Blog description.

Accentuating the Liberal in Classical Liberal: Advocating Ascendency of the Individual & a Politick & Literature to Fight the Rise & Rise of the Tax Surveillance State. 'Illigitum non carborundum'.

Liberty and freedom are two proud words that have been executed from the political lexicon: they were frog marched and stood before a wall of blank minds, then forcibly blindfolded, and shot, with the whimpering staccato of ‘equality’ and ‘fairness’ resounding over and over. And not only did this atrocity go unreported by journalists in the mainstream media, they were in the firing squad.

The premise of this blog is simple: the Soviets thought they had equality, and welfare from cradle to grave, until the illusory free lunch of redistribution took its inevitable course, and cost them everything they had. First to go was their privacy, after that their freedom, then on being ground down to an equality of poverty only, for many of them their lives as they tried to escape a life behind the Iron Curtain. In the state-enforced common good, was found only slavery to the prison of each other's mind; instead of the caring state, they had imposed the surveillance state to keep them in line. So why are we accumulating a national debt to build the slave state again in the West? Where is the contrarian, uncomfortable literature to put the state experiment finally to rest?

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Tuesday, April 29, 2014

Parker’s Plan is Anti-Innovation & Prosperity: Why There Must Be No Compulsory Kiwisaver.

A compulsory Kiwisaver works against prosperity for all of us, because it leads to a less innovative, less vigourous and less diverse economy. Thus David Parker’s announcement of Labour’s monetary policy this morning predicated on a compulsory Kiwisaver will be a needless drag on an economy which is currently growing faster than most world economies (including the economies of Europe and the US). In trying to fix something that is not broken in the way they think it is, Labour risks jeopardising our economic wellbeing.

To expand on my Tweets, I simply quote below the salient parts of an earlier post – the sixth most read post on this blog - which was in reaction to then CEO of The Financial Services Council, Peter Neilson’s calling for – with no conflict of interest I’m sure – a compulsory Kiwisaver (some may want to gloss over first paragraph because it’s … well, philosophy):

I don’t deny Mr Neilson makes some attractive arguments; obviously so because, yes, savings are vital to a thriving capitalist economy: if you could put the taxes you currently have extorted from you voluntarily into savings we would all be better off in every way. However, the minute the country has forced on it a compulsory savings into KiwiSaver from the Fortress of Legislation, then its philosophically lost every gain that has been made, because a capitalist economy is defined as a voluntary one – add compulsion, then there is merely another planned, big state economy. Capitalism can only work, and works better than any centrally planned mechanism, when individuals are left free to go about the business of bettering their lives voluntarily, following their pursuit of happiness, and rational self-interest. This is also the pre-condition of a free country. Unfortunately, however, because 99 out of 100 professionals and business people, and 100 out of 100 lobbyists and politicians, no longer understand the philosophical issues underlying a capitalist system, by which I mean classical liberalism, I am forced to break this Herald piece down on its own shallow terms:

Significantly, never mentioned in Mr Neilson’s lobbying, there is a huge cost to business via the compulsory employers contribution that employers must make, matching their employees contributions, that is ignored, completely, by him. He is advocating that every small and medium sized enterprise (SME), including farms, in New Zealand, that’s every entity which employs, is forced to give over the capital they could use to grow themselves, and employ, so a very minute, elite group of ‘favoured’ firms listed on the New Zealand Stock Exchange can use those extorted funds to further their own interests. Rational and fair people will rightly see this as first, philosophically repugnant, and after that economically retrograde. This is called crony capitalism, which, mixed with an uncritical MSM such as the lack of balance in this Herald piece, simply accelerates us all down the road to our serfdom.

Secondly, not only is every SME stripped of their own capital via the employers contribution, they also necessarily have to incur a higher incidence of income tax to fund the government contribution to each KiwiSaver’s scheme, being 50 cents for each $1 invested. Yet more money taken from business owners to play favourites and skew the open market for investment monies, given SME’s investing their own money in their own businesses is the major part of the investment market of any free country, and the KiwiSaver scheme is twice attacking that important source of investment funding, namely, retained earnings … (now repeat my philosophic arguments in above paragraph).

Finally, considering the KiwiSavers themselves, for many, compulsory savings into KiwiSaver will simply not be in their rational self-interest; they may well be prudent paying down their mortgages more quickly, than being forced to invest in risky start-up ventures such as Xero, Bliss, et al, as good as investment in some of those companies may indubitably be: investment has to consider both risk and return of each individual.

Thus, I end this post exhorting David Parker, as I did Mr Neilson:

… please leave businesspeople, many of them struggling, brave entrepreneurs, alone – don’t make your career one of … forcibly taking the money, and hence the choices and opportunities, of these people who are our economy.


  1. A compulsory Kiwisaver works against prosperity for all of us

    We already have "compulsory Kiwistealer" - or rather something even worse than compulsory Kiwistealer: National (Party) Super.

    Compulsory Kiwistealer is good because it heralds the end of National Stealer.

    Singapore - as Don "Lew Kuan Yew" Brash recently pointed out has no welfare whatsoever and a voluntary savings rate of 50%. NZ's economic could easily be reconfigured to have this savings rate tomorrow - simply by abolishing all welfare including super. We must first accept the truth about the country's accounts - that every welfare dollar spend in the last five years has been and will continue to be borrowed - before we can apply the only remedy: stopping everything.

    Note, no pathetic "phasing out" or "Grandfathering" or whatever: the whole point is that only immediately end to the dole, DPB, codger dole, and all the rest ("rest home subsidies" in particular) along with health & education will convince NZ that the government can never be trusted. That's why this was both Ruth and Roger's welfare policies - policies that their cowardly PMs prevented them implementing.

    Any transition period will always be extended; transition arrangements over an election will be reversed by communists (unless the franchise is restored to those who have a real stake in the country).

    Only once people see their parents and grandparents literally thrown into the gutter, or needing say $20,000 per month for rest home fees will they take responsibility for themselves and their families and save. Nothing else will do it.

    1. From a practical point of view to be elected any party would have to campaign on a transitional period.

      That said, I'm not a pragmatist, so I agree with your points. Of course we're talking a completely different political system to democracy under which this will never happen, so we'll all have to enjoy the scenery on the road to serfdom in the interim. #minarchy