When land is sold, no new wealth is created.
What does the Government do with the proceeds?
They reinvest the proceeds to create new wealth through investments returns.
They spend from the new wealth thus generated through the Net Investment Returns Contribution (NIRC).
What is the WP's approach?
What's the difference?
In the Government’s approach, land remain as a financial asset in the reserves that continues to generate new income.
In the WP’s proposal, land is disposed and the money spent, and we end up with fewer assets in reserves to generate future income.
Simply put, the Government spends from the returns (new wealth) generated through investment.
The WP proposed to spend from reserves/savings. There is no wealth creation from land sales. There is only spending. And that’s a raid.
Over time, this shrinks the reserves.
