Howard's End: Do You Believe In You?

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Despite a welcome return to income-related rents for State-housing tenants, one Christchurch family of two adults and an eleven-year-old child had been eating twice a week at the Salvation Army soup kitchen and still has to exist on just $66 a week for groceries. Enough already! John Howard writes.

I never thought I'd say it, but thank God for the coalition government and the good works of the various charitable organisations in New Zealand, particularly the Salvation Army who, over the last nine years, have clearly kept this country hanging together - albeit by a thread.

It shows exactly what type of country we've become when a newspaper reporter wrote last Friday: " When wrapping Christmas presents becomes a chore and a bore you could do this........."

What! - excuse me!

"...a chore and a bore..." - what happened to wrapping and giving presents out of love. Isn't that what it's supposed to be all about? And doesn't that reporter rely on the income from advertising which supports the basic human need for love? Sack the bum, I say!

Over the years there has been numerous warnings from charitable agencies about poverty in New Zealand - particularly around this season of peace on earth and goodwill.

The Salvation Army's, Campbell Roberts, says market rents have been responsible for a huge increase in poverty with an explosion of foodbanks, debt, poor health and inadequate housing. He should know because his group has been at the coal-face all along.

On the basis of the poverty that's existed, and still exists in New Zealand, you wouldn't want to let a National-led government near the Treasury benches again - ever.

But don't feel too smug - Kiwis let it happen. Unthinking about the plight of our fellow human beings, we allowed ourselves to be led by the nose and we worshipped, nay loved, that false idol - money.

That's not to say that business should not take a reasonable profit. In fact, in New Zealand, "profit" is often used by some as the only four letter word which contains six letters.

What this society has been lacking for so long and needs now, more than ever, is balance.

Cast your mind back to that great musical, Fiddler on the Roof. There in his ramshackle barn is Tevye, the poor Jewish dairyman living in Czarist Russia, daydreaming about being wealthy.

Somehow in New Zealand, we're made to feel ashamed if we dream of being wealthy. It's greedy, grasping, crass and base, we're told. We just can't have tall poppy's we're told. But that's wrong.

In the introduction to his song Tevye sheepishly admits, "I realise, of course, that it's no shame to be poor."

So, maybe if there's no shame in it, we should all just content ourselves with being poor.

Tevye doesn't. He quickly qualifies his statement by adding that being poor is, "no great honour, either."

Right after which he questions God in his conversational way, asking, "so what would have been so terrible if I had a small fortune?"

Disregarding weighty and specific questions about God's providence Tevye asks if he were rich, " Would it spoil some vast, eternal plan?" The quick answer, of course, is no.

Then there's the character Shylock, in Shakespeare's Merchant of Venice.

Shylock was the supposed loan shark - a usurer - and the other characters in the play, especially the Venetian merchant Antonio, hold him in low regard because he charges interest on the money he loans - because he makes a profit on his business.

Often viewed in New Zealand as something stolen from consumers by greedy price gougers, blood suckers and other shifty characters, profits are typically seen as the heart which pumps businessmen's veins with venom rather than the milk of human kindness. It's often thought that to sell something at a profit is to take advantage of someone. It's cruel and low, we're supposed to believe.

In the Merchant of Venice, profit is looked upon as so low that Shylock is dubbed "un-Christian" and a variety of other names, including "dog." He's then roughed-up by the good Christian townsfolk of Venice…..

Shylock's character is so vivid and the disdain for his character so real, that the name Shylock is still used for any businessman who charges an amount far in excess of the cost to produce the item.

"You don't need to charge that amount, the manufacturer built the thing for $5, why are you charging $8, you're just greedy," people say.

Maybe, but don't be so naive.

Profit is merely compensation for sticking your bum on the line. If I go and buy 3,000 gizzmo's for $5 a pop, I'm assuming that I can sell them to consumers. If my assumption is wrong and everybody wants doohickeys instead of gizzmo's, I've lost my investment capital - 15,000 simoleons.

There's a risk in getting those gizzmo's so why would I want to incur such risk? - profit.

Only with the expectation of bettering myself would I put myself in a place that might bring me harm. I am not going to spend 15,000 simoleons unless I can make a profit on the deal. If I took the risk without the expectation of a payoff, wouldn't I be a fool - and probably broke as well?

Seeing how going broke is not the best of life's moves, in the Merchant of Venice, Shylock hedges his risk with the hope of profit by charging interest on his loans.

Said Shylock to Antonio: “You call me a misbeliever, a cut-throat dog, And spit upon my Jewish garbadine, And all for your use of that which is my own.”

And that's the key. The money he loans is his.

The sticking point, however, comes when the cost of borrowing the money or making a purchase is seen as a trifle high. But it seems to me that when somebody speaks of "unreasonable profits" they are speaking in a sort of cipher code in which the charge "unreasonable" against the businessman is actually an incidental confession about the purchaser, by which he/she his admitting that they're tight.

So, a price tag is high not because the profit is unreasonable, but because the consumer doesn't want to pay that much.

It's simple really, if you don't want to pay the money, don't buy the product - but don't hide your own personality traits by trying to call the businessman's profit "unreasonable."

Most of us shop around for a good deal. We don't spend $6 for a product we can get just as easily for $5. We compare deals, try to get the best bang for our buck. The reason is that we, too, like to see bank accounts with more dollars in them at the end of the week. Is this wrong?

No, it's smart, wise and eminently sensible. It's the same for the businessman - whether he be a banker or a fruit-stall owner.

Antonio, as a businessman, should have known better. Shylock making a profit on the money he loaned was the same as Antonio making a profit on the wares he sold. And just like anybody else, Antonio could have refused to do business with Shylock if the price was too high instead of beating him up.

Moreover, rich people do benefit the poor. First of all, they employ them. Secondly, they don't just leave their spare millions lying around the lounge room floor collecting dust, either.

They invest their money in the capital markets - things like stocks, bonds, real estate and banks. The more money that's invested in the capital markets, the more there is available for loans to you and me to perhaps start our own businesses.

People are willing to pay for the use of another man's bread - it's called interest.

Dust-collecting money is worth nothing to a rich man, so he loans it to an enterprising fellow who has more immediate use of it.

Those loans allow companies to hire more employees, increase the wealth of current employees, expand the size and scope of their business, invent new and better products and improve on old ones.

These loans also provide the capital for start-up companies, plus for things like homes, cars and overseas trips - all of which are an economic benefit to people occupying the lower economic rungs of the ladder (me for instance).

When the Mr Moneybags of the world are not busy investing their stash, they're often out having a good time with it, buying things like expensive art, the new Rolls Royce, new planes, boats and new miniature robot gizzmos to hide in their desk drawer and play with at work.

While those lifestyles and opulence are often described as conspicuous consumption, consider who benefits from all those "consumed" mansions, Lear jets, BMW's, yachts and luxury toys - the people who build them. All that consumption equals money for somebody to buy groceries and pay the rent.

Cash never sits idle. One man's spending is another man's income.

It would be a total disaster for New Zealand if we allowed the pendulum to swing too far the other way whereby government policies started to take us entirely in the other direction by actually penalising the rich to help the poor.

New Zealand has what it takes to be an innovative and prosperous country for everybody.

Ever after a reduction in state-house rent I never, ever, again want to see a family of two adults and an eleven-year-old child having just $66 a week left for groceries or needing to visit a soup kitchen twice a week.

We need to, indeed we must, lift our long-term game-plan, provide some real community leadership and, most of all, get our values back into perspective and balance.

Get the spirit - Do you believe in you? I do!

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