01/09/2026
I read this on FB earlier
It makes both sense and cents
Isn’t that what we should be aiming for? Sense and cents?
“The problem with Labour, the Greens, Te Pāti Māori and, increasingly, TOP is that they keep looking at the world through the lens of intentions rather than incentives.
They genuinely believe that if government taxes something, regulates it, subsidises it or redistributes it, the desired outcome will simply follow.
But economies don’t work according to political intentions. They work according to incentives.
Tax alcohol because you want less drinking.
Tax to***co because you want less smoking.
Tax carbon because you want less emissions.
Fine. There may be legitimate reasons for all of those policies.
But then apply exactly the same logic to work, investment, enterprise and wealth creation.
If you tax work heavily, make employing people more expensive, increase compliance costs, penalise investment and continually expand the state’s claim on the fruits of private enterprise, you shouldn’t be remotely surprised when people respond to those incentives.
People work less.
Businesses invest less.
Entrepreneurs take their capital elsewhere.
Employers hire more cautiously.
Productivity suffers.
And eventually there is less wealth available to tax and redistribute.
This isn’t complicated economics. It’s human behaviour.
Thomas Sowell put it perfectly: economic policies should be judged by the incentives they create, not by the hopes that inspired them.
And that’s where the modern left repeatedly gets it wrong.
Labour, the Greens and Te Pāti Māori increasingly argue as though wealth is something government can simply allocate rather than something that first has to be created.
And TOP, despite presenting itself as economically sophisticated and evidence-based, needs to answer the same fundamental question: what incentives will your policies create for the person actually making the investment, starting the company, employing the staff or working the extra hours?
Because you cannot endlessly increase the rewards for not participating while simultaneously increasing the cost of participating and then act surprised when participation falls.
Government doesn’t create prosperity by redistributing an ever-larger share of a shrinking pie.
Prosperity comes from people taking risks, building businesses, investing capital, working, innovating and creating things other people are willing to pay for.
That’s why the Venezuelan lesson matters. And no, New Zealand isn’t Venezuela. That’s a lazy argument.
The lesson is much simpler:
Economic systems produce the outcomes their incentives encourage.
If you want more investment — reward investment.
If you want more businesses — make it easier to build businesses.
If you want more employment — make employing people attractive.
If you want people to work more — make work financially worthwhile.
If you want higher productivity — reward productivity.
And if you want less of something, tax it or penalise it.
It’s remarkable that governments understand this perfectly when it comes to alcohol, to***co and fuel — yet seem to completely forget it when it comes to work, enterprise and wealth creation.
That’s the contradiction at the heart of the modern socialist/redistributive agenda.
You cannot tax your way to prosperity. You have to create the conditions in which prosperity is created in the first place.
Politics runs on incentives.
Pretending otherwise doesn’t make the economics disappear. It just makes the consequences more expensive.”