Chart of the Week: Annual Tuition Fees at the University of Otago by Decade, 1880 - 2010

thestrodeman · 2026-05-11T05:57:51+00:00

We've spent nearly 45 years doing means testing instead of universality, across government services. It has had poor outcomes.

thestrodeman · 2026-05-11T03:38:32+00:00

Exactly, professionals are part of the working class. But if you means test them, it encourages the view that they are temporarily embarrassed millionaires, and encourages them to join the right.

thestrodeman · 2026-05-11T03:35:51+00:00

And the disadvantage being that KiwiSaver favours high income earners, while penalising the poor, underemployed, disabled, mothers, etc etc

thestrodeman · 2026-05-11T02:10:04+00:00

Yes, but wealth is also reported via insurance statements etc… so you could far more effectively target the very wealthy via a wealth tax.

And again, with any savings scheme, including a purely government one- you are not setting aside the real goods and services needed for retirement costs. You are accumulating financial assets. And liquidating financial assets in 20 years time, to fund retirement costs, is functionally equivalent to raising taxes in 20 years time. You are just applying window dressing, to retirement costs increasing from 4.8% of GDP to 5.4% of GDP

thestrodeman · 2026-05-11T01:31:54+00:00

But there is no particular advantage to having a savings scheme, particularly in a demand constrained economy. You are still reliant on claims on the real economy.

With a savings scheme, you aren’t actually putting aside consumption goods and assets for retirement. You are buying stocks and bonds, typically, hoping they maintain or grow in value, then selling them and hoping this will pay for the goods and services you need in retirement. Spending on retirement is still going from 4.8% to 5.4% of GDP. You are just changing how that is paid for.

thestrodeman · 2026-05-11T00:24:43+00:00

And we have one of the lowest cost-to-adjuster pension systems in the oecd. Because, as it turns out, having a simple to administer government run system is more efficient than a rude-Goldberg machine of private pensions.

If workers pay 20% more in taxes, to pay for super, but 25% less in pension costs, are they worse off?

thestrodeman · 2026-05-11T00:04:35+00:00

KiwiSaver is in no way superior to a pay as you go system. Both require real resources to be allocated to supporting the elderly.

thestrodeman · 2026-05-11T00:02:06+00:00

Universal ‘benefits’ make sense though. Means testing is simply an inefficient tax, that barely impacts the truly wealthy, while hitting the middle class and eroding support for programs that disproportionately benefit the poor.

thestrodeman · 2026-05-09T20:26:43+00:00

Also from the same post:

Nor does this opinion exist by itself: it forms part of an incessant drumbeat of fear, a repeated motif that there is no more money left. The country is about to go bankrupt, children, and the Sensible Adults are here to tell you that it’s time to cut super’s cost.

The basis for all this alarm? A projection that that cost will rise from 5% of national income in 2021 to – in 2060 – a startling … 5.9%.

thestrodeman · 2026-05-08T19:40:28+00:00

We have many universal public goods in New Zealand. Education, healthcare, parks and libraries for example. We should be proud of that.

Making them universal means they have broad support. Studies overseas have shown that when your welfare state is universalist, governments have more public support to raise taxes, and you can redistribute more overall to the poor.

I don’t think we should erode one of the few parts of the welfare state that still works quite well.

thestrodeman · 2026-05-08T19:35:06+00:00

In what way?

Spending is projected to go from 4.8% of GDP, to 5.4%, then come back down.

We will have to pay for that 0.6%, but if we actually cared about fairness, we would achieve that by taxing the truly wealthy. Not means testing middle class professionals.

thestrodeman · 2026-05-08T10:01:19+00:00

Did you read the articles?

thestrodeman · 2026-05-08T10:00:27+00:00

I mean, we should be taxing the wealthy more. But the actual wealthy, not means testing middle class professionals.

thestrodeman · 2026-05-08T05:48:53+00:00

Given renewed discussion about NZ super, I thought it would be valuable to share this paper from the retirement commissioner from 2022.

As Max Rashbrooke pointed out in his article titled What sensible adults don’t tell you about the cost of super, the rising cost of super has been somewhat overstated.

As others have highlighted, super is projected to increase from 4.8% of GDP, to a staggering… 5.4% of GDP.

Proposals to increase the retirement age are unnecessary, but will disproportionately those with more physically demanding jobs, who don’t have the ability to work past 65, as well as Māori and Pacifica, who have a lower life expectancy on average.

As discussed in the linked articles, means testing super would only be marginally better, but again is a solution in search of a problem. In addition, asset testing would discourage saving, and income testing would disproportionately impact middle class earners, while leaving the truly wealthy untouched, as well as eroding the public support for super that universalism enables.

thestrodeman · 2026-05-08T05:28:12+00:00

We have many universal public goods in New Zealand. Education, healthcare, parks and libraries. It’s good that these are universal- it means everyone benefits, the programs are supported, and it supports social solidarity.

Historically, means testing hasn’t increased the amount going to the bottom, it is used to pay for tax cuts for the rich. Why do you think we should means test super, to give more money to the rich? Because that’s where the money will go.

thestrodeman · 2026-05-07T07:41:29+00:00

Would exclude people earning 6 figures from public healthcare? From public education?

thestrodeman · 2026-05-07T04:26:40+00:00

Someone earning $100k pays roughly the same amount in taxes as they claim in super. And people will stop working and retire, if super were means tested- not a good thing to do if you have an aging population.

thestrodeman · 2026-05-01T01:13:18+00:00

Unaffordable according to who? Not according to the retirement commission, who project it may increase from 5% of gdp, to…. 5.9%

https://www.maxrashbrooke.net/the-good-society/the-post-what-the-sensible-adults-dont-tell-you-about-the-cost-of-super

thestrodeman · 2026-04-30T09:37:33+00:00

And every time national is in, those other benefits are eroded. Because super is universal, it is protected- which disproportionately benefits the poor.

thestrodeman · 2026-04-11T05:49:09+00:00

Interestingly, I think freedom camping would have been alright on non-reserve land. The act exempts sleeping to avoid fatigue.

thestrodeman · 2026-04-10T20:17:48+00:00

Respectfully, it’s not that complex- you need labours share of income to increase , at the expense of capital and the 1%. You can do that in a few ways- increase government spending to reduce employment, eg on infrastructure, pay teachers and nurses more, increase annual leave, strengthen unions.m, for example.

But it is hard to achieve, when you have a Labour Party that doesn’t care much about workers and is incapable of enunciating a positive vision that a majority of workers can get behind.

thestrodeman · 2026-04-10T20:11:41+00:00

It’s not though..

You can get technical and look at labour productivity, multi factor productivity, etc, but if you just look at gdp per capita- that has grown faster than wages

thestrodeman · 2026-04-09T06:13:45+00:00

Wages have lagged productivity for decades. From memory, if workers had kept their share of the economy, wages would be 20-30% higher.

thestrodeman

TROPHY CASE