Real Life: Kiwis ‘want tax cuts’ more than caring for poor, economist Shamubeel Eaqub says

Shamubeel Eaqub recently became chief economist at investment fund manager Simplicity. Photo / Andrew Warner

New Zealanders are “extraordinarily warm and caring”, but the way we treat the least privileged among us through economic policy “doesn’t show that”, leading economist Shamubeel Eaqub says.

In an interview with Newstalk ZB’s Real Life with John Cowan on Sunday night, Eaqub said there appears to be a “disconnect between what we want on a conceptual basis versus what it comes to when [we] want tax cuts”.

Eaqub, who recently became chief economist at investment fund manager Simplicity, believes it’s a cause for concern.

“I’m really weary of pointing the finger at politicians, as if they’re making some decisions on their own. I think the politicians are expressing what New Zealanders want,” he told Real Life.

“We may say that we want a caring, equal society, but when push comes to shove, we want to have tax cuts for ourselves, we want to have our wealth protected. That’s how we have voted for a very long time.

“So I think there is a bit of a mirror that we need to hold up to ourselves. This is not the fault of some independent third party. It is the collective choice we’ve made in our democracy so far.”

Eaqub told Cowan he believes Kiwis are “extraordinarily caring” and “would like to lift more people up”, but aren’t willing to make the sacrifices – which has created a “real tension”.

“The reason politics and economics can never be disconnected entirely is because the policies we choose, the things we choose to do – whether it’s welfare or investment or whatever – fundamentally, it is about our collective will being represented in the laws and rules and regulations.

“I really do worry that we say we are very caring as a nation, but the way we act, the way we treat our underprivileged, does not show that.”

Eaqub says for those less privileged, the current economic downturn – which has seen business insolvencies run at more than double the rate of last year – will prove to be even worse than the global financial crisis of 2007-2008.

“It is a scary time. The way I think about it is in a recession or in a downturn, some people will do it really tough, but most people will be okay. This time around, there’s probably more people doing it tough than we saw at the last recession,” he told Real Life.

“I do worry about that, because businesses are not just things, it’s real people’s businesses, right? It’s their lives that they’ve put into this thing. And so we are seeing quite a lot of business closures.

“That’s what unfortunately happens when the economy is shrinking, because when we’re all spending this money, we’re investing less.

“It is still tough. I think there’s still a few more months to go, and I worry that it’s going to happen heading into this period of Christmas, which is so important for so many people. It’s going to add an extra burden, extra stress.”

However, Eaqub told Real Life that despite the effects of the recession and our current economic policy settings, he’s still “extraordinarily optimistic about New Zealand”.

“The reason [for that] is not because there are no problems, but because we’re a country of five and a bit million people – and we can solve anything if we put our mind to it. We’ve done it before, and I think we can do it again.”

Real Life is a weekly interview show where John Cowan speaks with prominent guests about their life, upbringing, and the way they see the world. Tune in Sundays from 7:30pm on Newstalk ZB or listen to the latest full interview here.