No Second Class Citizens

Sunday, June 28, 2009

John Boscawen – Speech to ACT Wellington Regional Conference

Ladies and Gentlemen,

It is just over seven months since I was elected an ACT MP. From the moment I arrived in Parliament I was constantly aware of the privileges of an MP and the privilege to represent you, as we try to create a more prosperous society.

To those of you who helped with our ACT Campaign and helped elect me as an ACT MP, I say thank you.

Over the past seven months I have tried to speak out on behalf of those who have recently lost all or some of their life’s savings in finance companies or related investments. My call for an inquiry looks like it may bear fruit.

I have commenced research of the cost and availability of cataract surgery. A basic procedure that restores full sight to the elderly, and a procedure championed in third world countries by the Fred Hollows Foundation at a tiny fraction of what New Zealanders are required to pay as a result of licensing of Ophthalmologists.

In April I was privileged to travel to Vietnam and Japan on the Speaker’s Tour with Hon Lockwood Smith and had the opportunity to discuss cataract surgery with the Japanese Department of Health. Incidentally cataract surgery is cheaper and far more readily available then in New Zealand.

In May and June, I took parliamentary time off to stand in the Mt Albert By-election and to present ACT’s policies to the people of Mt Albert and the wider electorate.

I return to Parliament at a time when my private Member’s Bill to amend the so called Act-Smacking legislation and based on Chester Borrows amendment could not be more topical.

I joined ACT in 1995 and have been involved in all of our election campaigns ever since – either as a candidate, campaign manager, fundraiser or Board member.

Ironically I first stood for Parliament in 1996 – in the first MMP election – and in Epsom, the site our leader now holds.

My role then was to encourage voters to give their electoral vote to sitting MP Christine Fletcher, and their Party vote to ACT. We achieved just short of 8000 Party votes, or 21 percent. Little did I realise that I was to be an MP 12 years later.

I know wish to devote the remainder of my speech to why I was initially attracted to join ACT, and why I am still here today, as the reasons are substantially similar.

Firstly, back in 1995, my attention was caught by the fact that ACT was founded by Hon Sir Roger Douglas – a man who has shown such courage, vision and determination in reforming the New Zealand economy during the 1980s. The man whose reforms are largely unscathed today, despite the most recent nine years under a Labour/Clark Government.

Secondly, ACT set out policy program in a book: ‘Common Sense For Change’. This laid out a unique set of policies in Superannuation, Health, and Education that represented a totally different way of approaching social issues in New Zealand. I could see in 1995 that if those ACT policies were implemented, we had a real chance at substantially raising the living standards of all New Zealanders. We could address the real underlying issues of poverty. We could give all New Zealanders the choice to participate and to feel that they genuinely shared in the riches that this country has to offer.

Fast forward now to the present – just under two weeks ago caucus gathered at its regular weekly meeting. Sir Roger Douglas distributed the draft of a speech he was considering giving later that week. From our Leader down, we were all impressed. I could see immediately that it drew upon the policy principles first laid out in ‘Common Sense For Change’ in 1995.

Roger gave that speech, entitled ‘Two Classes of Citizenship, nine days ago in Rotorua. He received a great response and in subsequent days, it has been widely distributed via the internet.

Roger I know wishes that he could be here today, but in his absence he requested that I give his speech to you as this speech addresses ACT’s core beliefs and highlights the reason ACT was created.

Many think that ACT is a Party for big business. It is a real tragedy that ACT suffers from the stereotype. It is a tragedy because the profile is so out of whack with the reality.

The reality is that we do have 2 classes of citizens – we need to look at the facts.

For almost 80 years, New Zealanders have experimented with the welfare state. What have the consequences been?

Do all children receive decent education? No

Do most people retire with enough money to live in comfort? No

Does everyone receive health treatment when they need it? No

Have we eradicated poverty? No

On the very goals that welfare state has sought to achieve, no one could genuinely argue that it has succeeded. Even the modern day proponents of the welfare state, be they in National, the Greens, or Labour, all know it has failed.

But they think they have the solution. They think the solution is more money. I have never heard a Politician from those Parties come across a problem that they believe could not be solved with just more money.

That is why, regardless of who has been in power, the budgets for welfare, education, health have all shown an almost inexorable growth.

Two Classes of Citizenship

New Zealand has two classes of citizens. We have two classes not because the Government isn’t doing enough for the poor, but because what the Government does for the poor denies them choices, destroys the incentives they have to get ahead, and subjects them to political abuse.

In New Zealand, we have the haves and have nots.

The haves are the people who do not live from payday to payday, but earn enough to set some aside – to save, or buy healthcare when they need it, or buy education for their kids. The have nots are those who scrape by, and rely on the state for all their social services.

In New Zealand, we have the privileged and the unprivileged.

The privileged are those who get others to pay for their whims and fancies. The unprivileged are those who face the vicissitudes of the market economy, while being taxed to pay, for example, for the tertiary education of the affluent.

In New Zealand, we have the fortunate and the unfortunate.

The fortunate are those born in a school zone that happens to have a good school. The unfortunate are those born in an area with a poor local school. Zoning locks them in, and if they want to escape, they need to pay twice. They either need to move house, or they need to go private. Only the wealthy can afford to do that.

We have those who receive handouts, and those who pay for the handouts.

And the tragedy is that handouts are often not delivered to the ones who need them. Working for Families delivers money to many who are comparatively well off. Government subsidies for business force relatively poorer taxpayers to pay for those lucky enough to get a Government grant.

In fact, every party in Government claims to share essentially the same goals when it comes to welfare. National, Labour and the Greens are all wedded to the current system. Only ACT has an alternative to the failing status quo.

The problem with the status quo is that it’s all about power. Politicians control who gets an operation, where kids get educated, and how much superannuation you receive.

I can share the goal of equal opportunity for all, and have a different way of achieving it.

There are few things we have got as backward as we have with the way we try to help Maori.

There is no doubt that Maori suffer disproportionately from poverty. But if we continue to encourage Maori to look to the past, we will continue to create the system that locks them into poverty. Only if we are willing to look forward and devolve control of the money to individuals, will we deliver solutions to the problems they face.

We have become a nation rife with bureaucracy, recklessly determined to re-use the ideas that have failed to solve poverty for over 80 years.

But if we always do what we’ve always done then we’ll always get what we’ve always got. What 80 years of political control has achieved is a larger welfare budget, more people on welfare, and barriers for those at the bottom to actually get ahead.

Health

54 percent of your and everyone else’s personal tax goes towards healthcare. The growth is scary, when just two years ago the figure was 41 percent of your personal tax.

Saying 54 percent can hide what this means. If you earn minimum wage, you will pay about $2500 every year for healthcare. If you earn the average wage, you will pay over $6,000 for healthcare.

People say we have a free healthcare system. But in reality healthcare has never been so expensive.

Healthcare is not free. It costs you.

You’d hope that when healthcare costs the average person $6,000 per year that it would actually deliver.

But it doesn’t. Despite the enormous cost, we ration healthcare. People who are sick get placed on waiting list. On that waiting list people get worse, not better. Some die.

The suffering that takes place on health waiting lists is rationalised away, as if the goal of equality justifies denying healthcare to people who desperately need it.

If the health system treated every one like this, then at least it would treat s all equally. But the most pernicious effect of socialised medicine is how it creates second class citizens.

The first way it does this is through a bizarre mixture of subsidies. Some medicines are fully subsidised, some are partially subsidised, and others are not subsidised at all. Decisions over what medicines you can take are actually determined not by the patient, not by the doctor, but by a bureaucrat in Wellington.

The second way it creates second class citizens is through the way pressure can be applied to get treatments performed. Doctors, patients, politicians, can all pressure the system to get certain operations at the expense of others.

If you can get your story on Campbell Live you can be sure that you’ll get treatment.

But your treatment will come at the expense of somebody else and because the affluent tend to be more politically connected, the more influential, and more organised, treatments for rich come at the expense of the poor.

The third way it creates second class citizens is the fact that wealthy people can afford to pay twice. They can afford to pay tax for healthcare, and then buy insurance on top.

The very people who are denied this opportunity are the very people that universal healthcare was meant to help. While the poor die on waiting lists, the rich pop down to the private hospital. No one would seriously contend that the system treats people equally.

But the supposed solution to the problem is the same kind of lies we hear from all the other parties in Parliament. All the problems could be solved of only there was more money.

When will we wake up to this lie?

Under Labour, health spending increased in real terms by 50 percent. Yet we still have waiting lists. We still have a system that creates second class citizens.

Despite the huge increases in resources at their disposal, the productivity of doctors actually reduced by 15 percent. Nurse productivity dropped 11 percent.

If we simply gave the person on the average wage their $6,000 back that they currently pay, this would enable them to buy catastrophic health insurance, put money aside for their healthcare in retirement, and pay for their day to day healthcare needs such as doctors visits.

Superannuation

Superannuation today locks you into poverty in your retirement. These low levels of superannuation occur despite the high costs to taxpayers.

Superannuation costs you one third of your personal tax. If you earn the average wage, that is $4,000 per year.

Superannuation is not free. It costs you.

But, of course, our super scheme is designed so that people pay for the retirement of their parents. If we simply adjusted the system so that money went to pay for your own retirement, most would have a cushy retirement.

If that money was invested in the bank – earning seven percent nominal interest (five percent real) – then the average worker would retire with $1,804,300 in the bank.

It would be like you won lotto and then retired.

Education

Apparently we have a free education system. But it is not free.

GST receipts cover the cost of education. In other words, 12.5 percent of everything that you and every one else buys only just covers the cost of education.

Most people know ACT’s education policy. We call it school vouchers, or tax credits that effectively ensure education money follows the child.

The problem with our education system is lack of choice. But there is one small group who have choice in New Zealand.

The very people who have choice are the wealthy. They’re the people who can move house for the school zone, or pay twice to privately educate their child.

The very people who are ripped off are the poor. News reports recently indicated that police were now stationed in 10 South Auckland schools, and that this program is being expanded to the Bay of Plenty.

The real tragedy is that there will be kids in those schools whose parents desperately want them to escape, but they are not allowed. The Government won’t let them.

The Government continues to force the least well off into the worst schools, and they have managed to convince them that they do it in the name of equality.

They express concern that 30 percent of kids leave school with poor educations, unable to read or write adequately. But when you look at schools in the poor areas, this percentage is much higher. They get the rawest deal.

When it comes to enabling people to improve their lot, education is one of the best ways they can do so. Yet the very people who need this opportunity the most are denied it by the Government.

But on the tertiary level, the current system creates second class citizens in an even more concerning way. At least, when it comes to most education, the rich are forced to pay twice for quality.

When it comes to tertiary education, the poor are forced to pay for the education of the wealthy. Most people receiving the costly tertiary education courses are those from middle and upper classes.

Those who leave school and get a job pay to educate those who leave school and get a degree. The poor subsidise the wealthy.

Then many of the wealthy use their human capital in jobs overseas, leaving others to pick up the bill for all the failing aspects of the welfare state.

25 percent of skilled workers have now fled the high taxes of New Zealand for better prospects off shore. We will not attract them back with larger welfare states and higher taxation.

Conclusion

When you look, not at the goals of the welfare state, but its actual performance, the results are depressing. In the past 80 years we have grown far wealthier then we once were. Yet today, there are more that receive welfare then ever before.

We have created a system that gives options to those who can afford them, while denying choices to those who most desperately need them.

We have created a system that taxes and regulates opportunities for the poor out of existence, and destines them to poverty.

We have created a system that creates two classes of citizens.

And at the very same time, the solutions put forth by the other parties in Parliament are just more of the same. More health spending, more education spending, higher taxes on the wealthy. Only the ACT Party stands against the philosophy that is creating two classes of citizens.

When will we wake up? On its own terms, the welfare state has failed.