The government's Savings Working Group has reported back [PDF], and their final recommendations are more of the same. More talk of fiscal armageddon, based on the same conflation of public and private debt the government is currently using to stoke fear and push austerity. More demands to gut government. And a further shift in the tax burden from the rich to the poor, through higher GST and tax breaks for the investments of the rich.
But really, did we expect anything different? The government stacked the panel with NeoLiberals, and so its no surprise that they came up with a NeoLiberal solution.
What's odd though is how it manages to talk its way around the real problem. Yes, New Zealanders aren't saving enough - we have too much private debt and not enough private savings, leading to a haemorrhage of money overseas and a shortage of capital at home. But somehow, the "solution" to this problem is for the government to save (and at the cost of gutting public services). As for individuals - the problem - we get some tinkering around the edges of KiwiSaver and some tax incentives aimed at providing a financial windfall to those who already have a pile - and that's it. Compulsion is ruled out. The possibility of increased employer contributions to KiwiSaver isn't even addressed. For a problem which is said to be so enormous and threatening, this seems to be a rather underwhelming (not to mention mistargeted) response. But again, these are NeoLiberals we're talking about; the aim isn't to solve the problem, but to use it as another excuse for upwards wealth transfer and to shrink the state. And then if the government does what is demanded, and starts running large surpluses and banking them away for the future, we'll have the howls of "overtaxation" and demands that those surpluses be permanently given away as tax cuts for the rich again.
This report is not a solution to our savings problem. Instead, its just another excuse for National's to push harder to the right. We should not fall for it. A savings policy should target savings, and it should target those who need to make them. The Savings Working Group does neither.
