budget. not.
Frog would love to comment on the Budget, but has been injured in a serious information overload incident involving the zillions of missives being fired around by every organisation, party, union, lobby/interest group, and general collection of people with access to a distribution method.
So, alternatively, we’ll share these rather nice links to help with climate change deniers, head-in-sanders, and blog trolls:
This from New Scientist, and this from Grist.
Expect slightly more informed Budget analysis in coming days….
Bookmark to:
May 18th, 2007 at 10:06 pm
aha, nice one New Scientist!
bookmarked that for the future
Well mouldwarp, next time you diss the hockeystick a big fat:
http://environment.newscientist.com/channel/earth/climate-change/dn116 46
is coming back at ya.
here’s another good link, a list of “enviro-Nazis” and “left-wing loonies” who believe that Anthropogenic Global Warming is real and well supported by sound science:
http://illconsidered.blogspot.com/2006/02/global-warming-is-just-hoax. html
May 19th, 2007 at 8:56 am
Stuey
You know it won’t matter. I’ve concluded that the ideology that drives the deniers who visit us has far more to do with their fear of big government than any real misunderstanding of Science. The science actually doesn’t matter, as long as if provides them with a fig leaf of propriety for their efforts to deny government the right to try to do something about what will become an existential problem for human civilization.
respectfully
BJ
May 19th, 2007 at 12:51 pm
I think there is a lot more to it than that BJ (”yanky-boy”), it’s about the ability of one individual to have a hell of a lot, and be admired for it; it’s about man fitting the parameters that define all populations of biological beings.. exploitation of the environment, leveling off (sustainability), or collapse.
jh
May 19th, 2007 at 1:00 pm
jh
I was referring to some specific guests we have entertained here. You are correct in the sense that behind their fear of big government lies both greed and arrogance, but those things are seldom admitted. Short answers will suffice for them IMHO.
respectfully
BJ
spelled “Yankee” …. Steinbrenner would have you on toast!
May 19th, 2007 at 2:15 pm
BJ
Climate denialsts are perfectly right to fear big government. We should all “fear” big government for the same reason we “fear” big business.
The only real difference between big business and big government is how they define “market share” and “profits” and “shareholders”. In every other respect they are the same. The “board of directors” run things as they see fit during the year and make sure they control the “shareholders meeting” to prevent any “shareholder revolt” from succeeding. When the organisation is going well the “directors” take the credit and when things go pear shaped there are always minions that can be blamed and made to walk the plank.
Of course a fear of big government is no reason to deny human induced climate change.
Regards
Kevyn
You’re not a real Yankee if you can’t play Dixie on the banjo.
May 20th, 2007 at 5:28 am
Totally agree Kevyn,
As witnessed by this budget where they tax more money from us to hoard a surplus (because to give it back or take a little less would see us peasants in Cullen speak “just spent it”),
A little is given back in Kiwi Saver (which the poor cannot afford to join and beneficiaries are totally excluded),
Put in regional petrol taxes when the national total petrol tax take is not even spent on roads/public transport infastructure (which the large transport operators will totally bypass through purchasing in an out of region location and transporting back to home base),
Reduce business tax to try and make business at least competitive but claw it back with a company kiwi saver contribution to employees (keeps Un-united Future happy),
But wait till next year (who would have guessed it was election year?) when yes, they will start to let us keep some of our money and not have the State hoard it for us because we are such uncouthed cretins who cannot save to help themselves.
Big government all right, no better then big business.
May 20th, 2007 at 9:01 am
Don’t be silly, we WON the civil war - we don’t have to play banjos or “dixie” … and Yankees are also whoever Steinbrenner pays to play Baseball for him.
OK - back to topic
The issue with respect to the government is the degree to which it is ACTUALLY answerable to ALL the people of the country. The government is required to be answerable to all citizens, NOT a limited set of “shareholders”. There being no selection whatsoever, the use of the word shareholder is indicating a selectivity that does not exist. Subtly misleading usage is dangerous.
No mistake, Greens ARE suspicious of big government… but we also see the point of departure between it and big business. We do not fear it MORE than big business, which is where our recent guests have IMAO erred.
Gerrit - Any actual tax cut would light a match under an inflationary skyrocket. I have been watching the rest of the world as well and the supply of money is surging madly. The central banks are issuing additional credit and supplying money to cover debts desperately. The Bank of Japan is funding EVERYONE.
That money is flowing into this country, and it is hard to stop it. The carry trade lives. Fighting that influence through local rates alone is an error, but those rates are the only tool the Bank has, Cullen controls the other tools but has yet to accept responsibility for some of the problem. The inflation issue undoubtedly vexes him because he is quite definitely thinking inside a box of his own making.
The “Tobin tax” idea was floated elsewhere. He needs something like it and quickly.
Worse, if he were to even re-allocate taxes so that the overburden carried by the middle class here were somewhat shifted to the more wealthy, the numbers would leave him with increased inflation because unlike the wealthy who can afford to save, we would be spending it almost immediately… to buy houses instead of renting them among other things.
He can’t change anything without inflation biting us harder again, and the inflationary pressure is massive. I suspect that he is attempting to hold the line until the US actually kicks over into something like a recession and the inflationary pressure on the Kiwi is diminished, but even here there is a conundrum, because a low inflation here will raise the value of our currency with respect to the US $ and that core statistic appears to drive export decisions, never mind what the US $ is actually worth. Better to measure vs a basket of currencies and see how we are doing vs China and Australia and Singapore… and forget the US$.
I am mapping (slowly) the constraints he’s created for himself (or that Westpac has created for him).
It makes for interesting theories, but the practical results are what you observe.
Big government is better than big business because there can more easily be ballot box revolutions. I expect one next year. Labour has shot its bolt.
respectfully
BJ
May 20th, 2007 at 12:17 pm
Good points BJ,
Here is a point, why not cut wages so the tax take would be lower. The peasants would not go out and spend, inflation could not occur, housing prices would drop, etc.
Have tongue in cheek but it is a thought one could take half serious.
We could create a recession before one strikes!! Better control of the situation that way.
Seriously we need to compare the NZ$ with the Euro. It is worth something while the US$ is worth very little and being dumped by all including the Chinese.
Being in an export related industry we try and sell in Euros but buy raws in US$.
May 20th, 2007 at 2:08 pm
Gerrit,
Paying the peasants less is not going to change anything, that housing market crash is well overdue already, and only our foreign policy, that requires immigrants with money to invest here, is bouying up the property market - take out the $$ flowing in from Asia, South Africa, Zimbabwe, Canada and the USA, and we’d be looking at bankrupt real estate agents, property managers & developers, and brokers. Not to mention travel agencies…
This budget shows that Labour has firmly planted it’s feet on the side of the employers, and has ratified the abuse of younger generations that began when the ECA was passed in the early 90’s, along with the Student Loans act. Not only do tertiary (and some secondary) students have to work while they study to cope with exhorbitant fees, but also they have had to work for less than adult wages, displacing full-time jobs into a casualised, youth focussed, McJobs that ensure young people leave tertiary study deeply in debt.
There is an angry generation out there, who have internalised an attitude that says they missed the boat for subsidised university study, so they have to be in thrall to the older generation for the rest of their days. They are locked out of job promotion by baby-boomers who still jealously guard the reins of corporate NZ, and locked out of home ownership and investments by their student loan debt. This is a particularly stupid form of stealing from the poor to give to the asset-laden elders (via the Cullen funding of Superannuation).
I find it extraordinary, in the true sense of that word, that this has happened under a Labour government, but don’t expect that to change if National becomes part of the next coalition government… they want to take even more funds out of the education system, by advocating vouchers so that the national state system is not paid for by every taxpayer, just by those who can’t afford to send their kids to private schools (which is the majority of NZ, as State schools vastly outnumber private/integrated schools), and of course, only by parents who currently have children being educated. This will further impoverish our already embattled schooling system, to the point of unworkability, if it is applied as Bill English wants it to be.
May 20th, 2007 at 11:24 pm
>>This budget shows that Labour has firmly planted it’s feet on the side of the employers
Nonsense. Kiwisaver has been dumped on us from on high whether we want to contribute, or pay our people more directly.
>>They are locked out of job promotion by baby-boomers who still jealously guard the reins of corporate NZ
More nonsense. I suppose Google never happened? How about Digg? YouTube? There are more ways for under 30s to make billions now that there were in the 80’s, let alone the 60s.
>>to the point of unworkability
Remind me how it is that the US manages to be so productive?
Perhaps they don’t sit around whining about the golden age….
May 21st, 2007 at 9:12 am
Agree with PEL,
Kaite, The situation is that my education was paid for by my parents through taxes raised by the government to set up schools, pay teachers, etc.
Now Cullen still collects the same (plus about 30% more) taxes and hoards the money so us peasants “dont spent it”.
He should be spending the money on eduction that is used for “free” by the tax payers children.
In that respect you are right to berate Cullen and especially the Labour party.
Now when I entrered the work force there were all these WW2 veterans blocking any advancement in the government department I did my cadetship at.
What did I do? Get into a work opportunity that the veterans had no concept off. Same as my children are owning businesses (and employing workers) that I had no concept off when I was younger. No doubt my grandchildren will start up businesses that my children have no concept of.
PEL has the Google, You Tube, examples, add Trade Me, Pumpkin Patch, The Warehouse, Fast Food outlets by the ton, Navman, Microsoft, Apple, Vodafone, etc, etc. etc. These are just mainstream ones. Add all the little niche markets such as seen the local Farmers Markets, niche industries such as software development, boat building, motorhome manufacturing, specialised food processing (cheese, ice cream, beer, wine, etc.). All not there when I started work. (in fact the wine industry in New Zealand is a good example of what can be achieved by a new generation)
There are so many opportunities out there!!!!!!!!!!!!!!
Maybe this coming generation is soft and wants is handed on a plate.
Sorry kids, show intiative and do it yourselves.
Housing market will only slow down when demand equals housing stock for sale.
May 21st, 2007 at 10:25 am
It’s actually rather disappointing not to see an in depth opinion about the budget from the Green Party. I want to know exactly what the greens would have preferred to see in it.
May 21st, 2007 at 12:24 pm
clueless Says:
May 21st, 2007 at 10:25 am
It’s actually rather disappointing not to see an in depth opinion about the budget from the Green Party. I want to know exactly what the greens would have preferred to see in it.
You can get some idea from the 10c fuel tax imposed on Jafa’s and Wellingtonians, I shudder to think what the might impose on us in the name of climate change (the climate change con) if they were given the chance.
The co-leaders negative comments about the reduction in business tax should also cause alarm bells to ring.
But as far as detail goes, they will not tell you anything, better to keep the masses ignorant of the actual plan and keep banging on about climate change. if you scare them enough then they will not care about the real agenda.
frogmaster writes: well as we have challenged you before BB (although maybe with your split personality you forget) we maintain we provide the electorate with the highest level of detail of any party: http://www.greens.org.nz/docs/policy/ so which party provides more detail?
May 21st, 2007 at 12:48 pm
big bro says: The co-leaders negative comments about the reduction in business tax should also cause alarm bells to ring.
Where do they say that? Actually, what Jeanette said was “… last year the plan was still for a carbon tax to come into effect this year. Now it has gone, there is nothing to replace the lost $360m revenue, and income tax, company tax and GST are bearing even more of a burden proportionally.”
She’s advocating income tax, company tax, and GST contributing to a smaller proportion of the total tax take, not a larger one.
May 21st, 2007 at 1:01 pm
Toad
She is advocating nothing of the sort, I have heard her comment negatively about the reduction in business tax on more than one occasion.
Her comments only prove that the Greens stand for more tax not less, why should she be worried about a loss of revenue of $360 million?, we already have more taxes stolen from us than the govt need.
This govt (and all left wing govt’s) waste money like it is going out of fashion, there is NO justification for an increase in taxes, nor is there a need for a carbon tax.
Anyway Toad, what about answering Clueless’s question?, what would the Green party budget look like?
May 21st, 2007 at 1:18 pm
Yeah, you’re so right big bruv - the National Party will just ‘cut out all the waste’ in govt spending and not cut any public services - except that there has yet to be a concrete proposal put forward as to how one does this, and personally I think it’s a completely disingenuous argument. Lowering the amount of revenue collected is bound to lead to a drop in the public services provided. The point of eco-taxes isn’t over how much you collect, totol, but where you get it from. If we’re going to need a certain amount of money to run a civilised society where our right to health and education isn’t predetermined by our place of birth we’re going to need to contribute money towards this, but we can use our method of collection to encourage people and businesses to make choices that protect our collective interest to live sustainably. Labour has really failed to deliver on Helen’s ‘green’ rhetoric.
May 21st, 2007 at 1:30 pm
The problem with Labour is that they have increased spending a huge amount in Health, Education etc and there has not been an increase in output. Yes, a lot has gone on increasing pay (long overdue) but nothing has been done to get more operations. Because of their ideology they cannot bring themselves to contract out operations to the private sector. They keep hiring more public servants but what do they actually all do?
BTW, a good example of how to save money would be to cancel WFF and just give the money via a tax cut (or no tax for the first $20,000)instead of having more public servants administering it. They had to give an extra $180 million to the IRD to administer WFF. Is that a good example for you Molly? Almost a third of our Kyoto tax due.
May 21st, 2007 at 1:43 pm
an alternative ‘green budget’..presented/proposed by the greens..
would really be a good/(essential) thing for the greens to do..eh..?
policy as solutions..eh..?
because we/people would like to know how exactly differently the greens would ‘do things’..
‘cos green guys ‘n gals..you’ve got a bit of ground/credibility to catch up on..eh..?
‘cos the record to date is..
we all agree this labour government has overseen an accelerated degradation of our environment..
in their eight years in power..(that can’t be denied..)
and the greens have supported/succoured this government..
(for much/most of that eight years..)
is it drawing too long a bow to conclude that..to date..just going on the results/outcomes..
that the greens have supported/succoured that ‘..accelerated degradation of our environment..’..?
eh..?
and if not..pray tell how can it be seen any differently..?
and alternative budget proposals from the greens..
would..you’d think..
..be reasonably high on the green partys’ list of ‘things to do’..?
eh..?
or is it just a matter of coasting to the next election on the poll ratings..?
and ‘..not rocking the boat..’..?
and hoping it’ll all be alright..on the night..?
eh..?
phil(whoar.co.nz)
May 22nd, 2007 at 11:12 am
Kiwi Saver is an attempt to encourage money into a form of investment/savings that does not stimulate the residential housing market.
It also needs to reduce tax on interest income to 20% (to reflect that half of the interest return is just compensation for inlfation) and install a capital gains tax on rental property - a tax of this sort which was refundable if the house was sold to a first home buyer (or went into a new property/expansion of the housing stock).
Encouraging landlords to sell to their tenants or investing in new property to realise untaxed capital gain
1. results in more houses coming onto the market (increasing supply and restraining upward movement in price) as money transfers into new house construction (reducing longer term upward price movement as well).
2. creates an interest in price discounting to sell to a first home buyer (making houses more affordable for them).
May 22nd, 2007 at 11:14 am
The Greens also need to ensure that Kiwi Saver money can be used for home energy efficiency (insulation and heat pumps etc) and solar water heating.
That’s more effective than loans (which can remain for those over 65 and those without Kiwi Saver).
May 22nd, 2007 at 11:22 am
And why not campaign for the end of GST on food.
A broader reform would be 10 cents in tax for the first $20,000, moving to 30 cents at this point. This gives a $30 tax cut for those on the minimum wage (more for some working less than 40 hours at the minimum wage rate) and $10 a week for those on the average wage and above (those between the minimum wage and average wage would receive between 30 and 10 a week extra).
This could be financed by increasing GST to 15% (with a zero rate on food - so those on lower incomes are no worse off and yet have increased after tax pay). Increasing GST is part of restraining spending on cheap higher value dollar imports (which of course involves little of the food eaten) and is much more exporter friendly than cash rate rises.
May 22nd, 2007 at 12:15 pm
SPC said: And why not campaign for the end of GST on food.
Because this creates the sort of bureacratic tax nightmare that exists in Australia, where small business owners have to pay for accounting consultants to do their GST. You buy a few items for the staff kitchen and then have to go through the invoice item by item because some have GST on them and some don’t.
We need to be working to simplify the tax system, imo, not further complicating it. Similarly, if a Capital Gains Tax is introduced, I think it should be comprehensive, with an exemption only for the family home. The sort of exemptions SPC is proposing both complicate the system and give rise to a range of behaviours devised to minimise tax liability. The primary purpose of a CGT is to level the playing field between investment in property and investment in productive enterprise, rather than to expand housing stock.
BTW, GST is not really as regressive a tax as many people seem to think - because residentail rent and financial services, which low-income people spend most of their money on, are already exempt.
May 22nd, 2007 at 4:33 pm
Isn’t GST regressive in that because it’s a flat tax the impact on people with a lower income is more severe as a proportion of income? I think taking GST off fresh fruit and veges, despite complications, would be a good step towards making things easier for families trying to provide healthy meals on tight budgets.
May 22nd, 2007 at 5:51 pm
toad
In my opinion, the purpose of the CGT on rental property is to provide tax incentives for investors to expand housing supply and reduce the cost of housing - especially to new homeowners.
Easing financial pressure on people whose scarce dollars are used to buy food is again a priority.
I would rather have a people housed and fed than a nation with a simpler tax system (which serves whom, the taxpayers and tax collectors convenience?).
New Zealand has enough well respected and designed systems already and what does it do for the average worker/person?
Some increased tax on spending and broadening the incentive to save provides some correction to the structural imbalance in the economy. But otherwise some intervention to ensure incentives to landlords selling to tenants at lower prices or investing in new house construction is in the human interest - the people needing to be able to access affordable housing. However it’s possible this form of intervention would only be needed for a time and need not be permanent.
May 22nd, 2007 at 8:02 pm
Why not have a flat tax (around the 10% figure) and increase GST to 15%?
It will leave more money in peoples pockets, open up all sorts of possibilities and can only benefit those on lower incomes.
As an example those on the average wage can then chose private medical insurance as apposed to waiting in our pathetic public health system, this would free up the public health system for those on lower incomes who do not have medical insurance.
Irrespective of the political party you support there is not one person in NZ who can honestly say that our health system works or that we get value for money.
A low flat tax is the way to go, the country would then see real economic growth for the first time in years.
May 22nd, 2007 at 9:51 pm
molly67 said: Isn’t GST regressive in that because it’s a flat tax the impact on people with a lower income is more severe as a proportion of income?
It would be if the existing exemptions were not there. But if a family earning $600 per week pays $300 in rent and $100 in financial services, they only pay GST on the $200 they spend on day to day living - i.e. the GST paid is 4.167% of their income.
By contrast, a family earning $2000 per week with the same accommodation/financial services expenses who spend all their disposable income and save nothing pay GST on $1600 - i.e the GST paid is 10.00% of their income.
So it is actually progressive, unless you actually save a significant proportion of what you earn.
I agree, Molly, that taking GST off fresh fruit and veges would make things easier for families trying to provide healthy meals on tight budgets, but think that raising the minimum wage and extending the “In Work” component of the Family Tax Credit to all families with dependent children, rather than discriminating against those reliant to some extent upon (even partially abated) welfare benefits, would be an even better look and would simplify, rather than further complicate, the tax structure.
Plus a Capital Gains Tax, getting rid of the LAQC tax break, and banning non-resident investment in land - the combination of which would get property prices under control and actually give low-middle income earners some chance to become home owners.
But I think Cullen is scared to go down that path - his option to control inflation is through Kiwisaver, which will reduce wage demand as a consequence of the employer contribution, rather than attack the more significant inflationary driver, which is property prices.
May 22nd, 2007 at 10:03 pm
big bro said: As an example those on the average wage can then chose private medical insurance as apposed to waiting in our pathetic public health system
Yeah, we tried that in the late 1990s with ACC, and it was an absolute disaster. The problem with private insurers dealing with people on low incomes is that the insurers can just decline claims willy-nilly, and the claimants don’t have the financial resources to fight the legal battle necessary to establish their claim.
Health insurance works for people on middle to high incomes because the insurance companies know they will get the pants sued off them if they systematically wrongly decline claims.
As soon as you get a whole lot of low-income people into private health insurance, the cowboy insurers will get into the picture, in the full knowledge that the people they are insuring cannot afford to legally challenge their decisions to decline or underpay on claims.
May 23rd, 2007 at 2:45 am
Toad, You can add the Land Transport Fund to your list of GST exemptions, unless the GST compensation specified in the Transit NZ Act was dropped when Transfund and the LTSA were merged.
There is no obvious reason why this compensation is payed. It can’t be because of a reluctance to put a tax on a tax otherwise both petrol taxes would be exempt. This is all the more bizarre because the dedicated petrol tax has only ever been a tax in name but not in nature. On Oct 28 1927 when Parliament debated the resolution amending the customs tariff to provide for a duty on petrol to be paid into the Main Highway’s Fund every member that spoke positively mentioned “the principal that the user shall pay.”
To add insult to injury, the LTF assists local authorities funding of roads and public transport. Rates are essentially a property tax therefore GST on the regional council’s contribution to public transport is a tax on a tax but the GST on the LTF contribution is a tax on a user charge.
Often it seems that when politicians are given the choice of doing things in a simplest, most straightforward way or the most convoluted way possible they inevitably choose the most convoluted way.
May 23rd, 2007 at 2:53 am
I think the government should content itself with just two income taxes.
One on all money “incoming” to individuals and businesses.
The other on all goods “incoming” to this country. As with GST this would be a single rate, no exemptions tax.
May 23rd, 2007 at 12:54 pm
I am bemused by how you all think a CGT will “get property prices under control” and “expand the housing supply and reduce the cost of housing”.
Investors follow the maxim, buy well and never sell. The Oz experience is just that. Investors held onto property and because of that avoided CGT. So no extra houses on the market and if they do, they just add the CGT on.
And you are dreaming if you think that prices will crash. It has never happened here. All that happens is people expectations of a sale price are adjusted downwards slightly. The market does not operate in either sharp gains or falls.And banning foreign investment is just a naive joke. The country would collapse. Maybe thats what you really want?
Our inflation is being driven by Government spending. 24000 extra public servants is a horifying rise for no increase in productivity. Our economy is back to where it was in the 70’s. Cullen is bereft of ideas and his idealogy has got him locked onto a course he cant change. So much for Clarks statements of being in the top half of the OECD. We are drifting towards the bottom.
BTW, knowing I sound like a Nat supporter I should explain Blue refers to my hair colour (Red) and that I am not.
May 23rd, 2007 at 1:10 pm
Blue - I’m not talking about banning foreign investment - I’m talking about banning land sales to foreigners. Of course we need foreign investment, but we need it in enterprise, not in property.
And I would also disagree with you about the primary drivers of inflation - it is the high NZ dollar that sees both consumer goods flooding into the country as people spend up large with money they don’t have, and the out of control property market that sees speculative foreign capital flooding into the country.
Government spending plays a part, but Cullen has actually been extremely parsimonious in that regard - squirreling away billions in the Super Fund and running massive budget surpluses.
May 23rd, 2007 at 2:12 pm
A lot of foreigners buy property NZers dont buy. Very few buy standard suburban houses unless they live and work here. A good example is how they invest in our tourist industry by purchasing Hotel rooms as a form of passive investment. I think the current rules work well enough with regard to large land sales, think high country and coastal farms. Yes, I know some have said none get turned down but thats really because no one applies unless they are sure they qualify.Also, lets face it, the land aint going anywhere once theyve bought it. And we still control what they do with it. Some foreigners also do very good things with their land. Kauri Cliffs owned by billionaire Julian Robertson is an international icon, not sure about Shania Twain though….Rothschilds organic experiment in Banks Peninsular, maybe.
Cullen seems to take the view that we cant be trusted with tax cuts and we would all buy Plasmas. Well if thats the case (not in my house, I want to get rid of my mortgage so thats where mine would go) then put a sales tax back on brown goods.
Cullen has shifted the debt from Govt to private. And their spending has been huge, billions extra over any other govt we have seen. They are one of the main causes of the inflation we have now and we all end up having to suffer for it. 10%+ rates for mortgages for gods sake.
Capital is flooding all around the world. We have never seen this much cash in our history. Its a problem (!) a lot of countries face. Especially poor ones like ours.
I disagree that our property market is “out of control”. Sure, its been one heck of a boom. Personally I thought it would give out last year but has carried on. Slowing now I think. Then it will ease, prices will “soften” and inevitably will creep up again over the next seven years.
Affordable housing is more about issues of land supply,the consent process and charges ($85,000 Reserve Contribution to Council now for a new 2 bedroom auckland apartment!) and people’s inablity to save or settle for what they can really afford.
May 23rd, 2007 at 2:15 pm
Toad,
Remove accomodation costs from the CPI “shopping basket” and inflation almost disappears.
The reason accomodation costs are rising fast enough to create the false impression of “general inflationary pressures” is because middle income New Zealanders are competing to buy rental property.
They are doing this to claw back the money that Cullen has been taking from them. They claw this money back through both tax right-offs and through the accommodation allowance, which virtually makes it a government gauranteed investment. To complete this “virtuous circle” the accomodation allowance is indexed to inflation whereas tax brackets ae not.
Increasing interest rates further increases accomodation costs and makes the dollar ever more attractive.
May 23rd, 2007 at 2:48 pm
Kevyn, yeah they are buying rental property alright but that doesnt translate to an increase in rent charged but agree the ability to run renters as a business and claim depreciation, interest, maintenence etc and offset against personal tax is distorting the “real” return . (about 5% usually). Interestingly those who rent to Housing Corp usually get paid lower than market rent but go for it because of no tenant management and maintenence issues.
May 23rd, 2007 at 3:52 pm
BJ,
May I ask: what would it take to change your mind? That is, what information would I have to provide you with in order for you to decide that anthropogenic global warming is an invalid theory?
May 23rd, 2007 at 3:53 pm
Hah, just posted that on the wrong thread. Apologies.
May 23rd, 2007 at 3:54 pm
No, this *is* the right thread, it’s just somehow drifted to accomodation costs
Time for my afternoon coffee I think …
May 23rd, 2007 at 5:36 pm
“the out of control property market”
It isn’t out of control. For the most part, it is correctly valued. The problem is that wages haven’t kept up.
CGT won’t solve the price and supply issues, they’ll simply make matters worse. As I property investor myself, I couldn’t care less about CGT because property is something I buy, not sell. The tenants pay whatever the property costs to run + profit.
The only way out of this loop is to increase supply, which means freeing up more land for development, or converting a lot of the existing property stock to medium/high density.
May 23rd, 2007 at 8:32 pm
Toad
How about commenting on what I actually said?, nowhere did I advocate private health insurance for all, I merely said that if you gave a tax cut to those in the middle classes then they could chose to take out private health care, this would greatly ease the burden on the public health sector.
I notice that once again you had not put forward any other plan, I can then only assume that you are happy with the current performance of the health sector in NZ, remember this is the same sector that has had four billion poured into it yet it still manges to perform LESS operations per year.
The incoming National govt could greatly improve the efficiency of the health departments overnight, all they would have to do is fire 90% of the administrators hired by this Labour govt, I am sure you will agree that we need to make the public health sector far more efficient.
Personally I believe that the govt has no place being involved in the heath sector, I would far rather that they contracted out all health services or gave Kiwis a tax credit for private health insurance.
May 24th, 2007 at 1:14 am
Toad - I had to laugh about your comments on Cullen being stingy.
When he came in to power, he took 19 billion off us in tax each year.
Now he takes 30 billion MORE. Not 30 billion total - 30 billion MORE.
Government spending has gone up massively - what used to keep the country going for more than 30 months now gets spent in 12.
And what does an additional $30,000,000,000.00 buy?
No additional operations, few additional police, fewer benefits, no major infrastructure.
Where does he blow the additional $30,000,000,000.00 or and ADDITIONAL 1 1/2 years spending per year? I can’t see any great difference.
If we want to stop inflation and tthe high dollar in this country, we don’t need to stop spending - we just need to stop ONE PERSON spending.
Perhaps we could all go back to 1999 spending and 1999 tax rates, divy up the $30b and get $7500 for each man, woman and child, or $15,000 back for each worker - work it out. That’s how much additional tax is being paid in this country compared to when Labour came in.
May 24th, 2007 at 7:23 am
Duncan
The only thing that challenges a theory really, is experimental evidence that shows that its predictions are not valid. In Climate Science this is actually a very difficult thing. I cannot disprove the theory that “It’s the Sun” … because the predictions both theories make are extremely similar. The “It’s the Sun” theory does not completely explain several issues relating to CO2 but incompleteness does not invalidate a theory.
What will do it will be time. CO2 theory, which is almost the same as AGW (though AGW contains issues around Albedo and other effects of people, the bulk of the explanation is Greenhouse), expects that the rising CO2 and Greenhouse will continue to force temperatures higher. Some Solar influence theorists are banking on a decline based on some form of decreased insolation. Others however are also predicting continued increases. Most immediately I expect to see the predictions of declining temps go by the wayside. From there we will (hopefully) see some declines in CO2 which should be followed (at some 30 years temporal distance) by declining temperatures.
The problem with disproving anything in Climate Science has to do with the interconnections between all the different forcing factors. There are almost always alternative explanations available.
If the CO2 continues going up but the temperatures start going down, that’d be a big hit against AGW, but the alternative of adding sufficient aerosols and albedo shifts in the process of burning some alternative fuels would have to be considered as well.
The thing is, the only way to PROVE anything is to do the experiment - with the whole damned planet, and we don’t have a control for the experiment and we don’t have another one to go to after the environment here “goes South”. Eventually our children will know. Me, I just have to look at the theories and mostly I judge by completeness in the absence of absolute failures of prediction.
Which is why the issue is so rancorous. There really is no PROOF that can be used, of anything, but the potential consequences of error are pretty severe for everyone. It isn’t like Engineering, the bridge stands the load or it fails and we know the reasons. There’s too many inputs and not enough data. Can’t really be sure of temperatures more than a thousand years ago.
The things that affect my judgement of which theory to believe most likely are
Completeness. CO2 theory predicts a certain amount of temperature rise, which is apparent in our measurements of the planet to date. Inconveniently the effects lag the introduction of the CO2 by decades… so bulk changes in temperature owing to current CO2 levels show up in the future. CO2 theory explains itself as well… in the sense that the rapid measured increase in global CO2 has an Anthropogenic source. “Rapid” comes from the measurements that show that it is rising 50 TIMES as fast as it has ever risen in any previous similar period. This is “pretty good” data in that it is taken from entrained gases in the ice cores.
Solar theory does not explain the increased CO2, ignores the physics and the models that indicate that there should be a temperature rise from that increase and attributes everything to some subtle or not so subtle changes in solar input. Some of it is plausible, but on balance it leaves off from explaining some things, and the data suggesting such a large fluctuation in the solar input to the planetary thermal balance is thin.
The other thing is Consequences.
Asserting that AGW is wrong and the efforts made to restrain CO2 emissions are wasted, the cost of that waste is a quantifiable but liveable alternative for human civilization even though some people will die.
Asserting that AGW is correct and yet no meaningful restraint of CO2 emissions occurs leads us to scenarios where human civilization may not on a global scale even survive, and in which a vast number of people will die.
That’s my reasoning on the topic…. my time is up. I have to go again.
respectfully
BJ
May 24th, 2007 at 7:24 am
big bro said: How about commenting on what I actually said?, nowhere did I advocate private health insurance for all … Personally I believe that the govt has no place being involved in the heath sector, I would far rather that they contracted out all health services or gave Kiwis a tax credit for private health insurance.
Well, you’ve said it now, if you didn’t say it before!!! So I guess I was correct about what you were advocating all along.