Growing Up in New Zealand

"It's the economy stupid!"

Apart from coming through a life-threatening condition, seeing my immediate older brother get married in Lagos, Nigeria, and actually contemplating an actual date for when I take those vows in front of God, Man and the Church (yes... the church!); one thing has made me appreciate very clearly the fact that I am now an adult!

I pay taxes.

A bit of background here. In Nigeria where I grew up, taxation is not the hot-potatoe issue that politicians (or the military junta) have to deal with in order to win elections - or repress freedom of expression. (in the case of the military.) I do not have the exact statistics but Nigeria's economy is definitely more of an informal one. A greater percentage of the income earned by Nigerians is outside the "formal" framework of taxation and thus millions of workers do not pay income tax. And even those within the framework dodge the tax man with impunity and get away with it too. So how does the government get funds to fulfill its traditional role of public and social infrastructure provision??? 2 things:

It's not for nothing that Nigeria is the 6th largest producer of crude oil. And who says the government actually provides said infrastructure?

Thus when in the United States, a hugely popular "Gulf War" President lost his re-election bid to an upstart governor from Arkansas in 1992, the first sentence of this post entered the lexington of Political Economy. Outlining policy that involves increasing or lowering taxes in order to achieve some other social piece of engineering has always been a critical point in Western style democracies.

Nigeria was anything but, when I was growing up. My mum was a teacher in the state educational system and of course got taxed from source as a matter of course. As did people who worked with banks, civil service or any company registered with the Corporate Affairs Commission. But seeing as 80% of these people also had a thriving private enterprise of some sorts on the side (my mum certainly did) and they definitely did not pay tax, and perhaps double (or even more) of their number were completely 'hidden' in the informal economy, taxation simply was not an issue.

And when I lived in Sweden, I worked for AIESEC and got paid minimum wage (barely). I wasnt working to get paid in Sverige, I loved what I did and would have done it for free. (I did in Nigeria!) So although my wages as an AIESEC Vice President also got taxed, it was sufficiently low enough that I didnt care what a rise or decrease in taxes would do to it!

I have been in Aotearoa going on to 18 months working for the largest company in the land. And getting paid well above minimum wage. New Zealand is definitely a Western-Style democracy and income tax CANNOT be avoided. The saying, "the three certain things in life are death, change and taxes..." take on a whole new meaning for me. With so many things going on in the financial front for me, (hospital loan; planning for the future; buying a car) everytime I get my pay slip I scrutinize it carefully and see how much the government is taking from me.

Apparently they have taken too much in the last year

The Labour government in power (for the last 8 years) has declared an NZ$8.7 billion surplus. And this is after increasing spending in areas like health and education. The article in the NZ Herald goes on to say that Labour might use this as a bargaining chip in elections which are due sometime next year. "Vote for us because we have had a strong economy and we can afford to return some money back to you" or something to that effect.

There was a supplementary budget a few weeks ago and I remember the mood of one of my co-workers who is a mother of 4. It was distinctly unfriendly and cold towards the ruling government because she had been expecting an announcement of tax cuts. "They're not getting my vote in the next election, thats for sure" she muttered as she threw the paper down on the table in the coffee room.

I guess oil really has been a curse for my dear country. Rather than concentrating on increasing the productivity of it's people so it can get them to all contribute (via income tax) to social engineering and a better way of life, the black gold has made us overly dependent on it. A lot of lessons to be learned. A lot of ideas sprouting for the future. Clearer understanding and focused attention on the important things... but now I am babbling.

So even though I am not an enfranchised voter as yet in Kiwiland. I will be watching with keen interest what sort of tax cuts might come my way. Perhaps I'll finally be able to afford that diamond ring!