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Contact:
Foundation for Economic Growth,
P.O. Box 10-282,
Wellington, N.Z.
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Kiwis Poverty Immense
By Phil Scott
Jul 28, 2004, 16:26

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Nearly one quarter of us Kiwis are worth less than $20,000 each. The average Australian household is worth $220,000 but the average Kiwi is worth only $68,000. Less than one third. The Aussie battler is either working 3 times as hard or his government has a better idea how to increase the wealth of its citizens. Nearly 600,000 Kiwis owe more than they own. That is 16% of us compared with only 4% of Australians. About 10% of Kiwis in the 60 to 64 years age group had nothing or were in debt.

The question is, “What are we going to do about it?”

Back in the 50s and 60s when we were wealthy we could sell all that our farms produced at whatever price we liked to Mother England and Europe. Life was easy and the government controlled everything; Big government, big unions and micro-management by government of all aspects of our life. Business was a matter of having the right import licence and then you couldn’t lose.

Unfortunately our customers decided to change the rules in the 70s and at the same time the oil shocks hit the country. Still our governments continued to micro-manage the economy and Muldoon promised to “leave the country no worse off than he found it”. A promise he failed to keep. He famously stated that the average Kiwi wouldn’t recognise a deficit if he fell over one in the street and went on to command a Price Freeze, a Wages Freeze and an Interest Rate Freeze. This was the ultimate command economy. We were frozen over!

The government owned many businesses at this time and they weren’t doing so well. The Post Office/ Post Bank/Telephone business was losing $1 billion per year, the Railways were losing $1 million per DAY and the Bank of New Zealand went bust to the tune of $1 billion dollars. Our overseas reserves were plunging to zero and we couldn’t pay for our imports.

Micro-management by government didn’t seem to be doing so well.

So they sold off these losing businesses to business people who seemed to be willing to pay billions of dollars for these disastrous entities and used the cash asset return to keep the welfare state going. With government micro-management out of the way, each of these businesses become profitable and the investors recouped their outlay and went on to run successful businesses.

Now to for the IDEA.

Why wait until micro-management destroys the Post Office, our Kiwi Bank or other businesses that our government owns? Why not give these entities that are owned by “the people” back to us. Why should a government control and own the shares of our businesses if they are likely to destroy the wealth which is so hard to build?

I propose to make all citizens much wealthier by distributing our shares in these businesses from government micro-management back to “the people”. This is what democracy and equality is all about. Each registered voter will get 1000 ten cent shares in the Post Office. That is 2,000,000 people getting $100 each if the Post Office is worth $200,000,000. I also propose that all our citizens get a similar bunch of shares in Air NZ though this will be worth about $500 each since the government put in about $1,000,000,000 of our money not so long ago.

The electricity generators that the government own on our behalf at the moment are making record profits and their shares should be particularly valuable for us citizens. Then there are a couple of Utilities – the Transmission Lines and the Railway Tracks. These should produce good rents for us.

After that we should give Lotto back to us, the owners, which will be more beneficial than buying tickets ever was.

I think it would be a good idea to do a complete survey of all possible assets which would redress the asset balance and make us citizens wealthier. Some assets may require that we offer some shares to a keystone owner to ensure stability and sound management, some may not. There are sure to be a myriad of details to think through but we can work our way through them.

As a result, all citizens will end up owning around 20,000 ten cent shares in a variety of sound businesses. If this asset is carefully managed by experienced and top quality private enterprise managers we can expect that the shares will increase in value over time and will become a valuable retirement nest egg for those citizens who keep them.

Over 40 years they could well increase from 10 cents each to $2 or $3 each. This would do a lot for peoples retirement!

No doubt some citizens will sell their shares and some of those will pay off mortgages and credit card bills. Others will sell and have a party. I hope they enjoy their parties because they will have a rather quiet retirement.

Thus will our people become interested in the share market and the creation of wealth. Some of them, maybe the majority will even buy more shares for their retirement and provide much needed capital for our entrepreneurs. We will become a nation of savers and investors rather than spendthrifts as we are at the moment. We must make a dramatic moment of all this and encourage everyone to keep their shares and to add to their holding.

The Foundation for Economic Growth Inc. would be an excellent group to form a working party on this project and if any of you are interested in developing these ideas into a working proposition please call me now.

Let us help to make all our people wealthy and stop the drift to Australia before it becomes a flood.


© Copyright; Foundation for Economic Growth and various authors. Individual authors retain their own copyright.

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