Guest Post: Roger’s Outcomes
In this third part, Sir Roger looks at what the outcomes of his policy prescription would be:
1. Retirement Debt
A. – 30 billion dollars (indexed) gross savings each year stops the rot and ultimately solves New Zealand social welfare problem.
B. – Net savings offsets growth in debt from year one and starts to offset existing debt within 10 years.
C. – By year 2060 savings for future welfare spending exceed $600 billion (offsetting much of the debt owed to retired).
D. – Government financial accounts now mirror what the private sector has to do.
E. – New Zealand no longer going broke.
2. Fiscal Position
A. – A small surplus ½% of GDP year one instead of a deficit of 3.4% of GDP today.
B. – A turnaround year one of 3½% of GDP (9 billion dollars).
C. – Fiscal position improves year-on-year to be 20 billion dollars better off in 20 years’ time., relative to where it will be under today’s policy.
3. Government – Government budgets are now fully funded for future
welfare commitments (health and superannuation).
4. Productivity – Lower taxes, savings, lower debt, competition and
individual decision-making will all add to productivity improvements over time.
5. Inequality
A. – The turnaround in inequality starts day one.
B. – Individuals in work will have savings of $6,240 (super and $11,960 gross for health and risk). Double this for two income families.
C. – A 20 year old today who worked every year until retirement would most
likely retire with $1 million+ (super), plus $100,000-$200,000 in their health account.
D. – Compared to savings of almost nothing today.
6. Institutions
A. – Educational choice and an education tax credit available for every child whose family would like one.
B. – In retirement, New Zealanders would receive not only the existing pension but a lump sum super and health savings account.
C. – Health – Choice and competition have largely solved the waiting list and staffing problems while efficiency has improved as it did with all SOEs.
D. – Welfare has improved as self-provision/decision-making have largely removed dependency.
7. Power – Has been moved away from politicians and transferred
back to individual New Zealanders who now spend their own money.
– Politicians’ role is to act as regulator and insurer of last
resort.
8. Con Game – Politicians no longer take your money from you – you
save your own money $18,200 a year plus interest earned and buy your own insurance cover or pay directly for the services you wish to buy.
9. Politicians – No longer able to create dependency in order to
win votes,
– They no longer spend your money, you do.
10. Privilege – Government handouts amounting to $7-8 billion have
been removed and that is a large part of the reason why a 20-year old will retire with a million dollars in their pocket, a 40-year old $400,000+ in their super and health fund accounts.
11. Taxation – Low – no tax on first $52,000 of income ($65,000 single
income families) and 24c on income above $52,000. No
bracket creep.
12. Incentives – Improved low marginal tax rates.
– Huge rewards in the system if you stay healthy, and stay
in a job.
13. Capture – No longer possible when New Zealanders have choice and
there is competition in the social service marketplace (instead of compulsory government delivery).
14. Resource Distribution – Distribution of social services will be determined by individual New Zealander’s purchasing decisions, not politicians’ decision-making or provider capture.
15. Housing and Infrastructure – 3 billion dollars of government investment (via savings accounts) along with regulatory changes will, over a 10 year period, help solve today’s disastrous housing and infrastructure situation.