Gareth Morgan’s national political roadshow hit Auckland this week. Tim Murphy went along and got a free campaign button.
Gareth Morgan doesn’t want to be a politician. Doesn’t want to be in coalition. Doesn’t think he’s going to be attractive to Aucklanders and doesn’t really have that high an opinion of the personal and political choices of his fellow New Zealanders.
He’s been touring the country telling us all off. Challenging. “Hitting them between the eyes” as he said of a visit to a “rest home … sorry, you can’t call them that any more”.
And he’s reached Auckland. The first meeting for this The Opportunities Party (TOP) gig is, fittingly, in a lecture theatre.
It is no frills. A warm fug of about 100 people in an AUT room, an MC and a couple of volunteers and Morgan, wired up, sleeves pushed up on his black knit top and water bottle in hand.
There are no frills with the political packaging either. TOP’s policies are prosaically, economistly labelled. Morgan starts with “Policy 1” and selects “Policy 7” as his encore. There are 7 now but by campaign time there will be 10.
Morgan is the former economist who, with his son Sam, made a fortune from the sale of the TradeMe business. Through his Morgan Foundation he has taken on complicated policy and social issues in a series of books and campaigns.
The TOP party is in some ways a synthesis of those books and projects – Morgan says the health policy, for example, will reflect “some of what we said in the book”.
He leaves the audience in no doubt he’s loaded with money and doesn’t personally need to be doing what he’s doing now.
“What on earth am I doing here? It’s something I ask myself every single morning,” is the opening line.
The answer? “I’ve done economic work, policy work for years – and I have a massive sense of frustration. The difference between what we as policy wonkers want done and what is being done … the frustration has got to crescendo sort of levels.”
So watch out. Gareth Morgan is nearing crescendo frustration.
“I thought, ‘I’ve done all this work over the years. Rather than just walk away and get on my motorcycle again, I thought I would come into the political arena and throw a few marbles across the dance floor and see what happens.”
TOP’s seven policies cover a fairer tax system, a reset of democracy, education, climate change, a Universal Basic Income (UBI) for struggling families, “smarter immigration” and the environment.
Like a patient lecturer, Morgan runs through Policy 1. “For those of you who are economically literate …” he begins. Many in the audience look at their feet. Some, policy wonkers old and young, sit forward, lapping up what is to come.
On tax, TOP will cut rates by 30 percent, making 80 percent of people better off, the 20 percent affected negatively being the richest. It will introduce a system to tax all productive assets, including up to 1.5 percent eventually on homes.
Morgan says wage and salary earners pay way too much tax. “I look at them as a bunch of suckers – and then there are guys like me who pay hardly any tax.
“I make so much money I wake up each morning richer and I haven’t done anything.
“I’m quite comfortable earning far more than I can reasonably spend. What really grates me is the lack of tax on it. I find that reasonably repulsive.”
His whole tax package is fiscally neutral, he says. “No one extra dollar of tax is taken … but it makes sure all income from capital at last pays a little tax.”
He reckons that would raise $11 billion, which is about one-third of income tax receipts – about what TOP’s income tax policy would forego.
But taxing houses like other assets, Morgan believes a “misallocation of capital” will be remedied, savings will rise, small businesses will have more access to funding, will expand, employ people and raise incomes.
It all sequences neatly from his big economist’s brain and rapid delivery.
He thinks the change will also bring the ratio of house prices to average income down from about 8 ( it is 10 or 11 in Auckland) to 5 or 6 over time.
Having sorted out our capital misallocations, jobs, incomes, house prices and tax bills, Morgan switches quickly to Policy 7 – the one about the Universal Basic Income for struggling families.
He believes he needs $3 billion to fund a package of payments for the most vulnerable New Zealanders. He intends to cut superannuation payments in half – half – to fund this policy. (More about super later).
All families with a child under 3 would get a UBI of $200 a week. If they are low-income they also get free childcare for 1 or 2 year-olds, as long as at least one parent is working.
The beauty of universality, he says, is it does not involve witch-hunt welfare or uber-targeting of the vulnerable.
When it came to questions, the Auckland audience had one main theme: housing. The Morgan tax on houses. In one exchange, he offered this conciliatory line: “The family home is the basis of all evil here.”
Asked if his party gained more than 5 percent at the election whether he would seek an influential job, Morgan was dismissive. “My whole objection to establishment politicians is they are there to serve the average between two things, one of which is wrong and one of which is right.
“I’m quite comfortable earning far more than I can reasonably spend. What really grates me is the lack of tax on it. I find that reasonably repulsive.”
“They are not acting in your interests because they do not want to lose their jobs. I don’t give a shit about the jobs.”
Some asked if he expected blowback from the establishment or the electorate. “I would rather go down in flames than sit doing nothing. Don’t point the finger at me. I’m giving you the rational set of policies here. The issue is do you have the balls to do something about it or are you just going to vote for self-interest.”
As people took that one in, Morgan explained a survey TOP had done examining what motivated people when they decided if they support a policy:
– 40 percent said “Is the policy fair on me?” (“Pure self-interest”)
– 31 percent said “Who’s promoting this policy?” (“Red or blue – tribalism”)
– 24 percent said “Who’s paying for this policy?” (“If it’s someone I can’t stand the sight of, OK”)
– 6 percent said “Is this policy good for New Zealand?” (“And that’s what I’m dealing with”).
The night was peppered with anecdotes. One was about his “rich friends – like really, really rich” – from overseas buying into New Zealand land because there was no tax, land was a safe investment, the country is not corrupt and they get Category A for immigration.
Morgan says the demand for land in New Zealand is infinite given those conditions. “The bolt hole money will sweep you away, you won’t have a chance”; but the current “quality of migrants is crap, total crap”; the foreign education sector is “totally, totally corrupt”.
Back to Auckland’s housing and rents. “I’d like to see the cost of living choke you so you have to move. I thought with computers and that you would be able to work from the beach.”
His tax on assets to incomes would mean people in the regions would be better off than Aucklanders. “People there make the same incomes as you but their asset prices are not the same. So they won’t pay anywhere near as much tax as you.”
A breath, a swig of the water bottle and then an acknowledgment: “So you can see, I’m really after the Auckland vote.”
Aucklanders might not have to worry. “I have no intention of going into coalition. We would look to offering cross bench support for as many of the seven (policies) as we can get.
“I have no interest whatsoever in day-to-day political management. I’m only interested in the sort of policies that will make a difference.”
Knowing that preference to vote for self-interest, Morgan intends to win people over with rationality. “Most voters work on imperfect information. They are getting soundbites from silly little news programmes. I’m from the rational school of economics. If the people are informed they will make unbelievably good decisions.”
So, when he fronts up to the “rest home” and tells oldies their superannuation needs to be cut in half, and explains what the trade off is for the vulnerable and wider society, they back him.
“They said: ‘Of course, at this stage of life our concern is about our grandchildren’. This misrepresentation that old people are all about greed is rubbish.”
There’s lots more in the 90-minute session – Morgan is like a coiled spring on Treaty of Waitangi issues, criminals and corrections and education. His views are unorthodox on all of them but steeped in study and inquiry.
For their troubles, the audience get to take away a campaign button or badge featuring Morgan’s softest expression – to wear on their lapels. That and a head full of economic answers to the issues of our time.
