Labour Leader & Former Education Minister Hipkins must be held to account for his maths mistakes & dishonesty about the economic implications of population ageing

In an interview with TVNZ's Jack Tame, Labour's Chris Hipkins mislead Tame & five million New Zealanders about the economic implications of population ageing, which he states requires imposing capital & asset taxes. Hipkins says, “The big question is what happens with the working-age population. If it stays the same & the population over the age of 65 grows then yes we will [have to increase the percentage of tax revenue compared to GDP] .. We have to be honest about that. Let’s go back 10 years, there are now 200,000 extra people over 65 .. there’s another 400,000 that’ll be there in the next 10 years. That means our population over 65 will have gone from 14% to 21% .. You can’t say to people over 65 that we can give them everything that we gave them when they were 14% of the population and not increase government spending – the maths just doesn’t add up.” What. Bollocks.

Hipkins uses the word "honest", but what he says is dishonest. Many nations face ageing populations. NZ's fertility rate ranks as higher than many, at 1.7 per woman. By contrast, Singapore's is only 1. The Straits Times reports, "Singapore's population is ageing rapidly, with the proportion of citizens aged 65 & above increasing to 18.4 per cent in 2022". How is Singapore dealing with this issue? Fantastically - many scientific articles are lauding how its over-65's are doing. Hipkins says the "maths" shows population ageing must require higher taxes & government spending. He prefers capital & asset taxes (but not for Māori authorities which he wont dare tell anyone since that would mean an end to parliamentary sovereignty). Is he telling the truth? No. How come? Compare Singapore's taxes with NZ's. Its GST rate is 9%, top income tax rate 24%, corporate tax rate 17%, and tax revenues as a fraction of GDP (which Hipkins says must rise in NZ to pay for population ageing) are around half our level.

How did Singapore do it? Hipkins misled Kiwis by not telling how a bunch of other nations solve this issue by using funded social security systems (with the savings of their people). Instead of paying many welfare bills with taxes, individuals have savings accounts for their retirement, health & housing needs. In Singapore these funds are invested by the State's Central Provident Fund, earning returns on equity markets. The current NZ welfare system is different. Its "Pay-As-You-Go". When public funding runs dry, like now, there are few personal savings to use, and our government resorts to higher taxes and borrowing as we "go" along. Contrary to Hipkin's mathematically & economically illiterate musings, "the maths" of welfare with an ageing population adds up in Singapore, even with taxes half of ours, since people enjoy compounding returns on savings accounts that fund many of their welfare needs. Can it work here? Yes. Together with a former Finance Minister, I did a full NZ plan & prepared budgets to 2035. Seems Hipkins doesn't know how it works, even though some in his caucus have talked to me about it, without his knowledge, it seems.

Sources:

https://www.1news.co.nz/2024/09/08/full-interview-chris-hipkins-on-labours-tax-policy-pivot/

Here's the Supermarket Duopoly Defamation Threat Letter written by Chapman Tripp naming Auckland University Economist Tim Hazeldine.

Extraordinarily, a legal letter has been sent by law firm Chapman Tripp on behalf of its client, Foodstuffs North Island, to Auckland University, complaining that its (just retired) former employee, Emeritus Professor Tim Hazledine, wrote an article defaming Foodstuffs. The letter requested that the article, called Foodstuffs Wants to Merge its Co-ops, but Consumers Need the Opposite, be removed from the University's website. Business Desk also reports, "Foodstuffs North Island has made legal moves to silence an academic critical of its proposed merger". Here is that legal letter for your perusal (it is attached toward the end of the document):

https://comcom.govt.nz/__data/assets/pdf_file/0016/362032/Tim-Hazeldine-submission-in-response-to-FSNI-and-FSSI-statement-of-unresolved-issues-12-August-2024.pdf

It says Hazledine's article alleges, "Foodstuffs is currently engaged in illegal, criminal & anti-competitive practices and has entered into an anti-competitive agreement; and there are reasonable grounds to suspect that the owners or operators of Foodstuffs know that they are acting illegally and anti-competitively .. There are no defences to these imputations. The imputations are false. Even if some were clearly stated as opinions and were genuinely held by Professor Hazledine, they are not based on true facts and are not protected .. Provided these defamatory statements are removed by 5pm on 25 June 2024, this will resolve matters as far as Foodstuffs Is concerned".

I thought it wise to get the inside story straight from the horse's mouth, so asked Hazledine today what had gone on. He says that he'd been passed the above lawyers' letter and considers the defamation claim to be ridiculous - an attempt to "chill discussion" of the Foodstuff merger. It partially worked. He says, "My university’s officials caved in at once", pulling the article down from its website. So much for the New Zealand PM & Opposition Leader arguing University staff have statutory protection coming from being a "critic & conscience" of society. Hazledine says Stuff also published his opinion and was threatened by the lawyers, but ignored them (see The Post's website). What's bizarre is that his article, and the Chapman Tripp legal letter, are all embarrassingly fully publicly available right now on the NZ Commerce Commission government (".govt") website (the link is above). They form part of Hazledine's August 12, 2024, submission to the Commerce Commission. All I can say is that it appears the PM, Leaders of NZ First, and ACT, Head of the Commerce Commission, Commerce Minister & Justice Minister are all now breaking the law by posting what is alleged to be defamatory material on official government websites. Shame on them.