PAUL MCBETH: What’s wealth got to do with it?
Cash will always be king.
Paul McBeth is the editor of The Bottom Line and Curious News, and previously worked at BusinessDesk for 15 years. Curious News supplies a daily afternoon market report to the National Business Review.
The National Business Review’s annual compilation of the country’s growing elite dovetailed in nicely with the creation of the world’s first trillionaire in Elon Musk.
Staggering wealth always elicits waves of disbelief from the chattering classes, who can’t quite comprehend that they too are part of the elite, if not quite in the 1% – poor people, after all, have more pressing concerns to worry about like feeding the kids and keeping the power on.
Yet one thing that consistently gets misconstrued about our one-percenters is that they’re sitting on pots of cash. Elon Musk might very well have a secret vault filled with gold coins that he swims through like Scrooge McDuck, but much of his wealth is in Tesla and SpaceX stock tied to the animal spirits of Wall Street.
Similarly, but on a much less grandiose scale, the $129 billion of assets collectively held by the 150 individuals, families and duos on the NBR’s 40th instalment of the Rich List might very well be within cooee of the $136.37 billion held on behalf of 3.46 million KiwiSavers. But it’s highly unlikely they’re holding almost a quarter of that in cash like the retirement savings schemes.
And that makes it slightly trickier to raid when trying to broaden the nation’s tax base beyond the easily administered capture of wages and consumer spending.
Let me live that fantasy
Not for want of trying.
It feels like it’s only a matter of time before New Zealand’s tax base is widened to include wealth, land and capital gains taxes or a combination of the three to address the long-deferred hard conversation policymakers need to have with taxpayers on just what services they want and how much it will cost to deliver them.
The Greens’ latest attempt was full of fire and brimstone, snarling at greedy corporates and the super-rich as keeping the downtrodden in their place.
As implausible as it would be for the policy as announced to be passed into the law, they still need to tighten up loopholes like a net wealth tax that is easily circumvented with loss-acquiring vehicles or persisting with the sacrosanct exclusion of a family home to be taken seriously.
And to give their policy team credit, the proposed tax-free income threshold up to $10,000 is a helpful acknowledgement that New Zealand can’t simply rely on wage-earners to foot the bill for decades of intransigence.
That kind of luxe just ain’t for us
It’s a shame it didn’t go for a higher tax-free threshold given that the nation’s bottom two quintiles – or 2.08 million people – are living in households with disposable incomes of less than $48,000 – or roughly $920 a week – as at June 2025.
They tend to spend all of their money, which is captured by the 15% goods and services tax, and a meaningful reduction in income tax creates a far stronger offset for any new capital tax that juggles the complexities of paper value and actual cashflows.
It might seem far easier to implement a comprehensive capital gains tax when an asset is actually sold, but take a look at Australia to see the scaremongering of capital flight as they broaden out their existing regime. Politicians hate having to admit that decisions come with a cost.
But before we venture too far down the tax rabbit hole to infinity and beyond, it pays to step back and grapple with what we mean by wealth and how we as a nation think about it.
Especially when the latest National party policy pledge for compulsory KiwiSaver and a $1,500 baby kickstart will make notional asset values more than a philosophical question for generations to come.
Almost 20 years of KiwiSaver has already changed the way Millennials and Gen Zs think about wealth, shifting their focus to more readily accessible financial and crypto assets given the high barriers facing them to buy an entry-level house.
I’ve never seen a diamond in the flesh
But we’re still getting confounded by attributing a dollar value to those assets at any given moment, rather than accepting that the daily pricing of superannuation unit trusts ebbs and flows just like anything else.
Wealth, like everything else, is notional and if we’re ever going to end up taxing it, we probably need to consider what wider social contributions we expect from the 1%.
Take the NBR Rich List’s top billing – Nick and Matt Mowbray, who overhauled Graeme Hart’s seemingly unassailable dominance last year. Their $20 billion Zuru empire employs more than 6,000 people in 34 locations around the world.
And while the organisation’s heart might have a Kiwi twang, it’s a true multinational, with the inches spent on local society pages representative more of what the Mowbrays personally spend in New Zealand rather than their local business footprint, which had a domestic wage bill of just $20 million in calendar 2025.
Rocket Lab is a different kettle of fish again. It employs more than 2,600 people around the world, but has maintained a substantial New Zealand business, with a $152 million wage bill last year spanning 1,000 or so local staffers, many of whom were transformed into millionaires through the company’s share scheme.
It don’t run in our blood
They’re two very different approaches to aspirational wealth creation, and both have their supporters and detractors, depending on what point they want to make.
Do we want our uber-elites to embrace the steely-eyed rationalisation perfected by the media-shy Hart’s Rank Group, or latch on to an in-your-face enthusiasm of chasing revenue and making new hires like the tech wave of the 2000s delivered with Trade Me and Xero?
And what constitutes a fair contribution?
New jobs and a cornerstone office to reinvigorate cheap premises in an unloved part of the country or simply a bigger proportion of tax paid for the government to redistribute?
We crave a different kind of buzz
These are all valid questions that tend to go unanswered in what passes for long-form interrogation of our policymakers and their typically thin election manifestos that are more focused on style than substance.
But they need to be answered if we’re ever going to address whether our approach to wealth is leaving too many people behind.
Rocket Lab, like its precursor Xero, is an instructive example that the creation of massive wealth for one person isn’t simply a single winner taking all, with hundreds of millionaires being made by the emergence of a local space hero.
The NBR’s William Mace did an excellent piece on the anecdotal cashing in of Rocket Lab shares by a handful of staffers, acknowledging their trade-off of forgoing the chance that space company’s shares might go to the moon by selling to meet more pressing needs like buying a house or ensuring financial security for one’s family. Much like real estate, one can’t eat stock options.
Wrapping our collective heads around what’s notional and what’s real will go a long way to having a more sensible conversation about wealth – which should inform a better understanding of what’s needed when it comes to investing decades down the track for an unthinkable retirement.
And while we’ve been conditioned to view our retirement savings’ notional value at a single point in time, the reality is that those KiwiSaver funds are just a set number of units in a trust at a particular price.
Only two prices matter – what you pay and what you sell for. Everything in-between is noise.
Image from Curious News.
