Gareth Morgan goes after the fat cats

Gareth Morgan.

Following his party's policy announcement this week, I asked Gareth Morgan how the last few days had impacted on his plans around releasing his first policy on tax reform.

He'd just arrived back from Borneo, John Key had resigned and the political map had shifted. I didn't think he really cared who was in Government.

'For me, it makes no difference at all,” says Gareth.

'I'm interested in taking policy to the people and getting them to say yeah or nay. I don't really care who the other politicians are. I'll work with anybody. It's the arguments around the policies that are important to me, nothing else.”

Gareth had launched his The Opportunities Party with a determination to fix a system that he thinks is unfair to the average wage earner who he believes is paying too much tax.

'What I'm trying to do is reverse this big increase in inequality that started with Ruth Richardson back in 1990,” says Gareth, 'pulling the carpet from underneath low incomes. That opened up a bigger gap than there was. We've always promised that that would come right through trickle down. But we're 35 years further on now and there's no sign of it.”

He brings this history moment to the present day.

'John Key is a lovely man, but once the hoo-ha has died down, his legacy will be that that inequality gap opened up again, even further,” says Gareth. 'That has been driven primarily by the property phenomena which is really hurting people in terms of how much of their income is being sucked up by property costs.”

Clearly what he is trying to do is fix what he feels is an unfair system 'so we can start to make the NZ tax system fair again”.

'All I want is for them to do the right thing,” says Gareth. 'I've said a number of times now I don't want to be in Government. I'd rather be on the cross benches and be the tail that wags the dog. I don't care who the dog is.”

It's about starting another robust conversation with average New Zealanders. A fat cats and dog conversation.

'I've always gone directly to the public, I've never really dealt with the politicians because at the end of the day they will only do what they think will get them re-elected, so I need to get the sentiment of the people changed so that they can see that this is actually a far better system.

'My dream would be that they do it and I don't have to go into that madhouse. I've got better things to do to be honest, but if I ‘ve got to give up three years of my life to bloody do this, and people say yeah get in and do it then I will. But I'm a bit reluctant. I have better things to do than buggering up my own life.”

Is he quite sure he'll find resonance with most kiwis?

'Well this is high noon isn't it,” he replies. 'We'll see. Under my thing 80 per cent of people will be better off immediately, we'll all be better off in time and the 20 per cent who are basically funding this can well afford it, I assure you. So I'm asking those 20 per cent to do the decent thing and make our country fair again.”

His tax reform policy will suck the incentive out of property investors to be putting all their money into property. It will also slow down land banking, and target cities like Auckland and Tauranga.

Under his policy, land bankers would have to declare each year a taxable income of whatever the percentage is, say 3 or 5 percent of the value of the land.

'They can't just sit on it and make their tax free capital gains,” says Gareth. 'It won't be possible, unless they're prepared to play that game.

'What it will do is make housing more affordable. I'm trying to hold house prices while we get some time for income to catch up again. We'll phase it in so we don't collapse house prices, but we'll take the heat out of it because all the speculators who are only buying their 3rd and 4th houses just to make money will be gone out of the market.

'And that money they would otherwise invest will be going into NZ businesses, and they'll be able to expand jobs and incomes.

"We'll get rid of this bloody mortgage dependency that sees our prime minister going round and round the globe on this endless bloody journey, - no wonder the guy's exhausted, - with his begging bowl out begging for foreign capital and sees our treasury telling us you've got to cut your taxes even more on foreign companies.

"I want to bring an end to all that rubbish.”

He says the NZ business community keeps screaming out how they can't get capital or investment because it's all going into housing.

'People can make money sitting on their rentals, so I take that away and they have to grow their businesses,” says Gareth.

'I'm worried that my grandkids won't be able to afford rent let alone buy a house the way this thing's currently going. It's just nonsense. New Zealand is having by far the fastest rise in ratio of house prices to income and we've got to deal with it.”

He thinks the current bunch of politicians have cemented themselves to the short-term or three-year goal of getting re-elected.

'They avoid the tough decisions,” says Gareth.

'Half of the time they propose policies that won't even achieve what they say they will.

'Rosalie, the point is I don't want a job. I don't need a job. I'm doing this because I've spent 40 years of my career on this stuff, -economics, and I know what I'm talking about. Shivers, how can I walk away from this in all consciousness?”

Unperturbed by his past deliberate provocations, Gareth is laying out what he believes is an aspirational blueprint for both those who are benefitting from the property prices, and those who find themselves stymied from home ownership. He wants to light a fuse, and influence the government of the day.

'Let New Zealand decide,” he declares.

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9 comments

Morgan

Posted on 08-12-2016 11:20 | By Kenworthlogger

Ironically he says he wants to help businesses. People that buy rental houses are also running a business. Can he not see that? Its the land value that goes up not the house. Eventually the house will be demolished as it oneday will be worthless but he dirt it sits on holds the value.


No idea...

Posted on 08-12-2016 15:13 | By Number eight

Kenworthlogger,to me and most probably the vast majority of people, would not agree with your views.A business to me creates jobs in other words employment.Tell me Kenworthlogger,owning multiple homes creates how many jobs?and when i say jobs i mean full time employment(40+hrs a week)It's about time this tax system is looked at and i for one say go for it Gareth Morgan


Number 8

Posted on 08-12-2016 18:09 | By Kenworthlogger

Well last week my tenant payed their rent. At the local bank they had to employ someone to recieve this money and process it. My tenant had to buy fuel from the local petrol outlet which needs employs someone there and buy food and lots of other supplies for their household. Lots of locals were employed by these retail outlets for my tenant. These retail outlets needed electricians and painters and builders and services too. I had to get the local plumber to fix the leaking toilet so that employed someone. This week im redecking the old timber deck. I have purchased a grand worth of timber for this. This employed someone in the forest to cut down a tree and then a skidder to pull the tree to the skid site and a skiddy to cut it to lenght. A log truck had to be loader by another perso


Continued

Posted on 08-12-2016 18:11 | By Kenworthlogger

In a log loader. The truck driver had to drive the log to a weighbridge which employs people to run the weigh bridge and then take it to the lumber yard. Another loader driver unloads it a puts it thru a saw run by people and sawn into deck timber. It has to be qc ed before beingloaded onto another truck


Continued again

Posted on 08-12-2016 18:16 | By Kenworthlogger

Before being loaded onto a truck to take it to the retail outlet. More people unload it an stocktake it and store it and measure it and serve the customer before it is bought by me. This one item probably employed about 50 people before i bought it for my business and it is only 1 product. Do i need to listthe hundreds of people my business provides work for on a daily basis or can you now figure it out for yourself. The govt can see its a business and rightly allows it. Thats why you want it taxed more right cause it is big busness? So still wantto say its not a business?


Very interesting!

Posted on 09-12-2016 08:39 | By Baystyle

50 people employed by one deck. Now if 100000 decks were repaired or replaced throughout the country we could employ 5 million Kiwis just on decks with renters financing it all! Gareth Morgan we need you urgently.


You are wrong....

Posted on 09-12-2016 12:47 | By bryceh

Kenworthlogger, although I for one appreciate the time it must have taken to put your argument forward, it is flawed! You as a property owner/landlord don't control the logisitics within your example. You have no control other than the tenant. Therefore you are not creating any jobs. It would not matter if you owned the house or the tenant owned the house, all those bill payments, and the workflow, would still be required. The only job you are creating as a landlord is your own as Property Manager, unless you contract an agent. The point is, if the money is not being spent on property investment because it is less attractive, then those same investors will boost business investments. Increased business investment means expansion and diversity, and both of these things demand more people...... more jobs, more disposable income floating around the community, etc etc


Bryche

Posted on 11-12-2016 12:49 | By Kenworthlogger

So self employed people dont employ anyone so they should be banned too. Hotels and motels should be in the same caregory as rental houses as they are basically renting out a property short term so your argument is floored. Everytime i build a new rental property it creates more work for everyone....


Number8

Posted on 11-12-2016 19:26 | By Kenworthlogger

So if owning rental houses in your opinion and most other peoples is not running a business then why do i have to pay tax on it like a business? Which way do you want to have it?


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