These could be one-off taxes on new debts or percentage taxes on existing debts.

For example:

- All applications for new credit cards require a $1000 up front tax before the card will be granted.

- A similar up-front tax for personal loans, interest free deals and (possibly) use of home equity.

- Applicants for any form of consumer credit shall be required to give their tax file number on their application. Consumer debt could be taxed at a rate similar to the GST (eg 10%).

- Taxes on multiple credit cards that rise exponentially with the number of different cards.

During the late 80s it might have been possible to have one or more of these measures combined with much lower (and less recessionary) interest rates to successfully achieve Paul Keating’s desired ’soft landing’ (rather than the recession we had to have) without the hardship that ensued.

I assume you’re trying to discourage people spending money they don’t have, but wouldn’t you achieve the same aims rather more simply just by banning the granting of credit altogether?

http://troppoarmadillo.ubersportingpundit.com/archives/009567.html

And you still admire NZ’s economic management?

Lets face it, two decades of free-market zealotry has seen NZ living standards go steadily backwards relative to every other developed country in the world. I know they started from a pretty unenviable position, but really they oughtta have done better.

Alas - there is no support within New Zealand for this “initiative”.

My only hypothesis is that Australia is sucking a fair bit of the life out of the place - pinching it’s best and brightest. A gravity model explanation.

As an additional ‘two bob’s worth’, I’d add that when I started learning about the NZ economy, I was shocked to learn that this country that has the best GST in the world, the country that is supposed to have done it all by the textbook has introduced neither capital gains tax nor (I think) means tests on old age pensions. A pretty poor set of reform priorities if you ask me, but still not enough to explain the difference between NZ’s and Australia’s economic performance.

As for “It has a yawning current account deficit, employment shortages producing some inflationary pressure, labour keeps heading across the Tasman, and housing credit keeps growing”

I don’t think the CAD, employment shortages or rising credit necessarily represent a problem. Indeed, so-called employment shortages seem to me like a good thing.

The means test on NZ’s age pension has an interesting story. Way back when it used to be means tested. They got rid of the means test but imposed a special aged tax surcharge that had the effect of clawing the whole lot back from upper income people - this had the same effect in income terms as means testing but carried some big administrative advantages.

Predictably, taxing someone extra “just because they were old” was unpopular (though of course it wasn’t just because they were old - it was because they were getting a pension they didn’t need). Winston Peters, in populist style, campaigned against the tax surcharge and had it removed.

FWIW, I think there is an excellent case for progressively removing the means test from the Australian age pension and paying for it by winding back tax concessions on superannuation. It would actually boost household savings (the means test on the pension is a big barrier to voluntary saving for retirement, and pushes what saving there is into investment in the principal residence), would be far easier to administer, would encourage late retirement, is eminently affordable (the extra government outlay is about 0.5% of GDP now, rising to 1.5% in 2050) and would be distributionally fairer.

Much of this goes back to the late 1800’s when under the Premiership of Richard John Seddon - we New Zealanders saw ourselves as the “social justice laboratory of the world”.

In 1900 - according to the OECD figures - New Zealand had the highest GDP per capita of Australia, Canada, the United States and Japan. Today - New Zealand is lower than all of them - and some 30% behind Australia. I will send this data to Nicholas.

Now on the rugby front………….

That data on NZ was from this interesting PDF comparing NZ with the OECD;

http://www.stats.govt.nz/NR/rdonlyres/3526CCF7-E047-47D5-9B80-27C137E068C6/0/NZintheOECD.pdf

Nicholas’ point about no-one - supporter or critic alike - having a good explanation of WHY the NZ experiment failed is a good one. I suspect poor macro, rather than micro, economic management may be part of the answer, as it is in Europe. But I’ll have to think about it.