Helping Haiti

Two weeks ago a magnitude 7.0 earthquake devastated Haiti's capital of Port-au-Prince. Estimates of the dead range from 112,250 to 150,000 and are rising; nearly 200,000 people are injured and approximately 800,000 are homeless. That is over one million people directly affected by the earthquake in a city with roughly the same population as Auckland.

Similar natural disasters have struck in wealthier countries but with much less devastating effects. Haiti's current level of catastrophe is due in large part to its condition the day before the quake struck: crumbling infrastructure, the highest poverty rate in the Western Hemisphere, and a weak government. These are the factors that helped turn a natural disaster into a human catastrophe.

The international community has opened its hearts and its wallets to the people of Haiti. Texting services and websites have enabled thousands of people to easily act on their altruistic impulses, and actors, musicians, even tennis players have held shows aimed at getting more people to donate to relief efforts. The generosity displayed is to be applauded. The risk is that the relief being provided now, in the short term, will not do enough to address the real causes of the catastrophe. Immediate relief is needed, but so is a long-term commitment to helping Haiti rebuild in such a way that when the next natural disaster strikes (which it will), it does not turn into another human catastrophe.

According to Laura Freschi, Associate Director of the Development Research Institute at New York University, what are needed alongside all the donations to Haitian relief efforts are unallocated donations to non-governmental organisations that have a standing commitment to, and experience working with Haitian communities as well as other impoverished places. These are the organisations that will be there when the media loses interest. They will be the open hands helping Haitians ensure that their government grows stronger, their infrastructure is more stable, and their people find a way out of poverty.

• Read "Too much of a good thing?" by Laura Freschi
• Watch a video featuring Anne Hastings (Director of bank for the poor Fonkoze) created after Haiti's 2008 disaster

"A Tax System for New Zealand's Future"

It is time for change. That was the message from the Government's Tax Working Group which presented its final report last week. The Group was operating under some restrictions, like having to recommend changes that would not reduce the total amount of tax the government collects. Despite this, its carefully considered analysis suggests there's a good possibility of meaningful reform.

The Group was highly critical of the current system's uneven approach. In particular, different tax rates across different tax bases create a patchy system and practically invite tax avoidance. For example, because trusts are taxed at a lower rate than some personal incomes, people can shelter their income from paying personal income tax by directing it through a trust. The Group state "the ability to shelter income in trusts cost the government roughly $300 million in tax revenue in 2007." A solution is rate alignment, where the same rate applies to the different bases—30 percent on personal income, corporate income and trust income for example. To be able to afford to align these rates—for example, by dropping personal income taxes from 38 percent and 33 percent to 30 percent or less—it suggested some controversial measures. For example, property owners might face a new land tax and the tax break for depreciation on buildings could also be up for the chop.

The unfortunate reality is that change won't be comfortable in the short-term. Some of the changes suggested as ways to pay for rate alignment would mean either raising new taxes or removing tax breaks some taxpayers have been enjoying up until now. When thinking about the best mix of taxes to collect revenue from, the Government should think long and hard about how to mitigate impacts on vulnerable low-income families, in particular. However, it should think equally hard about why the Group recommends these changes. They are necessary to create long-run benefits to the economy and to all of us, including those who are vulnerable now.

Reconciling the long-term benefits with short-term care is perhaps the Government's biggest challenge, one that should be managed by a vision of a thriving future for New Zealand. The Group's report has given a good idea of what that vision might require.

• Read the Tax Working Group's final report, "A Tax System for New Zealand's Future"
• Read Maxim Institute's media release about the Tax Working Group report, "Government should design a tax system for the future"

Power and hypocrisy

The tale of a celebrity or a leader falling from grace is a familiar one. As the famous saying from Lord Acton goes, "power tends to corrupt, and absolute power corrupts absolutely." Psychological Science has published research which finds a link between power and moral hypocrisy. The researchers claim their work "is especially relevant to the biggest scandals of 2009, as we look back on how private behaviour often contradicted the public stance of particular individuals in power." They suggest that those who feel entitled to hold a lot of power, tend to see themselves as separate to the standards that they expect others to live by. This research is interesting and confirms many intuitive assumptions. It also suggests that the checks and balances built into our parliamentary system are to be celebrated and upheld.

The research, "Power Increases Hypocrisy: Moralizing in reasoning, immunity and behaviour," was based on five experiments. The first experiment revealed that those who felt more powerful were more likely to cheat, but were less tolerant of those who cheat, than those who did not feel as powerful. In two other tests, scenarios were given to see how those in positions of power felt about themselves engaging in moral or legal transgressions compared to others. In all three experiments "high power" participants showed a higher level of moral hypocrisy. The final experiment determined if a feeling of entitlement to their power, affected their level of moral hypocrisy. This revealed that for those who felt a sense of entitlement or legitimacy in their power, moral hypocrisy is more likely.

We can't replace the need for leadership but given the report's findings it does seem that perhaps our approach to leadership needs to encourage teamwork and accountability, rather than the elevation of leaders to hold power in isolation. In a parliamentary system in which our elected officials are given a significant amount of power and influence, we also need to be sure that we protect the checks and balances within the system, which keep that power contained.

And for those who find themselves wielding power and influence, it is crucial that they surround themselves with those who remind them of the responsibility and service attached to their power, if they are to mitigate against the risks associated with a sense of entitlement.

• Read "Power Increases Hypocrisy: Moralizing in reasoning, immunity and behaviour"
• Read a summary of the research in The Economist