OPINION: Many years ago I listened to a speaker describing the difference between Kiwis and Americans. He gave an analogy in which a man drove past a group of Kiwi kids and a group of American kids in a brand new Ferrari. The Kiwi kids looked on enviously, asking, "How did HE get one of those?", whereas the American kids watched approvingly, with one asking, "How can I get one of those?"
Obviously the story relies heavily on generalisations and - putting aside the fact that the car you drive says nothing about who you are and what you’ve achieved – it would also be unreasonable to assume that all Kiwis would react as described in the story. Nor would I wish us to emulate the values and attitudes of many Americans, particularly with what’s going on in that country right now.
But the simple point of the story is a telling one which exposes an ugly aspect of our national identity. Many of us are envious of the success of others, particularly financial success.
It’s a Kiwi trait I’ve always found hard to reconcile with other aspects of who we are as a people. We live in one of the most blessed locations on earth and enjoy a lifestyle that those in most other nations could only dream of. On top of that, we’re a nation of innovators who punch way above our weight in science and sport and our forebears have been responsible for some of the most important, and world changing, social, economic and scientific reforms of the 19th and 20th centuries.
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But if you do well in business, sport, entertainment or property, or make enough money to be visibly comfortable, sooner or later the great Kiwi levelling machine will clobber you.
If the consequences of that attitude don’t frighten you, they should, because it’s no exaggeration to say that Capitalism - the exchange of goods and services in the expectation of a profit - is what will enable our nation to emerge from the economic carnage of Covid 19. Capitalism provides jobs, fuels growth, funds the development of infrastructure, pays taxes and motivates us toward that ever elusive goal, to be comfortable in life and retirement.
Sadly, that reality is at odds with the growing perception of government as a great white knight coming into solve all of our problems. It's a dangerous myth, and one that's evident in the housing sector where attention focuses on what the Government will do to fix the housing market. There’s a huge irony in this because all of the real work in this area is being done by the private sector.
The private sector builds the lions share of new homes, puts in place the majority of new housing infrastructure, and owns the overwhelming majority of rental accommodation in this country.
There are no precise figures on the size of the rental economy – but if we used turnover (in the form of rent) as a guide then it is worth somewhere in excess of $15 billion per annum. Eighty percent of that housing is provided by the private sector, with the Government being a relatively minor player with its social housing providing just 12 percent of all rental housing in New Zealand. If the state had to provide the bulk of that housing, the cost would drive the country bankrupt.
Yet, despite this, landlords come in for sustained attack and are ceaselessly criticised for the rents they charge, for the supposed condition of their properties and for the gain they make in the value of that property, over time. It seems that every week there’s another call for rents to be frozen, for the property rights of landlords to be curtailed, or for that value to be somehow brought down so as to (supposedly) make house prices accessible. Indeed, just last week, there were more calls for capital gains to be taxed as a way of paying for the cost of Covid-19.
Frankly, it’s time we grew up as a nation. Doing well is something to be admired, not attacked. If we’re going to rebuild our shattered economy it’s going to be because we recognise entrepreneurs and risk takers as heroes.
- Ashley Church is a property commentator for OneRoof.co.nz. Email him at [email protected]
