How the Economy Is Rigged to Funnel Wealth Upwards — And Why Right-Wing Promises Often Break It
Why the Promised Land of Deregulation Is Just a Playground for Rentiers and Corporate Cronies
If you’ve ever felt squeezed by rising prices, stagnant wages, and a constant struggle to get ahead, you’re not imagining things. Despite promises from right-wing parties like National and ACT that “freeing the economy” will lead to prosperity and job growth, the reality is very different. Instead of helping everyone, these policies tend to funnel wealth upwards — to landlords, financiers, and big corporations — while leaving most people behind.
Let’s unpack how this happens, why it matters for everyday people and businesses, and what we can do about it.
The Illusion of “Freeing Up the Economy”
Right-wing politicians often campaign on the idea that cutting taxes, deregulating industries, and shrinking government will unleash business, create jobs, and make life better for everyone. It sounds appealing — less red tape and more money in people’s pockets.
But in countries like New Zealand and Australia, the story is more complicated. These policies usually mean cutting public spending on essential services like healthcare, education, and infrastructure — the very things that support working people and enable businesses to thrive. Meanwhile, tax cuts and deregulation often benefit the wealthy, especially those who own property or shares.
So instead of boosting real business investment and wages, these “free market” policies tend to increase inequality and push wealth into the hands of those who don’t actually produce goods or services — like landlords and financiers.
How Wealth Flows Upwards
Economists influenced by Keynesian and Modern Monetary Theory (MMT) tell us that government spending plays a crucial role in keeping the economy healthy. When governments invest in people and infrastructure, they put money into the hands of workers and consumers who then spend it on goods and services. This keeps businesses busy and growing.
But when governments cut spending or run “austerity” policies, the economy can slow down. People have less money to spend, consumer confidence drops, and businesses see their turnover fall. This isn’t because people are lazy or unwilling to buy — it’s because they simply don’t have the income.
Meanwhile, policies that favour capital over labor — like tax breaks for property investors, deregulation that benefits big companies, or negative gearing on housing — push wealth upward. Money flows from wages and small business profits into rent, interest payments, and fees paid to landlords, banks, and shareholders.
The Reality of Rising Benefit Sanctions and Structural Unemployment
In the last year, New Zealand has seen a sharp increase in benefit sanctions — penalties that reduce or cut welfare payments for reasons often beyond recipients’ control. This is happening even as numerous credible studies confirm that benefits are woefully inadequate to meet basic living costs. Meanwhile, the root causes of unemployment in this country are structural: lack of meaningful job opportunities, economic policies that prioritize asset inflation over business investment, and persistent underfunding of social supports.
Yet, instead of addressing these problems, the National Party chooses to redistribute wealth upwards. They punish the most vulnerable by cutting their already insufficient benefits and imposing harsher sanctions — essentially rubbing salt into wounds that society imposed on these people against their will and against the advice of experts with real financial literacy.
It’s worth noting that the National government’s Finance Minister attended two expensive private high schools — institutions that, critics argue, inflated her grades and provided grooming networks that helped place her in high-profile roles she clearly isn’t qualified for or capable of performing in. This highlights a broader problem: those setting economic policy often lack the practical financial understanding necessary to manage the economy for the benefit of all, instead serving narrow elite interests.
The Myth That Poor People Don’t Create Jobs
One common argument from the right is: “Poor people don’t create jobs.” But this misunderstands how economies work. The vast majority of jobs come from demand — people buying goods and services — and working-class and poor people drive this demand with their wages.
Think about it: without people spending their paychecks at shops, cafes, and service providers, many small businesses wouldn’t survive. Poor and working-class people are the backbone of demand.
Contrast that with landlords and financiers who make money by charging rent or interest on money already earned. They don’t create jobs; they extract wealth from the system.
As I often say: I’ve never met a poor person who charged me rent or earned interest on my savings. Yet these are the very mechanisms funneling wealth upwards.
Why Smart Business Owners Vote for Labour
It might surprise some, but many savvy business owners and entrepreneurs don’t buy into the right-wing rhetoric. They understand that an economy where workers earn fair wages and governments invest in infrastructure creates a stable environment where businesses can grow.
Strong consumer demand means customers have money to spend. Better public services mean workers are healthier and better educated. That’s why many smart businesspeople vote for Labour or other progressive parties — they know it’s better for the long-term health of the economy.
What Needs to Change
Fixing this rigged system starts with recognizing that the government has a vital role in supporting demand and directing investment toward productive activities, not just pumping up asset prices.
Policies should focus on:
Ending tax breaks that reward speculation, especially in housing.
Investing in infrastructure, education, and healthcare to boost productivity.
Encouraging banks to lend to businesses that create jobs, not just people buying overpriced homes.
Implementing fairer tax systems that target wealth and land ownership rather than wages.
Reversing punitive welfare policies and benefit sanctions that punish people for structural economic problems beyond their control.
By redirecting wealth towards workers and productive investment, we can build an economy that works for everyone — not just the privileged few.
Conclusion: Ending the Cycle of Upward Wealth Redistribution and Punishment
The surge in benefit sanctions combined with stubborn structural unemployment shows how harsh and misguided right-wing economic policies have become in New Zealand. Rather than investing in productive growth and supporting those in need, the current government punishes vulnerable people while handing wealth to landlords, investors, and financiers.
This isn’t just cruel — it’s economically counterproductive. The economy won’t heal until we stop blaming individuals for systemic failures, end the upward siphoning of wealth, and implement policies rooted in financial literacy, fairness, and real understanding of how money flows through society.
Only then can New Zealand build an economy that works for everyone, not just a privileged few.