New Zealanders pay off their mortgage while raising a family; sell and downsizefor retirement - keeping the surplus as their retirement nest egg.
That has unfortunate consequences. One million dollars invested in a house does nothing for the economy, once the house has been built. One million dollars invested in a business, creates jobs, tax revenue, and output. Investment into business largely comes from institutional saving.
High house prices mean we have little money left over to increase our Kiwisaver contributions. Without adequate institutional saving, we lack capital to invest in commercial enterprises.
Much of our commercial sector is now in overseas ownership. Many of our companies now list in Australia. We own our houses; and overseas interests own much of our business.
Our balance of payments is consistently in deficit, as overseas owners remit their profits.
Owning houses makes us to believe you get wealthy through capital gains - not through hard work. We need hard work to build a successful economy.
No capital gains tax, and a banking system which favours house mortgages over business loans, impede change. Banks borrow funds offshore, to fund mortgages- increasing our international debt. High house prices impede the next generation owning homes.
These topics are politically too hard, you say. Voters don't want the value of their home threatened. They don't want increased Kiwisaver contributions. Yet we increased cigarette prices to $40 per packet. We prohibited smacking. Both initially unpopular.
Major change can occur, despite voter reluctance. If they got out of their silos, Labour and National could even work together, to drive economic rebalancing.
Then we have low productivity growth. Unless we invest more, so our workers produce more, we will remain a low-skills, low-wage economy. Our small economy lacks competition, making New Zealand expensive. We don't add sufficient value to our exports.
While peripherally mentioned, these key economic issues have not been campaign topics.
Finally we have social services which are unaffordable and inefficient. The cost of New Zealand Super will increase dramatically as baby boomers retire, and people live longer. NZ Super Fund won't cover these increases.
Health costs are going to increase markedly. Our education, health and public services have falling productivity. Our social welfare system traps people in poverty, rather than empowering them to regain control of their own lives.
Politicians say to fix them: spend more money in these social areas. Wrong. Fundamental problems need to be solved, if social improvements are to be achieved at affordable cost.
Three positives have masked these structural weaknesses, and allowed New Zealand to delay reform.
Trade with China; high levels of immigration over the last six-plus years and booming international tourism, allowed New Zealand to postpone change.
Covid-19 will now intensify these imbalances. New Zealand is running major deficits. Spend our way back to prosperity? Unlikely. Our largest export industry- international tourism- is shut down entirely. Hospitality, international students, retail- are other impacted sectors.
Covid's impact on the economy has so far been masked by the wage subsidy, and by the Reserve Bank printing money. Neither can continue indefinitely after the election.
What have we heard in Election 2020 to address these major issues? Largely irrelevancies. A new public holiday. Increase the minimum wage. More sick leave. Temporary tax cuts from National. Minor tax increases from Labour.
Yes there has been skills training from Labour; boosting Tech from National. But no coherent economic policies.
Parties have outbid each other to spend more - especially on hastily devised infrastructure projects. Before we build roads, don't we have to determine the immigrant numbers we want? What the population will be in 25 years? Not discussed.
Are politicians - during an election campaign - appropriate persons to decide what infrastructure to build? Shouldn't these investment decisions be made by the Infrastructure Commission? Are we looking at a string of late, overbudget white elephant projects in five-plus years, which our grandchildren will have to pay for? Likely.
New Zealand is a wonderful country of major potential. But it needs change. Election 2020 called for serious debate. Sadly, this has not occurred. Covid's economic consequences will overtake us now, rather than steering our own economic destiny.
New Zealand politicians sold us short in Election 2020.
• David Schnauer is an economist and retired lawyer. He is the author of Covid, Catalyst for Change.