There has been a lot of chatter about the Green’s understanding of economics lately, so I thought it might be apropos to have a look at their economic policy, just released. The key points appear to be:
- Income taxes cut;
- Taxes on waste, pollution, speculation and scarce resources;
- Commitment to buying NZ made and Kiwisaver investment in NZ;
- Only citizens and residents allowed to purchase land.
Let’s start with the good bits. Income tax cuts are great because they reduce the distortion in peoples’ labour market decisions.
We’ve blogged so many times about our support for taxation of externalities that I’m not even going to bother linking it. That applies to the taxes on waste and pollution.
A tax on scarce resources just confuses me. Surely the cost of using scarce resources, absent of externalities, is the price. Unless we think that people are using the ‘wrong’ discount rate and over utilising them, I’m not sure of the point of a tax.
Finally, I find the restriction on overseas purchases of land very odd. At first glance it seems out of step with the Greens’ very open immigration policy: why allow immigration but not land purchases? Why not allow those who value the land the most to buy it regardless of their country of residence? What about citizens living overseas? It smacks a little of the government’s blockade of the sale of Auckland airport, only without the ‘strategic importance’ to support it. I’ll wait until I’ve seen the final policy statement before passing judgement, but I really don’t see how this policy could be beneficial.