web analytics
The Standard
Advertising

Trickleup

Written By: - Date published: 9:39 am, January 26th, 2014 - 207 comments
Categories: benefits, capitalism, class, class war, david cunliffe, Economy, minimum wage - Tags: ,

trickle-down-laughing

Trickledown is one of the most hated phrases in the progressive lexicon.  It is based on the premise that to improve the plight of everyone all that we need to do is give the already wealthy more and the benefits will trickle down to everyone else.

It is a theory whose validity the proponents have tried to prove for a long time.   We are now at the obscene stage where the richest 85 humans on the planet have as much accumulated wealth as the poorest 3,500,000,000.  Despite there being no evidence to back its validity some still claim that the current system is best for everyone and the rewarding of risk taking and some ephemeral concept of worth and talent will make things better for all of us.

The concept still persuades a section of the population to vote against their interests.  The thought that they may become obscenely wealthy themselves is sufficient to persuade them to support an economic system which realistically presents little chance of them ascending to the heights they think they can.

The system has significant societal support.  Every time you turn the TV on or open a paper or magazine chances are you will be inundated with words and pictures suggesting that a resource rich consumptive life is best and that people who lives those sorts of lives are somehow better.

Well it is time that all good lefties challenged this assumption and presented an alternative concept which, in my humble opinion, is much more likely to achieve an improvement to the collective good.  My working title for the concept is trickleup, if we give resources to the poorest amongst us then we can significantly improve the communities that we live in.

Unlike trickledown this concept has strong empirical evidence suggesting that it will work.  For instance it has been shown that giving cash grants to homeless people has done wonders for their reintegration into society.  Why shouldn’t we bail out the poor instead of the rich?  And giving cash to young people improves dramatically their future prospects.  The evidence is that they perform better academically, their mental health is better and they develop fewer problems.

If you need any proof then the spirit level provides all the proof that you could want.  Karol and Bunji have both posted about Wilkinson’s work on various occasions.  More equal societies perform better in a number of ways.  KJT’s series of posts on the benefit of a universal basic income has obviously struck a chord with the Standard’s readers and the discussions on two of the posts in particular were intensive and passionate.

So the evidence and the concept are there but how is the left going to persuade ordinary people that ?

IMHO they could describe the alternative as “trickleup”, which is the opposite of what we have been doing for the past few decades.  If wealth is given to the poorest amongst us then there are community wide benefits.  We all will be better off.

What would trickleup policies look like?

Well examples include:

1.  Increased support for students.  Most students used to have their course fees paid for and back in the 1980s were also paid a living allowance which went some way to paying for living expenses.  The current student loan scheme is merely loading our young with debt and amongst other things is driving them overseas.  Some relief, for instance at least the payment of course fees is long overdue.

2.  A living wage.  David Cunliffe has already committed to an increase in the minimum wage and the introduction of a living wage as circumstances permit.

3.  School breakfasts and lunches in decile one and two schools.  For a hundred million a year or so kids in the poorest 20% of schools would be guaranteed breakfast and lunch.

4.  A change in the tax system.  A Capital gains tax is vital and why shouldn’t the top tax rate increase?  The already wealthy have had the benefit of paying reduced taxes under Key’s regime and this has not incentivised them to work harder one bit.  All that it has done is make them travel overseas more and buy imported electronic goods, neither of which are good for our economy.

5.  And the most contentious … working for families for beneficiaries.  Or at least an increase so that their income allows them to feed themselves and their children properly.

For the avoidance of doubt all posts are my personal ramblings and bear no relationship to Labour party policy or the thinking of anyone else.

207 comments on “Trickleup”

  1. just saying 1

    The term “trickle up” doesn’t work for me. Gravity and all that.
    Maybe some other idea like “root blast” – because you mainly feed the roots if you want a plant to thrive (with a couple of exceptions) and kill the roots to kill the plant…..

    • blue leopard (Get Lost GCSB Bill) 1.1

      @ Micky Savage First I wish to acknowledge that I wholeheartedly agree with the thrust of your article.

      @ just saying – re the name.

      I like your idea here – although unfortunately ‘root blast’ sounds like a corporate label for a gardening product and sadly brings to mind Monsanto :(

      There is a good effect in using the term ‘trickle up’. It immediately brings to mind ‘trickle down’ and how miserably that is failing, i.e. its use conjures up the failed ideology and immediately offers an alternative – and Micky Savage nailed it when he wrote this alternative “ has strong empirical evidence suggesting that it will work.

      However I do tend to have a similar response to the term. The only other word I can think of that might fit is ‘ripple’ – ‘ripple up’
      yet changing from the word ‘trickle’ – lessens the effect noted in the above paragraph.

      In my attempt to find another word aligned to just saying’s idea I came across this interesting page – although I don’t think that ‘capilliary action’ would be very catchy (!) – however the link provides a visual with what will occur when the concept of ‘trickle up/ripple up’ is applied.

  2. Sacha 2

    To get public support for such a change after a few decades of constant neolib indoctrination, we would also need to convey the opportunity cost of current ‘normal’ arrangements.

    Think of the many ways it costs us all – not just the calculable ones (like foregone potential workplace productivity, tax income, healthiness) but the moral damage of knowing we live in a group of people prepared to walk past the suffering of others. That’s no society to raise children into. We can do so much better.

    • RedBaronCV 2.1

      We need to have an underlying structure of policies that has these ethical goals.

      Politically,getting votes is a bit different – that needs to be a soundbite that everyone can grab – $ 200 each to kick start the economy which is what should have happended in 2009. Long reasoned arguements just don’t cut it.

      Unfortunately the Nact’s grasp this, they are currently busy bribing a handful of schoolteachers to further the neolib agenda. The left needs to spread the love more widely, and at much lower rates.

  3. Colonial Viper 3

    GST is a highly regressive tax. It should apply only to items over $2500 (as a luxury sales tax, perhaps at a 20% rate). The difference should be made up by a combination of high level income tax, and taxes on investment land and property.

    Also, we need a full employment (jobs guarantee) policy for 25s and under where there is massive unemployment.

    • Lanthanide 3.1

      “It should apply only to items over $2500 (as a luxury sales tax, perhaps at a 20% rate).”

      So anything over $2,500 is a luxury item? So now lots of stores like Harvey Norman will sell their top-end computers for either $2,499 and sell optional “add-ons” or upgrades for individual prices of less than $2,500 to upgrade it to a faster computer?

      What about cars, are they luxury items?

      • Draco T Bastard 3.1.1

        So anything over $2,500 is a luxury item?

        Have you considered that it was only a suggestion and that it’s possible to make counter suggestions?

        What about cars, are they luxury items?

        Yes.

        • Lanthanide 3.1.1.1

          Have you considered that I’m suggesting his suggestion is bad?

          “What about cars, are they luxury items?

          Yes.”

          Tell that to the working poor in Auckland.

          • Colonial Viper 3.1.1.1.1

            You’re fine with a 15% tax (GST) applying to cars right now. I’ve never seen you complain about that.

            So what’s the problem with 20% as applied to cars?

            • Lanthanide 3.1.1.1.1.1

              1. 20% is more than 15%.
              2. At the moment the tax applies to *all* cars, not cars over some arbitrary limit. I think you would quickly find that people would come up with ways to game the system to avoid paying GST on the cars – quite suddenly you’d see a lot of cars selling for $2,499 where previously they might have sold in the $2,500 – $3,500 range. So you’ll lose more on GST than the simple calculations would suggest.
              3. You’re calling it a luxury goods tax and applying it to anything over $2,500. A lot of people would not consider cars to be luxury goods.

          • Draco T Bastard 3.1.1.1.2

            Have you considered that I’m suggesting his suggestion is bad?

            I did consider that but decided that all you were doing was whinging. Really, how many people buy $2500 computers? I figure it’s only businesses and possibly some gamers and the businesses get to claim the GST back.

            Tell that to the working poor in Auckland.

            Auckland is badly designed and is automobile dependent but that’s changing as the public transport improves. Thing is, that auto-dependency doesn’t make cars any less of a luxury. On average cars spend 96% of their time doing nothing and they’re highly inefficient as a form of transport. This makes them an expensive waste of resources.

            So, yes, cars are a luxury.

            • Colonial Viper 3.1.1.1.2.1

              A lot of people would consider a $2500 car a real luxury and a big step up from the $800 shit boxes that they have to put up with and which break down every other month.

              However, the class of people who would think that way are basically invisible to the rest of well-to-do society who believe that $2500 cars are usually 20 year old pieces of crap on the verge of breaking down themselves. Which they generally are.

              • Draco T Bastard

                Cars are a luxury because:
                1.) They use up resources unnecessarily and
                2.) They’re expensive to run

                The problem we have is that our cities are designed around everyone having a car. Change that and cars will become something that only a few people will own proving them to be the luxury that they are.

                • Lanthanide

                  Click your fingers and change it overnight and you might have a valid point that cars are a luxury. Until then, we’ll continue to live in the real world where for the majority of people a car is a necessary part of daily life.

                  • Draco T Bastard

                    I’m pointing out that we need to change as we can’t afford to maintain cars for everyone.

            • Lanthanide 3.1.1.1.2.2

              Really, how many people buy $2500 computers? I figure it’s only businesses and possibly some gamers and the businesses get to claim the GST back.

              Then you really didn’t think very hard about my example.

              My point is that some items, particularly things such as computers, are easy to break down into constituent parts. If you are saying anything under a magical $2,500 limit doesn’t get charged GST, it’s very easy to break a computer down into multiple parts, each of which is GST free, and thereby avoid paying GST on the purchase.

              The universal nature of our current GST system solves this problem – except for items bought online overseas, which is becoming more and more of a problem.

              Auckland is badly designed and is automobile dependent but that’s changing as the public transport improves. Thing is, that auto-dependency doesn’t make cars any less of a luxury.

              Well, there we have a fundamental disagreement. You live in a bizarre fantasy world where personal motorised transport isn’t a necessary part of every day life for the majority of the population, and therefore imagine that it’s a luxury.

              • No, you’re viewing the New Zealand/developed world context as healthy and normal when it’s not.

                A (personal) car is a luxury in terms of the resource usage it implies. It shouldn’t be something that we can take for granted in our society, even though practically, it is. A majority of the world’s population would not have access to a personal car. I wouldn’t mind ending our extensive subsidies in this area, that help make cars more affordable, including their preferential treatment above other transport options. We probably don’t need to tax them at all if we just stop subsidising their usage so badly.

                Now, that doesn’t prevent the problems with having a sales transaction tax cut off at a certain dollar value. Really we’d be much better off applying a luxury tax to specific classes of items than cutting off a transaction tax at a value, or even trying to band it, for precisely the reason you mention: people will just break up their transactions that would fall over the threshold.

                • Lanthanide

                  A majority of the world’s population would not have access to a personal car.

                  A majority of the world’s population doesn’t have regular access to healthy food, clean water and medicine, either.

                  You can’t judge what is a necessity in one society by comparing them to other, very different societies.

                  Just like you can’t say “there’s no poverty in New Zealand because people aren’t literally starving to death”.

                  Really we’d be much better off applying a luxury tax to specific classes of items than cutting off a transaction tax at a value.

                  Totally agree. I don’t know much about European VAT, but it seems like probably a good model to follow.

              • Flip

                The universal nature of our current GST system solves this problem –

                I find myself agreeing. In thinking about a good UBI system as soon as you remove universality or introduce some sort of limit you introduce ways to rort a system and introduce complexity which in turn increases costs.

                Having said that, to redistribute income for equality there needs to be some mechanisms to level income.

                I think the best way is to tax assets which is something the wealthy have in abundance that the poor do not.

                The other thing is to make top incomes dependent on the bottom incomes in some way. This means that the wealthy need to lift everybody up to lift themselves. Everybodies boat rises. Income shares stay fixed at some socially agreed and sustainable level.

      • Michael 3.1.2

        1. No. 2. So what if they do? 3. Not all. Capitalists will always try to game the system and evade the rules so they can obtain commercial advantage. No system of government can ever eradicate that behavior, even if it wants to. The current government positively encourages self-interested commercial behavior at the expense of the public good. I think the debate we must have concerns what forms of self-interested commercial behavior we need to regulate in the public good and how we need to regulate it. If people want to spend their money on purchasing items that must be imported, at great cost to our economy (think current account balance), when cheaper and equally functional alternatives exist, then I think it’s reasonable to make them pay a premium – in the public good.

    • gem 3.2

      +1 Will be interesting to see how financial transactions tax fares in Europe this year. Italy introduced a tax on derivatives in September 2013 (and earlier in the year on equities), while the shape of the wider EU proposal for 11 states is still being wrangled, hopefully for implementation some time this year. It’s likely to be watered down, but will be good to get the framework in place. Contrary to what the PM claimed on a Stuff live-chat once, this tax does not harm the poor!

    • Markymark 3.3

      God help NZ if economic illiterates like you ever have any sway over public policy, CV

      Have you even bothered to read any of the reports of the Tax Working Group 2010, the McCaw Working Group or any sort of academic analysis over the years on GST?

      GST is regressive, but its there because its a economically efficient tax that taxes consumption, in a clean, non distortionary way. It replaces the myriad of exemptions, sales taxes and corporate welfare handouts the old tax system used to give which only benefited the wealthy who could afford to hire armies of accountants and lawyers.

      • Colonial Viper 3.3.1

        Please point out to me anywhere I proposed going back to the “old tax system.”

        As for “economic illiterates”…that’s both the people in charge right now and the people advising them, and, apparently, yourself.

      • RedBaronCV 3.3.2

        Yes to CV it’s highly regressive and yes to MM the current system is relatively “clean” few exceptions. But MM it is no longer a low rate tax and it is a difficult tax to reduce as the difference is unlikely to be passed on to the end user. It is also noteworthy how much time and effort goes into something like this compared to the zero effort into say trust income. Or for that matter the massive EMR’s and other issues where the benefit system collides with the tax system

        Trust Income should be taxed at the same rate as the highest individual rate and be an “end user rate” Then even if income is distributed it is taxed as unearned income at that same rate in the hands of the recipient. That fixes high income “income splitting.”
        We also need to deal with taxing either with GST or non deductibility from income tax of a lot of transactions with a foreign party at one end.
        Services such as “call centres” are imported (displacing local labour) along with no health and safety or enviromental standards and these cross border transactions are not taxed. They also exceed by a huge margin the private import of goods that evryone seems so dead keen on levying GSt on.

      • Sabine Ford 3.3.3

        and it is predominantly paid for by the End Consumer, those that are not GST registrated and can not offset it as the cost of doing business.

        GST, should be reduced. Back to 12.5% at least. Goods and services Tax on Food, Electricity, Water and Letting Fees for housing. Really for shame.

      • Draco T Bastard 3.3.4

        GST is regressive, but its there because its a economically efficient tax that taxes consumption, in a clean, non distortionary way.

        /facepalm

        It replaces the myriad of exemptions, sales taxes and corporate welfare handouts the old tax system used to give which only benefited the wealthy who could afford to hire armies of accountants and lawyers.

        That sounds like the way it is now. The majority of people still can’t afford the lawyers and accountants needed to set up their finances so that they can avoid paying tax while the wealthy can.

        • Indeed. Better to apply things like financial transactions and luxury taxes that hit them where they can’t dodge, and lower or remove GST as much as possible. It might be simple to apply but it’s a bad tax that punishes the poor.

          • greywarbler 3.3.4.1.1

            +1
            I do have an idea for applying part of GST as if it was a tourist tax. That is for GST transactions to have an area code attached, and a percentage of the GST in that area to be transferred to funds held by lcal councils providing needed infrastructure (except roads). I’m thinking of small areas hit by costs from big use of their amenities in holiday time and causing cost to small cash strapped councils.

            They would get extra funding for provision of water, wastewater and sewage systems, signs directing holiday vans to areas for sewerage drops, with signs including French, Spanish and Nordic, Chinese and Japanese etc. Then perhaps beach warning signs about dangers, about nesting birds with illustrations, about annoyed residents surveilling the area for bad behaviour, and then replacement signs from light-fingered youth nitwits, discreet surveillance cameras at trouble spots and fake cameras for reminders, perhaps extra holiday policing, partial tar sealing on unsealed roads where they passed orchards, or vineyards otherwise covered in dust from holiday traffic. Things that would ease the burden on small places.

            These are all costly but needed to protect areas and also to protect our tourists from becoming vandals, and also to protect them against our own predators, young anti-social males who try to operate outside the rules of the NZ herd.

      • Lloyd 3.3.5

        But why does GST have to be 15%? At 10% with higher income tax rates for higher earner the tax structure was less regressive.

        A carbon tax could be more effective in taxing the effects of cars than a luxury taxon buying one. A carbon tax would also help replace some of the reduced GST and would tax the production of carbon dioxide – probably the worst threat to our civilisation.

  4. Sabine Ford 4

    1. 0 % interest should help students a long way. That would be easy to do, if there is a political will.

    2. If the living wage will only be implemented if circumstances allow for it you might aswell just stay mum. Lipservice has fed no one and does not pay rent. An overall increase in the minimum wage would be a better way to go and would increase the wages of more than just the people that work for various councils and government.

    3. School Lunches and breakfast for all children…..please lets stop identifying poor and rich kids by the lunch they eat. Simply open the cafeterias, allow for healthy food that all inclusive the teachers eat.

    4. Changes to the tax system. Make the first 17.000 tax free, and increase Taxes for those above 70.000. Tax secondary houses that are not on the rental market, Tax Capital Gains, reduce GST – as this truly is the Tax that is paid predominantly by the End Consumer (they are usually not registered for GST). Include allowances for Transport and Workclothing in the Tax Return of ordinary Citizens. How come a selfemployed person can claim Business Travel, but the Receptionist or Nurse that travels from South Auckland to Central can not claim a penny back on the costs of Gasoline or Busticket? Allow for Business Costs, i.e. cost of establishing a CV, Folders, Interview Clothing etc to be tax deducted. Surely if we put our thinking heads together we could find a few more things than just Capital Gains.

    5. Working for Families…..Not all Families have children but they still struggle. If a Family of two, has one unemployed partner often there is no to very little welfare, if the one person still working is earning 2.50$ above the household limit. Maybe we want to redefine Family. A better idea might be to establish a Under 18 Benefit, that Parents can claim for their children. I can not understand how Winz can cut Benefits to Single Parents, and Unemployed Parents and say to bad if your kids don’t get food. We should/could establish a benefit that stipulates X $ for clothing/school uniforms to be paid per kid, X$ for School Lunches and Trips per Kid, X Dollar for Housing etc. This way if Winz wants/needs to cut a benefit for a parent, the child is not in danger of having to go barefeet and hungry to school or to miss out on Schooltrips that are actually important and beneficial for the child.

    6. Last and in my eyes most important to reducing poverty. Housing Costs, Rent needs to be regulated. How often can rent be raised, on the grounds of what? How much rent can be charged per square meterage? How is rent calculated? Does School zone Matter, Infrastructure etc? Abolish the 6 month contracts. More protection for tenants that have their property sold under their bums, cause Housing Speculations (i had two flats that went up for sales literally within weeks of me moving in….joy oh joy). Many many people pay up to one complete salary per month for housing, and we wonder why peeps can’t get ahead, at best stay stagnant, but more often than not fall behind. Do we really want to be the country in which people live in Garages? Because if that is our Future, Labour if they win, could just declare some parts of every City as the future Shanty Towns / Favelas for the working Poor on which we then can build illegally houses of card board.

    We know the issues that need to be addressed most urgently, however it seems that the issues are not sexy enough.

    • Sacha 4.1

      The issues are as sexy as we make them, which has to improve massively this year.

      • Colonial Viper 4.1.1

        Can someone also PLEASE sort out the abatement rates and secondary tax system which tends to smash people with low paying part time jobs?

        The underclass and precariat understand these issues all too well, a political party needs to stand up and make it happen.

        • Sacha 4.1.1.1

          Totally agree. I do not understand how left governments kept that hugely unfair relic in place, nor the Ruthless benefit cuts.

        • RedBaronCV 4.1.1.2

          The abatement rates are difficult but in theory the secondary tax should sort itself out when an annual tax return is filed. The trouble is that the people who most need to file these returns all to aften don’t.
          The IRD gets in touch with them if refunds are big enough but hey $20-$50 is very important if you don’t have a lot of money. They just kinda forget that.

        • Molly 4.1.1.3

          … including those children in families receiving benefits who try to earn their own income.

          A friend, who had been widowed in the last few years – had to declare the money earned by her children’s newspaper rounds. This reduced the amount of support from the government.

          National’s mendacious theme that they help those that help themselves, should be exposed during this election.

          • RedBaronCV 4.1.1.3.1

            Which should be publicised far and wide. The kids should be entitled to earned income of their own. Not unearned income or the lot at the top would be rorting it.

            They hate women and kids don’t they.

          • The Pink Postman 4.1.1.3.2

            Trouble is Molly ,very few people are aware of these Tory practices. There is no doubt that National has a superb propaganda unit .the left must use every opportunity to show the public just what a scary load Tories are . And the comment you have made regarding your friend should become common knowledge .

        • Draco T Bastard 4.1.1.4

          …secondary tax system which tends to smash people with low paying part time jobs?

          The secondary tax rate wouldn’t hurt the poor if they did their tax returns – which most people don’t do because IRD tells them the tax that they pay is correct.

          That said, if we treated every worker as a business as we used to then we wouldn’t need the secondary tax rate at all. And if we had a UBI then we wouldn’t need abatement rates on benefits.

          • Sacha 4.1.1.4.1

            Having to wait until the end of the tax year to get some of your income hurts those with the least of it in the first place.

    • RedLogix 4.2

      I rather agree with your comments around renting Sabine – although understandably given your background your coming from the tenants perspective only.

      I’m on both sides of this fence; I am a landlord AND I’m currently renting myself.

      The NZ renting sector is in desperate need of growing up, on both sides. In many other developed countries there is a great deal more regulation and procedural protection for both parties. In this country it’s far too easy for good tenants to be shafted by crappy, amateur landlords – and vice versa.

      There are plenty of high-risk tenants who are a total nightmare for landlords. Too much risk on both sides of the fence.

      Renting in Australia for instance usually requires a substantial amount of form-filling, reference-checking and professional vetting by an agent. All tenancies are either for a fixed six-month or twelve-month term. Move out before then and you DO have to pay for the balance until another tenant is found. On the other hand – the tenancy is absolutely secure for its term. Maintenance is usually done by the agent and the costs simply deducted from the rent paid to the landlord.

      NZ is way behind on this. I’m not sure that rent-fixing is the answer. It’s led to all kinds of distortions overseas – but it’s certainly it is a market which is in dire need of more regulation in order to operate properly.

      • Lanthanide 4.2.1

        I agree, as a landlord and a renter, both sides of the situation need to grow up.

        I go to propertytalk.com every now and then, which is a predominantly NZ site for housing investment, mostly frequented by landlords but there’s also a tenants forum.

        The number of ridiculous stories coming out of the tenancy tribunal that are clearly biased against the landlord in favour of the tenant is frankly alarming and would be enough to put off most risk-averse people getting into the market.

      • Sabine Ford 4.2.2

        coming from a german back ground the idea that someone moves into a house / flat for 6 month, twelve month is simply mind boggling. Every time someone has to move it costs about 5000 $ in from of Bond, letting fee front up rent, and moving costs. – Who has that money? Not many! If i check out a flat, I make it quite clear, that the Agent better not waste my time. I don’t sign anything less then a year and I am only a long term tenant. It takes an enormous amount of time to go and visit flats/houses and be accepted, after filling out many forms and providing references and income statements. I have never ever been able in NZ to ask a Landlord to provide me with references that they are decent land lords etc. The onus is on the Tenet alone. I have lived in houses in NZ with leaking roofs (i now jokingly just say that i don’t care about the inside, can I climb on the roof to see if there is plant growth and duct tape), singing electricity and mushrooms growing down the ceiling….and this is standard. I have paid rent up to 2500 per month….for a house with no insulation, double glazed windows and or a decent bath. And that is the norm in AKL and in Wellington. Are there dead beat renters? yes, but there are also just as many Slum Landlords, that rent a property to have the mortgage paid before the they flog the house a couple of month later. ….And that is the problem of the Rental Market in NZ.

        • Draco T Bastard 4.2.2.1

          Are there dead beat renters? yes, but there are also just as many Slum Landlords,

          IMO, you’ll find that there are proportionally more slumlords than there are bad tenants.

          • Sabine Ford 4.2.2.1.1

            i tend to agree, but I was charitable. I have yet to rent a house in NZ that is not cold, damp and badly insulated. For some reason Kiwis think that they live in the Tropics. :)

            • RedLogix 4.2.2.1.1.1

              I have yet to rent a house in NZ that is not cold, damp and badly insulated

              Not mine. All our units are double-glazed, over-insulated and well heated. Most have showerdomes and some form of ventilation. Two have underfloor heating.

              Incidentally of the 33 tenants who have rented from us over the last 12 years (spread over a total of 8 units) – 3 have caused significant problems.

              One was imprisoned after kicking in all the doors while hospitalising his partner. The bond went no-where near compensating for the lost time, repairs and cash.

              Another simply stopped paying rent and refused to move. Lost six months rent before the system finally moved him on. I never bothered to add up the costs in that one.

              We carried another young couple with a sick baby many, many months of erratic or no rent payment (which meant I was paying their housing costs from my own after PAYE income) – and when they finally left there was a weeks work to clean the place up, and toilet and a bathroom ceiling that had to be replaced. All up around $6000 out of pocket.

              The other 30 tenants by contrast have all been fantastic – many look after the places better than we would. Four have gone on to buying their own first property.

              • Draco T Bastard

                Incidentally of the 33 tenants who have rented from us over the last 12 years (spread over a total of 8 units) – 3 have caused significant problems.

                Anecdotes ain’t data.

                That said, I would like to see some real research into this including why some people actually are bad tenants.

                • Lanthanide

                  Heh, I actually thought 3 out of 33 was a very low rate, and here you go implying that it’s high.

              • geoff

                I have nothing against you personally, RL, but your story of being the landlord of 8 units is a kind of microcosm of everything that’s wrong with New Zealand. You’re someone who, presumably, considers themselves leftwing yet you’re actively participating in a broken housing system for your own financial gain. (I assume you’re not a landlord for charitable reasons?)

                Does that have a whiff of hypocrisy or have I got things totally wrong?

                • Lanthanide

                  I don’t see what’s incompatible with being a landlord and being leftwing.

                  You’ll note that he says his units are far from slums. Presumably he’s also charging a fair rent for them.

                  If you’re going to judge anyone who is successful with suspicion, you might as well throw out half of the Labour MPs for being ‘wealthy’ and therefore somehow leftwing traitors.

                  • geoff

                    you might as well throw out half of the Labour MPs for being ‘wealthy’ and therefore somehow leftwing traitors.

                    I would throw out more than half of the them.

                    I don’t see what’s incompatible with being a landlord and being leftwing.

                    And that’s the problem. Lot’s of people think it’s fine but housing shouldn’t be considered an investment strategy. It’s a destructive, small-minded approach to housing.

                    • Lanthanide

                      Or, put it another way. It is highly likely these 8 units would still exist, if Red Logix didn’t own them; they’d just be owned by someone else.

                      Would you rather have Red Logix as the landlord, given what we know of his personality and how he treats his tenants and properties, or someone else who is highly likely to be not nearly so good a landlord?

                    • geoff

                      What a pitiful argument. If I don’t clip the ticket someone else will, and I’m a nicer guy than most so it’s all good

                    • Lanthanide

                      Well your argument seems to boil down to “I don’t like private landlords”.

                    • geoff

                      No. My point is that treating housing as an investment strategy is not good for the country and is so prevalent a phenomenon that even ardent leftwingers think it’s a good idea.
                      Having a house as a rental because you’ve moved town is one thing, actively purchasing 8 units as a money making scheme is something completely different.

                      I’m sure RedLogix is an excellent landlord but that is irrelevant. I know plenty of landlords who are really nice people but regardless, they’re actively participating in a system that is making things worse, not better AND they’re only doing it for personal gain.

                    • Lanthanide

                      IIRC Red Logix has talked on here before about his units, and I think he bought them as an investment for retirement, rather than for “making money” per se.

                      There is also a worthwhile distinction between buy-and-hold and buying and flipping for capital gain, again I think Red is in the former.

                      In general I have to agree with you though, housing investment is bad for the country because of the imbalance systems we have that give housing investment preferential treatment. Personally I don’t think it’s so bad as to impugn any left-winger that chooses to go down that route, though, as long as they’re good landlords etc.

                      Ultimately I think the same of my own circumstances: while I will vote for a government to raise taxes generally, I’m not going to go and donate my own income to the IRD (which you can in fact do) just because I’m a leftwinger.

                    • geoff

                      I do think it is that bad, it is what has caused a massive property bubble and locked at least one generation of people out of what should be affordable housing.

                      It’s the culture that makes it acceptable. It isn’t (yet) considered regressive to think of housing as an investment. Having the likes of Brian Gaynor in the Herald tell us how we should all be investing in the share-market instead of unproductive housing, isn’t going to change anything either.

                    • miravox

                      “And that’s the problem. Lot’s of people think it’s fine but housing shouldn’t be considered an investment strategy. It’s a destructive, small-minded approach to housing.”

                      I agree with this. If housing was treated as necessary as healthcare and education, and an investment in individual, family and community health rather than as a market and profit-making venture we’d all be a lot better off. I feel that profiting from private housing (including receiving tax breaks on investment) is incompatible with leftist ideals.

                  • Flip

                    I don’t see what’s incompatible with being a landlord and being leftwing.

                    Capitalist make money from capital (renting assets etc) which normally = right wing economically. Left wing earn money from labour/ working for income.

                    There are blurrings of that simple distinction.

        • alwyn 4.2.2.2

          You say “It costs about $5000 in “from” (I assume you mean form) of a bond etc, etc.”
          Why on earth should it cost you anything for a bond when you are only shifting? You are surely getting the bond from the previous property returned aren’t you?
          I can see a little bit larger bond if you are moving to a more expensive property but you seem to be saying that you have to find the whole of it each time you move. If that is the case and you are forfeiting your bond at each place you rent you really must be a tenant from hell.

          • Draco T Bastard 4.2.2.2.1

            You are surely getting the bond from the previous property returned aren’t you?

            Yep but that may actually come later than what’s needed to secure the place you want depending upon when the landlord releases it.

          • Lanthanide 4.2.2.2.2

            I think the point is that you have to have a new bond and there’s often a time when shifting that your previous bond is locked up and you need to pay the new one.

            While it is possible to transfer bonds from one property to another through housing NZ, some landlords are suspicious of this practice and won’t take on a tenant that does it, because they see it as evidence that the tenant is likely to have trouble paying rent in the future.

      • Draco T Bastard 4.2.3

        All tenancies are either for a fixed six-month or twelve-month term. Move out before then and you DO have to pay for the balance until another tenant is found.

        I was in a tenancy like that. The problem I had was that I couldn’t really afford to continue living there and I couldn’t afford to move out as I would get stuck paying two rents for a time. Fixed term leases are a PITA for low income people.

        Maintenance is usually done by the agent and the costs simply deducted from the rent paid to the landlord.

        One wonders what the purpose of the landlord is and why are we paying him? Might as well have gone straight to state housing – at least then we wouldn’t have to be paying somebody for nothing.

        Actually, that applies across capitalism. Why are we paying shareholders? They don’t do anything either.

        • RedLogix 4.2.3.1

          Yeah but that’s trying to have it both ways. You want the landlord to be locked into a fixed term – but for the tenant to be able to walk whenever they want.

          I’ve no problem whatsoever with State Housing. Roughly you can divide the housing market into:

          1. Around 60% home owners. The banks are happy to take these people’s money.

          2. Around 20% people who one day will own a house but either cannot afford to yet, or are in a transitional phase of their life and do not need to own one at the moment.

          These are the people that the private rental market suits best.

          3. Around 20% of people who will never be in a position to own a house, either due to low income, terminally bad credit, or some personal circumstance that excludes them from ever qualifying for a mortgage.

          These people are best served by social housing – provided either by the state, local govt, or not-for-profit ‘housing associations’ as is common overseas.

          I realise these are very broad generalisations – but it’s why I think there is a legitimate place for the private rental market but it does need much better regulation and management.. It also shows why there is a need for a strong social housing sector, to provide a floor in the market below which no private sector landlord could afford to fall.

          • Draco T Bastard 4.2.3.1.1

            You want the landlord to be locked into a fixed term

            Not really or, to be more precise, what I would like is a fixed term lease at the beginning but be able to move out when I want after that (with reasonable notice of course).

            I’ve no problem whatsoever with State Housing.

            You seem to have missed the point. If the rent is paid to an agent and the agent takes care of all the issues that the tenant has/is while taking out charges from the rent then what is the purpose of the landlord? The agent seems to be the one taking all the responsibility and the landlord is just dead-weight loss.

            The state could do that far better and cheaper and without the dead-weight loss of the private landlord or the agency.

            There is, quite simply, no reason for privately owned rentals.

            • RedLogix 4.2.3.1.1.1

              How come you always manage to make feel like only just a little to the left of Genghis Khan?

            • Psycho Milt 4.2.3.1.1.2

              There is, quite simply, no reason for privately owned rentals.

              Well, none other than the fact that every time having the government own everything has been tried, it’s made what we have look like paradise. But that’s a pretty good reason.

              • Draco T Bastard

                Private ownership is a problem as it encourages rentier behaviour and the exploitation of everyone else which everyone else can’t do anything about. I’m not joking when I say that the ever growing private ownership is taking us back to feudalism.

                Government ownership is a problem if the ‘government’ sees itself as a dictator and hides everything it does from the populace. It’s not a problem if it’s totally transparent and democratic.

                That said, I didn’t say that everything should be owned by the government.

                • A well-regulated private system with greatly expanded state housing or state involvement in the housing sector (eg. current left wing housing policies) would be fine. I don’t have a problem with people making profit off housing capital, or being middlemen as agents, if everyone’s taken care of for housing, and if they’re required to meet earthquake safety, insulation, wiring, hygeine, etc… standards before a rental contract can be made. Essentially, the lot of them need to be acting like good landlords like Red are.

                  I think it’s reasonable to require people to lock in to fixed term agreements for at least a year, although it would be nice if there was a bit more flexibility after that if at least one of the tenants has been renting the same house or through the same agent for a long time. Fixed terms are good in that they assure the landlord income and the renter a property, but they can also reduce labour and personal flexibility. It would be nice also if the insurance industry were forced to offer cover that includes reducing the risk of bad tenants who leave extensive hygeine problems or damage to the house that can’t be recovered from the bond, to give a bit more surety to landlords. Really a lot of the ticket clipping happens in what goes on with the rent money after it’s paid, (eg. agents, insurers, etc…) and how some of them don’t provide a fair service to renters and landlords.

                  But if someone wants to rent a house, they should be required to improve it enough to reduce the public health problems and large disaster risks caused by our bad housing stock. Slum lords can GTFO.

                  • Lanthanide

                    It would be nice also if the insurance industry were forced to offer cover that includes reducing the risk of bad tenants who leave extensive hygeine problems or damage to the house that can’t be recovered from the bond, to give a bit more surety to landlords.

                    Such insurance is already available. I think a lot of landlords don’t know about it though.

                    http://www.state.co.nz/personal-insurance/other-insurance/pages/landlord-insurance.aspx

                  • Draco T Bastard

                    I don’t have a problem with people making profit off housing capital, or being middlemen as agents,

                    I do because it ends up costing more and thus we don’t get the full benefits available from our economy.

            • Lanthanide 4.2.3.1.1.3

              Not really or, to be more precise, what I would like is a fixed term lease at the beginning but be able to move out when I want after that (with reasonable notice of course).

              Under the existing legislation that is already possible, and in fact actually the default case.

              If, at the end of a fixed term tenancy, a new fixed term tenancy is not arranged before 21 days of the tenancy ending, it automatically roles over to a periodic tenancy where you can give IIRC something like 21 days notice before moving out.

              Actually this is the position I’m in. My fixed term tenancy ended and the landlord didn’t sign a new agreement with me. We agreed on a 6 term tenancy by email but I’ve never signed any new tenancy documents, so legally speaking I’m in a periodic tenancy right now. I don’t expect I’ll take advantage of the situation, but it’s up my sleeve if I need it for some reason.

              • Draco T Bastard

                Yep, I know. I’ve had that most times in fact. The problem I had was the time when the landlord turned up to renew the lease every year with absolutely no flexibility. If I didn’t sign the renew then I had to be out on the last day whether I’d found a place or not and I couldn’t afford to leave early effectively locking me in place.

                • Lanthanide

                  Yeah, it’s lame. But I guess that’s why they have the minimum 21 day period in there: it means if they come to you on day 20, it’s too late because it’s already turned into a periodic tenancy at that point.

          • karol 4.2.3.1.2

            Some of us choose to rent rather than go into the whole home ownership thing. It’s easier, if like me, you’ve moved countries a few times, as well as living in different locations within a country. And it’s also preferable if, like me, you prefer a relatively small living space. Owning your own piece of real estate is far too over-rated, IMO.

            I’ve nothing against private landlords if they aren’t profiteering from it, an are responsible,

    • Lanthanide 4.3

      We already have student loans with 0% interest, providing you continue to live in NZ. Which I think is completely reasonable and fair.

      There is a new $50 annual admin fee which is purely nickle-and-diming from this National government, which IMO they should have kept alongside the 10% early repayment bonus and wiped in any year in which someone paid $500 or more; eg make $500 voluntary payment and you get $50 extra as well as the $50 admin fee for that year wiped, making total savings of 20% on your $500 early repayment.

      “Allow for Business Costs, i.e. cost of establishing a CV, Folders, Interview Clothing etc to be tax deducted. Surely if we put our thinking heads together we could find a few more things than just Capital Gains.”

      Fundamentally these things do not cost much money. If you really want them brought into the tax regime, you’re adding a huge amount of overhead and administration costs for a very small benefit to most individuals, as well as opening the system up for more rorting.

      IMO better for the status quo, and for extra government allowances / charity groups to cater for these costs to the segment of society that most needs it.

      For example there are quite a few non-profit groups that can provide help with CVs as well as business-appropriate clothing for job interviews etc. Was listening to a piece on This Way Up on National Radio last year about one in the North Island specifically for getting women clothing for job interviews and support through the process.

      • Sabine Ford 4.3.1

        If you are unemployed, and you prospect for Jobs, any Jobs, these costs are huge. They are costs of doing business….i.e. an outfit for a lady to go to interviews will about a f200$ (shop at Max/Hannahs/ etc) throw in a Haircut etc. Having professional CVs on hand to take to interviews, Printer ink, a Printer, Paper, the folder itself. For someone who works these might just be 50$ for someone on an unemployment benefit it will mean electricity/water/phone./food or that…..It always depends how you look at it. And it is the cost of doing business, so why not be able to claim the cost back? Why should working people be the only ones in NZ that can not claim any working related expense back?
        Please someone explain that to my in Laymans terms, because I can not understand it. We don’t expect a selfemployed person to go to a Charity for Gasoline costs? But we expect the receptionist to go to a food bank to make ends meet? Really?

        Why ?

        Oh and the place for the free clothes? You need to be referred by Winz, they might not have your size, the stuff is old, and you will only get one outfit.
        Why do I know this? Because I had to go there once, It was the most embarrassing, painful thing i ever did in my life. I ended up with something that I would never ever wear in real life, but I took it to basically please the Lady working at the charity (i was a rather skinny girl, not fitting the average size 12 they had on offer). I did not get the job.

        As for the student loans, I did study in germany so I am not aware fully of the Student Loan situation in NZ.

        • Lanthanide 4.3.1.1

          And it is the cost of doing business, so why not be able to claim the cost back? Why should working people be the only ones in NZ that can not claim any working related expense back?
          Please someone explain that to my in Laymans terms, because I can not understand it. We don’t expect a selfemployed person to go to a Charity for Gasoline costs? But we expect the receptionist to go to a food bank to make ends meet? Really?

          Why ?

          Because the GST component on $250 of expenses is $32.60 and if you’re taking this off someone’s PAYE who is earning in the 17.5% bracket we’re talking about $43.75.

          So all together, if you exempted GST and PAYE you’d save $76.35 on $250 worth of expenses. A reasonable amount, and sure every little bit helps for those who are unemployed, but surely a system in which the full $250 was paid for them, either by WINZ or some other community organisation, would be much better.

          Similarly the system you’d proposed would be available to people such as myself who are earning in the top 5% and have no need of such tax breaks. It’d be easy to rort and claim these expenses each year.

          So again, the proper solution is for the government to set up explicit funding for these costs which can be directly targeted at those who need it most – the unemployed and those in the bottom 50% of earners.

          Just for example, the place you went to that had old, unappealing clothing that didn’t fit and only gave you one outfit? Well instead they’d give you lightly worn – to brand new clothing, 2 outfits, it’d suit you and fit well.

          • Draco T Bastard 4.3.1.1.1

            Because the GST component on $250 of expenses is $32.60 and if you’re taking this off someone’s PAYE who is earning in the 17.5% bracket we’re talking about $43.75.

            We’re talking about treating a business as a business. Income – expenses = profit. The profit is what’s taxed at the appropriate PAYE rate. GST would be GST received – GST paid.

            A reasonable amount, and sure every little bit helps for those who are unemployed, but surely a system in which the full $250 was paid for them, either by WINZ or some other community organisation, would be much better.

            WTF are you smoking? The full amount would still be paid. We’d probably have to increase taxes though.

            Similarly the system you’d proposed would be available to people such as myself who are earning in the top 5% and have no need of such tax breaks. It’d be easy to rort and claim these expenses each year.

            You do understand that you’d have to have a receipt to get the tax deductibility don’t you?

            So again, the proper solution is for the government to set up explicit funding for these costs which can be directly targeted at those who need it most – the unemployed and those in the bottom 50% of earners.

            Nope, the proper solution is to treat all businesses the same.

            • Lanthanide 4.3.1.1.1.1

              We’re talking about treating a business as a business. Income – expenses = profit. The profit is what’s taxed at the appropriate PAYE rate. GST would be GST received – GST paid.

              Seems you don’t actually understand how that works. I’ll give you an example with round numbers.

              You earn $20,000. Your expenses are $250. In the current system, you might pay $3,000 in tax on your $20,000 (15%). If you deduct your $250 expenses first, then you’d pay $2,962.50 in tax, which is $19,750 * 15%, or the $250 you paid in expenses has reduced your tax bill by $37.50, not the entire $250 you seem to believe.

              As for GST, your suggestion is actually worse than mine, because individual people typically do not receive GST, because they’re not selling anything. So GST received = 0, GST paid = $32.60, GST payable to government = $32.60. My suggestion is to exempt the purchase from GST.

              WTF are you smoking? The full amount would still be paid. We’d probably have to increase taxes though.

              Assuming you are still talking about income – expenses = profit which is taxed, then you’re wrong. As in my example above, all you’d get back is your marginal income tax rate on the expense, not the full amount.

              I propose the government pay the full $250 of your expenses, through targeted grants or funding community organisations that provide the goods/services for free. This is better than a tax rebate and targetted at those who need it.

              You do understand that you’d have to have a receipt to get the tax deductibility don’t you?

              Yes, I do. I provide a tax receipt for $200 of business clothing that I say was for a job interview. Prove me wrong. Note: proving me wrong means you have to employ someone to investigate the truthfulness of my claim, thus increasing expenses of this system.

              Nope, the proper solution is to treat all businesses the same.

              Private individuals aren’t businesses. This has to be one of the bizarrest claims you’ve made, especially since you’re so communist in most regards.

              • Draco T Bastard

                As for GST, your suggestion is actually worse than mine, because individual people typically do not receive GST, because they’re not selling anything.

                Except for the fact that I said to treat all businesses the same and they’re selling their labour +GST.

                Private individuals aren’t businesses.

                If they’re selling their labour then yes, they are. Under the current system what else would they be?

                I propose the government pay the full $250 of your expenses, through targeted grants or funding community organisations that provide the goods/services for free. This is better than a tax rebate and targetted at those who need it.

                And comes with all the expense of the needed bureaucracy that you’re whinging about for making things tax deductible.

                I provide a tax receipt for $200 of business clothing that I say was for a job interview. Prove me wrong.

                I’ll take your word for it just so long as the receipt says that the sale was a business suit and you remember that you only get to purchase one per year for a job interview. Remember, we can put other restrictions in there.

                Also, business clothing is already tax deductible for the self-employed. Think about it.

      • Draco T Bastard 4.3.2

        Fundamentally these things do not cost much money.

        Neither does the coffee you have at smoko but it’s still tax deductible for the business.

        It’s one of the biggest pieces of BS about our society in that we’ve decided that people going to work for others aren’t in business themselves and, using that failed logic, treat them differently from every other business.

        Was listening to a piece on This Way Up on National Radio last year about one in the North Island specifically for getting women clothing for job interviews and support through the process.

        Dress for Success is global but only for women.

        IMO better for the status quo

        The status quo isn’t working.

        • Sabine Ford 4.3.2.1

          so good I had to repeat it.

          “It’s one of the biggest pieces of BS about our society in that we’ve decided that people going to work for others aren’t in business themselves and, using that failed logic, treat them differently from every other business.”

          there is a lot of money that people that work for others spend in order to go to work for others. But apparently its not the same. The cost of business is more of a cost to some that to others, and we wonder why inequality is sky high.

        • RedBaronCV 4.3.2.2

          Although DTB I am always heartened by the number of people who bring their breakfast cereal to work and use the high priced business milk. Pointed this out to one business owner, who stewed happily but couldn’t do anything about it.

        • Lanthanide 4.3.2.3

          Nice to quote me out of context, DTB.

          I said better for the status quo AND extra government allowances to people and charities that help those who are really in need with clothing and job-hunting expenses.

          • Draco T Bastard 4.3.2.3.1

            The status quo still isn’t working.

            Specifically, you said minor expenses shouldn’t be tax deductible because they’re minor and that low income people should just get government grants or go to non-profit organisations get a top up.

            This, as I pointed out, is treating businesses differently. I also think it’d be more complex and thus more expensive to do than making those expenses tax deductible.

            • Lanthanide 4.3.2.3.1.1

              Minor expenses shouldn’t be tax deductible because:
              1. They’re minor
              2. They’re too easy to rort
              3. The expense in managing these would increase costs on the government, and become one of these “dead-weight losses” you are so fond of

              At the moment most PAYE earners don’t file tax returns. If you suddenly allow people to claim for minor expenses, everyone is going to file tax returns. That means you’re going to have to hire more people at the IRD to handle all these tax returns (automated systems can only go so far). You’ve drastically increased the scope for fraud and most individuals are only going to see minor cash benefits that would not make substantial differences to their lives.

              There are better ways to spend the same amount of money as proposed in your scheme… such as fully targeting it at the people that truly need it. Administration of this would be more efficient, the people who receive it are the ones who really need it and because you’re not cutting the pie into so many tiny pieces, you can give bigger pieces of pie to these people so they would benefit substantially more from the payments.

              This, as I pointed out, is treating businesses differently.

              That’s because for some reason you’re treating private individuals as businesses, which is frankly strange.

              • Draco T Bastard

                If you suddenly allow people to claim for minor expenses, everyone is going to file tax returns.

                Which is how it used to be but the government over the last few decades have thought the same as you and killed the ability of the individual person to file tax returns.

                That means you’re going to have to hire more people at the IRD to handle all these tax returns (automated systems can only go so far).

                That would depend upon the automated system wouldn’t it? I’m of the opinion that we could easily make it close to fully automated – just need to have every transaction go through an electronic system and be fully itemised. We could call it EFT-POS. We could easily determine inflation as well.

                There are better ways to spend the same amount of money as proposed in your scheme… such as fully targeting it at the people that truly need it. Administration of this would be more efficient,

                No, it wouldn’t.

                That’s because for some reason you’re treating private individuals as businesses, which is frankly strange.

                No, treating someone in business as not being in business is strange and delusional.

                • Lanthanide

                  just need to have every transaction go through an electronic system and be fully itemised. We could call it EFT-POS. We could easily determine inflation as well.

                  Fully itemised, eh? You realise that at the moment, EFTPOS does not “fully itemise” anything, all it does is calculate the sum owed and transfer it between bank accounts.

                  So what you’re suggesting is actually a radical re-writing of EFTPOS. I’m not sure if you’ve ever dealt with inventory management, but trying to come up with ways to code all items sold across all companies in New Zealand in a consistent fashion, well, good luck to you. Also still doesn’t solve the rort problem.

                  No, it wouldn’t.

                  Although you don’t really have any basis for saying that except for your magical technical solution that is massively different from what we have now in terms of electronic payment. Which is now going to have to send terrabytes of data from around the country to a single database to be processed to get the final balance of everyone owing.

                  My basis for saying it would cost less to administer is purely on the number of recipients involved: you are talking about dealing with ~4.1M people’s individual tax status. I’m talking about dealing with maybe ~500,000 requests for grants and service per year.

                  • Draco T Bastard

                    but trying to come up with ways to code all items sold across all companies in New Zealand in a consistent fashion, well, good luck to you.

                    Bar codes and the software to deal with them already exists and so do relational databases.

                    Which is now going to have to send terrabytes of data from around the country to a single database to be processed to get the final balance of everyone owing.

                    Yes but I doubt if it would be terabytes per second (or even daily or weekly) as it would be done on a transaction by transaction basis. I doubt if it would get much over a megabit per second (if that) and that would be spread out over the entire country.

                    Paymark, which processes about 75% of all eftpos and credit card transactions in New Zealand, says a record-breaking 148 transactions per second was recorded at 12:24pm today.

                    It sounds like a lot but, once you really break it down, it’s sweet FA.

                    My basis for saying it would cost less to administer is purely on the number of recipients involved: you are talking about dealing with ~4.1M people’s individual tax status.

                    Almost fully automated and done at the time of transaction.

                    I’m talking about dealing with maybe ~500,000 requests for grants and service per year.

                    Done manually taking about an hour of labour each time.

                    Really, which do you think will cost less?

                    Also still doesn’t solve the rort problem.

                    Yeah, I really think you’ll find that it’s solved.

              • Murray Olsen

                ” That means you’re going to have to hire more people at the IRD to handle all these tax returns (automated systems can only go so far).”

                Good. A lot of people need jobs.

      • RedBaronCV 4.3.3

        The CV’s could be dealt to by the local WINZ office because the printing folders etc are not cheap.
        But aren’t you missing the point L? You are demanding that charities (and those who do this work out of the goodness of their heart ) should fill the gap.
        FFS why are people allowed to get so poor in the first place that these costs have to matter so much to them that they are a real obstacle.

        • Lanthanide 4.3.3.1

          I’m not demanding charities fill the gap.

          I’m saying the government needs to fund these charities and also offer more in the way of direct assistance through WINZ or other channels to those that genuinely need the help, rather than adding a hard-to-administer and poorly-targeted, easily-rorted tax break available to a lot of people that don’t need the help.

  5. Sanctuary 5

    “5. And the most contentious … working for families for beneficiaries”.

    This will never fly, for the simple reason most voters won’t be able to get past the scorn being poured on the obvious stupidity of saying you will be providing working for families for families that don’t work.

    Labour has got no-one but themselves to blame for this. They were the party that brought in WFF as a middle class welfare/subsidy rather than seeking mechanisms to force business to pay decent wages. And they were the party that cynically excluded the non-working from that taxpayer subsidy/welfare scheme in order to pander to middle class prejudice.

    They would have to significantly re-brand the policy before they could extend it to the non-working.

    • QoT 5.1

      Completely agree. This issue is only “contentious” because the Labour government which brought in WFF deliberately set it up to give a handout to the middle class while reinforcing the idea of “deserving” vs. “non-deserving” poor.

      One workaround could be raising benefit levels to ensure they’re actually liveable.

    • alwyn 5.2

      “seeking mechanisms to force business to pay decent wages”
      The whole problem is that, although you can force business’s to pay any minimum wage you care to nominate, to the people thay actually hire you canot force them to hire people if it doesn’t make economic sense for them to do so.
      They can always take the option of mechanising process’ if doing so will get the work done at a lower cost. Just look at all the jobs that used to exist but don’t any more. How many telephone operators do you know? How many bank tellers are there around today? When do you think call centre employees will vanish as computerisation takes over?

      If a person cannot produce enough output to match the wage an emplyer is forced to pay they won’t hire them. If people aren’t getting a socially acceptable income, and they are incapable of actually earning that amount then pay them what they are worth and make the difference up by things like WFF.

      One of the saddest, and most memorable, stories I remember (and I have probably referred to it previously on this blog) was that of an intellectually handicapped young man working in some sort of sheltered workshop. He was paid a dollar or two per hour. Unfortunately the law was changed, and interpreted in such a way that he had to be paid the minimum wage. His mother was interviewed by the paper when he was laid off. She said that he couldn’t produce output worth more than a dollar or two. However if he could be paid that he was worth employing. It made the lad happy. He was employed, he had somewhere to go each day, he met other people and he earned what was, in effect, his pocket money. It also got him out of the home and gave his mother a break. The state meantime paid his mother the main cost of his upkeep. Isn’t that better than having him stagnating at home and feeling useless?

      • Draco T Bastard 5.2.1

        Universal Income & the Minimum Wage

        Although, after thinking about it since then, I still think we’d need a minimum wage but it’d be way below what it is now. I also think that low paying jobs should be done away with ASAP and the people working in them transferred to training/education for a higher paying job that they want to do.

        Society operates on a mass of cross subsidies – can’t get away from that and that is another aspect of free-market capitalism that the current economic theory fails at.

        • alwyn 5.2.1.1

          That rather ends the debate on the subject, at least as far as I am concerned.
          I only read the main post, and not all the comments, but there is nothing at all there, or in the other two paragraphs that you have put in this comment that I have the slightest problem with.

          Completely free markets, with no regulation, certainly do have problems. A market economy, with some degree of regulation does work fairly well however. If nothing else it stops people refusing to stop doing stupid things. If it is a private firm doing it they go broke. That is my real objection to politicians trying to run businesses. They will never admit it is time to recognise error and quit.

          • Draco T Bastard 5.2.1.1.1

            If it is a private firm doing it they go broke. That is my real objection to politicians trying to run businesses. They will never admit it is time to recognise error and quit.

            Can’t see the fossil fuel corporations stopping any time soon even though what they’re doing is obviously stupid.

          • Sanctuary 5.2.1.1.2

            Alwyn has so much stupid it hurts.

  6. Molly 6

    Along with political policy change – there could be changes in mindset within the population.

    After seeing Transport Blog’s post – Read This: Happy City I decided to do so. It’d been coming up as a suggested purchase on a couple of my book buying sites.

    Received it yesterday and the had a brief chance to look at the first few pages, in a chapter about Enrique Peñalosa – the type of politician long been missing from NZ’s political landscape:

    “When Peñalosa ran for the mayor’s seat back in 1997, he refused to make the promises doled out by so many politicians. He was not going to make everyone richer. Forget the dream of becoming as wealthy as Americans: it would take generations to catch up to the gringos, even if the urban economy caught fire and burned blue for a century. The dream of riches, Peñalosa complained, served only to make Bogotans feel bad.

    “If we defined our success just in terms of income per capita, we would have to accept ourselves as second – or third rate societies – as a bunch of losers, “ he said. No, the city needed a new goal. Peñalosa promised neither a car in every garage nor a socialist revolution. His promise was simpler. He was going to make Bogotans happier.

    “And what are our needs for happiness?” he asked. “We need to walk, just as birds need to fly. We need to be around other people. We need beauty. We need contact with nature. And most of all, we need not be be excluded. We need to feel some sort of equality.”

    Ironically, in giving up the chase for the American dream, Peñalosa was invoking a goal set out in the American Constitution: by pursuing a different kind of happiness, Bogotans, despite their relatively meager paychecks, really could beat the gringos.”

    There are a wealth (haha) of movements out there that can benefit the less financially well-off. Many of whom already know this, and are generous with what they have. It is the loss of wider support networks other than family and friends that makes managing that much more difficult.

    Collaborative consumption, car sharing, collective developments and businesses, local investing and purchasing, all these can contribute to healthier communities without the need for extra dollars.

    How we spend is just as – if not more – important than how much we have to spend.

  7. Sanctuary 7

    To add, I am saddened at how limited your ambition is for what should be done. For example, I am amazed (but not surprised, given the Kiwi penchant for top down solutions) that you fail to propose any sort of mechanism for workers to self-organise to get their own improvements in work terms and conditions. Sure, the neo-liberal press has so demonised “unions” that in the current climate the re-introduction of widespread unionism would be impossible. But what about Labour announcing it it is going to set up German style works councils? (http://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Workplace-Representation)? The Germans are just about the most productive workers there are. Adopting what they do could be easily sold to the electorate.

    So what would I do as well as your five points?

    6/ Introduce German style work councils.
    7/ Re-introduce inheritance tax and a graduated income tax scheme.
    8/ And (if I were a mad dictator for a day) Introduce a requirement that all schools must represent the economic, social and demographic makeup of sample taken from a 10km radius. If that means bussing Island boys into AGS, and sending little Remmers toffs to Tangaroa college, all the better.

    • mickysavage 7.1

      The list is not meant to be exhaustive and the examples in the list are exactly that, examples. They are all policy changes which the first budget could achieve. The post is more about general theming of reforms rather than determining the reforms themselves.

    • Anne 7.2

      If that means bussing Island boys into AGS, and sending little Remmers toffs to Tangaroa college, all the better.

      Pardon my chuckling. It would be the best comedy in town. Worth a trip to Tangaroa to watch the bawling little Hooton clones being dragged through the gates.

  8. Most students used to have their course fees paid for and back in the 1980s were also paid a living allowance which went some way to paying for living expenses.

    Yes – it meant I paid next to nothing for my education and only needed to work during the summer. Which was great for me, but it was feasible for the nation’s long-suffering taxpayers only because university education was the preserve of a tiny elite, and many of the degrees on offer didn’t require anything more expensive than a few rooms, an academic and the odd postgrad student tutor. Once employers started wanting tertiary ed qualifications for everything more complicated than shovelling shit from one place to another, and universities became the biggest IT organisations in the country, free tertiary ed with generous living-costs allowance ceased to be an option.

    TL/DR version: worked back then, too expensive to it now.

    And the most contentious … working for families for beneficiaries.

    As Sanctuary points out above, extending something called an “In-Work Tax Credit” to those not in work would be industrial-strength voter repellent. Reversing Richardson’s benefit cuts would be a much more justifiable policy, but even there you’d need to tie it to policies that involved making more work available, making work pay and making sure that people who can work do work, otherwise you’re setting yourself up to have your policy portrayed as giving wasters a pay increase at taxpayers’ expense.

    • Sanctuary 8.1

      My biggest problem is the way tax-paying cleaners in South Auckland are subsidising the university education of many of what end up to be Australia’s professionals. We are not a mega-rich country, and I can’t see how we can continue to afford to keep subsidising the Aussie workforce. We might not be able to do away with student loans, but I strongly favour “golden handcuff” loan relief for graduates who stay in NZ.

      • Lanthanide 8.1.1

        Well we already have 0% interest student loans unless you live overseas. So those professionals now living in Auzzie will be paying market interest on their education.

        Of course that doesn’t hardly recoup the governments initial ~85% subsidy on their education.

        I think a scheme that actively wrote-off student debt for staying in NZ however would need to be approached very cautiously. We already do have some schemes around doctors and nurses encouraging them to work in the provinces. I think a broad and general scheme that applied to all NZ graduates would be too expensive and not really achieve very much – getting to save say $5k a year on your student loan by staying in NZ pales in comparison if you’d be earning $30k more in Oz anyway and in a better climate / bigger city / etc.

        I think better to start re-couping the government’s initial subsidy for those who move overseas, so their student loan actively grows. I don’t see how that’s politically tenable, or even entirely morally fair, though.

        • Olwyn 8.1.1.1

          Since 2008 New Zealanders living in Australia have been charged compound interest on their student loans. This ensures that all but the highest earners cannot outrun the ever-expanding interest. Hence they find themselves paying tax in Australia, where they are unable to access welfare provisions, and what is effectively an ongoing tax to New Zealand, where they no longer live.

          • Psycho Milt 8.1.1.1.1

            Since 2008 New Zealanders living in Australia have been charged compound interest on their student loans.

            Always seems odd to me that there are students who think it outrageous that not paying back a loan causes the interest on it to pile up. I can only assume they aren’t economics or finance graduates…

            • geoff 8.1.1.1.1.1

              Funny, I’ve never met any students who thought that was outrageous. What they do find outrageous is that they were duped into taking on massive debt for no good reason.

              • QoT

                Yes, the myth of the hordes of ungrateful 20-somethings who took student loans and didn’t understand what the word “loan” meant is a great bugbear of mine.

                Have I met people who got loans, fully intending to fuck off overseas and never repay them? One or two. What they had in common was a massive sense of betrayal by the politicians who never paid varsity fees then imposed student loans on the next generation.

          • Lanthanide 8.1.1.1.2

            I’m curious as to why you say this is since 2008, because as far as I know it’s always been the case with the student loans.

            Labour made them interest-free but there was always the caveat that you had to live in NZ. Before that, everyone was charged interest regardless of where you lived.

            • Olwyn 8.1.1.1.2.1

              I have been told about this by people living in Australia, and so far my attempts to get clear about it haven’t proved successful. Going by their reports, the interest changed then to a form of compound interest, which causes the debt to grow astronomically. Here is a story from the Herald in 2010. They guy in question seems to have forgotten his small loan and not paid any of it, but the growth of his debt seems extreme to me. Up there with Instant Finance.

              http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10670936

              This is far from being my area of expertise, so I may well be misunderstanding something.

              • Lanthanide

                Ok, I don’t think there’s anything new here.

                I’ve yet to come across any loan in which the interest didn’t compound.

                Also that article talks about a loan from the 90′s when he was 19, and he’s now 39, which is 20 years of compounding debt. It’s not surprising it’s grown as large as it has.

        • Draco T Bastard 8.1.1.2

          So those professionals now living in Auzzie will be paying market interest on their education.

          Except that they’re not paying at all.

          What we need to do is to make NZ worth staying in and we don’t do that by remaining a farm. We do it by pushing the boundaries: fully automated factories, mining and even farms that provide us with what we need so that people can do what they want in R&D and Arts & Craft.

          • Sacha 8.1.1.2.1

            Yes, creative knowledge-based industries are an attractive future. ‘Technology’ is last century’s answer. Other nations will always be ahead of us in volume manufacturing, engineering, etc (though higher-value niches are still space we can thrive in).

            Yet look what National’s recent education policy prioritises – factory skills.

          • Lanthanide 8.1.1.2.2

            Except that they’re not paying at all.

            Actually most expatriates do pay their loans, and the current government is really cracking down on it, particularly for those that live in countries with which we have reciprocal tax agreements, which is most English-speaking countries – obviously including Australia.

      • Chooky 8.1.2

        …if they stay in New Zealand they may be unemployed

    • Lanthanide 8.2

      Glad to see someone else here agrees with me re: free tertiary education in this day and age.

      • Chooky 8.2.1

        …in Germany and France and probably most Scandinavian countries they have free Tertiary education….it is only in Anglo-Saxon countries ( led by monetarism of USA Britain etc, with Neo Liberal economics that they saddle youth with huge burdens for Tertiary education….an education which our generation enjoyed largely for free…I think it is a disgrace!

        ….youth should be the last that we come down on hard financially …just when they are trying to make their way in the world!…..if we do come down hard on them….. they will feel no loyalty to NZ….as it is they are acutely aware of how our generation got Tertiary education for free!.

        It is the Capitalist class that wants to make money out of the education of youth!….shame on anyone who suggests this!

        ….tax the landlords and property speculators first imo!

        • Draco T Bastard 8.2.1.1

          +1000

        • PapaMike 8.2.1.2

          Bear in mind that Norway is able to do great social work and free education because of the Oil Drilling that has amassed into their coffers.

          • miravox 8.2.1.2.1

            “Bear in mind that Norway is able to do great social work and free education because of the Oil Drilling that has amassed into their coffers.”

            The amassing of the funds in the Norwegian coffers did not occur in an ideological vacuum. Compare and contrast where North Sea oil profits went in the UK and Norway.

    • Draco T Bastard 8.3

      TL/DR version: worked back then, too expensive to it now.

      Wrong: Still more than capable of doing it now as the thousands of people out of work show. Basic Real economics: If we have the resources to do it then we can afford to do it.

      The problem is the monetary system which gives a false idea as to what’s affordable especially as the rich vacuum up most of the money.

      • Colonial Viper 8.3.1

        Basic Real economics: If we have the resources to do it then we can afford to do it.

        Correct. With a slight clarification for the uninitiated: money is NOT a resource. It is simply a unit of account created by computer keystrokes.

      • Psycho Milt 8.3.2

        Basic Real economics: If we have the resources to do it then we can afford to do it.

        Sure – “we” can do all kinds of things with the money we put into the communal pot. But again, if a political party wants to be put in charge of what we do with that money it should avoid voter-repelling policies. With that in mind, consider offering NZ’s working-class voters a policy in which huge amounts more of their tax contributions are used to ensure middle-class kids don’t pay have to pay anything for the education they need to get that fancy job – and get a living allowance while they’re doing it.

    • geoff 8.4

      @Psycho & Lanthanide:

      What do you do about all the youth unemployment when you get rid of university education?

      I think the university system is a racket which has spent decades saddling naive young people with pointless debt and has robbed them of years of potential earning.

      But if you don’t have something to replace the system you’re going to end up with much greater unemployment.

      • gem 8.4.1

        Education became a bigger portion of the economy as manufacturing declined and western economies relied on the service and financial sectors. It made sense to steer youngsters into this growing sector; politicians didn’t know how to make a neoliberal economy work so they pushed the education to succeed line. Britain has recently sold nearly £900 million of student loan debt to the private sector. Encouraging the masses to enter tertiary education also created a new financial product to play with.

        • geoff 8.4.1.1

          politicians didn’t know how to make a neoliberal economy work

          I don’t agree with this characterisation, it makes politicians sound like innocent victims rather than the architects of the farce that it is.

          So what would your solution?

          • gem 8.4.1.1.1

            I don’t think they’re innocent victims, but I do think they’re numpties. As we know, the last generation of politicians (although some are still around now, for god’s sake) bought the Washington Consensus, and we were taken along for the ride. We’re left with its legacy. Clark wanted to more fundamentally alter the status quo , but it seems was scared off by the spectre of capital flight, and Labour’s still broadly in this mould. There’s ultimately large forces at work here; that’s not to say all’s lost. But we have to pressure politicians and not let them off the hook. That means not accepting the line that, for example, we’ll bring in a living wage only ‘as the books allow’, or that the superannuation age has to rise when this makes no sense, or that we won’t follow Europe and implement a financial transactions tax or even find out what it is. It also means we stop pretending that it’s ok for Labour to support the TPP, and the line that ‘as long as NZ’s interests are protected it’s good’, when the party should reject it outright.

            • geoff 8.4.1.1.1.1

              Fair enough…but…what about the tertiary education system? Would you change that and if so how?

              • gem

                What I’d do about it depends on the control I had over other levers, such as enabling people to access resources in their own communities/ teaching them practical skills at a young age etc.

      • Will@Welly 8.4.2

        geoff -it’s really been only 3 decades of student debt. That’s how short-term our memories are. Even then, the 1980′s debt system wasn’t “loaded” like today.
        The problem is in those 3 decades we’ve either exported the jobs, accepted lower/cheaper standards, or simply given up.
        Take a pair of NZ made shoes, made back in the day. Not cheap, when compared to today’s “imports”. But chances are, they had a life span. Today, what is the life-span of a pair of cheap imported shoes? The same argument could be made with a lot of clothing.
        New Zealand manufacturers often set rigorous standards of manufacturing. Yes, that came at a price.

        • geoff 8.4.2.1

          That’s why I said decades, ie more than one.

          So what’s your solution? Keep going? More debt forever?

      • Psycho Milt 8.4.3

        @Psycho & Lanthanide:

        What do you do about all the youth unemployment when you get rid of university education

        Well, I’ve certainly no desire to go back to the not-so-good-old-days when we could afford free tertiary ed because only a few got to experience it. But if we did, we’d need the same kind of paths into work that existed back then – apprenticeships, for instance.

        • geoff 8.4.3.1

          Apprenticeships is what I would think could work, but for a much wider range of employment than than has traditionally been the case.

          Why not have apprenticeships for scientists, accountants, IT workers, the lot?

          • Draco T Bastard 8.4.3.1.1

            Why not have apprenticeships for scientists, accountants, IT workers, the lot?

            I’d be all for that actually. On the job training suits some people far better than any amount of schooling.

      • Lanthanide 8.4.4

        Not sure where I said we should get rid of university education.

        As for access, currently with 0% interest free student loans and free entrance over 20, anyone who wants to get an education can.

        Although I believe National put on an age limit of 45 for student loans, which I’d have to say I generally don’t support, but haven’t considered the results or circumstances of this too much.

  9. Penny Bright 9

    Here you go !

    How about advocating the following principles?

    * Genuine transparency – open the books at local and central government level and make publicly available the ‘devilish detail’ showing EXACTLY where ratepayer and taxpayer monies are being spent.

    ie: The NAMES of the consultants and contractors; the SCOPE of the contracts; the TERM of the contracts and the VALUE of the contracts.

    Publish these details in Annual Reports of Councils (including CCOs), all Government Departments; Crown Entities, and State-Owned Enterprises – and make this information available on-line.

    *Social welfare – not corporate welfare.

    ie: The public majority should benefit from public monies – not a corporate minority.

    To ensure ‘prudent stewardship’ of public monies, subject contracted-out (privatised) public services to a ‘cost-benefit’ analysis, compared with ‘in-house’ service provision under the public service, not commercialised (profit-making) model.

    If private sector provision is NOT more ‘cost-effective’ – then CUT OUT the CONTRACTORS.

    (Please be reminded – that as soon as local and central government get into ‘contracting’ – then this requires ‘contract management’, so you end up replacing one layer of public service ‘bureacracy’ with TWO layers of private sector CONTRACTOCRACY – where highly paid consultants project manage the works contractors.

    ie: TWO layers of private sector ‘piggies-in-the-middle’ engorging themselves at the public trough.

    (That was the real reason behind the Auckland ‘Supercity’ council amalgamations – setting up a bigger public trough for fewer but bigger private snouts.

    Now – it will be easier for privatisation (PPP) supporter, Auckland Mayor Len Brown to push for PPPs, because of the larger scope.

    http://media.nzherald.co.nz/webcontent/document/pdf/201348/PPPStudyForAttachmen1.pdf

    First CCOs – then PPPs?

    Remember – that’s what the neo-liberal Rogernomics reforsm were all about – commercialise, corporatise – PRIVATISE.

    First State-Owned Enterprises (SOEs) – the commercialised ‘profit-making’ model owned by the State – then flicking them off to private shareholders.

    Beware the bullshit!

    Public-Private-Patnerships (PPPs) are STILL privatisation, because the income stream from operating and managing assets that are still publicly-owned, flows into the private sector who have the PPP contracts.

    * Make it a mandatory statutory requirement for ALL elected representatives / Board members / Executive staff / those responsible for property and procurement (and their spouses) to publicly declare their interests, in Registers of Interests, which are available (on-line) for public scrutiny.

    How can ‘conflicts of interest’ be minimised if they are not declared?

    Ok – that will do for now – but a framework for genuine transparency and democratic accountability is available here: ak-Mayoral-campaign-19-July-2013-2.pdf

    Political parties – concerned citizens – help yourself…..

    Penny Bright

    • freedom 9.1

      +1
      the single most obvious way to reform our governments.

      Genuine transparency – open the books at local and central government level and make publicly available the ‘devilish detail’ showing EXACTLY where ratepayer and taxpayer monies are being spent.

      ie: The NAMES of the consultants and contractors; the SCOPE of the contracts; the TERM of the contracts and the VALUE of the contracts.

      Publish these details in Annual Reports of Councils (including CCOs), all Government Departments; Crown Entities, and State-Owned Enterprises – and make this information available on-line.

      They are our government
      We are not their voters

      • Draco T Bastard 9.1.1

        They’re not even our government, they’re our servants. We are the government.

    • Draco T Bastard 9.2

      +1

      The government can do things just as well as the private sector and cheaper as they have no dead-weight loss of profit.

  10. Draco T Bastard 10

    Don’t like the word “trickleup” as it still seems to be all about catering to the rich, i.e, if we give everyone more then the rich will get richer and the one thing that no society can afford is the rich.

  11. Sanctuary 11

    Actually, in terms of ensuring trickle up I am surprised the left has allowed the abolition of inheritance tax in 1992 to be more or less accepted twelve years on. A really powerful social-democratic intellectual argument can be made for these taxes, Adam Smith, the hero of neo-liberals everywhere, himself said:

    “…A power to dispose of estates for ever is manifestly absurd. The earth and the fullness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural… …There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death.”

    It seems to me a basic tenet of social democracy that equality of citizenship is going to be impossible in a nation where inequality of wealth is cemented through the inheritance of unearned wealth. All inherited wealth allows is the elevation of members of particular families by dint of birth to a position of un-earned privilege from where they can exercise an undue influence in politics. Further, the accretion of huge portfolios of property that will occur over generations will mean ordinary people will be unable to, for example, buy their own homes.

    This is the sort of political debate that is good for the left – it shifts the focus from defending the “unearned” income of the poor to attacking the actual unearned income and privilege of the rich. Further, it would force the right into arguing on ground that would expose its self-serving self-interest.

    • Draco T Bastard 11.1

      +1

      I’ve long thought that death taxes should be set at 100%. Everything that a person owns at death goes straight back to where it came from – the community.

    • RedBaronCV 11.2

      And the current law commission of white old blokes wants to extend the life of trusts – which enhances their ability to capture wealth.

  12. Mr Tank 12

    Trickle Up – nope tis naff. Try Raise the Base.

    • Chooky 12.1

      Trickle down on an electric fence and you you will get a very sharp Trickle Up….

      French students, workers and farmers know how to deal with a State that is trying to rip them off…..they take to the streets and are not afraid to fight it out…..We have something to learn from the French!….they have very good conditions for students, workers, farmers and the retired!

    • mickysavage 12.2

      Like I said this is a work in progress. Alternative proposals welcome.

      • gem 12.2.1

        What about dropping the specious slogans and straplines? I think they’re part of why people have turned off from politics. When was the last political slogan that was really effective?
        The Trickle Up idea is flawed, as it semantically accepts the notion of scarce resources neoliberal economics successfully fostered. Sounds like more of the same Third Way neoliberalism. Why brand paying a higher minimum wage ‘trickle up’? Branding it thus suggests it’s a handout, which is surely not the intention.

  13. bad12 13

    Trickle up indeed!!! given the structure of the economy the wealthy couldn’t help but be benefitted by the ‘have not’s’ having a higher income which in most cases they will spend into the economy to get the goods and services they ‘think’ they need,

    Given a high tax rate on the wealthiest has been in place here befor we know that the wealthy still gain such wealth and remain wealthy no matter what the tax rates are, under the current regime tho there is simply an acceleration of such wealth under a tax regime that has lowered the tax rates on the wealthiest in favor of raising taxes via the likes of GST, fuel tax and even tobacco taxes which obviously impact upon those with the least income the most lowering their standard of living as they find themselves paying more tax as a % of income than befor,

    If you apply the right-wing propaganda used by them as a justification/reason not to pay for instance beneficiaries more, ”if you give them more money they will lose the incentive to get a job”, to the wealthy schooled in the expectation of gaining X amount of profit/wealth from the exploitation of our labour,

    Most of the wealthy are driven people with a huge desire to gain and hold onto wealth, when the rules are changed which makes it far far easier for these people to gain and hold onto wealth, like lowering their tax rates over the past 30 years, then in my opinion the wealthy lose part of the incentive to gain and hold onto that wealth,

    Given that it is our labour which actually creates this wealth it then becomes a logical conclusion that making it easy for the already wealthy to gain and hold that wealth will make them less likely to hire our labour acting as production from where such wealth stems,

    The simple answer is of course a highly progressive tax system which redistributes such monies to those with the least with the obvious conclusion there that such monies will be spent into the economy and eventually find its way into the bank accounts of the wealthy enabling them to gain and keep such wealth albeit at a slower rate than the bullshit of ‘trickledown’ does,

    To achieve this tho the wealthy would need to hire more of our labour…

  14. RedBaronCV 14

    The benefit cuts of the 1990′s were aggravated for single parents by the state picking up the other parent’s contribution and any interest and penalties received whether or not the caregiving parent was working. Which was a huge bludge off women who cared for kids by both males and the state.
    How about giving all this money back to these women – even if it has to be added to their pensions.

  15. RedBaronCV 15

    Student loans.
    Some countries allow the fees to be deducted off tax. Personally I would favour a rebate of fees for each year the person is resident in the coutry after leaving university. Treats everyone equally.
    But IMHO it needs to be done carefully – taking the interest off loans meant that the cost of an average bachelors degree doubled in those years so by default the university’s scooped a lot of the funds for increased top end salalries. BTW the universites should cooperate – it woyuld get rid of marketing budgets.

    • The Stepper 15.1

      How about all income tax paid for (say) the first three years of employment in NZ goes to paying off your Student Loan? Surely new graduates can’t be paying that much in tax, but it would make a huge difference to the Student Loan balance – it could even make the scheme self-supporting without any input from government which would also help to offset any reduction in the tax take.

    • Molly 15.2

      Nigerian university graduates must work in a community for a year in another part of the country – often in impoverished situations (- which would not be the case here).

      The policy was intended to help foster unity after war, and other countries have variations. Some unfortunately, militarised.

      However, graduates are given a small allowance from government and often create long term community and personal benefits and growth. In NZ, this opportunity could be offered to university graduates, apprentices or any other young person willing to relocate for a year to provide a community service and gain experience in the process.

      ” A summary of an account given by former Corps member Alhaji Sani Garba portrays life in the community-development aspect of NYSC. Garba’s summons to NYSC duty saddened him, “as he viewed it as a year of suffering and hardship, and did not want to be deployed from the north to the southwest – it was a long way from his parents.” The summary continues (Community Service Volunteers, 1998):

      Following his three-week-orientation, he was posted to a remote village with no transport, no electricity, no clean water, and poor sanitation. He had to stay and learn how to survive, because the assigned location could not be changed. Money was minimal, so he used his elementary school carpentry skills to build a bed, and make a mattress from the grasses. His demonstration of mattress-making inspired the whole village to make mattresses. As sanitation was poor, he worried he would get sick, so he built a pit latrine (there were no facilities prior to this). He also helped the villagers to dig mini-wells to find clean water. He said, “The community learnt a lot from me and I learnt a lot from the community…. I went in a Northerner and came out a Nigerian.”

      While nearly all university graduates serve in the NYSC – there are a few exemptions based on such factors as age and army service – the annual enrollment of about 100,000 suggests the magnitude of its impact, both on societal needs in areas such as health and education, and on the promotion of understanding among the Yorubas, Ibos, Hausas, and other cultural groups.”

  16. democracy 16

    Look at them yo yos they get their money for nothing and no responsibility to the majority

    • bad12 16.1

      Look at them yo yos, they get their money for nothing and show no responsibility to the workers or communities who’s labour made them that money…

  17. captain hook 17

    the media is constantly telling people that they cant be happy unless they consume goods and earn the envy of their peers.
    We hav e become infantilised and distracted by the endless supply of meaningless gimcracks, gew gaws and empty choices.
    so how do we fix this remorseless assault on our sensibilities?

  18. Bill 18

    I’m far too tired to enter into discussion or debate today. But I think this might interest and be of use to all of you participating in both this thread and on Karol’s “Less (inequality) is more” post.

    I’m just going to leave a link to the front page. I’m thinking it’s particularly relevant insofar that David Cunliffe has indicated making a break from neo-liberalism – just as any independent Scotland would be looking to make the same break.

    The Common Weal Project will issue an open call for anyone to submit ideas, papers, proposals or policies which would contribute to a Common Weal vision. These might be pieces of work produced specially for the project or they may be existing papers or reports from Scotland or elsewhere that fit well with the Common Weal vision.

    It is based on the conviction that we will get better outcomes for both society and individuals if we emphasise mutuality and equity rather than conflict and inequality.

    All of this can be captured in one simple phrase: to build more we must share more.

    Under the ‘library’ link there are a number of reports under the following headings.

    Society and Wellbeing
    Creative Change and Governance
    Industry and Work
    Tax and Money
    Resources and Ecology
    International and Citizenship

    Here’s the home page link http://scottishcommonweal.org/

    • karol 18.1

      Thanks, Bill.

      I like the line on the linked page:

      our wellbeing is common to us all.

      The life needs some new phrases. Subverting the right wing ones has it’s place. But there needs to be something that contributes to a new narrative – that focuses on cooperation, and the collective wellbeing.

      “Tickle up” highlights the problems with “trickle down”, but it still is a hierarchical concept of verticle ladders and flows,

  19. Draco T Bastard 19

    The Rich and Their Robots Are About to Make Half the World’s Jobs Disappear

    We really do need to rethink our entire economy especially the private ownership model that makes a few people rich while impoverishing everyone else.

    • gem 19.1

      We should be pushing back on the digital evangelists’ fallacy that automising everything is inevitable or desirable.
      It is often just a way to ramp up the market to sell more gadgets, and, in the case of say paywave electronic bank cards, a way for banks to charge (exhort) retailers more, for no added value, and indeed an increased security risk to customers.

      • Draco T Bastard 19.1.1

        Automating everything that can be done by wrote is both inevitable and desirable. The problem comes from the fact that only the few will benefit while everyone else is thrown into poverty. What that means is that we have to change the system from a capitalist one to something else.

        • gem 19.1.1.1

          Oh, so there is no alternative? Except to try to get a cut of the benefits? We better do it to ourselves before they do it to us…? Even if it’s built on chinese slave labour, relies on planned obsolescence to keep the returns high, and does not fulfil basic human needs? Why don’t we focus our energy on building decent houses, finding better ways to deal with landfill, and sustainable methods to produce food without polluting the environment. But then those things aren’t in the interests on the powerful, are they?

          • Draco T Bastard 19.1.1.1.1

            We’re talking two things here – economics and socialisation.

            Economically it’s better because it frees us up to do something else such as finding ways to build better houses, dealing with landfill (although that ones easy – recycling) and producing better food in better ways.

            Socially it’s not so good but we have to look at the reason for that and that reason is that a few people will get all the gains while the majority of people will get thrown into extreme poverty. To address that point we have to change the system as capitalism just doesn’t cut it anymore.

            But then those things aren’t in the interests on the powerful, are they?

            We cannot afford the rich.

            Now do you understand?

            • gem 19.1.1.1.1.1

              That is simplistic, you gloss over my point. There are adverse consequences of this zombie march to automisation/using a screen for everything that go beyond not getting a financial slice of the pie.
              Concerns include: privacy, personal security, integrity of infrastructure in a natural disaster/technological failure, employment, planned obsolescence, third world labour concerns, e-waste, use of precious metals/rare earth, massive water use to produce devices, possible effects on child cognitive development, opportunity costs from the money for the devices going offshore and worsening our terms of trade.
              A story on Stuff two days ago has prompted me to take my paywave card, which was imposed on me by the bank, into the branch next week to ask for it to replaced with a PIN enabled card, due to security concerns:
              ”A Palmerston North judge has questioned the security of contactless credit cards after two men admitted using them to commit crimes.”
              We don’t need to unquestionably accept every piece of kit pushed our way.

              • McFlock

                capitalism is different to automation, and capitalism seems to be the cause of most of your concerns.

                • Colonial Viper

                  Pushing back against the technology employed by corporates is one effective means of resisting capitalism.

                • gem

                  What’s your point? Excessive automation is not a naturally occurring phenomenon unrelated to capitalism.
                  Say an anti-arms campaigner spoke of the harm caused by weaponry and was dismissively told their beef was with capitalism because that is what drives the global arms trade. That would be indeed be the wider context but it doesn’t negate the real life consequences of the issue raised.

                  • McFlock

                    There is o such thing as “excessive automation”.

                    Arguing against automation in general is arguing that people should perform mind-numbing, repetitive and possibly dangerous tasks, permanently.

                    Automation boosts our abilities. What we do with those abilities is the issue.

                    • Draco T Bastard

                      +1

                    • gem

                      Right, so like Draco T(ina) Bastard, your point is just that there is no alternative. There is, you say, no such thing as excessive automation.
                      We don’t have to accept the digital evangelism that pushes us to buy a new gadget every year or two, replaces real-life carers with robots, or tries to make us adopt insecure payment mechanisms such as paywave.
                      And it’s important we do not override the evidence in education in order to slavishly give children devices for everyday learning. Research demonstrates the most intelligent people had a close relationship with the natural environment in their formative years. And yet children get more and more screen time, despite this not being an evidence based way to lift IQs (not to mention the posture problems etc).

                    • McFlock

                      Of course there is an alternative: we can spend our lives doing dull and dangerous tasks. You can choose to do that, but don’t drag me down with you.

                      Some carers’ tasks should indeed be automated – as a nurse, my mum fucked her back when a patient fell on her.

                      ps: paywave – put your card in a foil mesh, or take a hole-punch to a corner (not the chip, there’s an inductive foil coil in the card, snap that and the paywave won’t work).

                      “Research demonstrates”? That’s nice. You’re getting a fair bit of screen time yourself, though.

                    • Draco T Bastard

                      Right, so like Draco T(ina) Bastard, your point is just that there is no alternative.

                      Never said that so stop putting words in my mouth.

                      Oh, and do try to understand what I actually said.

                    • Colonial Viper

                      Automation boosts our abilities. What we do with those abilities is the issue.

                      Nonsense. More discarding of the working class by an intellectual elite.

                    • Draco T Bastard

                      More discarding of the working class by an intellectual elite.

                      Only if we allow that to happen. Admittedly, under both National and Labour that will happen which is why I don’t support either.

                    • McFlock
                      Automation boosts our abilities. What we do with those abilities is the issue.

                      Nonsense. More discarding of the working class by an intellectual elite

                      Oh noes, I used my brain againz!

                      Your contempt for the working class is astounding. Running groceries across a scanner for 8 hours a day is not the best use of anyone’s time. Packing boxes with cans off a conveyor belt for eight hours a day is not the best use of anyone’s time. Hand-collating till receipts or other records is not the best use of anyone’s time.

                      Maybe some people will choose to do these things by hand, in the same way that people still hand-produce illuminated texts. But the point is that they get to choose, rather than something needing to be done has only one monotonous, inefficient and dangerous way of doing it.

              • Draco T Bastard

                That is simplistic, you gloss over my point.

                You’re not making one.

                Concerns include: privacy, personal security, integrity of infrastructure in a natural disaster/technological failure, employment, planned obsolescence, third world labour concerns, e-waste, use of precious metals/rare earth, massive water use to produce devices, possible effects on child cognitive development, opportunity costs from the money for the devices going offshore and worsening our terms of trade.

                All of which can be addressed if we change the system, can’t be if we don’t but have absolutely nothing to do with increasing automation. In fact, increasing automation will allow us to better address some of those concerns as it will free up people to look into them.

                We don’t need to unquestionably accept every piece of kit pushed our way.

                No we don’t and we shouldn’t which is why I didn’t say that we should.

                • gem

                  Draco, I agree we need to make the system work for us, rather than us serving it; a good example of how technology can serve us is implementing an FTT (instead of GST) on all transactions. This would capture electronic online purchases to other countries, which at present escape GST.
                  McFlock, I sympathise with your mum, but I don’t accept the only way to address workplace safety issues in a clinical context is by getting a robot to do it.

                  • Draco T Bastard

                    but I don’t accept the only way to address workplace safety issues in a clinical context is by getting a robot to do it.

                    It’s not the only way but it may be the best way all depending on what the issue is.

                    Google and several other companies are presently working on developing self-drive cars. Estimates is that in doing so road accidents can be dropped to 5% of what they are now if all cars, buses and trucks were fitted with such technology.

                    Now, should we or should we not introduce that automation?

                    See, I think we should for a number of reasons:
                    1.) The computer really will drive better and so we really will see a reduction in road accidents
                    2.) All vehicles will actually be driven more economically saving fuel/energy
                    3.) All the professional drivers can now go into training to do something else

                    Two problems exist though. One is the present private ownership of the bus and transport firms that will make an absolute killing because they won’t have to pay drivers and the second is that those people will be thrown onto the unemployment scrap heap because none of them will be able to afford to go into training and the greedy owners (the ones now making a killing) don’t want to pay the taxes that will let them get it for free.

                    • McFlock

                      Agreed re: the problems.

                      Technology is a major part of the solution, but not the solution in its entirety.

                    • gem

                      McF: ”ps: paywave – put your card in a foil mesh, or take a hole-punch to a corner (not the chip, there’s an inductive foil coil in the card, snap that and the paywave won’t work).”

                      Thanks for the tip, but it’s the principle. Visited the bank today, and was told if I wanted a credit card, I had to have paywave, so I cancelled the credit card. Which is a nuisance, but why isn’t this a bigger issue? It means bigger bank profits, and even more wealth siphoned from NZ.
                      Prices in the shops will probably go up to make up the fees, pushing the cost of living higher…

                      If DC tackled the banks and the supermarket duopoly it would make more difference to the average person than Best Start.
                      Oh well, at least we’re freed from the arduous tedium of punching a few buttons on a key pad.

                      This extract from a story on Stuff on Jan 14 explains it well (not sure how to link sorry):

                      Banks are using “sexy” new payWave cards in a grab for millions in fees, critics say.

                      PayWave has been touted as the latest and greatest in retail technology, allowing customers to make a purchase by simply waving a card over the terminal.

                      But the cards have a cost – shifting away from free transactions towards costly credit-card fees.

                      The new contactless cards are debit cards, which in the past would be processed as eftpos and free for retailers.

                      But, whenever a customer uses the “wave and go” function of their card, the purchase is processed like a credit card, with some retailers charged up to 2.5 per cent.

                      Christchurch bar owner Jasper Bryant-Greene said the fees were impacting retailers, who were “paying 2 per cent for nothing”.

                      “If you’ve got reasonable turnover, you’re talking about hundreds of dollars a week or more.”

                      Bryant-Greene said the changes were significant, and “happening quite quietly”. It was “a first step towards pushing the eftpos system towards the credit network”.

                      “Effectively what it means is that as we start paying that fee more, our prices have to go up. And that’s going to be the case across the industry.”

  20. Yossarian 20

    The Picture at the top of this article on “Trickledown” makes one wonder!
    I ponder what was so hilarious to “Dick Heads Inc” they are laughing so much, they are spilling some of their Pink Champers..
    Perhaps..
    ” Oh Christ, you heard the latest frm New Zealand, the fools have voted for that twat Keys again!”

  21. ecossemaid 21

    They spilled some of their champers…That’s what I call trickle down!

  22. Xtasy 22

    I hope David Cunliffe is reading this thread tonight, and perhaps use some feedback and ideas, to include something “good” in his speech tomorrow. TS commenters offer an abundance of ideas and possible solutions, if only Labour would “tap” into this a bit more, and adopt ideas and solutions, and add them to what they may offer! I think the Greens are certainly doing so, to a fair degree.

Important links

Recent Comments

Recent Posts

  • Shane Jones’ new job raises Ministerial interference questions
    The Public Service Association says the announcement that Labour MP Shane Jones is to move to a new ‘ambassador-level’ role...
    PSA | 24-04
  • Evidence lacking for Northland council amalgamation
    The Public Service Association has told a Local Government Commission hearing in Kaikohe that there is a lack of evidence supporting...
    PSA | 24-04
  • World News Brief, Thursday April 24
    Top of the AgendaObama Navigates Asia-Pacific Security Challenges...
    Pundit | 24-04
  • This is treason, sirs!
    A guest post by Captain Horace Cockwood, RN, on the problems besetting the Labour Party...
    Imperator Fish | 24-04
  • The Beatification of St Jonesy
    This has been even stupider than I thought it would be. The majority of the media commentary regarding Jones has been – as Malcolm Tucker would put it – borderline homoerotic. Morning Report featured Damien O’Connor, Clayton Cosgrove, John Tamihere, Chris...
    DimPost | 24-04
  • Photo of the day – ANZAC
    I don’t know if they’ve done it again this year but this from 2012 was one of my favourite things to happen in Takutai Square Photo are credited to oh.yes.melbourne...
    Transport Blog | 24-04
  • How to become a climate change denier (in 4 easy steps)
    Cartoon drawn by Joshua Cakeburger Drummond as a contribution to the High Water Project, and rooted in bitter experience, I suspect…...
    Hot Topic | 24-04
  • TV3′s The Nation: Antarctica and public understanding of climate change
    A few days have passed since Lisa Owen’s interview with Antarctic scientists Chuck Kennicutt of the US and Gary Wilson of New Zealand on TV3’s The Nation but I hope it’s still worth drawing attention to. Programmes like The Nation...
    Hot Topic | 24-04
  • Shane Gones
    So, Shane Jones is quitting politics.  The reasons given, according to Polity, are because he wants the Labour Party to embrace a wide range of opinions, and that that too many people have opinions he doesn't agree with, like forming...
    Left hand palm | 24-04
  • Australia welches on open government
    Last year, Australia announced that it was joining the Open Government Partnership. But now that Tony Abbott is in charge, they're backing out:THE Abbott government is reconsidering Labor’s pledge to sign Australia up for a major international transparency and citizen...
    No Right Turn | 24-04
  • A counterproductive waste of money
    That's the quick assessment of Britain's participation in the "war on terror":Britain's military operations since the end of the cold war have cost £34.7bn and a further £30bn may have to be spent on long-term veteran care, according to an...
    No Right Turn | 24-04
  • Shane Jones Nationalised
    Shane Jones is on Radio Live as I type this, explaining that he quit politics because he just couldn't be arsed etc.  "No reservoir of energy to..." as he put it.  Ridiculous.  Retirement at 54.  A career beginning and ending...
    Tumeke | 24-04
  • The ICJ orders Australia to stop interfering with witnesses
    Last year, in what was clearly the actions of a guilty government, the Australian government detained a former ASIS agent who was going to testify against them over their bugging of the government of East Timor, raiding his house and...
    No Right Turn | 24-04
  • Here’s what a real bloke sounds like
    Kelvin Davis3 hrs ·...
    Pundit | 24-04
  • So long Shane, thanks for all the ‘fush’
    So Shane Jones is off. Retired from politics he says. Couldn’t give 100 percent to the cause so he did what he thought was best for the Party.Shane Jones has always been a polarising figure and never more so when...
    Greenpeace NZ blog | 24-04
  • The benefits of transparency
    Ministerial expenses were released today, and as usual, I spent an hour trawling through the credit card statements hoping to find evidence of Ministers rorting us. So what did I find? Nothing. No $1,000 a night luxury hotel rooms. No...
    No Right Turn | 24-04
  • Christchurch to use Auckland’s old trains?
    As the new electric trains roll out over the coming year or so, a question we don’t know the answer to is what will happen to the old diesel trains Auckland no longer needs. Of course we will need to...
    Transport Blog | 24-04
  • Access: Defective, deficient, deviant and delinquent
    As many NZ babies do, I developed eczema and asthma. My mother took me to various clinicians. I have vague impressions of kindly doctors with strange accents. In retrospect they were probably part of the Jewish diaspora - educated at...
    Public Address | 23-04
  • An FPP politician in an MMP world
    So, now that Shane Jones has gone, he's come clean about the reason: he didn't want to work alongside Russel Norman and the Greens. Which I think emphasises just how much of a throwback Jones was, and how unsuited he...
    No Right Turn | 23-04
  • Hard News: Friday Music: News from talented women
    As I may have noted once or twice, Janine and the Mixtape's Dark Mind EP is one of last year's overlooked local gems. Or perhaps not-so-overlooked now, given that her new video for 'Hold Me' was premiered this week on...
    Public Address | 23-04
  • Focus on housing costs, raise wages not interest rates
    "The increase in the Reserve Bank's interest rate, while expected, shows little imagination and will raise mortgage costs for home owners," says CTU economist Bill Rosenberg. “The focus should be on getting housing costs down, and raising wages to make...
    CTU | 23-04
  • One year on: progress made to prevent another Rana Plaza tragedy
    Date of Release: Thursday, April 24, 2014Body:  An official from one of the two global union bodies that negotiated the Bangladesh Accord on Fire and Building Safety, currently visiting New Zealand, says that the Accord continues to make big steps forward to ensure...
    First Union Media | 23-04
  • Update from Dr.Gevil
    We wanted to share with you a little fun....
    Gareth’s World | 23-04
  • Matauri Bay: There are certain stories that get under your skin