
Who got let off the hook
The jump from $2 million to $10 million spared someone. People assume the higher threshold was about protecting Auckland homeowners. It wasn't. The family home was always exempt, so moving the line did nothing for someone whose wealth is just their house.
The people it actually spared are those with $2 million to $10 million in wealth beyond the family home: a Waikato or Taranaki dairy farmer whose land and stock put them in the low‑single‑digit millions; a Wellington couple with two rental properties and a six‑figure share portfolio; the owner of a solid local business valued around a million; the provincial, asset‑holding middle whose accumulated properties sit well above $2 million but nowhere near ten. It's a very particular group, and it's more or less exactly the constituency the Greens have never been able to reach, the one National and ACT mobilise hardest. A wealth tax at $2 million lands on a lot of those people. A wealth tax at $10 million sails right over them and settles on a few hundred genuinely rich families instead. Bravo Greens!
Why I think the guardrails work
A few things in this document made me take it more seriously than the earlier versions. The Greens assumed they wouldn't collect it all. Their modelling assumes 28.5% of the super-rich tax simply won't be collected, lost to avoidance and minimisation, on advice from the Parliamentary Library informed by Treasury. Most parties pretend their tax take is simple and it really never is. The Greens are admitting wealth taxes are leaky, and costing for it. I had not seen that political maturity before.
You can see exactly who ends up paying the inheritance tax. The policy spells it out with examples, and they’re good. Inherit a $1.5 million family home and $250,000 in shares, and you pay nothing: the home is exempt, and what’s left sits under the million‑dollar threshold.
Inherit, instead, a $2.5 million commercial building and $500,000 in shares, or two rental properties worth $1.8 million plus $400,000 in cash, and you do pay: 33% on the amount above your $1 million lifetime threshold, with the family home and core farm assets still carved out. You only ever pay 33% on what you receive above a million, excluding the home. You can at least see exactly who this catches and who it doesn’t. Good!
The company tax rise is finally ringfenced, 33% for the biggest 0.7% of firms, 28% for everyone else. Earlier versions hit small and medium companies too, and I could never stomach that, because it rested on a shitty assumption that every business owner is greedy and every business is rolling in it. Both halves of that are wrong, and I'll die on that hill. Most small business owners are drawing a modest salary and carrying all the risk.
But a hit aimed squarely at the supermarket duopoly and the banks? Let’s go! It's a far narrower and more defensible target than "raise company tax", and it drops the pretence that every firm is a villain. I just can’t agree with their narrative about folks being evil for making more money. It’s the framing which I challenge, but this policy is now going in the right direction.
And then they got caught funding the tax department too well. Lol. The one number they had to correct was the money for Inland Revenue to actually collect the tax. They'd set aside $100 million to run the new taxes, but in the spreadsheet, it got added to revenue instead of counted as a cost. The fix knocked about $800 million off their four-year net.
A bad look, sure. But … they over-funded enforcement and then fumbled where the number sat in the table. A typo, as Swarbrick said and I get it. Political parties with smaller budgets like the Greens, are running on fumes and trying to do way too much with little. I'm less interested in the slip than what it reveals: they were trying to over-fund collection, not skimp on it. I'd take that any day. Be realistic about what it takes to actually enforce a policy. Yes, all day!
The bad
The whole document leads with corporate greed: supermarket profits, bank profits, power bills. But the corporate measures are the small numbers. The big corporation’s tax, the bank levy and the big tech crackdown together raise less than the super-rich wealth tax does on its own.
And then there is the framing. They treat wealth, business, and landlords as if they're the scum of the earth. The shitty rich-lister with the helipad and the couple with one rental and the family running a panel-beating shop folded into a single story: the greedy and the problem. It’s just not ok! And it's bad politics. You can argue the super-rich should pay more without implying that wanting to do well is an evil value. Sigh!
The income tax side gives 96% of us a cut and lands a new 45% rate on income over $160,000. Sure. But actually, the Greens spend 40 pages telling you the banks and the supermarkets are the villains. Then they tax those companies at 33%, while taxing a New Zealander who earns over $160,000 at 45%. Under a policy built around corporate greed, the company keeps a bigger share of its next dollar than the dentist does. Make that make sense?
I get it: company profits get taxed again as dividends when they reach a person. But that doesn't rescue it. So, if concentrated wealth is the problem, why does the person who works for a high salary pay the higher rate? And why such a jump, so fast? The top rate goes from 39% to 45% and kicks in $20,000 sooner, all at once. Bring us along. Start at 41% or 42% and build? Just my two cents.
The landlord fight
This one deserves its own piece, and it'll get one. But in a nutshell, because it’s a shit show. By the Greens' constant rhetoric, landlords come off as the worst thing to happen to mankind. It's exhausting, and it's the same flattening I keep coming back to, the speculator with 20 houses and the nurse with one rental and a mortgage get painted as the same villain. They aren't. I recently managed to own my first property, I will absolutely not apologize for that, and the Greens assuming I’m the same as a corporate greedy irresponsible developer is just not a pill I can swallow.
What grates most is that we're this heated about a group we can't even find. Depending on whose number you use, New Zealand has somewhere between roughly 120,000 and a couple of hundred thousand landlords, maybe, we are actually not sure. There is no official source that can tell us. We're proposing to reshape the rules around a population we can’t measure or find within any data source.
Chlöe Swarbrick has worked this issue for years and knows it inside out, the policy includes a landlord register for example. A register is sensible. Overseas, Scotland has run one for nearly two decades for trivial money. But a register is a map, not a fix. It tells you where every rental is. It does nothing on its own about the ones that are cold, damp, or dangerous. That takes enforcement, and enforcement is the expensive part. It's a start. It just isn't the finish or this simple. Like I said, this is a large policy issue on its own.
So did they crack it?
Mostly, yes. I still hate the framing of money bad, having less good. I still don't accept that wanting to do well makes you a villain, and the document never quite lets that go. But the policy underneath the rhetoric is the most honest thing the Greens have put out in a decade. They moved the line to $10 million, owned who that spares, funded the tax office to actually collect, and aimed their corporate hit instead of swinging wide. Lets see if this can get them the votes and conditions to make it to Cabinet.
*Natalia Albert is a political scientist living in Wellington exploring how to govern divided societies in diverse, liberal democracies, with a focus on New Zealand politics. She writes weekly on her Substack, Less Certain. Albert stood as a TOP candidate in the 2023 election.
56 Comments
Thanks Natalia for your very informative article! I like the way you included your perspective on the framing of values which often are more influential with voters than the numbers! I hope you get some mainstream coverage.
Thank you so much for reading and commenting such a generous comment. Nat
Natalia: Never reply to PDK. Even if you agree with him he will still burn you because you can never agree correctly enough.
Thanks for the advice, KH. I try my best to reply in good faith, even when being thrown some pretty random comments. But I appreciate the heads-up. 👌
Don't use that as a reason to avoid the links though.
Many here - particularly this site; it's why I chose it 20 years ago - don't want to know what they don't want to know. Typically because they have built personas, justifications and status, on the basis of the growth narrative.
Nobody likes saying 'I got that wrong'; and at some point there isn't the time to re-group. So doubling-down.
'Why criminalise wanting more money? I moved to New Zealand from Mexico precisely so I could make more of it. Something I will never apologize for.'
So no cognisance of the fact that money is a demand on the planet?
You're young enough to need to understand what is being handed you:
THE CHALLENGE | Surplus Energy Economics
Come back when you've learned something.
Thanks for reading and commenting.
It sounds like you see things in quite a binary way? Or that you have a misunderstanding of how politics works? or that you know very little about folks that aren’t like you?
The cost on the planet is real and I will never pretend it is not. What I won’t apologize for is wanting to survive in a world that is dangerously unforgiving outside of NZ. If you have traveled, which I hope you have, maybe you’ll see the reality of the Global South and why some of us, might have a different set of values than you. Which are not wrong or bad. In the same way your values are not wrong, mine aren’t either. But I understand if this is also something you disagree with.
Nat
I have travelled and had glimpses of the Global South.
The problem is that we are already an overshot species - even with maybe only 1/4 of humanity consuming at First-World rates. Indeed, we're already so close to the LTG apex, that 'raising living standards' - which merely reflects as more energy and material throughput per person - just hastens/steepens the descent.
Once you've digested the first link, try this: Update to limits to growth Study that BAU2 graph carefully (LTG is the longest-running still-valid 'economic' projection on the planet - by some margin...
Arguing that the poor need to be made more wealthy, is anthropogenic arrogance. Asking how many people the planet can support? is the valid first move (same with NZ). Professor Ellen Moselely-Thompson answered that best (I was there): "That isn't the question", she fired back. "You tell me the level of resource throughput you want to live at - and I'll tell you the number of people the planet can sustain". Research suggests that at good-peasant level, perhaps 2 billion. At our current level, south of 1 billion. We are overshot via resource draw-down - particularly the fossil energy stocks (life and food are energy; we're currently eating our way through the FF stock - think; Haber Bosch).
Energy, money and growth: The future is not the past | interest.co.nz (Edit: prescient, considering it was written in '22 :)
I get that younger folk want a pretty future - I've got grandchildren myself. But chasing 'money' - as the first link points out, money is a claim on future energy and resources - is REDUCING that future. If you don't understand that - look at the first diagram in the just-above link. Note the two incoming arrows, into the 'box'. Money is a proxy, keystroked inside the box - that you can take to the left-hand side and exchange for a portion of the arrows. If no flow? Money is worth nothing.
Resource/energy stock draw-down, therefore, is making us poorer. Not richer. Meaning the whole concept of 'making money' is flawed from the get-go. Adding proxy, is the more accurate description - while economics and economists studiously avoid addressing the being-drawn-down planetary stocks. And all politicians - you'd have to go back to Jeanete Fitzsimons to find an energy-understanding exception - fiercely agree the Emperor is in raiment garbed.
You have some learning to do - and it becomes a lonely road - perhaps too lonely to cross 5%. Programmed to Ignore? | Do the Math
Good luck to you
I understand and you might be right. I just don’t understand why the personal attacks. It would be great to debate these arguments in good faith without the stabs. But I also get these topics mean a lot to all of us. So fair enough. Thanks again for engaging with it. I’ll give your arguments some thought. Nat
Not sure where you're domiciled, but this fellow would be worth you booking an hour - or two - of his time:
2019 04 04 Mike Joy Biophysical Limits to Growth - YouTube
Nothing personal :) but I've been researching LTG for longer than you've been alive, and it is a tad frustrating at this late stage...
If you're going to lead - fine. You will likely get my vote (the Greens left real sustainability behind; they're into raising incomes in an already-overshot scenario) because I think the status-quo needs challenged. But if you REALLY want to lead, tackle the real human predicament head-on. We've nothing to lose by trying
go well
I think the description you might be looking for is blinkered.
Probably wouldn’t bother trying to engage with powerdownarabbithole Natalie. In my experience Once people start preaching they have subconsciously lost the ability to listen anyway. I find it fascinating that people seem to get to a certain point in life and decide they don’t want to learn any more, that they know enough, when ironically their knowledge originally came from learning and listening
Come back when you've learned something.
Could you be anymore of a patronising dick head.
Nah - I've got all my hair
Edit - if someone puts themselves up as a potential leader of the country, I'd expect them to have researched what the future holds, before offering.
So fair to challenge those who (apparently) didn't do so.
PDK, I get the impression you believe Natalia is a candidate in the election this year. She isn't. She stood in 2023 and wrote about the experience here - https://nataliaalbert.substack.com/p/why-i-joined-and-left-top
Cheers.
Fair cop. I was still associating her with TOP.
As a political scientist, she can offer perhaps more than need-the-vote politicians (who are hamstrung by a need to please the ill-informed masses. As you know, my frustration with the (lack of) dialogue goes back a few years... and a few more.
Thanks, Gareth, for that. I was about to explain how I'm currently just a political analyst, knee-deep in researching and understanding the New Zealand political ecosystem. And leading absolutely nothing else 🤣
You have encountered an element here that often, too often in fact, tends to be proprietary to the point of, degradation of other participants. It is not though founded in ill will, quite the opposite, but the delivery can verge on superciliousness which unfortunately can annoy rather than educate which in effect, is both counterproductive and regrettable.
This is a really interesting assessment of the Green's release.
However, given they have campaigned so long on high wealth taxes, there are some trust issues that there won't be immediate pressure for thresholds to be lowered and tax rates increased as soon as the mechanisms are in place.
Not exactly unknown for legislation to be fiddled with by using the regulatory apparatus.
Examples
- Bracket creep on taxation that keeps remorselessly pushing people in to higher tax brackets,
- Automatic inflation indexing for per litre alcohol excise duties that are crippling the craft distilling industry becasue their from-scratch costs of production are so much higher than distillers who buy in whey spirit from the dairy industry and simply flavour it.
Fair comment Golem. So, bracket creep and excise auto-indexing both ratchet quietly once the mechanism exists; no new vote is required.
A $10m threshold is a number written in legislation that every opposition MP, journalist and affected voter can watch like a hawk. Lowering it is a deliberate, attributable act, not a silent drift. That doesn't mean you are wrong in assuming it could slowly be lowered, but it makes it more costly in a way creep never is. This is a question about trusting future governments, not about the policy as written. And on that, keeping your guard up is fair.
We've a notable lack of transparency in government at all levels, and it's that culture of secrecy and perceptions of ineptitude and self-serving behavior that's eroded trust in government institutions, the public service and politicians.
I think people now rather expect gaming of processes and that loss of trust makes us ripe for the rise of a local brand of populism.
The rise of One Nation in Australia seems to be driven more by a disillusionment with careerist politicians, public service ineptitude and tilted democratic institutions rather than actively signing up to any policy. A protest against a deeply unattractive status-quo.
How, on God's green earth, was Trump seen as a better alternative to anything that could be put up in opposition. Twice.
And Farage at al. in the UK? Words kind of fail me.
And as others have noted, and I've practiced for a while, just don't engage with PDK. There's no point and it only encourages their behaviour.
The Greens have had recent contact with Gary Stevenson (UK) who has on occasion advocated 10 million as a wealth threshold for taxation...I wonder if he has had input into these policies?
10 million what?
Sorry, but counting in keystroke-conjured, fiat-levered proxy which since the GFC - and arguably longer - has 'cost' more in debt than it has 'accrued' in GDP (itself an avoiding accounting racket) is fraught.
And we need to remember that there is one less chair, every time the music stops (even that is misguiding; the next stop is really 2 chairs missing, then 4. 8, 16,... )
So we end up asking: What are they 'taxing'? The answer is: the processing of resources, using energy. So they're displacing some of that and sharing it around differently. Nothing more.
Lol...dont disagree as to what money is or isnt (as you should well know by now)....it was a musing on why/how the Greens had refined their previous policy
:)
That 2022 article is well worth a reread.
https://www.interest.co.nz/public-policy/115678/murray-grimwood-outline…
Haven’t seen the Green’s manifesto detailing their refined policies. The sticking point must be on any wealth tax how you identify, locate, collate and monitor private assets and then apply a value on all of those stages of it. The first attempt by the Greens was frankly appalling. They proposed to authorise IRD right of entry to audit and worse claimed to justify that because the government had right of entry to investigate benefit fraud thus downloading criteria for unlawful activity on law abiding citizens. But getting back to valuations. How do you arrive at them. Just go back and delve through all the court cases over property arising from the Canterbury earthquakes to see how protracted and argumentative that quickly becomes. For 800 years the Magna Carta has been a cornerstone of our law preventing the Crown from intervention in the legitimate ownership of assets by citizens. A wealth tax by necessitating compilation, monitoring and auditing of personal property, a dossier in other words, and it would be in direct violation of that ancient decree
There were an estimated 300 million people on the planet when it was signed.
Muscle labour was the all of it - with a few water-wheels and sails thrown in.
The planet was largely intact - except for where recent civilisations had irrupted and collapsed.
You cannot extrapolate that, to the current 8 billion-and-a-dying-planet.
Personal 'now-rights' can never outrank obligations to (a) the biosphere and (b) future others.
Well they can - but the result is collapse every time. Except that it can only happen once, globally; so 'every' is not quite accurate...
"They proposed to authorise IRD right of entry to audit and worse claimed to justify that because the government had right of entry to investigate benefit fraud thus downloading criteria for unlawful activity on law abiding citizens."
Im not sure why this would be considered anything new....I had an aquaintance decades ago who was tax audited and his recounting had IRD agents camped out at his residence for days requiring detail about all assets and records....I doubt the laws have been changed since.
So why then did Labour Minister Parker then have to resort to sneaking legislation (since repealed) through parliament at the eleventh hour of the Xmas break, so as to give the IRD the authority to enquire into the wealth and assets of a select list of perceived wealthy New Zealanders.
Perhaps because they wished to compel information without audit.
https://www.taxcounsel.co.nz/FAQs./Tax+Investigations.html#:~:text=The%….
The intention was stated clearly enough. The point is though a law had to be created to enable it. That means obviously, that before that law was passed, the Crown had no legal basis for any such intervention.
ps, tks subsequent link. That is taxation criteria concerning income in the first instance and it notes that a judicial warrant must be first obtained before any search is undertaken so the ask yourself why did Parker tsimply not then seek warrants from the court.
https://www.taxtechnical.ird.govt.nz/operational-statements/os-1301-the…
- These warrant applications are made without notice to the occupier, and can include confidential information. Where the relevant secrecy or confidentiality rules apply the Commissioner will generally seek to keep the information confidential. Other information may be disclosed either in whole or part at the conclusion of the investigation and any litigation resulting from that investigation. In some cases, this information may still be protected after the investigation or litigation has ended.
The audit I described was pre1994, but I do not know how or if the Act was changed in 1994 in relation to private property, nor do I know how private property is treated if the residence is the registered business address.
Look the IRD has far ranging powers to investigate tax fraud, tax evasion etc and that investigation obviously might carry on into the assets of the subject if they had been enabled by the said tax evasion or whatever. In that case the thrust of the law is property which has not been legitimately acquired. Criteria for those actions has had to be carefully constructed for reason of the civil liberties and privacy that are enshrined for all of us under our law, That protection goes back all the way to the Magna Carta which, for very good reason, overturned the power of the Crown as it had been installed by William 1 some 130 years earlier with such as Domesday Book.
The IRD has far ranging powers to ascertain IF you are meeting your tax obligations....whatever those obligations are deemed to be.
Correction - whatever those obligations are “under law.”
And who makes law?
Yes and therein lies the rub of the point I have been trying to convey. A law that has stood for 800 years, and been respected, should not be allowed to be defeated by a clandestine passage through parliament by an elected lawmaker representing the people. There would be no need to resort to such subterfuge If the intended method of extracting the required information was in the first place legal, or as you explain , requisite warrants could be obtained from the courts. The law is there to protect all of us from government overreach and undue intervention. Have a think about the USA right now, how the integrity of the constitution is being compromised by the politicisation of the judiciary, and how that is rolling over and undermining the rights of their society.
I think you are misunderstanding both law and history.....the state has the ability (and the right so long as it remains in control) to pass any law and that includes taxation, and we have current and recent past exemplar of the state being able to invade privacy in the benefit of the state....you may not like it but the facts remain.
Whether the state chooses to rigorously enforce said laws is another question...I would suggest the degree of enforcement is directly related to the degree of desperation...and they are becoming increasingly pressed.
So, by that argument any government, if it so wished, would have the right to abolish habeas corpus? Think a bit more about it please. In the same vein the Magna Carta is a foundation law that decrees, that no one, neither sovereign nor government, is above the law.
If you wish to think consider that habeas corpus requires a challenge on legal grounds.....when the state has the ability (sole right) to make law.
You can only challenge the legality of confinement if a law has been broken by the state....who makes the law.
We are not 'sovereign citizens' we are citizens of a (hopefully) democratic state....and Parliament is the supreme law making body.
Tax tax tax. Sad reality i NZ inc needs more money to operate for a variety of reasons. How is the crux.
Targeting this and that will just see international. Corporates and the Uber wealthy restructure to avoid/minimize. They are good at it. Lawyers and accountants will rejoice. Foxglove makes great comment on how to access and assess.
These truths highlights why a land tax is the answer. Simple. Regular. Unavoidable. All great features for any tax.
Its also why the ponzi members hate it.
Read my links upthread.
Land is static, inert.
Tax has to be traced to energy/resource flows (and, ultimately, stocks).
Taxing an inert item might fit with a desire for a more-level playing-field, but it forces the (money-making) use of it. Even earning the tax off-site has the same effect - more resource draw-down, more pollution.
I regard those who advocate a 'land tax' as being energy-blind. Energy Blindness - The Great Simplification
Surely GST (transaction) and income (human and machine/process) do just that?
Just saying fiddling around the edges is subject to manipulation and costly to track, prove, and enforce. Example the much talked up Labour capital gains tax. If you dont sell an asset, how much tax is created...
Nothing.
As the author will know, most countries which once had wealth taxes have given them up. In 1990, 12 European countries had one, while today, I believe only 3 do; Norway, Switzerland and Spain. From my reading, countries abandoned them because they proved to be costly and complex to administer, susceptible to capital and residency flight and on balance these issues outweighed the revenue collected.
Ole Gjems-Onsted, Emeritus Professor of the Norwegian Business School, has estimated that wealthy Norwegians removed some US$54bn, resulting in a revenue loss of nearly US$150m annually. Jean-Baptiste Colbert, Louis XIV's finance minister made this observation; "the art of taxation consists of plucking the goose so as to obtain the largest amount of feathers with the minimum amount of hissing".
I think the hissing here would be deafening. I used to advise clients in the UK on tax issues such as Inheritance Tax and I would support the introduction of one here, but would not exempt the primary residence on the death of the remaining spouse, if the tax collected is to be worthwhile.
Perhaps stamp duty on property sales could be considered for higher value properties, say those over $3m.
Overall, I do believe that we need to rebalance our tax system and that must involve some form of capital tax. I would also like to see a nil rate on incomes below a certain level.
The exoduses and reasons are misrepresented....unsurprisingly so.
Hi Natalia
Great to see you featuring here at I.C.NZ.
I thoroughly enjoyed your article, and note from your responses that you possess a very open and enquiring mind - also that you are currently completing a Political Science Doctorate.
My question to you is this... Within academia, and in particular, Victoria Uni, are the subjects, of Public Banking Utility models, and FTT/APT tax systems ever included in any of the curriculums, or discussions in general amongst students and lecturers?
I studied Economics at Uni in the very early seventies, and sadly I have come to regard the entire subject as nothing more than pseudo-science/mysticism.
The generally accepted fundamentals would be laughable, if the effects on the distribution of wealth for humanity weren't so destructive, as amongst other monumental defects, the entire "discipline" completely ignores the manner in which "money" creation takes place.
The reason I put this question to you is, because around 97% of the money supply (MS) is created out of thin air within the Western casino models when private banks write up loans for their customers - the money never existed in the first place - it is simply a digital ledger entry.
This "money" is not borrowed from any other entity or intermediary.
Obviously the Money Supply (MS) can be created in different ways...
#1 The status quo - as debt created out of thin air by the privately owned international banking cartel/monopolies, where they get to pocket hundreds of billions in interest paid on the "loans". Under this heist, hundreds of billions of capital leave the domestic economy, only to benefit the 0.001% of humanity's population who sit at the head of the human food chain.
#2 OR the MS can be created as credit in a public banking utility model where billions of dollars stay within the economy and benefit NZ society rather than the overseas network of plutocrats, the FIC (Financial Industrial Complex) the network that also engineers the asset bubbles and, of course, forever wars. The alternative model is often referred to as the PBS (Public Banking Solution).
If this system was deployed, I believe that NZ could turn its debt-doom-loop economy around within three years, and go on to become one of the most vibrant and wealthy economies on the planet.
The PBS run in tandem with a minuscule 0.5% APT (Automated Payment Tax) that could replace ALL other taxes, directly addresses the structural vulnerabilities of a higher 2% FTT, plus the compounding inflation (pyramiding), and capital flight that would result.
The obvious corollary, the public utility model (the PBS), can issue home loans and infrastructure credit at, or very near, the cost of administration, as there are no third party entities taking their cut.
This is how it worked in the 1930's in NZ where our central bank operated as a public utility. NZ was held up as one of the world's shining examples of how an entire economy could rapidly recover from the ravages of the Great Depression.
The public banking model can easily absorb a tiny APT, keeping retail mortgages low and stable, whilst shielding Kiwi homeowners from the private banking pump-and-dump schemes that have existed especially since the U$ Fed was incorporated at the end of 1913.
An APT of 0.5% would change the behavioural response of the market, shifting much of the tax burden away from everyday citizens and the real economy, and onto the speculative capital loops, AKA the financial economy, that in no way contributes to a healthy GDP profile.
For high-frequency trading algorithms, dark pool liquidity providers, and foreign exchange speculators who rapidly churn millions of dollars to capture micro-margins, a 0.5% APT makes this speculation unprofitable.
The PBS effectively funnels capital away from unproductive asset bubbles, and encourages investment back into tangible, productive Kiwi businesses and entrepreneurial activities, including the value-added activity that our commodity economy so desperately needs to develop.
...........................................................................................
Personally I feel completely dis-enfranchised when it comes to this years election and in finding a political party which I could vote for that seriously addresses the fact that NZ's economy remains in a serioisly debilitating debt-doom-trap.
I belong to a local and very eclectic geopolitical discussion group that meets for 2-3 hours every Friday, and has been doing so for five years. Of the 15 that attend, most are expats from Germany, Belgium, Romania, South Africa, the US, and not one of them has found a party that they can bring themselves to vote for in the forthcoming general election.
This strong feeling within the entire group is, not just in relation to the appalling state of the NZ economy (total debt, including unfunded liabilities, is around 600% of GDP), but also because they have simply lost faith in the integrity all of the incumbent parties.
Voting, once again, for any of the group, would come down to a tick of "approval" for the party/candidate that is the least-worse of the choices at the ballot box.
My final question is - can you point me in the direction of a single party whose financial policy is not essentially status quo, and in reality, tantamount to changing the font on the breakfast menu on board the Titanic just before it hit the iceberg?
Cheers and regards
Col
can you point me in the direction of a single party whose financial policy is not essentially status quo, and in reality, tantamount to changing the font on the breakfast menu on board the Titanic just before it hit the iceberg?
Perhaps your qualm isn't solely with the parties and candidates, but with the natural human resistance to change. If a party stepped up with ideas so outlandish, so revolutionary, they would likely never gather the needed votes to enact it due to this psychological barrier we have. Where then is your energy best spent each day if trying to battle against an innate psychological trait of our species? I can only attest to educating and having rational debates with those around me in the hopes of bringing a variety of viewpoints to consideration from them, so they think for themselves, not on what they were taught growing up or what their parents think, or any echochambers they may attend.
Kia ora Col, thank you; this is a great comment.
On what VUW teaches, I'm not entirely sure. I did my masters and now my PhD at Vic in political science, and I was taught monetary theory and banking models, but through the lens of political institutionalism, which is my bread and butter. A very different angle from the economics or public administration one.
I'll also grant your point on money being created by banks. But I'll tread carefully, because I'm not knee-deep in that space, and I'm not sure I can debate it with the confidence I like to have when I comment on things.
Then there's your argument that "a 0.5% APT replacing all taxes turns NZ around in three years", which is not something I agree with and not something I think I can fairly assess from where I sit.
On the last question: I can't point you to a party. Partly because recommending votes isn't what I do, and partly because if no party reflects what you and your Friday group believe, that's the information right there, not a failure to look hard enough. Sometimes the menu just doesn't have your dish.
Thanks for raising the level here. Nat
That link to Mike Joy, should tell you that academia obviously has a failing.
Which has been covered here:
Young people need the knowledge & skills to deal with a post-growth world | interest.co.nz
The textbook referred-to is a goodie.
I very much appreciate your reply, Natalia.
Just to be clear, my hypothesis is that it is the Public Banking Solution (specifically method #2 within my post) that stands to do most of the heavy lifting if we are serious about turning NZ's eCONomy around.
The Automatic Payment Tax could be the corollary that would fully complement the PBS, but it wouldn't be the main driver.
Plus, a return to sound money principles, as the 55-year-old disastrous fiat experiment dies, would complete the Troika.
I didn't mention this third aspect, but I do see it as a mathematical inevitability that could help to broker a grassroots demand for the PBS
And a big yes to Interesting1234's comment above - this IS all about education and rational debate, which was the basis of my original comment.
As far as I know, dreams are still free, even if Big-tech would dearly love to change that rule too.
Cheers, and thanks again
Col
The biggest miss with their policy - it raises an amount ($6b) equal to half our current deficit ($12b). All goes to plan and we are still in deficit, then the additional spend policies kick in and we go further into deficit.
Just sticking the bill for our lifestyle onto our grandchildren like every other party...
Well said.
Just like driving an EV isn't 'saving the planet' - it's just depleting the planet slightly slower.
Long after $$$$$$$$$$$ numbers cease to be revered, the physical legacy will remain. I apologised to my offspring, on behalf of my generation, nearly 20 years ago.
The $20,000 MWh reason you should never let ecotards near energy policy. Paying $10,000/MWh for coal to charge your battery. Once the greens are finished with you there will be no tax to collect.
"Australia’s main grid chalked up its worst one-day wind drought in more than two years over the weekend, causing a series of price spikes in South Australia and highlighting the urgent need for more battery storage in the state with the highest penetration of renewables.
“The volatility didn’t stop there. Elevated prices persisted overnight, and this morning delivered another period of $20,000 [per megawatt-hour] prices in SA.”
As OptiGrid explains it, many of the state’s batteries discharged heavily through Sunday afternoon and early evening and, as batteries across the state ran low on charge, several dispatch intervals cleared above $3,000/MWh, with prices peaking above $20,000/MWh.
“Around half managed to catch the first extreme price interval,” says OptiGrid, “but far fewer were able to discharge in the later spikes. A couple of batteries were even charging through dispatch intervals above $10,000/MWh.
“By [Monday] morning, many batteries still had limited energy available after the overnight price event. Despite another period of $20k prices, relatively little battery capacity was able to respond.”
https://www.macrobusiness.com.au/2026/06/another-wind-drought-exposes-e…
https://reneweconomy.com.au/big-batteries-caught-short-as-worst-wind-dr…
https://joannenova.com.au/2026/06/batteries-failed-on-day-one-a-four-da…
You shouldn't let fanatics near a finite planet.
They'll f--- it.
But there are always the Fred Singer types, eh Profile?
To put this in a different perspective. We pay around 37c/kWh at the retail level. The numbers profile used is probably AUD$/MWh. Still sticking with AUD$, 3000$/MWh translates to 3,000c/kWh, around NZD 3500c/kWh, nearly a 100x the retail level The retail level is usually buffered from these wild swings but somewhere along someone pays, either as a loss or fat profit.
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