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Best stick to the polling, Farrar

Written By: - Date published: 7:07 am, March 19th, 2012 - 103 comments
Categories: debt / deficit, national/act government, tax - Tags: ,

David Farrar has had a go at David Clark for supposedly blaming (or crediting, Farrar can’t make up his mind) National for the revenue loss resulting from Labour’s 2008 tax cuts after Clark said that National’s tax cuts have sucked 2.5% of GDP out of the Crown’s revenue, widening the deficit by $5b a year. Either Farrar can’t read or he’s desperately spinning.

Here’s what the IRD’s Briefing to the Income Minister says on the 4% fall in Crown tax revenue as a % of GDP since the last BIM it wrote (in November 2008, after National came to power):

One obvious change relative to figures reported in our previous BIM (2008) is that New Zealand’s tax revenue as a percentage of GDP has fallen significantly in recent years from 35.1 to 31.0 percent of GDP since 2007.2 This is considerably larger than the fall experienced by OECD nations on average; the OECD-average fell 1.5 percentage points from 35.4 percent to 33.9 percent.

Some of the decline will be attributable to the global financial crisis. But there have also been significant tax reforms enacted since 2008 that will also be reflected in this reduced tax to GDP ratio. We estimate that about 2.5 percentage points of this decline is attributable to policy changes with the remainder attributable to the global financial crisis.

IRD is gently pointing out that New Zealand is pretty unique in the developed world in that our government, our National government, went on a three year tax cutting binge during the global financial crisis and its ongoing aftermath.

Did Labour cut tax too? Yes. Company tax went down to 30% on April 1 2008 and everyone got a tax cut on October 1 2008. But it was National’s choice to keep those cuts – they cancelled the rest of Labour’s package and substituted their own larger one – they could have reset tax levels to pre-April 2008.

But, instead, they went on a bender and the cost of that bender, according to the IRD is $5 billion a year in extra debt.

It’s high time the Right faced up to the cost of their tax cut fixation.

Actually, they already know all about the cost. They want tax cuts to carve a huge hole in the government’s books, which they can then (with much-feigned regret and a dose of hard-nosed pragmatism) fill by slashing important public services.

The Nats didn’t get to a position where they’re borrowing an extra $5 billion by accident. This is a strategy – a strategic deficit that enriches National’s wealthy backers even more with tax cuts while strangling the public services that National ideologically opposes.

If only they had the guts to come out and say it.

103 comments on “Best stick to the polling, Farrar”

  1. RedLogix 1

    I read the whole IRD Briefing document on the way into work this morning. For those of us who’ve argued the merits of various tax reforms over the years it’s a fascinating read… really.

  2. Jackal 2

    The DF writes:

    And the answer is that over around four to five years, National’s changes look to have slightly less impact on tax revenue [than Labours].

    What a complete spin line fail! I’m predicting that National’s strategic deficit is going to become unwieldy. What happens when you cut the top tax rate for high income earners, you reduce economic efficiency and get less tax revenue. Was Labour going to cut the top tax rate more than National? Get the fuck out of here Farrar you moron!

    • Pascal's bookie 2.1

      ha. I’m sure he’ll apply the same thinking the next time he starts talking about “after tax income growth since 2008”, and go back and make corrections for all the previous times he’s blathered on about it.

  3. Spot on, James.

    In fact, much of NZ’s problems in delivering adequatre social policies can be sheeted home to SEVEN tax cuts since 1986; two during Rogernomics Labour; two in the 1990s; one by Cullen in 2008; and two by John Key.

    Which means less revenue for the government to spend in health, education, public transport; etc – and more for people to waste on housing speculation. No wonder we’re stuffed.

    • Lanthanide 3.1

      I wouldn’t go that far, Frank.

      The rise of technology and computers in particular has lead to efficiencies. On the flip-side I guess it’s made Health in particular much more expensive (but with much better results as well).

      We shouldn’t simply label tax cuts as “always bad”, because it really depends on a multitude of factors at the time.

      Btw, is there any online resource which shows the personal tax rates in NZ year by year? Wikipedia annoyingly seems to edit out the historical data. It’s difficult to even find data on the tax cuts that Brash campaigned on for National in 2005, yet alone the actual rates people paid going back to 1970 or so.

      • I’m sure there’ve been efficiencies due to technology, Lanthanide.

        But considering that practically every District Health Bosrd is in debt , suggests that they are not being adequately funded. On top of that, we have more user pays in healthcare than we used to, prior to 1984.

        I don’t label tax cuts”bad” so much as unsustainable or self-defeating. Key’s two tax cuts in April 2009 and October 2010 were done during a recession, as economic activity declined; tax revenue declined – and NZ had to borrow $380 million a week to make up the shortfall.

        Bolger’s two tax cuts in 1996 and 1998 also took place at a time of economic stagnation and falling GDP growth: http://www.tradingeconomics.com/new-zealand/gdp-growth-annual (Use the drop down meno on the left and enter 1990 as a value.)

        Finding info on tax cuts isn’t easy – even on the ‘net. Considering that the ones in ’86, ’88, ’96, and ’98 took place before the internet took off in NZ, there’s a paucity of information on line. What there is, is spread out over several websites. (I’m happy to be corrected on this if anyone can locate a good website in this issue.)

        This is one I found; http://www.businessnz.org.nz/doc/364/Growthfromtaxcuts

        • Lanthanide 3.1.1.1

          The tax cuts in 1996 and 1998 may have allowed the massive growth we saw in the economy from 2000+, which is actually what the bottom link talks about.

          Certainly it appears that Key’s tax cuts (and Labour’s proposed ones in election 2008) are bad for the economy, particularly the 33% tax cut and GST “switch”, but I think you’re being too broad in labelling all tax cuts from 1984 onwards as being unsustainable or self-defeating.

          • burt 3.1.1.1.1

            Lanthanide

            Imagine 1996 tax rates and thresholds in place today…. no tax cuts were required… So what if the person earning the average wage is paying 66c in the $…. <lies>That’s inflation and has no effect on the amount of tax you pay…</lies> yes Frank.. we remember how fucked up Dr Cullen’s ideology was….

            Frank, you need to understand that if you like progressive tax systems then you need to get use to regular tax cuts delivering more benefit to higher earners. Threshold adjustments at least….

            Or do a Cullen and be a complete tosser and think it’s valid to never cut taxes cause that’s what nasty National do and it’s wrong… la la la la not listening – rather stall the economy and really put stress on low earners when they lose their jobs – la la la no tax cuts la la la .

            • TimD 3.1.1.1.1.1

              I seem to remember Cullen saying during the lead up to the 2005 election, after much bombardment from Brash, that we couldn’t afford them.
              Oddly enough, we couldn’t, and seemingly still can’t.
              The wonders of the three-year system.

      • Tax cuts of the type National generally proposes, that heavily favour businesses and wealthy individuals, are “always bad”, though. There is a time and a place for temporary tax cuts, I agree, but never top-heavy ones that benefit only the richest members of society.

        • Gosman 3.1.2.1

          That ignores economic theory. Decreasing the tax rate for the wealthier section of society directly impacts on the savings rate. Hence if you have a problem with a country’s savings rate it can be beneficial to reduce top tax rates.

          • felix 3.1.2.1.1

            “That ignores economic theory.”

            Indeed. It also ignores alchemy, astrology, phrenology, and ritual sacrifice.

            That’s because he was commenting on reality.

            • Pete George 3.1.2.1.1.1

              Odd super exaggerated reality.

            • Gosman 3.1.2.1.1.2

              Trouble is felix a number of lefties have been arguing my case for me down below just in a different way. I believe Vicky32 put it as “People who earn more, save more and spend less” Do you have a problem with her logic?

              • felix

                Why do you ask?

                • Gosman

                  Because it is also consistent with the economic theory that I posted about which you seemed to imply didn’t reflect reality. I was wondering if you had a problem with Vicky32’s interpretation as well as mine or if you are just being a dick because you have a natural afinity.

                  • felix

                    No, I mean why do you ask me?

                    Since when am I responsible for what Vicky or anyone else says?

          • rosy 3.1.2.1.2

            I’ve just read this
            The University of Chicago’s Raghuram Rajan, a former chief economist at the International Monetary Fund, argues that although saving is good, saving concentrated at only the very rich causes macroeconomic instability. The rich do indeed save more, but the concentration of savings at the top finance unsustainable debt by middle and lower income people – leading directly to economic collapse. The super-wealthy purchasing luxury goods cannot lead to an increase in demand that a better spread of money would create.

            if the dynamics fuelling income concentration cannot be reversed, the super-rich save a large fraction of their income, luxury goods cannot fuel sufficient demand, lower-income groups can no longer borrow, fiscal and monetary policies have reached their limits, and unemployment cannot be exported, an economy may become stuck.

            The early 2012 upturn in US economic activity still owes a lot to extraordinarily expansionary monetary policy and unsustainable fiscal deficits. If income concentration could be reduced as the budget deficit was reduced, demand could be financed by sustainable, broad-based private incomes. Public debt could be reduced without fear of recession, because private demand would be stronger. Investment would increase as demand prospects improved.

            • Matthew Whitehead 3.1.2.1.2.1

              Oh, I replied without noticing your comment was also addressing the same spurious objection. Thanks for bringing a specific example to the table as to why the super-rich saving their money is a bad thing.

          • Matthew Whitehead 3.1.2.1.3

            I only want the wealthy saving money when the economy is overheated- hence why I said there was a time and a place for temporary tax cuts, if they benefit everyone and aren’t just a massive giveaway to the wealthy.

            During a recession, however, the very wealthy (or if you prefer, the 1%) need to either be spending their money directly or paying increased taxes, so that it stimulates the economy and generates new jobs. As they’re likely to do the opposite, (which is in their own best interest individually) the very least we should be doing from a policy perspective is ending their tax cuts.

            And no, I’m not ignoring economic theory, I’m favouring Keynes over Hayek, which given the lack of uncomplicated evidence (ie. not open to interpretation) on the matter is a simple divergence of philosophy and interpretation, which I think accords with reality better than the alternatives I’ve seen or been presented. In fact, saying “that ignores economic theory” is somewhat like saying “that ignores libertarian philosophy” – not a bad thing so long as there is informed reason for doing so, which I will reassure you, I have. If you want to discuss economic fundamentals I think there are better places, however.

    • Frank, there’s some important tax information you are leaving out of your list of tax cuts:

      1986 – GST of 10% introduced
      1989 – GST increased to 12.5%
      2010 – GST increased to 15%

      GST now comprises about 19% of core revenue. People who earn more generally also spend more so pay more tax that way too.

      • Pete,

        There are many things I left out from my post above – it was a brief statement on tax cuts. To list everything that has happened to taxation since 1986 would take most of the day to flesh out.

        Secondly, “people who earn more generally also spend more so pay more tax that way too” – that is not necessarily true. In fact, high income earners can often offset purchases against a business. Not only do they NOT pay gst – but they get a gst REFUND!! (Yes, I’ve seen it happening.)

        Thirdly, even if that’s true, you know as well as I do Pete that low-income earners spend nearly everything on consumables, so the level of gst they incur is greater than someone on, say, $14,423 a week (Tony Gibson), who has more to invest or spend on non-gst activities. For example, he can invest it in speculative property, which incurs no gst.

        That is why gst is unfair on low income earners.

        I’m sure you’re quite aware of this – you’re simply letting your neo-liberal views cloud your thinking.

        • Lanthanide 3.2.1.1

          “I’m sure you’re quite aware of this – you’re simply letting your neo-liberal views cloud your thinking.”

          I’m sure he’s aware of it too, but you’ve got his motive wrong. He’s trying to cloud other people’s thinking.

        • Gosman 3.2.1.2

          “That is why gst is unfair on low income earners. ”

          So I’d expect a left wing party would abolish GST completely then. Any left wing parties in NZ planning on doing that?

          • felix 3.2.1.2.1

            No, but they damn well should.

            • Frank Macskasy 3.2.1.2.1.1

              Agreed, Felix..

              Gosman, I hope you will assist the Left to scrap gst.

              • McFlock

                it’s not often I agree with goose, but he’s bang on, there.

              • Gosman

                Why would I do that Frank? I actually prefer a broad based tax system which doesn’t favour one area of the eeconomy over another unduly. Hence why I am all in favour of a Capital gains tax, although not the one proposed by Labour before the last election.

                • Wouldn’t you rather the revenue gained by GST be moved to taxing something that’s actually avoidable or punishable behaviour, such as a tax on packaging, or lifetime liability for products sold in New Zealand? That way people are taxed only for contributing to the more wasteful parts of the economy, and not simply for spending money at all.

                  • Gosman

                    You could argue that consumption on it’s own is damaging to some degree. Regardless of that it is much easier just to slap an across the board rate on all consumption rather than leave the exemptions up to the whims of the politicians. You are also have a far more stable and steady revenue stream.

                    • Consumption past the renewal rate is damaging, yes, but I don’t think that should necessarily be addressed by maintaining policies that contribute to poverty, like GST.

                      We’re already past the carrying capacity of the planet for most of the resources we need- saying that we should all pay to reduce consumption, waste, and population in equal measure is vastly unfair given the fact that we have reached the limit of our resources.

                      In a world where excess limits are plentiful, maintaining property rights, facilitating transport, and preventing violence or theft is enough to ensure a relatively fair society. That hasn’t been our world for decades. We live in a world where we have passed our limits, and the only people being asked to sacrifice are the poor and ordinary workers, who don’t even approach having an equal share of the world’s resources yet. In a world where we must all cut back, the most fortunate must set the example first- and even then, we can focus on making it less painful for them by incentivising them to part with the things they want the least.

                      There are also ways to stabilize the revenue stream of other taxes, for instance scaling waste tax to the economy, which means that it forces continued improvement and is always nipping at the tails of businesses that can’t keep up with waste reduction.

                      No, this obsession with broad-base taxes is about making things easier for the economists and accountants at the expense of people who are struggling to feed themselves or their families and pay rent and utilities, and that’s not okay. If you can’t afford the core necessities yet, you shouldn’t be paying a cent of tax.

            • Gosman 3.2.1.2.1.2

              Perhaps they realise that it might distort the tax system so that consumption is favoured over savings.

              Interesting that one of the major policies for addressing climate change is essentially a consumption tax.

              • McFlock

                Perhaps they realise that it might distort the tax system so that consumption is favoured over savings.

                … and you had to go and ruin it.
                    
                Your argument would be valid if GST were tweaked quarterly to affect investment levels (like interest rates are), or if anyone, anywhere, had demonstrated a constant bias of 10-15% in favour of consumption exists to the detriment of long term economic policy. Unfortunately, the former doesn’t happen and the latter would be bullshit if it existed.
                   
                The rationale for GST-style taxes has always been “equitability” (i.e. the rich pay less of a proportion of their income on it than the poor do). It’s just another way the parasites take more money off the weak and call it “fair”.

                 
                 

                • Lanthanide

                  I’m in favour of consumption taxes because:
                  1. They’re (comparatively) very easy to administer and collect
                  2. Consumption in and of itself needs to be limited. Increasing prices helps to reduce demand.

                  Another potential way to look at consumption taxes is as a complement to inflation. Inflation is a negative pressure against saving, so consumption taxes help to push back at that by tipping the balance somewhat back towards saving.

                  • McFlock

                    But having a fairly constant consumption tax in a dinnamik invirinmint is a bit like a ship maintaining the same level of ballast whatever the seas. Sooner or later the stabilising ballast helps sink the thing. But as soon as one makes GST as dinamik as the economy, it kills the easy administration factor.
                         
                     

                • Gosman

                  “The rationale for GST-style taxes has always been “equitability” (i.e. the rich pay less of a proportion of their income on it than the poor do). It’s just another way the parasites take more money off the weak and call it “fair”.”

                  Ummmm… show me one argument where someone has argued for GST on this basis.

                  • McFlock

                    Fair cop, I can’t be bothered trawling through twenty years of quotes in order to substantiate a dim memory of the events just to satisfy a self-important robot banker.
                         
                    Funny you didn’t seem to notice thise paragraph, though:
                     

                    Your argument would be valid if GST were tweaked quarterly to affect investment levels (like interest rates are), or if anyone, anywhere, had demonstrated a constant bias of 10-15% in favour of consumption exists to the detriment of long term economic policy. Unfortunately, the former doesn’t happen and the latter would be bullshit if it existed. 

                    • Gosman

                      I noticed but it is irrelevant in terms of the overall economy. Your argument applies equally to the other forms of taxation. The best bet is to strike a balance across most of them and then leave it until such time there is evidence that one rate is causing a large distortion in behaviour. If you encourage spending rather than savings by removing GST completely how is this beneficial to your economy long term?

                    • McFlock

                      You’ve yet to demonstrate that GST distorts consumption patterns. Those with enough spare cash to invest largely do so anyway. Those who don’t are simply forced to pay the GST-inclusive price on what they already purchase.
                         
                            
                      And there are already two separate mechanisms by which the government can encourage saving over spending if needs be – interest rates and Kiwisaver. Why do we need a third that simply ensures poor people get less in exchange for what little they can afford to spend?

                    • Gosman

                      As GST was in effect prior to Kiwisaver you could have equally applied your argument towards that method when it was being introduced.

                      Interest rates are a far more blunter instrument when it comes to spending/savings. You tend to impact productive investment as well as unproductive consumption by raising them. The focus of the Reserve bank act also means that this aspects of them isn’t really that great as it is price stability that is key not the consumption/investment rate.

                    • McFlock

                      As GST was in effect prior to Kiwisaver you could have equally applied your argument towards that method when it was being introduced.

                      Apart from the fact that Kiwisaver eventually returns the money and investment dividends directly to the saver after it has been saved (notwithstanding economic apocalypse arguments), whereas GST is a tax that hopes to indirectly encourage savings by discouraging consumption (which I’m not sure it does).
                          
                      And if GST is such a delicate economic instrument rather than the “blunt” interest rate adjustment, why isn’t GST tweaked quarterly to fine-tune the economy rather than interest rates? Or at least more often than 3 times in 20 years? A delicate instrument is useless if you need a tool that’s more coarse.
                         

                       
                       

                    • Draco T Bastard

                      …whereas GST is a tax that hopes to indirectly encourage savings by discouraging consumption (which I’m not sure it does).

                      Actually, it can’t. If you need to spend all your income to live then the existence of GST does nothing to increase savings. Those who don’t need to are already saving.

                      The only real effect of GST is to put more taxes on the poor while allowing less taxes on the rich.

                    • McFlock

                      Hence “hopes”.
                      It does seem to be gossie’s current sales tactic.

        • Foreign Waka 3.2.1.3

          Don’t forget the under the table cash economy. GST? Not on that Planet.

      • Vicky32 3.2.2

        GST now comprises about 19% of core revenue. People who earn more generally also spend more so pay more tax that way too.

        IMO, that’s the reverse of true. People who earn more, save more and spend less, whereas people with lower incomes, spend everything they get. It evens out.

        • Pete George 3.2.2.1

          People who earn more, save more and spend less

          That’s a huge generalisation and also confused.

          In the main the more people earn the more they spend, that’s logical. Of course at some stage once the mortgage is paid off some people increase nett savings, but most will still spend significantly more than people on lower incomes or benefits.

          For example buying a new vehicle involves more spending that many on low income or benefit get to spend in a year.

          • Gosman 3.2.2.1.1

            It isn’t that much of a generalisation Pete. It is all about proportionality. If I get wealthier I am unlikely to increase the proportion of my income I spend versus how much I save. I might buy more stuff but I can afford to.

      • Rosemary 3.2.3

        Pete George, Frank’s not just right, but what you say is so wrong you should be banned from this site for trolling.

  4. Ianupnorth 4

    PG, are you really such an arse?
     
    Everyone pays GST, rich or poor. The difference is that those on lower incomes have less disposable income, so contribute more by virtue of spending a larger percentage of their earnings.
     
    Two other facts you may have missed; many people own these things called ‘businesses’ and all the GST is conveniently written off by smart accountants. The second is that those who have more disposable income are able to do a couple of things like spend overseas via internet shopping, thus avoiding GST, or, travel overseas on holidays and donate their taxes to those countries economies.

    • Gosman 4.1

      I’d suggest it is highly unlikely they contribute more in real terms. It is obviously true that that they contribute more as a percentage of their income however you could argue this is more than offset with the progressive tax system we have at the moment.

      • Lanthanide 4.1.1

        Yes, everyone is saying that, Gosman.

        The point is that increasing GST by 2.5% impacts on low-income people much more than it impacts on high-income people, no matter what ridiculous examples John Key might like to come up with.

        • Gosman 4.1.1.1

          Proportionately a simple rise in GST does. However if you couple it with increases in benefit level and a lower tax level at the bottom the impact can be neutralised.

          • Pete George 4.1.1.1.1

            Which is what happened when GST was raised to 15%, so I’m not sure why the angst about the effects of GST and the poor.

            One of the best things many people on benefits could do to reduce the amount of GST they pay is to grow more of their own food, and to buy more cheaper staple foods and make their own processed goods.

            • Lanthanide 4.1.1.1.1.1

              “Which is what happened on paper when GST was raised to 15%, so I’m not sure why the angst about the effects of GST and the poor.”

              Fixed it for you, PG.

              • It wasn’t just on paper, it was in bank accounts too.

                In October 2010 when GST rose to 15% (Tax Package Overview))

                – PAYE was reduced:
                “the majority of taxpayers will see their after tax incomes rise by an amount greater than anticipated GST-related price increases. “

                – benefts, pensions etc were increased by 2.02%
                “The 2.02% rate for increased assistance is based on Statistics New Zealand’s estimation that the overall impact on prices (measured by the Consumers Price Index (CPI)) will be about 2%. This is because about 9% of the goods and services within the CPI (e.g. rent) do not attract GST.”

                People on low incomes who have closer to 50% of their income going on rent will have benefitted slightly.

                • Lanthanide

                  This assumes that prices rose by only 2.02%, when in the inflation rate was actually around 5% because shops had held off putting up their prices, or used the GST increase as an excuse to increase their prices.

                  Of course you knew that, but once again were trying to muddy the waters.

                  • The 2.02% increase was just to balance the GST increase on October 2011.

                    “From 1 April 2011 there will be a 3.75% increase…

                    The increase in these payments reflects the increase in the Consumer Price Index for the year to 31 December 2010.”

                    http://www.workandincome.govt.nz/about-work-and-income/news/2011/payment-changes-for-april-2011.html

                    You didn’t know that?

                    • Lanthanide

                      “Main benefits will increase by 3.75% from 1 April 2010 to 1 April 2011, this includes the GST compensation component of 2.02% added in 1 October 2010.”

                      So from 1 October even though prices often went up by over 2.02%, beneficiaries didn’t get extra.

                      From 1 April, even though the inflation rate was 5%, benefits went up 3.75% including the previous 2.02% increase.

                      So, I stand by my statements.

                    • The inflation rate included the GST increase, so the benefit increase for the year (Oct+Apr) of 5.77% covered the annual CPI.

            • Vicky32 4.1.1.1.1.2

              One of the best things many people on benefits could do to reduce the amount of GST they pay is to grow more of their own food, and to buy more cheaper staple foods and make their own processed goods.

              You really are an ignoramus, PG. Do you know any people on benefits? (I thought not… 🙂 )
              Because if you did, then you’d know that we already do those things!

            • Foreign Waka 4.1.1.1.1.3

              Let them eat cake?

    • Ianupnorth 4.2

      Sorry Frank, I had a call (and the above post sat unsent) and posted virtually the same – great minds think alike!

    • Especially in places like Auckland poor people spend a large chunk of their money on rent or mortgage.

      It’s actually not that easy to write GST off, no matter how smart their accountants. That’s in part because our GST system has so few exemptions.

      Anyone can shop overseas via the internet. But there are limits to how much GST you can avoid – higher value purchases get GST’d. And trading is monitored by IRD to detect those who are trading and liable.

      • “It’s actually not that easy to write GST off, no matter how smart their accountants. That’s in part because our GST system has so few exemptions.”

        Are you referring to zero-rated gst supplies such as financial transactions, mortgages, rental properties, etc? There are quite a few exemptions, actually.

        Full lists here:

        http://www.ird.govt.nz/gst/additional-calcs/calc-spec-supplies/calc-exempt/
        http://www.ird.govt.nz/gst/additional-calcs/calc-spec-supplies/calc-zero/

        Or are you referring to thre fact that businesses can offset gst on goods and services purchased against goods and services sold?

        Considering I’ve owned and operated my own business, I’m fairly cognisant as to how GST works. It’s actually a fairly easy tax to calculate. And even easier to rort, if one was so inclined (I was not so inclined).

        But this is deflecting from the main point that gst is unfair to low income earners and beneficiaries, as it gobbles up more of their spending, than, say, Tony Gibson on $14,423 .

        • felix 4.3.1.1

          Yep, for most small businesses there’s not much that a person buys that can’t be at least partially written off as an expense if they’re so inclined.

          • Pete George 4.3.1.1.1

            Nope, not legally. And most cheating is easy to pick up if IRD audit them.

            • Lanthanide 4.3.1.1.1.1

              Keeping a vehicle log for where you drive around doing ‘business’, and of course since you’re going past the supermarket any way you do the shopping at the same time, with the whole trip charged to the business. Since it’s now a business car, you can charge insurance and maintenance against the company too.

              “Home offices” let you charge mortgage interest, rates, electricity, phones. Things you would be paying for anyway, but because you have a “home office” you can now a portion to the company and get tax benefits from it.

              It’s really not difficult, and perfectly legal.

              • Spot on, Lanthanide.

              • feleix said “there’s not much that a person buys that can’t be at least partially written off as an expense”. There are a lot of things that can’t be legally offset against income to reduce tax. Some people push the envelope more than others – and some get caught out.

                I’m aware of business use and misuse of vehicles – the example you give would have no effect on tax. I’m also familiar with home offices, there can be some small advantages (and costs) if you do it legally.

                If anyone gets audited by IRD they find out how limited the advantages usually are.

                What are you suggesting is done to change this, and what do you think it would achieve?

                • felix

                  “I’m aware of business use and misuse of vehicles – the example you give would have no effect on tax. I’m also familiar with home offices, there can be some small advantages (and costs) if you do it legally. “

                  No effect on tax? Then you’ve misunderstood the entire discussion.

                  Lanth’s example means that the gst on the costs of running the vehicle (tax normally paid to the govt) is refunded to the business (a loss of tax to the govt).

                  That’s one example, there are thousands of others.

                  Gee, I hope your mate Peter Dunno understands revenue better than you do Pete.

                  • Using Lanth’s example, if I’m using a business vehicle and on my way to a job I stop at the supermarket and do some shopping I have incurred negligible additional expence so it will have had no effect on tax.

                    If I use a business vehicle to go on a special private shopping trip then it’s avoiding tax. It’s widely known this sort of thing happens but trying to deal with it any differently is likely to be far more expensive than would be gained in tax revenue.

                    • Lanthanide

                      PG, you can claim mileage on your vehicle as a business expense. The current rate is 74 cents per kilometre.

                      Say the supermarket is 20k away, but you’ve got business just nearby so can justify it as a business cost. You can now claim $29.60 per round-trip against your business. This is an expense that reduces your business income, so you save $8.28 in tax (28% rate) that you would normally have to pay the government on your costs. Do this 52 times a year and you’ve just copped a nice little $430 from the government for trips to the supermarket that you would have had to have made anyway.

                    • felix

                      The bit you’re missing Pete is that the person without the business and the person with the business are both going to drive to the supermarket.

                      One will pay gst on the costs of the drive and one won’t.

                      Also, what Lanth said, and repeat.

          • Lanthanide 4.3.1.1.2

            NZ apparently has thousands of small owner-operated businesses and yet they employ less than 20% of the workforce.

            It is my strong belief that a lot of these small owner-operated businesses are actually just gaming the tax system. Sure, they might bring in $20-30k in year through activity, which actually isn’t a lot and makes it a marginal proposition, but they can probably get $5-10k in tax kickbacks and other various write-offs (insurance, rates, mortgage interest on a home office, etc) that pushes it from “marginal” to “reasonable”.

            This would go some way to explaining the disconnect I see between the published income rates ($20-30k in this example) and the amount of retail shops and how busy they are.

        • Pete George 4.3.1.2

          New Zealand has one of the cleanest exemption free forms of GST. But as you point out (and I’ve already said) mortgages and rents are GST free.

          You claimed (3.2.1) “you know as well as I do Pete that low-income earners spend nearly everything on consumables”.

          Someone earning 30k pa netts about $480 per week.
          Someone earning 40k pa netts about $640 per week.

          If they pay say $250-400 per week on rent that’s somewhere around half of their income not spent on GST applicable consumables.

          Of course if they have kids they’ll be getting WFF tax credits (and possibly pay no nett income tax) so will have more to spend and incur more GST, but it will still not be “nearly eveything”.

  5. you know as well as I do Pete that low-income earners spend nearly everything on consumables

    Maybe I know better than you on this – rent and mortages are GST exempt and make up a significant proportion of the expenditure of low income earners (and non-earners).

    A lot of middle to higher income earners spend a higher proportion of their income that includes GST, especially once their mortgages are paid off.

    I’m aware that some people fiddle expenses through their business to avoid tax – but actually this is mor difficult to do with larger busionesses, it’s more prevalant in small businesses, owner/operators etc. Most of them aren’t in the richest group.

    Across the board business owners tryo to avoid tax throuigh the use of trusts.

    Wage and salary earners can’t work around taxes so are disadvantaged by tax cheats.

    Many people, from rich to poor, also operate in the grey market to avoid tax, mate’s rates, home jobs etc.

    I support any moves to tighten up on all these tax avoidances.

  6. “A lot of middle to higher income earners spend a higher proportion of their income that includes GST, especially once their mortgages are paid off.”

    You still don’t understand, do you?

    Someone on unemployment welfare – $201.40 a week, nett* – spends $50 a week on groceries.Of that $50, $7.50 is gst.

    S/he has $150.oo a week left.

    If gst did not exist, s/he would have an extra $7.50 to spend on food.

    Someone like Gibson on $14,423 a week spends, say, $200 a week on groceries, and spent $30 on gst for groceries. He has $14,223 left each week.

    If gst did not exist, he would have an extra $30 to spend on food

    Who has felt the greatest impact of gst on their income/expenditure?

    * http://www.workandincome.govt.nz/manuals-and-procedures/deskfile/main_benefits_rates/unemployment_benefit_tables.htm

    • I get that bit. But adjustments to GST have been accompanied by adjustments to benefits to cover it.

      If we dropped GST and didn’t drop benefits that would give beneficiaries more spending power, but it would reduce our tax take by 19%. Unless of course we hiked taxes on rich pricks who would put their salaries up and charge more for goods and services.

      But there’s no serious proposals in New Zealand nor many other countries to stop using consumption tax.

      • Lanthanide 6.1.1

        Oh yes, the imaginary “tax switch” that would cost $1B over 4 years and somehow also be “revenue neutral” that has actually costs $1.1B in the first 9 months.

        Yes, all those beneficiaries definitely got 100% compensated by the adjustments to their benefits.

        • Pete George 6.1.1.1

          (Tax Package Overview))

          – benefts, pensions etc were increased by 2.02%
          “The 2.02% rate for increased assistance is based on Statistics New Zealand’s estimation that the overall impact on prices (measured by the Consumers Price Index (CPI)) will be about 2%. This is because about 9% of the goods and services within the CPI (e.g. rent) do not attract GST.”

          People on low incomes who pay more than 9% of their income on rent will have benefitted marginally.

        • Pete George 6.1.1.2

          Plus: From 1 April 2011 there will be a 3.75% increase… The increase in these payments reflects the increase in the Consumer Price Index for the year to 31 December 2010.

          Plus: From 1 April 2012 there will be a 1.77% increase…

          http://www.msd.govt.nz/about-msd-and-our-work/newsroom/media-releases/2012/payment-changes-for-april-2012.html

          • Lanthanide 6.1.1.2.1

            Reposting from above so you don’t have any excuse about not seeing it:

            “Main benefits will increase by 3.75% from 1 April 2010 to 1 April 2011, this includes the GST compensation component of 2.02% added in 1 October 2010.”

            So from 1 October even though prices often went up by over 2.02%, beneficiaries didn’t get extra.

            From 1 April, even though the inflation rate was 5%, benefits went up 3.75% including the previous 2.02% increase.

            So, I stand by my statements.

            • Pete George 6.1.1.2.1.1

              You have quoted “Main benefits will increase by 3.75% from 1 April 2010 to 1 April 2011, this includes the GST compensation component of 2.02% added in 1 October 2010.”

              Where does this come from?

              There was a 2.02% increase in October, and Work and Income clearly says “From 1 April 2011 there will be a 3.75% increase”.

              That’s 2.02% + 3.75% which makes a 5.77% increase for the year, unless you can show otherwise?

              • Lanthanide

                Click on “Minister Bennett’s announcement – beehive.govt.nz” it’s right in the centre of the page.

                I don’t need to “show otherwise” because it’s quite clear that you’re wrong, following the pages you linked to.

                • Ok, I’ve found an explanation now, it wasn’t clear. The 2.02% was a temporary increase, it terminated and was replaced by the 3.75% April 2011 – odd way to do it but that explains it.

                  I’ve compared CPI to annual increases and it approximately correlates but I’m not sure what periods each of them correspond with, and CPI is rounded.

                  2010 CPI 2.0%, increase 1.96%
                  2011 CPI 4.0%, increase 3.75%
                  2012 CPI 1.8%, increase 1.77%

                  The differences may be due to rounding plus a shift of a quarter, or it may mean a slight slippage in rates, if so that would surprise me because it is supposed to be adjusted to CPI.

                  • Lanthanide

                    However the adjustment is lagging. Prices of goods have gone up during the calendar year 2011, but it is not until April 2012 that beneficiaries actually get an increase in their income to account for it.

                    So, for example, you get paid $100 week starting in April 2011, but during the year your costs go up by $4. You don’t get your income increased to $104 until April 2012 and in the meantime you have to make up that $4.

                    • They can’t do it in advance on future CPI they don’t know. It’s barely enough if that for many regardless – it’s just system for indexing it.

                      I’d prefer to see less people paid at a better rate, maybe it’s possible to get there some time, but it’s not going to be easy no matter who forms a coalition.

  7. Foreign Waka 7

    . as all history informs us, there has been in every State & Kingdom a constant kind of warfare between the governing & governed: the one striving to obtain more for its support, and the other to pay less. And this has alone occasioned great convulsions, actual civil wars, ending either in dethroning of the Princes, or enslaving of the people. Generally indeed the ruling power carries its point, the revenues of princes constantly increasing, and we see that they are never satisfied, but always in want of more. The more the people are discontented with the oppression of taxes; the greater need the prince has of money to distribute among his partisans and pay the troops that are to suppress all resistance, and enable him to plunder at pleasure. There is scarce a king in a hundred who would not, if he could, follow the example of Pharaoh, get first all the peoples money, then all their lands, and then make them and their children servants for ever …quote from Benjamin Franklin

  8. Liberal Realist 8

    Very surprised no one has mentioned an FTT as a means to reduce taxation/income inequality and replace lost tax revenue?

    • Colonial Viper 8.1

      Both the Greens and Te Mana deserve credit for their promotion of an FTT. Labour is too enured in the neoliberal free market model to seriously consider such a move.

  9. burt 9

    James Henderson

    With all due respect I don’t think in the context of tax cuts either Labour or National have any high ground.

    For the love God something had to change after 9 years of static tax rates and thresholds. The shuffling of the deck chairs to adjust around some ideologically notion of ‘high income’ was ridiculous. Vast welfare entitlement changes were engineered and implemented to adjust for the inequity of wage inflation being eroded by fiscal drag.

    Calculations quickly reveal the absolute stupidity of Cullen’s disregard for anyone earning more than his 1999 enactment of high income. His inability to lift lower thresholds was most disturbing, that’s what most needed to change.

    But my real point is James, this song and dance around tax cuts was Cullen’s song and dance. Thankfully Shearer seems to have a better grasp of the real world economics and already seems to have let it go; Give up on being anti tax cuts, in a healthy tax environment they would be adjusted at least annually, and yes big tax payers will get more benefit than small tax payers…. woopee it’s the other way around when you crank then down again…. such is life with a progressive tax system.

    Stop fighting about the tax rates and focus on tax policy. A coherent vision for how tax should be extracted from the earning population and how much – Vote. Implement or rethink and repeat until you get the focus right. Two goes down the drain, keep going on about your ideological top tax rate low enough the punish a high school teacher and see how well you get on in 2014.

    • Kotahi Tane Huna 9.1

      Ah, the notion of taxation as “punishment” as opposed to “contribution”. I’m sure this is a desperately unpopular position, but I think we ought to be proud to pay tax: look what we have achieved with it!

      • burt 9.1.1

        Great, yes one word you can grasp and throw to the floor. Fantastic debating muscle you have there.

        A high school teacher being called ‘rich’ by the tax system is punishment, not contribution. Now tell me how teachers should be paid more and how it was fair to tax them as rich all at the same time.

        • Kotahi Tane Huna 9.1.1.1

          Punishment fantasies may be a growth market, but I’m not interested in participating in yours.

  10. Mark Blanco 10

    Nostradamus predicted this. send free text messages at textme4free.com

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    Parliament will be leading by example and adjourning tomorrow after a special sitting to consider an epidemic notice and state of emergency. Day-to-day oversight of the government will be delegated to a select committee. But that's not the only overight mechanism. The OIA will still be law, and (so far) ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • ‘Overjoyed’: a leading health expert on New Zealand’s coronavirus shutdown, and the challengin...
    Michael Baker, University of Otago Overjoyed. That’s not a word epidemiologists normally use, but that’s how I felt after hearing Prime Minister Jacinda Ardern’s announcement about New Zealand’s COVID-19 shutdown of everything except essential services for at least four weeks from midnight on Wednesday. More than anything, I just ...
    SciBlogsBy Public Health Expert
    1 week ago
  • One way to solve the housing crisis
    How much homelessness is caused by house hoarding? We're about to find out. The pandemic has destroyed tourism, which means that house hoarders who put their hoarded properties up as short-term tourist rentals are now offering them on the ordinary rental market:Property investors are pulling properties from Airbnb to offer ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • The pros and cons of planting trees to address global warming
    This is a re-post from Yale Climate Connections by Bruce Lieberman It seems like such a simple, straightforward, empowering idea: plant trees – a lot of trees – all over the world, and watch the planet’s temperature fall. Who doesn’t love a tree or two, even far more – the right ...
    1 week ago
  • Not a grand coalition, but a government of national salvation
    According to Newshub, Simon Bridges is open to joining a “grand coalition” with Labour as we hunker down to go into a month long lockdown. The idea is sound. Before now, the role of the opposition was to scrutinise and oppose. In the context of what almost amounts to a ...
    PunditBy Liam Hehir
    1 week ago
  • Raise the Bar: hospitality workers & wage subsidy entitlements
    Kia ora my name is Chloe Ann-King* and I am the founder of Raise the Bar, a campaign and non-profit that gives free legal aid, advocacy and tautoko to hospitality workers in Aotearoa. Right now all over our country hospo workers are being fired at will, having shifts cut or ...
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    1 week ago
  • Lifting our game against COVID-19
    We need to be lifting our game against COVID-19. You and I need to help those working to prevent the spread of COVID-19 while they’re trying to lift the testing and treatment efforts. We don’t want to be playing this game running backwards. Best to play it solidly forward, from ...
    SciBlogsBy Grant Jacobs
    1 week ago
  • The maths and ethics of minimising COVID-19 deaths in NZ
    Prof Tony Blakely, Prof Michael Baker, and Prof Nick Wilson The NZ Government must do more to clearly articulate its COVID-19 strategy: eradication or ‘flattening the curve’ mitigation. But to do so means understanding the maths and ethics of both these strategies. In this blog, we adapt our work for ...
    SciBlogsBy Public Health Expert
    1 week ago
  • All aboard the Covid Train
    A few days ago I was starting to write something about the pandemic, which now seems unconscionable. It took the form of a letter to an agony aunt:“Dear Deidre, I have an ugly confession. I am quite excited by Covid-19.”This is how the piece went:“I’m not a psychopath, honest. Although the ...
    PunditBy Phil Vine
    1 week ago
  • 2020 SkS Weekly Climate Change & Global Warming Digest #12
    Story of the Week... Toon of the Week... Climate Feedback Article Review... Coming Soon on SkS... Climate Feedback Claim Reviews... SkS Week in Review... Poster of the Week... Story of the Week... In Just 10 Years, Warming Has Increased the Odds of Disasters The likelihood of extreme events ...
    1 week ago
  • We are all socialists now
    Last week, the government announced a $12 billion initial package to support people during the pandemic. Today, the Reserve Bank is buying government bonds - effectively printing money - to keep up the money supply during the crisis. Normally such moves would have the right apoplectic. Instead, the National Party ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • A plea to experts: safeguard your role in public life
    I am a pundit, somebody who opines and comments on the news. There are no real qualifications to punditry though having a rudimentary way with words and good general knowledge helps. That is one reason there is a constant oversupply of would-be pundits and why it is quite hard to ...
    PunditBy Liam Hehir
    1 week ago
  • Enlightenment when?
    I recently encountered the following prescription from a Faculty of Education at a leading New Zealand University. At first I wondered if it was another product of the postmodern generator (http://www.elsewhere.org/journal/pomo/), designed to create gibberish in the postmodern form, but I’m told it is real: The “schooled” society: Towards the ...
    SciBlogsBy Michael Corballis
    1 week ago
  • What the Crisis Can teach Us
    The coronavirus pandemic has of course had a major impact on individual lives and on societies as a whole. But, long after the crisis has passed (assuming it does), we will begin to realise that its real and lasting significance lies in the lessons it has taught us, if only ...
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    1 week ago
  • Hammering home measures to stop COVID-19
    COVID-19 has plunged Aotearoa New Zealand (indeed, the world) into territory that, while maybe not totally unprecedented, certainly hasn’t been seen during the lifetimes of most of us here today. Our borders are closed to non-citizens, we’re being told not to gather in groups of more than 500 outside/100 inside, ...
    PunditBy Andrew Geddis
    1 week ago
  • What does ‘level two’ mean – and why does it matter?
    For the last few weeks, I’ve been urging you to prepare yourself, your family, business, and community for Covid-19. Now it’s time for real action.  Yesterday the director-general of health Dr Ashley Bloomfield announced another 13 confirmed cases of Covid-19 in New Zealand, bringing our total to date to 52. ...
    SciBlogsBy Siouxsie Wiles
    1 week ago
  • 2020 SkS Weekly Climate Change & Global Warming News Roundup #12
    A chronological listing of news articles linked to on the Skeptical Science Facebook Page during the past week, i.e., Sun, Mar 15, 2020 through Sat, Mar 21, 2020 Editor's Pick Now Isn’t the Time to Forget About Our Climate Change Efforts   Tasha Tilberg, Lindsey Wixson, and Liu Wen photographed ...
    1 week ago
  • Is the Guardian becoming  a real newspaper again?
    by Jan Rivers The article has been corrected to show that it was Ewen MacAskill, former Guardian journalist and not Luke Harding who travelled to meet Edward Snowden with journalist Glenn Greenwald and filmmaker Laura Poitras.  Some of the Guardian’s well-known journalists who did not sign the protest letter are ...
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    2 weeks ago
  • Life asserts itself regardless
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    2 weeks ago
  • Politics, the possible, and the pandemic
    Whenever people demand real change from their politicians, we're told that "politics is the art of the possible". The implication is that change isn't possible, so we'd better just get used to the sucky status quo. But now that there's a pandemic, a lot of things we were previously told ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • The Only Way Through This Crisis Is Together.
    Together: In leading New Zealand through the Covid-19 Pandemic, the Prime Minister could do a lot worse than allow herself to be guided by the spirit of collective sacrifice and co-operation that animated the New Zealanders of 80 years ago. Most Kiwis alive today have had no opportunity to prove their ...
    2 weeks ago
  • GFC vs Covid-19
    It is said that generals fight the last war. In the case of the early stages of the Global Financial Crisis (GFC) they had learned from the Great Depression of the 1930s and they fought intelligently and successfully. Later their advice would be ignored in favour of the Austerians who ...
    PunditBy Brian Easton
    2 weeks ago

  • Advance payments to support contractors
    Advance payments will be made to transport construction industry contractors to retain the workforce and ensure it is ready to quickly gear up to build projects which will be vital to New Zealand’s COVID-19 economic recovery, Transport Minister Phil Twyford announced today. He said keeping the workforce required to build ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Government seeks infrastructure projects
    The Government has tasked a group of industry leaders to seek out infrastructure projects that are ready to start as soon as the construction industry returns to normal to reduce the economic impact of the COVID-19 pandemic, Economic Development Minister Phil Twyford and Infrastructure Minister Shane Jones say. The Infrastructure ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • Health system scaled up to prepare for COVID-19
    Work to scale up the health system in preparation for COVID-19 was today outlined by Health Minister David Clark, as he reported back to the new Epidemic Response Committee. “We are well placed to contain the spread of COVID-19. We have taken early and decisive action at our borders, and ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • Essential media COVID-19 guidelines refined
    The Government is refining its COVID-19 essential business guidance to include the distribution of news publications for communities which are hard to reach. The Minister of Broadcasting, Communications and Digital Media, Kris Faafoi, said the move was in recognition of the importance for New Zealanders who might be harder to ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • New Zealand defence personnel conclude mission at Taji
    Following the successful conclusion of the Building Partner Capacity (BPC) mission at Taji, New Zealand defence personnel are returning to New Zealand from Iraq, in accordance with the Cabinet decision made in June 2019, Foreign Affairs Minister Winston Peters and Defence Minister Ron Mark announced today. “New Zealand is very ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • State of National Emergency extended
    The State of National Emergency to help stop the spread of COVID-19 has been extended for a further seven days, Minister of Civil Defence Peeni Henare said. The initial declaration on March 25 lasted seven days and can be extended as many times as necessary. “Since we went into isolation ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Strong Govt books support ‘go hard, go early’ response
    New Zealand’s ability to go hard and go early in the fight against COVID-19 has been underpinned by strong Government finances and the growing economy heading into this global pandemic, Finance Minister Grant Robertson says. The Treasury today released the Crown financial statements for the eight months to the end ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Christchurch Hospital Hagley ICU to open to support COVID-19 response
    Health Minister Dr David Clark says 36 new intensive care beds at Christchurch Hospital’s new Hagley building are being fast tracked so they are available for treatment of COVID-19 patients.   The Ministry of Health is working with contractor CPB and Canterbury DHB to enable access to the hospital’s ICU, ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government supports Air NZ freight flights
    The Government has fast-tracked up to $1 million to help Air New Zealand move urgent freight to and from New Zealand, with the first flight to Shanghai leaving tonight, Transport Minister Phil Twyford announced today. Phil Twyford says it’s crucial that trade in vital goods such as medical supplies and ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Tariff concessions on COVID-19 related products
    New Zealand will temporarily remove tariffs on all medical and hygiene imports needed for the COVID-19 response. Trade and Export Growth Minister David Parker and Commerce and Consumer Affairs Minister Kris Faafoi said today that the New Zealand Customs Service will apply tariff concessions to all diagnostic reagents and testing ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Clarification of modification to wage subsidy scheme
    Minister of Finance Grant Robertson has clarified that the changes to the wage subsidy scheme announced yesterday mean that employers should be passing on the full subsidy to workers, except in the case where the person’s normal income is less than the level of the subsidy. “We still want employers ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Face masks flowing to DHBs
    Medical face masks from the national reserve supply are now being distributed to District Health Boards, while at the same time local production is being ramped up. Yesterday more than 640,000 masks were sent to DHBS – that is an immediate two week supply, with more to follow in coming ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • COVID-19: Further steps to protect New Zealanders’ jobs
    The Government has made modifications to the wage subsidy scheme to ensure people don’t lose their jobs during the national lockdown. These changes will soften the impact of COVID-19 on workers, families and businesses, and position them to exit the lockdown and look to recovery, Finance Minister Grant Robertson says. ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Tax relief for Mycoplasma Bovis farmers
    Farmers whose herds were culled in response to the outbreak of Mycoplasma bovis will be able to minimise the tax treatment of their income in some circumstances. Revenue Minister Stuart Nash says Cabinet has agreed to change the law. It means farmers may be eligible to spread their income over ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • $27 million for NGOs and community groups to continue providing essential services
    A $27 million dollar package, effective immediately, is being provided to social sector services and community groups to ensure they can continue to provide essential support to communities as we stay at home as a nation to stop the spread of COVID-19, Minister for Social Development Carmel Sepuloni announced. “At ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Statement on guilty plea of March 15 terrorist
    “The guilty plea today will provide some relief to the many people whose lives were shattered by what happened on March 15,” Prime Minister Jacinda Ardern said. “These guilty pleas and conviction bring accountability for what happened and also save the families who lost loved ones, those who were injured, ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • COVID-19 updates
    The Prime Minister is holding daily press conferences to update New Zealanders on the Government's response to COVID-19. Links to videos and transcripts of these updates below. These transcripts also include All of Government press conferences led by Director Ministry of Health's Director-General of Health Dr Ashley Bloomfield. 25 March: Live update from the Prime ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Police numbers break through 10,000 mark
    Frontline Police numbers have broken through the 10,000 mark for the first time in history as officers step forward to keep the community safe during the COVID19 lockdown. “Two Police graduations in Auckland and Wellington in the past week have been conducted in unprecedented circumstances,” Police Minister Stuart Nash said. ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Urgent tax measures for economic recovery
    Urgent legislation has been passed to support the package of economic and social measures needed to recover from the impact of the coronavirus outbreak. “The COVID-19 Response (Taxation and Social Assistance Urgent Measures) Bill will cushion New Zealanders from the worst economic impacts of the COVID-19 outbreak,” said Revenue Minister ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Further support for farmers and growers as drought persists
    From tomorrow, Government support for farmers and growers affected by drought will be expanded and extended across the country, with access to Rural Assistance Payments (RAPS) available throughout the North Island, parts of the South Island and the Chatham Islands, Social Development Minister Carmel Sepuloni announced. “These challenging conditions have ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • COVID-19: Temporary changes to Education Act
    Parliament has passed amendments to legislation that give the Secretary of Education stronger powers to act in the fight to limit the spread of COVID-19, Education Minister Chris Hipkins said today. “They are part of a suite of changes passed under the COVID-19 Response (Urgent Management Measures) Legislation Bill,” Chris ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Canada, Australia, Chile, Brunei and Myanmar join NZ and Singapore in committing to keeping supply a...
    Canada, Australia, Chile, Brunei and Myanmar have joined forces with New Zealand and Singapore by committing to keep supply chains open and remove any existing trade restrictive measures on essential goods, especially medical supplies, in the face of the Covid-19 crisis.  Trade and Export Growth Minister David Parker today welcomed ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • COVID-19: Rent increase freeze and more protection for tenants
    Immediate freeze on rent increases Tenancies will not be terminated during the lock-down period, unless the parties agree, or in limited circumstances Tenants who had previously given notice can stay in their if they need to stay in the tenancy during the lock-down period Tenants will still be able to ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Working together to protect businesses and workers
    As New Zealand unites to lock-down in the fight against COVID-19, the Finance Minister is urging all businesses and workers to stay connected over the next four weeks. “We understand the extreme pressure many businesses are under right now. I know most business owners think of their workers as family ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • State of National Emergency declared to fight COVID-19
    A State of National Emergency has been declared across the country as the Government pulls out all the stops to curtail the spread of COVID-19. “Today we put in place our country’s second ever State of National Emergency as we fight a global pandemic, save New Zealanders’ lives and prevent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister’s statement on State of National Emergency and Epidemic Notice
    Mr Speaker I wish to make a Ministerial Statement under Standing Order 347 in relation to the recent declaration of a State of National Emergency. Having considered the advice of the Director Civil Defence Emergency Management, the Minister of Civil Defence declared a State of National Emergency for the whole of ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Deadline for domestic travel extended
    People needing to travel on domestic flights, trains and Cook Strait ferries to get home before the country moves into level 4 lock-down tomorrow night will be able to continue using the passenger services until midnight on Friday, Transport Minister Phil Twyford said today. Domestic passenger services, particularly ferries, have ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Mortgage holiday and business finance support schemes to cushion COVID impacts
    The Government, retail banks and the Reserve Bank are today announcing a major financial support package for home owners and businesses affected by the economic impacts of COVID-19. The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government working to keep air freight moving
    Minister of Transport Phil Twyford has today announced details of the Government’s support package to keep key air freight moving and ensure New Zealanders retain access to essential goods during the four-week level 4 lockdown. “The Government is working with airlines and air freight operators to ensure New Zealand’s key ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand moves to COVID-19 Alert Level 3, then Level 4 in 48 hours
    New Zealand moved up to COVID-19 Alert Level 3 – Restrict New Zealand to move up to COVID-19 Alert Level 4 – Eliminate, in 48 hours Two-staged approach to give people and businesses time to prepare  Level 3, from tomorrow Non-essential businesses must close All events and gatherings must be ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister: COVID-19 Alert Level increased
    Good afternoon  The Cabinet met this morning to discuss our next actions in the fight against COVID-19.  Like the rest of the world, we are facing the potential for devastating impacts from this virus. But, through decisive action, and through working together, do we have a small window to get ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Govt takes significant economic decisions as NZ readies for Alert Level 4 in COVID-19 fight
    The Government is announcing significant further support for the economy, workers and businesses as the country unites to prepare for Alert Level 4 in the fight against COVID-19. Cabinet today agreed to remove the cap on the Government’s wage subsidy scheme, which will inject a further $4 billion into the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Govt backs RBNZ move to support economy with lower interest rates
    The Government is backing the Reserve Bank’s latest action to support the economy by reducing longer-term interest rates, meaning lower costs for businesses and mortgage holders, and a lower currency to help our exporters. The Minister of Finance has signed a memorandum of understanding and a letter of indemnity with ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government statement on commercial cooperation during COVID-19
    The Government has asked the Commerce Commission to take account of the exceptional circumstances created by COVID-19 when monitoring business behaviour in coming weeks.   “The purpose of my request to the Commerce Commission is to make sure businesses can work together in ways that will allow them to provide ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand temporarily closes diplomatic posts in Barbados and Myanmar due to COVID-19
    The New Zealand Government has temporarily closed its High Commission in Bridgetown, Barbados and its Embassy in Yangon, Myanmar due to the COVID-19 pandemic, Foreign Minister Winston Peters says.   “Due to the increasing scarcity of air links in and out of Bridgetown and Yangon, and the pressure COVID-19 is placing ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Supporting Māori communities and businesses through
    Associate Health and Whānau Ora Minister Peeni Henare has today announced the Government’s plan to support Māori communities and businesses in the face of COVID-19. “Our Government’s $12.1 billion economic package will help many Māori whānau, workers and businesses, whether it’s through wage subsidies, income support and worker redeployment, or ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Guidelines for hospitality establishments released
    The Government and the hospitality industry have worked together to produce guidelines to assist with managing and reducing transmission of COVID-19, Health Minister David Clark announced today.  The guidelines developed between the Government, Hospitality New Zealand and SkyCity Entertainment Group, set out how the new restrictions on physical distancing and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Nation steps up to COVID-19 Alert Level 2
    Four stage Alert System for COVID-19 announced New Zealand moved up to COVID-19 Alert Level 2 – Reduce Contact New Zealanders over 70 and those with certain medical conditions told to stay at home as much as they can to reduce risk of contact with the virus Workplaces to implement ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • PM Address – Covid-19 Update
    Kia ora koutou katoa I’m speaking directly to all New Zealanders today to give you as much certainty and clarity as we can as we fight Covid-19. Over the past few weeks, the world has changed. And it has changed very quickly. In February it would have seemed unimaginable to ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • NZ and Singapore commit to keeping supply and trade links open, including on essential goods and med...
    New Zealand and Singapore have jointly committed to keep supply chains open and to remove any existing trade restrictive measures on essential goods, especially medical supplies, in the face of the Covid-19 crisis. Trade and Export Growth Minister David Parker welcomed the commitment. “This is an important collective response, and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago