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Labour’s alternative budget

Written By: - Date published: 1:00 pm, June 25th, 2014 - 139 comments
Categories: david cunliffe, david parker, labour - Tags:

PRESS RELEASE

A Labour Government will run surpluses while investing in health and education, and paying off National’s record debt, Labour Leader David Cunliffe says.

“Our Economic Upgrade will transform the New Zealand economy to higher value and higher incomes through higher investment, innovation and industry development.

“This will grow our economy and secure well-paid jobs and a more prosperous, sustainable future. This transformation will be based on a solid fiscal foundation.

“Labour will introduce a new, progressive top tax rate of 36 per cent on income over $150,000; that’s the top 2 per cent of income earners. We will also raise trustee income tax to 36 per cent to avoid trusts being used as tax avoidance vehicles.

“This combined with our capital gains tax will allow the Labour-led Government to run surpluses and pay down National’s record debt by the end of our second term,” David Cunliffe says.

David Parker says: “Everything is paid for, plus we are in surplus.

“Labour will set aside money to ensure service levels in health and education are maintained to meet inflation and population growth. Any new policies we announce for these sectors will be clearly and transparently funded by new spending.

“Labour will also clamp down on tax avoidance by multi-national corporations because we believe that everyone should pay their fair share.

“All Kiwis want a well-paid and secure job, the chance to buy their own home and to be able to afford to raise a healthy and happy family. To give every Kiwi those opportunities, we need to grow a strong economy.

“That means we need solid and stable economic management. Labour’s fiscal strategy is the cornerstone of a positive change for New Zealand that only a Labour-led government can provide,” David Parker says.

139 comments on “Labour’s alternative budget”

  1. Lanthanide 1

    I guess the move to 36% was only because they couldn’t justify a 39% tax on trusts. But at least they aren’t repeating the 1999 mistake by Labour.

    Personally I think we should just copy Australia’s tax rates, they look pretty good and it’d be impossible for the right wing to claim capital flight:
    0 – $18,200 0%
    $18,201 – $37,000 19%
    $37,001 – $80,000 32.5%
    $80,001 – $180,000 37%
    $180,001 and over 45%

  2. The Lone Haranguer 2

    Works for me.

    I sell my Trust owned properties to my newly formed Company for their fair market value and pay tax on those rental profits at 28% (much friendlier rate than the 36% for high earners) and the company pays no dividends to me.

    As the Trust has equity, it advances the $$ for the purchase to my company interest free, repayable upon demands of course.

    Company uses its tax paid profits to repay the trust its loan (not income so no taxes involved) and the Trust just chooses to do a capital (read tax free) distribution to me. Or to just pay out my current account as thats in credit too.

    So I get to pay 28% tax and still use my money, and will probably arrange my affairs so that I personally earn around $70,000 to make good use of the progressive tax system in place.

    And I can unwind the deal when we get the next National Government……..

    Works for me.

    Note to the Labour People: You MUST ALIGN the top tax rate with both the company and the trust tax rate or else accounting and tax types will run buses (electric ones of course) thru the loopholes.

    • The Real Matthew 2.1

      You’d want to be careful not to trigger a depreciation recovery if the Trust owned the property prior to nil depreciation for Buildings coming in.

      I’d also like to hear your commercial reason for doing this as your scheme looks like a tax avoidance scheme that would breach the overarching avoidance provision.

      • The Lone Haranguer 2.1.1

        Yes it would trigger depreciation recovered. But I have to pay that money sooner or later.

        My reasons for such a change is primarily based around my age and poor health, definitely nothing to do with tax avoidance of course. No Government would argue against a mans declining health.

        Although the scenario I described is factually accurate, the reason for listing it it to stress that us accounting and tax types run buses thru dopey tax policy.

        Again Labour MUST ALIGN the top tax rates for trusts, companies and individuals or else theres room to avoid the taxes.

        • Tamati 2.1.1.1

          “No government would argue against a mans declining health”

          Probably not, but the commissioner for IRD probably wouldn’t give a fuck. He’d probably chase your estate too, after you die.

          • The Lone Haranguer 2.1.1.1.1

            You may be right, but my experience of the IRD is that they are actually very reasonable to deal with now and nothing like they were back in the 90s when Henderson was getting Hell from them.

            I would suggest that they are one of the best Government departments for dealing with now.

        • Ad 2.1.1.2

          So just to clarify: they have aligned the trust and top personal rates.

          But they are not dumb enough to further align that with the company rate as that would have serious competitiveness effects.

          • Colonial Viper 2.1.1.2.1

            The shareholders of NZ’s highly profitable big Aussie banks plus Telecom, MRP, Meridian etc. thank the Labour Party for leaving the company tax rate at a nice low “competitive” figure; they would have been forced to leave the country otherwise.

        • Sacha 2.1.1.3

          Fair enough. How does 45% across the board sound?

      • Tamati 2.1.2

        Sounds a lot like Penny and Hooper.

    • Tracey 2.2

      Exactly

      The tax rate is a glaring hole for legitimate tax avoidance. Tax lawyers and accountants trying to work out if theyshould vote for labour cos of how it will improve their workloads.

      This is what happens when you accept the system and tinker at the edges

    • Bearded Git 2.3

      Lone-fairness is the name of the game, though that is clearly irrelevant to you.

      The change of structure you are suggesting from a trust to a company is too complicated, expensive and time consuming for most people.

      Labour is cleverly hitting all of the people who have set up trusts to avoid tax. It’s a rort.

      • Colonial Viper 2.3.1

        The change of structure you are suggesting from a trust to a company is too complicated, expensive and time consuming for most people.

        Yep. But that means that the 10% will get whacked hard, but the 0.1% will walk away scot free yet again.

      • The Lone Haranguer 2.3.2

        BG, my fairness and your fairness may be different, but both are based upon opinion only. There is no “tax fairness” that is factual.

        You could quite rightly argue that I am rorting the system and I could quite rightly argue that I am paying too much tax.

        My example, tho accurate to my situation is really just there to show the loophole that needs to be sorted before Labour can implement their proposed tax changes.

        I studied taxation under FCT (Frank) Owen back in the 80s when Muldoon was controlling everything. Frank told us it was our duty as soon to be accountants, to wake up at 4am the morning after the budget and figure out ways for our clients to beat any tax increases.

        New Zealand needs a simple and inherently fair tax system that is easy to understand, easy to use and very hard to rort.

        • Colonial Viper 2.3.2.1

          New Zealand needs a simple and inherently fair tax system that is easy to understand, easy to use and very hard to rort.

          And that deserves a thumbs up…same with a social safety net via a UBI

        • Sacha 2.3.2.2

          “based upon opinion only”

          how Joyce must love you

    • Lanthanide 2.4

      You seem to have missed the point where the current company tax rate is 28% and the trust rate is 33%. So you can already do exactly what you’re saying.

      It was National who dropped the personal income tax rate from 38% to 33% and the trust rate to the same level, claiming they had to do it to close the tax loop-hole. Then they dropped the corporate rate from 30% to 28%, so the 5% gap between the tax rates is exactly what it was under Labour (38% vs 33%).

      • Colonial Viper 2.4.1

        I think TLH is saying that Labour is ramping up the incentive differential even further

        • Lanthanide 2.4.1.1

          Yes, but that’s not how he’s presented it. He’s made it look like a brand new thing he’ll be able to do under this policy, rather than something that parasites as he’s described wouldn’t already be doing. There is already a 5% incentive, so given the rich already have accountants, they’d be doing it.

          Furthermore he suggests it will all be unwound with the next National government, when actually this current National government had a chance to close the loophole, or at least reduce it, and instead they kept it exactly the same size while lying that they’d closed it.

          • The Lone Haranguer 2.4.1.1.1

            Then I offer my apology to you all.

            You are correct that its not a “brand new thing” but my point was that when messing with tax rates (as Labour is proposing) aim for rates where no one group gets favoured over the other. Or do a major rewrite of the tax laws to bring in some form of fairness.

            The last time this was actually done, was during the Lange government when Douglas cut the Muldoon rate from 66% to 33% and introduced GST.

            Im in favour of a UBI, the elimination of income tax and the introduction of a Hone Heke transaction tax along with GST increasing to 20% or 25% (including on imported stuff from Amazon etc)

            Our current tax system wont get fixed with a Labour Party lead tinkering around the tax rates.

            And when Labour introduced the 39% tax rate, you would be amazed how many private companies paid their shareholder/workers $70,000 and left the balance in the company. Shareholders who needed the extra $$ just did drawdowns on their current accounts. The cleaning out of the Company accrued profits came about via massive dividends after the tax rates were cut under National

  3. fisiani 3

    “Labour will also clamp down on tax avoidance by multi-national corporations because we believe that everyone should pay their fair share”

    So is this the Google and Facebook ban that David Clark talked about..

    oops My Bad . Labour quickly retreated from that suggestion. Today’s plan hinges on setting up a special commissioner for tax avoidance who would focus on multinational corporations.

    Under that commissioner, a new corporate tax unit would “embed” Inland Revenue Department (IRD) auditors in corporations which have a history of tax avoidance either in New Zealand or abroad.

    The embedded IRD officials would review multinationals’ financial plans where they may affect their tax bills to prevent tax avoidance from occurring in the first place.
    IRD spies everywhere.

  4. The Real Matthew 4

    Though I’m not a Labour voter I’d like to commend them for coming up with a votable policy.

    In previous times the raising of the top tax rate has occured at the $70,000 level which is too low in my opinion. Raising the top tax rate to 36% from $150,000 makes more sense as it targets the demographic you want to get at with this policy.

    The flip side is that the Trust tax is going to be easy to avoid. It will be beneficial from a tax perspective to pay trust income to any beneficiary (provided they are not a minor) up to the level whereby that beneficiary earns under $150,000. That’s a lot of income in many instances.

    • lprent 4.1

      In previous times the raising of the top tax rate has occured at the $70,000 level which is too low in my opinion

      It was at $60k, and it wasn’t at the time – 1999. Like this one it was targeted then at the top 2% of earners.

      The problem is that we don’t have a good mechanism to shift the tax bands as incomes rise with inflation and wage increases. This is a fiscal drag problem. So by the end I think that it was about 10-12% of income earners were in it.

      So band changes require slow legislation, computer upgrades, and consequently are frigging awkward to roll out. And governments like fiscal drag in terms of ever increasing amounts of tax take.

      Apart from the costs of getting payroll programs country wide to shift, the other technical issue with shifting bands was that the lump of old iron that the IRD calls a computer system, and is slowly currently replacing, wasn’t flexible enough to have frequent taxation shifts. They barely managed to get working for families working.

      • The Lone Haranguer 4.1.1

        “It was at $60k, and it wasn’t at the time – 1999. Like this one it was targeted then at the top 2% of earners”

        Actually, a policy that focuses on the top 2% is a quite sound idea. Despite what the guy from the Taxpayer Union says, its actually very hard to uproot my buildings and my business to Oz to reduce my tax burden.

        Really, its the multinationals who have the ability to shift profits between tax jurisdictions, and to pay almost no tax here, and that is the situation under the current tax regime and will continue under any Labour lead regime.

        Personally, I would like to see a higher GST, the introduction of a transaction tax and the elimination of personal income tax. But theres no party out there that agrees with me.

        • Lanthanide 4.1.1.1

          You’d be paying more tax in Oz anyway. Their rates are 37% that kicks in at $80k, and 45% that kicks in at $180k.

        • Draco T Bastard 4.1.1.2

          Low tax for me, high tax for thee

          GST is regressive and results in poor people paying a higher proportion of their income in taxes than the rich and you want more of it?

          Basically, what you’re asking for there is to let the rich off of paying taxes altogether.

      • Lanthanide 4.1.2

        Cunliffe proposed an automated bracket adjustment to account for inflation and was lambasted by National for the “chewing gum tax cuts”.

        So that’s why we can’t have nice things.

      • Clemgeopin 4.1.3

        Key and some posters on other websites are peddling the scare of Kiwi Saver funds being subjected to CGT. I did not see any announcement from Labour regarding that.

        My own understanding is that Capital Gains Tax only occurs when you SELL something , like a ( non primary) secondary house or land or may be business. I don’t believe Kiwi Saver will attract CGT because one does not SELL the Savings from Kiwi Saver.

        I am interested in comments/advice on this issue from those in the definite know.

        • Clemgeopin 4.1.3.1

          A poster on TV3 web side said that ‘dividends’ on investments will attract CGT and says therefore it affects Kiwi Saver.

          My reply was as follows:
          I doubt that. I will need to see the announcement from Labour first and not from Key or some RWNjobs. But EVEN if you are correct, it could easily be exempted by law because it will be a government economic initiative and includes compulsorily requirement to save and the funds are compulsorily locked until the retirement age.

          As I said, this issue does need clarification.

        • john 4.1.3.2

          I was looking for that in Labour’s policy as well. I’d previously understood they planned to tax shares and rental properties for capital gains.

          If they do that, then over two million Kiwisaver accounts will lose a big part of the returns they make.

    • wtl 4.2

      The flip side is that the Trust tax is going to be easy to avoid. It will be beneficial from a tax perspective to pay trust income to any beneficiary (provided they are not a minor) up to the level whereby that beneficiary earns under $150,000. That’s a lot of income in many instances.

      Yes, but the point of the Trust tax rate isn’t to put an additional tax burden on those who earn less than $150k, but instead to simply ensure that those that earn $150k or more can’t hide it in a trust to avoid the higher tax bracket.

      • Lanthanide 4.2.1

        “but instead to simply ensure that those that earn $150k or more can’t hide it in a trust to avoid the higher tax bracket.”

        Yes, but now they’ll hide it in a company instead, which has a 28% tax rate.

  5. Mary 5

    Good to see Labour sticking to its guns on welfare and the non-employed poor. Consistency – that’s what we need.

    • blue leopard 5.1

      There may be another way that governments can address the issues you cite of welfare and non-employed poor, however the only way I can see that can be done is through having money to either create jobs or raise welfare or both – this policy of Labour is a way of gaining more money without taxing those who will be hit by greater taxation and therefore vote against Labour.

      CV and DTB refer to ‘just printing money’ as a way governments can meet the greater revenue required to address the serious issues you raise. I am unsure whether this approach can simply be started up or requires a process to get to the point where money can ‘just be printed’ It must also be noted that this idea remains controversial and may be too ‘scary’ for the majority of voters to vote for, along a similar vein if Labour just said ‘we are going to raise welfare benefits and create jobs for those who can work this may well cause certain groups of New Zealanders to vote National rather than having this issue addressed, sad as that seems, I believe this may well be the case.

      I think Labour are sending out fairly strong yet somewhat coded signals that they know and intend to address the issues faced by those in the worst circumstances in New Zealand – I think this is about the only approach that can be pursued because in case you haven’t noticed there are a large number of New Zealanders who blame the poor for being poor and appear to express a combination of resentment and misguided envy toward these people. I believe the Labour Party recognises this and are addressing the issues in the best way they possibly can considering the sorry state of peoples’ attitudes in this country toward those in less fortunate circumstances than themselves.

      Or would you prefer for Labour to be blunt about the issue and risk not getting into government at all? How would that address the issues you feel need addressing?

      • Mary 5.1.1

        The trouble with such a Machiavellian approach is that it relies on trust and deception and, importantly, leaves the “blame the poor for being poor” attitude completely free to blossom into becoming an accepted part cultural fabric / values etc.

        It relies on trust because we must trust Labour to do the right thing when elected. The trouble with this is that Labour between 1999 and 2008 introduced a whole raft of welfare reform you’d expect from a National/Act government, many of which National tried but failed to introduce in the 1990s because the resistance was too great, including from Labour. And if you say “well, that was then and now is now” I’d say there’s no evidence at all to suggest Labour would do anything differently if in government, and every bit of evidence to suggest it wouldn’t do anything differently: heck, Labour’s even now supporting oppressive welfare reform introduced by the government!

        It also relies on deception because in order to get the votes its needs to become government it must dupe voters into believing “Labour’s tough on beneficiaries” when, if what you’re saying is correct, it isn’t at all. What happens then when Labour rolls out its wonderful new “participation for all” welfare scheme? Those voters who would’ve voted National had they known the truth would say “bloody Labour, can’t trust them, never voting for that lot again.”

        And by taking this line our collective hatred for the poor continues to balloon unaddressed, so every three years the fractured Left plays this stupid hush-hush game so that a bunch of untrustworthy Labour MPs can get elected to form a government that continues to hammer the poor in the same way it’s done for the last 30 years, whether in government or not.

        Some strategy that is. Not to mention the cultural mess this leaves in its wake. Yeah, great strategy.

        • Colonial Viper 5.1.1.1

          It relies on trust because we must trust Labour to do the right thing when elected.

          This is the critical point. The broad Left must FORCE a new Left govt to do the correct thing when it is in power, and hold it to firm account every day.

          If any political compromises are to be made – then capital has to make its fair share of compromises too.

        • blue leopard 5.1.1.2

          @ Mary,
          You raise some fair points of concern yet it simply ends up with the result of being more concerned about catering to the fuckwits who have attitudes based on ignorance, rather than bypassing them having the issue addressed.

          For example: The best start announcement was a policy that will lift unemployed parents income – that is pretty clear – did you hear the media and the bigoted types screeching about that aspect of it? No because they are too daft to work it out. The were gibbering on about how the threshold was too high instead. It requires something to hit them in the face for them to react to it and Labour didn’t bother being blatant and in doing so bypassed all the hysteria. Take care you are not conducting the same ‘only exists if it hits you in the face’ approach toward policies that Labour are announcing.

          Have you examples of Labour cultivating those ‘beneficiaries choose it’ attitudes? Shearer did it with his ‘beneficiary on the roof’ routine; however I haven’t heard anything along those lines since Cunliffe has been leader. I have heard plenty that quietly undermine such attitudes – ‘we all deserve a share’, ‘we need to create jobs there are not enough’, ‘ladders are being pulled up’, ‘opportunities are being taken away’ Cunliffe’s ‘get out of your leafy suburb’ comment that got slammed by Key/Media was all about acknowledging the poverty that is occurring in this country and responding to National’s denial of it and Grant Robertson only yesterday in parliament was conveying loud and clearly that ‘governments haven’t even been aiming for full employment’. Where, therefore, is the duping ‘voters into believing “Labour’s tough on beneficiaries”’ coming into it? From your imagination perhaps?

          They are providing information that anyone with half a brain can see that they have a better attitude toward what is causing the poverty- government policy – (not ‘choices’) and therefore how to solve it: via government policy, so the only people who would still consider Labour are blaming the poor and therefore going to punish them are those too thick to work out otherwise.

          Stop doing National’s work for them
          p.s. How do I know you are not a concern tr0ll?

          • weka 5.1.1.2.1

            The problem is that unless Labour recant the painter on the roof story somehow, we can never trust them. At what point will they be able to be honest and start addressing the bene bashing culture? At what point will they make actual redress to welfare policy? Are they going to roll back Bennett’s reforms? When? How will we know?

            Sorry, but I don’t like being a scapegoat for the greater good.

            btw, I think it’s important to differentiate between the two memes: blame the poor for being poor, and bene bashing. There are people with empathy for the poor, just not if they are on a benefit. That distinction shouldn’t be lost because it’s part of the NACT agenda of creating the division between people who should be allies – the deserving poor and the underclass who everyone else can hate on.

            • Colonial Viper 5.1.1.2.1.1

              In terms of “Labour being tough on beneficiaries.” I want to copy and paste in full a comment Mary made a while back (my emphasis):

              I’d really like to share your optimism, but how do you do that or expect that to happen when Labour keeps crapping on people, such as with the two social welfare amendments you refer to that Labour voted for? (By the way, I know about the Bill that extends criminality to partners of beneficiaries without the need for knowledge of the offending and that also removes the power not to recover debt, but what was the other one?)

              I’m more of the view that the rot is too deep and that if Labour is ever going to come right it needs to be destroyed at this election in the same way the nats were in 2002. It’s the only way we can try to regain some semblance of a true left party. I’d like to see Labour get trounced so badly it’s reduced to being regarded as a minor party. It is time to convey nothing but complete and utter disdain for Labour because nothing less has the slimmest chance of making them understand. That’s how bad Labour’s become.

              http://thestandard.org.nz/a-new-zealand-for-100-of-new-zealanders/#comment-804890

            • blue leopard 5.1.1.2.1.2

              @ Weka,

              I have just written two pretty lengthy comments on things I think Labour are doing that engenders trust for me so why are you asking me these questions?

              Considering I have suggested these and provided links and other suggestions in a similar conversation with you and Mary and all I got was ‘yes but… [I'm not prepared to trust them no matter what you say]…’ and ultimately some sort of ‘oh well you must be (actually it was are) a ‘loyal labour supporter’ so you would say that’ type response (which is incorrect by the way – loyal lefty not pinned to one party). So it seems like a futile game that is starting up again and I am not prepared to repeat it.

              To date Labour have rolled quite a few people since the bene bashing comment – Mr Pagani and Shearer come to mind – and Cunliffe got in a whole lot of new staff didn’t he? So it would appear a lot of the people who set up that bene bashing attitude have recieved consequences for such idiocy and aren’t there anymore.

              Perhaps you could answer some of the questions I posed?

              Or perhaps you could answer your own question yourself seeing as you are the one arguing for people who have lost trust? What do you think Labour could do or say to make people who have lost trust trust them again?

              Ultimately I don’t think there is anything that Labour can do or say if a person is dead set not to trust them. In which case there are other parties on the left that can be voted for for people who find themselves feeling this way about Labour.

              The trouble is, though, when people start dissing Labour too much (CV’s quote 5.1.1.2.1.1 above is a good example) I really think that is more likely going to be the type of message/attitude that is going to stop people voting altogether rather than voting for smaller parties because it appears people still think in a fairly binary manner toward the election decision. e.g. ‘Oh so Labour are fucked, that means National will get in, why bother voting’

              Whilst I agree it is good to define and clarify differences, there is a link between ‘blame the poor’ and bene-bashing. The whole ‘blame the poor’ idea is the foundation of bene-bashing if people didn’t believe people ‘made choices’ that got them there then the whole argument falls down/anger is diffused – I guess there are people who are more empathetic toward the poor than those who are poor who are on benefits, though it is odd isn’t it because I believe the majority of the most poor are on welfare, so that is interesting that you point that out.

      • Colonial Viper 5.1.2

        Or would you prefer for Labour to be blunt about the issue and risk not getting into government at all? How would that address the issues you feel need addressing?

        This is a common or possibly deliberate misconception of the Thorndon Bubble.

        When David Cunliffe took the leadership reins last year he was talking hard core lefty language around a ‘true Red Labour’ which wasn’t going to be like National but with “anaesthetic.”

        And Labour’s polling in the MSM polls was the highest that it has been since. Lesson – the real NZ electorate wants a gutsy, forthright, principled Labour to stand tall and resolute. The cautious (or cowardly) Thorndon Bubble advisors want nothing of the sort.

        CV and DTB refer to ‘just printing money’ as a way governments can meet the greater revenue required to address the serious issues you raise. I am unsure whether this approach can simply be started up or requires a process to get to the point where money can ‘just be printed’

        Step 1
        The Reserve Bank credits WINZ’s bank account with an extra couple of million a week.

        Step 2
        WINZ pays every beneficiary in the country, an extra $30 pw. Those on Super can get an extra $10 pw since they already got their $20pw back earlier on.

        Step 3
        DONE. New money successfully issued to the bottom 50% and immediately spent into the local economy.

        Now, that wasn’t hard, was it?

        • blue leopard 5.1.2.1

          Yes that is the best reasoning I have heard so far CV, re the amount of support around the time of that Leadership campaign – and I agree that people like forthright leadership – but were those 3 leaders speaking loudly out about raising welfare? I don’t think so.

          There was a lot of media airtime for Labour over that time and most of it was fairly positive and promising. I feel certain there is a correlation between simply airtime a party gets and poll results rising and could explain at least some of the jump in public polls.

          Cunliffe did well in politically active leftwing circles (i.e. the Labour membership)- for sure – with his stance and that is how he won the leadership (obviously), but the jury is still out for me on if Cunliffe/Labour were to come out and made an announcement that welfare was going to be raised by $100+ across the board (which is fairly well what is needed) whether this would be received as well by the wider public.

          Have you even been unemployed CV? I have spent quite some time on welfare and it would seem to me that there are a huge amount of people in the circles I have traveled in that really have very little empathy and even less understanding of what it means to be unemployed and how one ends up there (especially when ‘stuck’ there). People are quite content to come out and say some pretty counterproductive things when one is in such a situation. This is one of the problems with being on welfare for any length of time – there is a tendency to need to keep away from people in order to avoid really nasty and judgemental interactions with people. Having too many of these experiences just sinks one further into the cycle of despair making it more likely one gets stuck and the tendency to shy away from people because of it also is a trap because the less one socializes the less one is likely to get a job.

          I would really appreciate some more positive comments re Labour especially from you because yes Greens and Mana could win the election between them – but the most likely way the left win is for Labour to be in the mix too and constantly putting them down and painting them in the worse possible light is getting between me and experiencing a decent government by the end of the year. And it is not a good idea to get inbetween Leopards and where they need to get to. Don’t you know that already? GROWL ROAR :twisted:

          Labour are FAR BETTER THAN NATIONAL do you get it?? It might not matter to you who have jobs either way but for fucks sakes it makes a huge difference to those who lost all education opportunities in the last few years, who continue to have low wages and high costs and have a government who don’t even acknowledge that such conditions exist.

          If you don’t like Labour and prefer Greens, Mana or the Internet party then promote them, but please stop putting Labour down – I think what they are coming out with is hugely promising and actually quite a shift. Surely this response they are getting from the media at least is showing you that? There is something fairly threatening about Labour getting into government this time. It is threatening to the establishment. Do you think this is because they are just planning to conduct ‘business as usual’?

          So in short I suggest you stick your ‘Thornton Bubble’ theories where the sun don’t shine and wake up. Bill English was using that theory to attack Labour today in partiament FFS

          • Mary 5.1.2.1.1

            It’s such a pity you feel the need to add a sting at the end of your posts that are responses to others who obviously hold views fairly similar to your own. That last remark to CV adds nothing but a desire (for me, anyway) to hurl personal abuse straight back at you. Discussions between like-minded people can be amazingly constructive because they necessarily focus on refined differences that wouldn’t ordinarily get an airing. Your personal abuse is an unnecessary turn-off to want to even engage. I enjoyed reading the first two-thirds of your response to a post of mine above and even began drafting a further response but then saw what I was dealing with. Still might send it but it did make me want to accuse you of being someone who works in the Labour Research Unit, but I won’t stoop to your level. Fuckwit.

            • blue leopard 5.1.2.1.1.1

              Yeah Mary, tried being decent toward you last time – you responded with such a fixed attitude and level of disrespect, you showed no acknowledgement of ‘like-mindedness’ then so why mention it now? Did you expect me to be any different with you in future?

              As for hurling abuse go for it. I don’t give a damn. As I said, I wouldn’t be surprised if you were a Concern T, you appear very good at doing National’s work for them.

          • Colonial Viper 5.1.2.1.2

            Well, it is a difficult situation.

        • Olwyn 5.1.2.2

          When David Cunliffe took the leadership reins last year he was talking hard core lefty language around a ‘true Red Labour’ which wasn’t going to be like National but with “anaesthetic.”

          And Labour’s polling in the MSM polls was the highest that it has been since. Lesson – the real NZ electorate wants a gutsy, forthright, principled Labour to stand tall and resolute. The cautious (or cowardly) Thorndon Bubble advisors want nothing of the sort.

          I don’t think that the problem is entirely to do with the Thorndon bubble or the public’s lack of empathy for the poor. I think it is more to do with those whose political and economic clout exceeds that of the government. They can make it hard for you to get elected, and hard for you to govern if you do get elected.

          Look at the Liu business, which admittedly seems to have proved less than successful: A shrilly delivered, widely reported, baseless corruption claim accompanied by an unnerving poll, right at the point where the caucus was free to change leaders without input from the membership and affiliates. It was like a warning shot – go ahead without our approval and this is what you get. I think that the “we have to appeal to the middle class” claim is a euphemism for “we have to appease those who would make governing impossible if we did not.” Since the Liu thing, I have more sympathy for the Labour right, though I still very much disagree with them.

          • Colonial Viper 5.1.2.2.1

            Oh yeah. The power of the MSM and of organised financial capital is not to be toyed with. But the more timid you get, the weaker you get. And the weaker you get, the more timid you get. And as you lose mass support and mass understanding, then all you are doing is marking time until the day your signature and your sovereignty is a mere formality.

            And this is the biggest danger, one that you can see brewing in the US, the UK and other western countries. “Appeasement” of corporates and capitalists doesn’t work, and it doesn’t work for a simple reason: this class knows no such thing as rational self limitation.

            There is no point at which they say “OK, we’ve got enough, let’s leave a little bit on the table for the other people and for the Earth.”

            • Olwyn 5.1.2.2.1.1

              I agree wholeheartedly. The problem seems to be that leaders are weakened by the lack of mass support, and mass support dissolves when leaders are weak. We need to find a way of bringing the two components together.

          • blue leopard 5.1.2.2.2

            @ Olwyn,

            I also agree that ‘group’ is a power player that neither CV nor I mentioned and a big player. Good one for mentioning that!

            I do believe, though that one of the tools they use is manipulation of public opinion in order to be able to gain that leverage i.e. attitudes toward the poor have been cultivated by those with the resources to do so so that they can press their agenda. Such manipulation makes use of a fairly wide range of knowledge and is one of the reasons I think it is easier/quicker to work around the attitudes these creatures have cultivated rather than just tell people they shouldn’t think that way, (or assume that they don’t). i.e. I suspect once people have been manipulated it isn’t so easy to ‘unmanipulate’ them – certainly not in 100 days – it would require longer than that.

            One way of working around the problem of bad attitudes toward the poor is to improve the underlying reasons for why such attitudes have taken hold – which is what I see Cunliffe’s Labour Party moving on. i.e. if the working poor and beneficiaries have been pitted against one another – it might be more effective to raise conditions for the working poor so that they do not feel that beneficiaries ‘have it good’ (which apparently people do – because why else are they resented by some quarters?) Another way is to dissolve division amongst smaller groups by getting people to identify with a larger group i.e. the top 1% versus the 99% or the ‘have’ and ‘have nots’ as Labour commonly refer to.

            Another angle for addressing bad attitudes is that of awareness raising: i.e. the more people know what beneficiaries are actually living on and what their lives are like the less people would be susceptible to believing some are ‘choosing to bludge’. (Like what exactly are the pay offs supposed to be that leads to that supposed choice? ) Which is perhaps the angle that Mary and Weka are coming from. But if Labour aren’t doing that aspect, it doesn’t mean they aren’t addressing the issue from another angle.

  6. Tamati 6

    So much for Hooton et. al. claiming this would be the most left wing government in a generation. These tax brackets could hardly be described as socialism, pretty mild all round and considerable less than Britain and Australia.

    • The Lone Haranguer 6.1

      Hooten Hooton et al are 100% correct.

      Afterall, it you lot who bleat about the “neo-lib” Labour governments of the past decade. So if by chance Labour was to form a Government after 20 September, then surely it would be “the most left wing in a generation”

      [lprent: Please avoid the name moderation trap. Use the correct name. ]

  7. Ant 7

    I was expecting a bit more than a few tax changes from an “alternative budget” I guess its a pretty good euphemism for raising taxes though.

    • Tamati 7.1

      I think we have to bear in mind, that a coalition government wouldn’t necessarily follow Labour’s tax plan. The Greens of course would want to implement some of their policies, as would Mana-Internet.

      • fisiani 7.1.1

        A coalition of the damned would give us increased income tax, CGT on homes, baches, boats businesses and Kiwisaver accounts, Carbon Tax and a Hone Heke financial transactions tax.Tax Tax and more Tax

        • You_Fool 7.1.1.1

          While a coalition of the stupid will give us increased debt and no income

        • Tamati 7.1.1.2

          It would nice to know what they will actually deliver, by making a joint policy statement. Not at all hard, and would save the predictable ‘broken promises’ claim after the election.

        • Tracey 7.1.1.3

          nasties, for sale to the highest bidder, three legged pig with lipstick, ans son of satan is your choice fizzy… Highway Robbers?. Self righteous crossed with self interested

        • Colonial Viper 7.1.1.4

          And taxing enables SPEND SPEND SPEND, and as we all know government spending means we can fill up our pockets with economic activity.

          Don’t you want your share of some nice fat government manufacturing or infrastructure contracts, fizzy?

          • Kiwiri 7.1.1.4.1

            Labour’s alternative is preferable to National’s borrowing and shifting wealth to the rich.

            • Colonial Viper 7.1.1.4.1.1

              Oh yes. But the question of which is preferable is a different one to the question of what the country needs.

        • Draco T Bastard 7.1.1.5

          Contrary to what RWNJs like Fisiani think we do actually need to pay for the services that government provides and that means tax. National, Act and UF always promise more for less which is always physically impossible which is why our society is crashing.

          • fisiani 7.1.1.5.1

            I do not regard myself as Right Wing and have never claimed to be so. I am as Right Wing as Damien O’Connor

            • Draco T Bastard 7.1.1.5.1.1

              And yet you always come out with right-wing slogans.

            • blue leopard 7.1.1.5.1.2

              O.k Fisiani, you have really got me curious over that one, what a stunning revelation; you do not consider yourself right wing? …what is the punchline? Do you consider Fascism right wing? Libertarianism?

              • McFlock

                Genghis Khan was an damned social1st extremist…

              • fender

                As suspected the punchline seems to be: no political self awareness, just a deep loyalty, love and admiration for anything and everything Key.

                • blue leopard

                  Fisiani’s comments are becoming increasingly blatantly fallacious – it is like Fisiani can’t even be bothered trying to convince anyone – which is a good thing because I think they would be pushing shit up hill trying to achieve that here. Sometimes it appears Fisiani is just having a laugh and is just entertaining itself.

            • NickS 7.1.1.5.1.3

              Prediction – fisi will not reply, for to do so would be far too “hard”.

              And so booking this comment for future reference :twisted:

  8. Jrobin 8

    I agree with blue leopard. Boosting minimum wage and creating jobs is a far more positive means of reducing poverty. And avoid being lacerated by voters who have been educated to believe that the poor are the enemy. Isn’t it better to get rid of this government by being subtle than be ideologically pure and watch the oil drilling and privatisation from the opposition benches.

    • Colonial Viper 8.1

      Don’t you see that is the trap that has been laid out for us?

      You need money* to get the things you want for your country. But to get the money you have to destroy and exploit your country, your people and your environment.

      *money being keyboard entered electronic figures in electronic spreadsheets held on hard drives

    • blue leopard 8.2

      Thanks Jrobin,

      I thought this point was obvious but it seems it isn’t to many.

  9. john 9

    There’s a couple of problems with the Labour plan.

    1/ Upping the rate by 3% for those on over $150k will only gather an an extra $0.5b – that’s not even a 1% increase in the overall tax take.

    2/ As Australia found out, the amount of tax they thought they would collect in just a few year, actually took 15 years. People, particularly landlords, often keep houses for their retirement investment, or in a trust, and simple don’t sell them (and are even less likely to under a CGT ascheme) – hence no capital gains tax to pay.

    • felix 9.1

      That’s good.

      No complaints from you then re- ‘Labour is going to tax us all to hell’.

      • dave 9.1.1

        the people that going get taxed to hell are ones who don’t vote labour anyway so who gives a shit
        and lets call a spade a spade there’s a lot criminal tax avoidance which is theft going on since iam being over taxed because wankers at top don’t pay there fair share and people on at low and middle income earners cant make ends meet without top ups(welfare)(subsidy) paid for largely by over taxed new Zealanders because income ratios to costs are fucked up and the group at the top who pay sweet f all steal assets and rip us off i would be more happy to unleash cunliffe peters and Norman on them because iam fuckin angry that our economy and country has been trashed by the greed of the few at expense of the many so Felix,bm and the rest of the neoliberal cultists can go to hell

        • felix 9.1.1.1

          Sorry dave I’m finding that a bit hard to follow.

          Do you like Labour’s tax plan? john reckons it’s alright.

          • john 9.1.1.1.1

            Actually I don’t have a big problem with higher tax on over $150k – just that it gives an an overall increase in the governments tax take of less than 1%, so it’s certainly no magic bullet, and it won’t allow for much extra spending.

            The GCT is another issue – when it finally starts to take effect, it will largely be paid for by those at the bottom who live in rentals.

            It also has several other negative aspects.

            • Colonial Viper 9.1.1.1.1.1

              The GCT is another issue – when it finally starts to take effect, it will largely be paid for by those at the bottom who live in rentals.

              That’ why its important that about 20% of rentals in NZ are long term ones supplied by the Government.

              • john

                For 20% of rental properties, HNZ would need an additional 45,000 or so houses, costing around say $18 billion, which is a cost of about $7000 for every worker in the country.

                Good luck selling that one to voters.

                • Colonial Viper

                  The voters will get a solid rental return on the capital of each house, and we will be able to keep the retirement age at 65. What’s the problem?

                  • john

                    No they won’t.

                    Rentals typically get around 6%, minus 2-3% for maintenance, rates and insurance. That leaves a return of 3-4% (plus any capital gain you get in the long term). HNZ houses get even lower rentals.

                    Take away the capital gain (with either a CGT or for a govt who never sells), and you either get an appallingly low return, or rents need to go up significantly.

                    • Colonial Viper

                      3% to 4% rental return is fine if your cost of borrowing is zero. Silly billy, this is the NZ Government. Private sector landlords can’t compete.

                    • john

                      So you’ll borrow $18 billion at 0% interest?

                      The only way you’ll do that is by printing $18 billion, which is a nutty idea (even the extreme greens gave up on that).

                    • Colonial Viper

                      What’s the problem with borrowing $18B from yourself and paying yourself back over 25 years? What, you’d prefer to borrow that money from JP Morgan instead, because their money is somehow more legit?

                    • john

                      Because effectively steals $18 billion off the country, through inflation.

                      If it was a good idea, every government everywhere could simply pay for everything by printing money – every person could be on a huge benefit, we could all be rich, and no one in the country would have to work.

                      Meanwhile, back on planet earth….

                    • vto

                      yes john, I mean gosman, I mean srylands, nobody prints $billions each and every month do they ….

                      nope

                      not your favourite Zimbabwe, not the privately owned federal reserve in the US, not the bank of England, nope, nobody, not even westpac or bnz or anz

                      nope

                      cant print money unless it is a privately owned bank

                      you are truly hopeless gosman

                    • john

                      vto – so why doesn’t everyone just print money instead of taxing people?

                      And you’re equally as wrong at thinking I’m someone else.

                    • vto

                      why does the privately owned federal reserve print money?

                      why does the bank of england print money?

                      • and I think you are someone else from a previous pseudonym. You show the exact same simpleton characteristics
                    • Colonial Viper

                      If there are any signs of inflation caused by injections of new money, simply tax the money back out of the economy and cool it down. No problem there.

                      And with house prices cooling down due to new state rental builds, inflation will be tamped down anyway.

                    • john

                      You are confusing quantitative easing as done by US and UK (where the Central Banks gets private financial institutions to lend out more money to businesses)….. and printing money so the government can use it to pay their bills (i.e. Zimbabwe).

                    • Colonial Viper

                      No I’m not :)

                      And that’s not the way QE actually ended up working :)

                    • john

                      Wrong.

                      Quantitative Easing as in the UK and US is where the govt buys bonds off private institutions.

                      THE GOVT DOESN’T SPEND THE MONEY – the private institutions LEND it out.

                    • Colonial Viper

                      wrong – the central bank buys the private toxic assets with the newly issued cash. Nothing to do with the governments.

                    • Draco T Bastard

                      Where does money come from John?

                      As soon as you answer that question you’ll understand that the government printing money and spending it into the economy works better than leaving the private banks to create it.

                    • john

                      Colonial Viper – you’ve argued yourself into a circle and just bitten your tail.

                      First you want govt to print $18b to build houses.

                      Now you’re arguing its “Nothing to do with the governments.”

                    • Te Reo Putake

                      John, my understanding of QE is that the central bank buys bonds etc. with money that previously did not exist. In other words, they (digitally) print more money. That frees up the institutions to invest as you suggest. But the key thing you seem to be missing is that the Government both prints and spends the money. Sure, it’s not spent on ‘paying the bills’, but it is spent.

                    • john

                      Dracos got it wrong as well – the UK and US governments are not spending the money.

                      They are buying bonds off private financial institutions. The private institutions then have excess money to lend, which the lend out at low interest rates.

                      This is different to a government printing money to pay it’s bills like Zimbabwe and Nazi Germany did (and is illegal for the likes of the UK and other signatories to the Maastricht Treaty).

                    • Draco T Bastard

                      Dracos got it wrong as well – the UK and US governments are not spending the money.

                      I didn’t say that they were. I said it would be better if they did so. The present rounds of QE only benefit the banks and not society.

                    • Te Reo Putake

                      Yeah, John, the Economist got it wrong, too. Sigh.

                      http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-7

                    • Colonial Viper

                      johns being a little toady fuckwit now.

                      The NZ Govt spending into existence new NZD to build housing, resilient infrastructure and create full employment has nothing to do with US QE and it has nothing to do with Zimbabwe.

                      Of course, he knows this, he just wants to gum up the discussion like a diseased dick.

                    • john

                      Te Reo Putake, you got the first bit right. But govts don’t spend the money as such – institutions lend it out.

                      One of the problems it causes is bond returns become very low. In the UK, many pension funds pay out pensions from returns on bonds, but with QE the return was so low that they had to start selling the actual bonds.

                      So UK Pensions Funds lost over GPB312 Billion – a loss not very different from the GBP375 Billion that was pumped into the economy with QE.

                    • Colonial Viper

                      Brilliant, so john now states that the financial oligarchy have been punishing pensioners and savers with both ZIRP (and finally now NIRP).

                      That’s news which is only 4-5 years old. And still nothing to do with the NZ Government, sovereign issuer of NZD, spending money in order to build houses, build resilient infrastructure, and create full employment.

                    • Colonial Viper

                      And here is Max Keiser talking about how savers and pensioners have been raped by the oligarchic financial ponzi scheme – in Sept 2011.

                      https://www.youtube.com/watch?v=-WwjcX38JAs

                    • john

                      Te Reo Putake – Your Economist link backs me up.

                      If you read your link, you’ll see QE is used only after dropping interest rates to near zero has failed to resuscitate the economy.

                      NZ never got that bad.

                      QE is a signal of an economy in serious trouble, done as a last ditch desperate measure when interest rates can’t go lower.

                      It’s nuts that you’d want to start QE when NZ has the opposite problem – interest rates going up. It would make the problems here worse – not better

                    • Colonial Viper

                      And here is john now pretending that what we have been talking about is running US style QE in NZ.

                      John, please get up with the play.

                    • john

                      Colonial Viper says “The NZ Govt spending into existence new NZD to build housing, resilient infrastructure and create full employment has nothing to do with US QE and it has nothing to do with Zimbabwe.

                      Of course it does. That’s why printing money for direct government spending is completely ILLEGAL in pretty much every first world country.

                      If it was such a good idea as you think, then why doesn’t every government simply print money for everything it need to spend on?

                      All government spending could simply come from printing money.

                      No one would have to pay tax.

                      Everyone could live on a generous benefit.

                    • Draco T Bastard

                      John, no one’s mentioned Quantitative Easing for NZ. We’ve just said that the government should create money and spend it into the economy balanced by taxes.

                    • john

                      Colonial Viper says “And here is john now pretending that what we have been talking about is running US style QE in NZ.”

                      You’ve already explained you want print money for the govt to spend directly on infrastructure – exactly what Zimbabwe was doing.

                      It’s a total fruitcake idea, which is why the only countries in the world printing money are desperate basket cases.

                    • john

                      Draco says “We’ve just said that the government should create money and spend it into the economy balanced by taxes.”

                      But that’s total nuts – countries that do that are basket cases.

                      Here’s why it doesn’t work.
                      http://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/

                      And again, if it did work, the government could just print money for ALL it’s payments, everyone could go on the dole, and no one would have to do any work.

                      This is like arguing with someone who insists there really IS $15m waiting for them in Nigeria, and it IS possible to create masses of wealth out of nothing.

                    • Colonial Viper

                      So that everyone is aware:

                      john is speaking on behalf of the private banking and financial system.

                      For whatever reason, he wishes people to ignore the fact that sovereign issuance of money should lie solely with sovereign nations, not with the banksters who currently run our financial system.

                      You can be sure that sovereign nations routinely issue their own notes and coinage (just check your pockets).

                      The problem is nowadays that a very large proportion of our money supply is provided by profit driven private banking and financial interests.

                      John would like it to remain that way, because once a nation retakes sovereign issuance of currency, the power and influence of the international bankster and financier cartel diminishes enormously.

                    • blue leopard

                      @ John,

                      But isn’t that what the banks are doing? They are pouring money into the economy and it is being spent on houses and look at the prices of houses.

                      Why don’t the reserve banks buy government bonds at least? The government could spend the money on creating things, therefore the problem of ‘the same amount of resources’ (and services) would be obviated?

                    • Colonial Viper

                      In order to develop your thinking about money, it is crucial to identify that in NZ, as in many western countries currently, there is a vast amount of productive capacity and human talent sitting idle, in fact, in a kind of wasteful idleness, because of an artificial and deliberate shortage of money being enforced on 90% of the community.

                      Factories, machines, workers, artists, writers, etc who want to work and add to our communities and our real physical economy cannot – they are in fact being left to rot idle while the top 10%, but particularly the top 1% hoard money and financial assets in electronic accounts and ponzi markets where they do human society as a whole no good.

                    • Draco T Bastard

                      But John, that’s how the creation of money works now with the proviso that, ATM, it’s the private banks that create the money, charge interest on it but don’t create enough money to pay the interest resulting in the country having to go ever further into debt. This descent into debt requires ever more growth on a finite planet which means the present system has the total destruction of life on Earth contained within it.

                      Now, which one’s nuts? The one that allows a stable state sustainable economy or the one that ensures destruction?

                    • Colonial Viper

                      You’ve already explained you want print money for the govt to spend directly on infrastructure – exactly what Zimbabwe was doing.

                      john here proves once more that he is a fucking liar, by trying to make equivalent what Zimbabwe did in destroying their productive economy, with what NZ should do, in building our economy and putting our people to work in well funded debt free creative and productive enterprises.

                      In other words, john reveals himself to be a traitor to the NZ people, and someone who is happy to argue against the interests of the nation and of Kiwis in general.

                    • Colonial Viper

                      It’s also critical to understand that the vast majority of money (and its near cousin “credit”) is created by electronic keystrokes in the modern monetary system, it is not “printed.”

                      Money in other words is a kind of score keeping talley on a spreadsheet, with an add in this cell balanced with a subtraction in another cell.

                      There is nothing mysterious about this in the least, it is also very easy to create new money in the system by entering in additional electronic digits.

                    • john

                      Colonial Viper – you go and find a country that’s printing money to fund it’s operations and I’ll show you a basket case with out of control inflation.

                      That’s why it’s illegal in first world countries.

                      And despite request after request, you’ve been totally unable to answer why we don’t just print money for ALL govt spending, if your idea is so good.

                      You’ve failed and failed, and failed to explain that.

                      We’re one of the BEST performing economies in the world, and you want to copy the economic policies of the world’s WORST basket cases.

                      There’s a big clue in the sentence above.

                      But you’ll never see that while you’ve got the blinkers on and heading for that magic $15m with your name on it in Nigeria, or the equivalent of it – that printing money is a way governments can magically spend up big time without ever having to pay anything.

                    • john

                      Colonial Viper – your ranting is getting really boring.

                      There’s a couple of hundred countries in the world – you should be able to find a country doing what you suggest. They’re easy to find – just look for a list of countries by inflation figures.

                      Have a look at those countries that have hyper-inflation, and I’ll guarantee that they are economic basket cases doing exactly as you suggest.

                    • Colonial Viper

                      to general readers:

                      john here is a financial drug dealer. He would like to keep NZ hooked on having to borrow NZ dollars from his mates, foreign financial institutions at interest, instead of having NZ independently issue NZ dollars itself interest free, in the needed amounts required (no more, no less) to fully utilise our own people, resources and factories, and to pay a living wage.

                      john also knows nothing about the financial and economic situations of Zimbabwe nor Nigeria (2 extremely different countries), and of course, he doesn’t understand why NZ is a very different example again.

                      In essence, we need to carve our own unique way forward out of the debt based money creation system that we (and the rest of the western world) is currently locked into.

                    • Colonial Viper

                      Have a look at those countries that have hyper-inflation, and I’ll guarantee that they are economic basket cases doing exactly as you suggest.

                      Here, john demonstrates his ignorance, and his lies, servicing his masters, foreign financial institutions desperate to maintain their monopoly on the money supply to countries.

                      Firstly “hyper-inflation” requires very specific circumstances, usually including a capital strike organised by world financial markets, and a real-economy sanction organised by the powerful western governments controlled by major banking interests.

                      Some degree of war or civil war is also usually required for a currency collapse, as is destruction of the productive infrastructure of the country (factories, farms, etc.)

                      Loss of an effective taxation system, rampant corruption and/or requirements to service excessive debt in foreign hard currencies usually rounds off the requirements for a currency collapse leading to hyper-inflation.

                      John of course, doesn’t understand any of these dynamics.

                    • Draco T Bastard

                      you go and find a country that’s printing money to fund it’s operations and I’ll show you a basket case with out of control inflation.

                      We have out of control inflation now caused by excessive printing of money. Sure, it’s limited to house prices but it’s certainly there.

                      It’s kinda interesting that the rich go on about wage/price inflation and why that means wages need to be kept down but they never consider the inflation caused by their own excessive incomes. In fact, in the case of houses, they consider it a good investment.

                      And despite request after request, you’ve been totally unable to answer why we don’t just print money for ALL govt spending, if your idea is so good.

                      That’s why it’s illegal in first world countries.

                      No, it’s illegal because being rich and living on other peoples work would no longer be an option. That’s the thing about living in an oligarchy – the rules are set up to protect the rich rather than being good for the society.

                      We’re one of the BEST performing economies in the world

                      Actually, under present policies, we’re going backwards. Another decade or so and we’ll be the basket case you think we’d be if we followed rational monetary policies.

                      that printing money is a way governments can magically spend up big time without ever having to pay anything.

                      Nobody’s suggested that either. I think it must be your ideological blindness getting in the way making you see things that aren’t there.

            • felix 9.1.1.1.1.2

              I agree, the top rate needs to be a bit higher. 36% is very low.

              • Herodotus

                At least the govt receives all PAYE tax as a result of their wages be it $1 or $1+m. Better IMO to seek out the cash society, black and grey markets that pay Nil tax, and with this announcement are still not targeted. :-(

                • felix

                  The grey market is the one that lives in the cracks between the top personal, company, and trust rates.

                  Align those and suddenly a whole lot of tax avoidance is a waste of time.

  10. dave 10

    a lot us haven’t had wage rises in a decade despite what John key says and you can tell small and medium businesses are dying as wealth get ever more concentrated at the top end houses are a dream know for the lucky few ! i really really hope we get a coalition government with mix of best policy’s each party has to offer because WE NEED CHANGE because neolibralism has been a disaster

  11. Mike the Savage One 11

    So much for Labour’s move to its “roots”, and being “left”, haha.

    The tax rate of about 36 per cent should rather start with 100 k per annum, or even 80 k per annum, and income over 150 k per annum should be taxed at least at 38 per cent income tax.

    Trust law must be reformed, to restrict what trusts can be used for, and it should be made more difficult, to use trusts to re-arrange business and income situations, in order to avoid taxes. Using trusts in co-ordination with ongoing ordinary businesses, and with certain investments to generate earnings for profit, must be stopped.

    Trusts should be used only temporarily, or for very restricted purposes, for administering certain estates and the likes, and for financing not for profit operations. When we have doctors and others use trusts to pay their own incomes, and otherwise shelter earnings from limited companies, then this is an invitation to abuse. Maybe there have been some changes already, but some comments above seem to show, how trust funds can be shifted quite freely between companies and the trust and so.

    But with their alternative budget Labour seem to be keen to not “upset” the existing status quo in the business, finance and investment world, and to not “scare” the many upper middle class and also many other middle class small time investors, and some good earners. Too little revenue will be earned from the top 2 per cent of income earners, which will mean, the talk about investment in education, health and so will be rather “moderate” after all. I see little changes ahead with such policies, that is, unless there are other significant tweaks to the present system.

    A Capital Gains Tax will also only start bringing in revenue after a few years of it being introduced, and that will not deliver all that much either, I am afraid.

    There is going to be no change to GST, so many ordinary consumers will pay a lot of the whole tax take, including the poorer ones, and I hear and read nothing about a transaction tax or any thing like that.

    The minimum wage of 15 dollars will only be marginally above the present adult minimum wage rate, and with inflation going to increase more soon, the 16 dollars per hour will also not be such a great leap ahead for low paid, as that additional income may lead to some less entitlements in other areas (WFF or accommodation supplements and so).

    I am a bit disappointed, to be honest.

  12. DS 12

    Before people get excited about trust loopholes: the last decade or so has seen a massive tightening up of trust law in this country. You now can’t set up a trust to either avoid tax or avoid creditors, and the courts are very comfortable with looking behind the curtain on either point.

    So by all means, go ahead with your trust schemes to evade the proposed top tax rate. Just don’t be surprised when the IRD comes knocking on your door anyway.

  13. Ergo Robertina 13

    Top rate of personal income tax 36 cents, three cents lower than the 2011 manifesto.
    Again Labour moves to the right of the 2011 package (GST off fruit and veges, employer contribs to KiwiSaver, tax-free $10,000 threshold).
    In 2012, Cunliffe said voters rejected Labour as there was little difference between it and National (apart from asset sales). Based on speeches like that to the New Lynn women’s branch he was voted to lead the party, and promptly took it to the right. He also helped neutralise resistance to the TPPA and the Super age rise.
    A commenter last week mocked others here for holding Labour responsible for Rogernomics, saying no-one cares any more what happened 30 years back. But it seems to me the reason David was voted to the leadership was in large part for acknowledging and explaining the past, and the mistakes that were made. But now he seems intent on repeating them.

    ‘Those voters saw that our policies – with the exception of asset sales – were mostly the same as National’s. So we can’t really be surprised at the result.’ – Speech to New Lynn women’s branch, April 29, 2012.

  14. Jepenseque 14

    Hi, The proposed capital gains tax is projected to be earning $1.035B by fy20/21. What assumptions for asset price inflation is used to reach these numbers? That implies circa 6.9b in realised taxable cap gains in that year. Particularly interested in what this implies for house price inflation.

    Labours release says modelled by berl but cant find it anywhere. Cheers

  15. john 15

    So there’s a claim Labour will spend more on health and education, pay off more debt, start NZ Super payment again, AND build thousands of houses.

    Yet according to the fiscal plan on the Labour Party website, ALL the new tax initiatives totalled will bring in a total of less than $0.25B – that’s less than half of 1% increase in the overall tax take.

    Monthly fluctuations are bigger than that.

    And after three years it’s still only $0.5b – less than a 1% increase after a whole term of govt.

  16. blue leopard 16

    @ CV,

    That bit about your and DTB’s idea – I ignored it because I didn’t want the conversation to be deviated from its focus – but wanted to return to what you said. I am questioning the political process of setting it up, not solely the physical process – i.e. would it be suitable for a government to simply set up that approach? – or would it be something that needs public input – or at least a process, such as going through parliament? Obviously according to you (I don’t know much about it) it is a simple procedure, but it seems to me that a process through parliament might be required rather than just changing the accounting methods.

    • Colonial Viper 16.1

      It will probably require an Act allowing the government to order the Reserve Bank to create the required funds: in very specific circumstances, in very specific amounts, at very specific timings, for very specific purposes. All the “machinery” required to actually create the electronic money and deposit it into accounts within the local banking system already exists.

      Remember, today the Reserve Bank orders the printing of new notes and minting of new coins at its discretion, and releases them into the economy, at its discretion. These new powers are not that different.

      • blue leopard 16.1.1

        Thanks, I hadn’t realised until you explained it to me (a week or so ago) that the ‘physical’ process was so easily conducted and that was a question that played on my mind since – re the policy process that would be required. It would require fairly serious checks and balances wouldn’t it? Otherwise the detrimental effects commonly cited by people who object to the idea would occur; the money would need to be spent on production, yet services would suffice wouldn’t they?

        • Colonial Viper 16.1.1.1

          Responsibility, accountability and transparency of all government monies spent would need to be well enforced. But we do that quite well now anyway and have serious checks and balances in place which could be easily beefed up.

          Money spent in the private sector would require steps to ensure that only highly competitive and well put together tenders were considered. Sharp competition is key.

          Money spent in the public sector would require a high level of accountability, traceability and transparency. Those responsible for sign offs and using the money have their jobs on the line in terms of delivering good results for least cost.

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