Lies, Half-Truths, and Statistics

Keith Rankin, 19 November 1998

 

In his column of 17 November, "Our Cleverest Export: People" (NZ Herald, "NZ losing its mind and no one seems to care"), Gareth Morgan makes mischievous assertions about New Zealand's past emigration and about Australian tax rates.

About emigration, he says: "The net outflows of New Zealanders (not recent immigrants deciding to go elsewhere) moves in cycles. Under Muldoon we got to 43,000 rational Kiwis per annum escaping his command and control policies. The outflow fell to zero for a short period in the mid-1980s and then Rogernomics restructuring encouraged a further outflow - Auckland cab drivers looking to be real estate salesmen in Surfers Paradise. That surge saw the net annual outflow of New Zealanders peak at 37,000."

The first thing to notice is that Morgan uses an emigration statistic for the Muldoon period, and a net outflow statistic for the late 1980s. Any skim reader would assume that the two statistics were comparable, and would concluded that emigration under the Muldoon regime was even worse than the worst under Rogernomics.

The following table presents the relevant published data:

             year to March

NZ residents returning

"permanent" NZer departures

"long-term" NZer departures

"long-term" visitor departures

"permanent" & long-term departures

net inflow

1977

15522

13048

36164

6880

56092

-16270 

1978

15644

18336

39424

5920

63680

-22156 

1979

22328

19680

52952

8376

81008

-26544 

1980

23561

23875

46162

5987

76024

-21314 

1981

25774

25536

39198

5056

69790

-16209 

1982

26830

19719

33050

4005

56774

-4743 

1983

27105

12314

26197

4163

42674

15442 

1984

24320

  9182

20916

4049

34147

10557 

1985

20222

12120

28003

4204

44327

217 

1986

19368

16526

35998

5071

57595

-18518 

1987

21910

17945

36588

4096

58629

4357 

1988

63469

-957 

1989

70941

-18298 

1990

56019

-1633 

1991

45472

14576 

1992

44723

2938 

1993

42714

8080 

1994

41670

15793 

1995

45894

20401 

1996

50456

28626 

1997

55948

37779 

1998

60221

1923 

Let's look at the correct data. Interestingly, Morgan significantly understates the average annual long-term departures of New Zealanders in the 8-year period from April 1976 to March 1984. (The correct figure is 54,000 and not 43,000). While counting "long-term" departures, he ignores "permanent" departures of New Zealanders, but includes the "recent immigrants deciding to go elsewhere" that he explicitly claims to have excluded. This appears to have been carelessness on Morgan's part; he excluded one column of data that he meant to include and he included one column of data that he meant to exclude.

The most important migration figure by far is the one on the right hand side of the above table: net inflow of all travellers, regardless of whether they state that their movements are short-term, long-term or permanent. For an analysis of emigration only, the best figure is all permanent and long-term departures. While the vast majority of these departures are New Zealand citizens, many New Zealanders travel on foreign passports and are therefore classed as long-term visitors.

The lowest years for emigration in the 1980s were the 24 months from April 1982 to March 1984, exactly the years that Gareth Morgan would have us believe were those of maximum emigration.

Fewer New Zealanders departed in the second half of the Muldoon administration, and many returned during that second half. Almost all of the criticism of Muldoon's penchant for "command and control policies" relates to the second half of his government; the early 1980s rather than the late 1970s.

In the late 1970s, when the emigration flood took place, Robert Muldoon was the champion of the New Right of his time. He even said that Margaret Thatcher was his role model. It was only after the 1981 election that economic liberalisers turned to Labour, although the failed "colonels coup" of 1980 did show that, from 1979, Muldoon was failing to deliver what those on the right of New Zealand politics was expecting from him.

When Gareth Morgan says "the outflow fell to zero for a short-period in the mid-1980s" he was talking about the Muldoon period, and not the Lange-Douglas period. In fact, emigration took-off in the year to March 1985, much of it triggered by the post-election July 1984 devaluation which left New Zealand wages very low in comparison with those in Australia and Great Britain.

It is true that, in the late 1990s, New Zealand emigration is returning to its peaks of the late 1970s and late 1980s. To some extent it reflects an economic cycle that is probably a more significant determinant of migration than any politician.

The other problem area of Morgan's column is his statement that compares New Zealand and Australian tax rates. He says: "The sick joke of it all is that the alternative government promises to make it better through a rise in taxation and greater State intervention in industrial development - this at a time when Australia is making itself even more attractive to the world's skilled labour by reducing its tax burden. Once that country's new regime is in place the tax on those earning up to NZ$50,000 will be lower than in New Zealand - further encouragement for emigration across the Tasman."

Even after the GST is introduced, the Australian tax scale will be highly graduated, as the table below shows.

    Australian Tax Rates        1998 Tax Pack   

Australian Liberal Party Manifesto Tax Rates

$1-$5,400

  0%

$1-$6,000

  0%

$5,401-$20,700

20%

$6,001-$20,000

17%

$20,701-$38,000

34%

$20,001-$50,000

30%

$38,001-$50,000

43%

$50,001-$75,000

43%

$50,001 and over

47%

$75,001 and over

47%

 

The impression that would have been given if Morgan had told the whole story about Australian tax, is that he favours graduated tax scales that do not tax the first few thousand dollars of gross earnings, and that tax earnings over $50,000 at rates in excess of 40%.

But, on 27 October, in a column titled (Herald) "The Tax Route to Better Times", Morgan laid into Alliance leader Jim ("Marx") Anderton and Labour leader Helen Clark. Why? Because Clark proposes a tax rate of 39% for gross incomes in excess of $60,000 per annum. (While Morgan doesn't say so - we are no longer surprised at Morgan's omissions - the Alliance income tax scales have all been very close to those of Australia.)

Just how can Gareth Morgan be so much in favour of a Howard tax rate of 43% for incomes over $50,000 while so much opposed to the Clark/Cullen plan to raise the tax rate from 33% to 39% for incomes over $60,000? "What is driving Labour to destroy the 14 years of progress it instigated?", Morgan asks.

I sometimes wonder if Gareth Morgan and some others deliberately misuse statistics as some kind of game, in which they are placing bets on how long it will take them to be caught out. If so, they probably cannot believe their luck. Certainly, the left in New Zealand, if it's to get its act together, must start to oppose commentators like Morgan on the basis of their inaccuracies and half-truths, and not just on their provocative rhetoric.

 


© 1998


Rankin File | 1998 titles