But How Do You Pay For It?

27 comments on “But How Do You Pay For It? ”

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1. Descendant Of Smith 1

   5 March 2023 at 9:03 am

   Bringing back the stamp duty that John Key removed and increasing it to 5% would both have the effect of damping house prices at a time when lack of supply will push them up and raising revenue. Time empty properties were taxed as well to encourage them to actually house people.

   A temporary flood levy for two years on incomes over $150,000 would also seem sensible. I think it would also be prudent to start collecting PAYE, student loans, etc at the point of deduction from the wages. This would reduce tax fraud through non-payment significantly
   • Belladonna 1.1

     5 March 2023 at 9:52 am

     Try Jenny Shipley. Stamp Duty was abolished in 1999 – arguably as an (unsuccessful) election bribe – just before Clark won in coalition with the Alliance (notably one of the more left-wing governments of the last 60 years) – who did not take the opportunity to re-instate it.

     https://www.legislation.govt.nz/act/public/1999/0061/latest/whole.html
     • Descendant Of Smith 1.1.1

       5 March 2023 at 10:22 am

       Was 1999 indeed.

       In my defense I only own one house bought 35 years ago.

       I did think it was abolished more recently but there you go.
2. PsyclingLeft.Always 2

   5 March 2023 at 9:33 am

   Robertson should look to the multiple property owners and trusts where most of our wealth is kept

   Yep, that would be a start….I've linked some of this before. Stuffs : Mega landlords

   Over 22,100​ homes are owned by an elite class of large investors who each own more than 20​ properties, new analysis by property data company Valocity reveals.

   That’s the equivalent of Invercargill or Nelson, owned by 906​ people or private companies, whose portfolios continue to grow.

   https://www.stuff.co.nz/life-style/homed/housing-affordability/300415265/mega-landlords-over-22100-homes-owned-by-small-group-of-very-large-investors?utm_source=stuff&utm_medium=readmorepanel&utm_campaign=mega-landlords

   Robert Wright owns or co-owns an estimated 79 properties in Wellington. That’s the equivalent of roughly a quarter of the suburb of Ōwhiro Bay, or 4 per cent of Wellington Central.

   https://www.stuff.co.nz/life-style/homed/housing-affordability/300428886/mega-landlords-the-housing-investor-who-owns-79-wellington-properties

   And this guy….and what a guy he is. I couldnt imagine any kindness in his persona….

   Mr Goodwin, 74, has 37 properties in Auckland and Waikato generating $14,500 a week in rent.

   https://www.nzherald.co.nz/business/18m-landlord-who-owns-37-properties-dont-be-too-kind-to-your-tenants/H46F7RKYH34YOER63ASZVHDKWQ/
   • Belladonna 2.1

     5 March 2023 at 9:59 am

     You do realize that increasing costs to these large-scale landlords will simply result in increased rents. No, they aren't operating a charity, they are running a business – with bottom-line profit the main driver.

     If you don't want renting to be a 'business' – and therefore want to only have government or NGOs leasing-out housing – then you need to legislate for this (and be prepared for the huge costs associated with buying out the current owners).
     • Descendant Of Smith 2.1.1

       5 March 2023 at 10:29 am

       Really. Most landlords I know had their mortgage paid off by their renters years ago. Some post the Christchurch earthquake gloated that they were able to hike rents and get them paid off in three years.

       The myth of the poor indebted landlord is predominantly a myth.

       Lets face facts – landlords put the rents up regardless of their costs. Nothing stops them part from increased state housing stock.
       • Belladonna 2.1.1.1

         5 March 2023 at 12:28 pm

         Not the commercial ones – very few have no mortgage – it's just a standard business cost.
         • James Simpson 2.1.1.1.1

           6 March 2023 at 11:53 am

           Exactly. If you get anywhere near paying off your loan, you leverage off your equity to borrow more to purchase more property.
     • AB 2.1.2

       5 March 2023 at 1:09 pm

       “If you don't want renting to be a 'business' … then you need to legislate for this”

       Or try a deterrence approach. So that where a mortgage exists, rent payments are considered to be indirect mortgage payments. Therefore the person paying the rent gains equity in the house and is paid out proportionally when the house is sold. Thus eviscerating the landlord's capital gain on sale.
       Sure – an administrative nightmare and bound to have unfortunate consequences somewhere, but socially just/equitable and a powerful deterrent to becoming a landlord in the first place.
       This need apply only to housing as one of life’s essentials, not to other forms of rent, like renting a trailer for the day to transport a mate’s furniture.
     • Craig H 2.1.3

       5 March 2023 at 1:41 pm

       That's one possibility. Another is that they will increase rents to the maximum the market will bear regardless of what the government of the day does.
   • Shanreagh 2.2

     5 March 2023 at 1:07 pm

     I can see your aim, Psycling.

     For speed/clarity my view is that the levy like the Queensland one is best (on income for salary earners and taxable income for all firms) rather delving into the heart of Trusts unless it is on gross income from rentals. Once the balance sheet has been done gross rental income can very easily and legally for tax purposes, change into a net loss.

     Large scale landlords can be of two varieties:

     Large scale landlords who own & rent out residential property

     Large scale landlords who own and rent out commercial property

     A levy on the taxable income might catch some for one year. During subsequent years there will be feverish work done by accountants etc to ensure that this taxable income is even lower. This will result in lowering tax takes & levies. .
   • Stuart Munro 2.3

     6 March 2023 at 9:02 am

     I've been saying for decades now, an accumulation tax on residential properties is desirable to deter wannabe slumlords.

     1% on your second property

     4% on your third property

     9% on your fourth property

     and so on.

     Pretty soon property speculation looks worse than productive enterprise. Meantime you can fix a few roads up north.
     • PsyclingLeft.Always 2.3.1

       6 March 2023 at 7:35 pm

       Hi Stuart. Good on you, ..because this present problem has been sadly decades in the making. Slumlords is well apt for some of them….
3. Janice 3

   5 March 2023 at 11:20 am

   What about bringing back the death duties and gift tax that Peter Dunne cancelled as a sensible move?
   • alwyn 3.1

     5 March 2023 at 12:42 pm

     What did Peter Dunne have to do with it?

     They stopped collecting them in 1992 when Bolger was PM, there was a National Government and Peter Dunne was still a Labour MP.
     • Craig H 3.1.1

       5 March 2023 at 1:43 pm

       Gift tax was removed in 2011 because by the end, people spent more on avoiding the tax than it raised.
       • Stuart Munro 3.1.1.1

         5 March 2023 at 6:54 pm

         It wasn't supposed to raise income, but to make shifting earnings harder for tax evaders.
         • Craig H 3.1.1.1.1

           5 March 2023 at 8:57 pm

           Agreed, particularly to make it harder to avoid inheritance tax and to qualify for things like rest home subsidies. Not sure how active MSD is on the latter (they have some powers in that area), but with the loss of inheritance tax, gift tax was less useful.
4. Binders full of Women 4

   5 March 2023 at 1:51 pm

   Ditch the Auck light rail. You'll pay for the rebuild, get some change out of 30 Bil, and reduce emissions by more than the Auck-light-rail.
5. Maurice 5

   5 March 2023 at 2:51 pm

   Governments of any stripe, being what they are, will simply make any "temporary" increase in tax or levy permanent as soon as they get addicted to spending the extra.

   One tiny anomaly is the decrease in road use tax on fuel which is becoming political poison to reinstate
6. Patricia Bremner 6

   5 March 2023 at 5:44 pm

   Windfall taxes and all of your suggestions Ad.

   I think a two year extra take, to smooth out wrinkles and pain.

   A special lottery every year for ten years, prizes a home.

   Plus Rebuild Bonds 2-10 years at a fixed rate plus inflation. multiples of $100, so all may contribute and take part.

   Business Contributions List. Free Adverts.

   Open a pledge Bank for Community contributions in goods or services. Tatou Tatou.

   Together we are stronger.
   • Maurice 6.1

     5 March 2023 at 6:20 pm

     A number of Councils have opened their Mayoral Funds for specific contributions already. Many locals have already contributed.

     https://www.lgnz.co.nz/news-and-media/2023-media-releases/councils-adopt-cyclone-hit-communities-to-support-their-fundraising/
   • Hunter Thompson II 6.2

     6 March 2023 at 10:14 am

     Even if taxpayers do pay for the repairs, will they be asked to pay again when the next cyclone hits?

     I'm not confident rebuilding of communities will occur in locations less prone to floods and slips.
7. Belladonna 7

   5 March 2023 at 10:24 pm

   I absolutely agree with the definition of 'rich'

   And $50K is darn close to the minimum wage ($47K+ after the rise in April).

   I could support a (temporary) increase, if it were absolutely ring-fenced for infrastructure and/or retreat, and not one cent was spent on consultants. I don't really feel the need to have my hard-earned dollars siphoned away for the benefit of EY, etc.

   I could also support further (temporary) hikes on incomes in $50K increments ($150K at 1.5%, $200K at 2%, and so on) $250 is a hell of a lot more in real terms for someone on $50K than $4,000 is for someone on 200K

   Income tax increases are (I understand) usually deflationary – whereas taxes on industries (e.g. road tax increase) are inflationary – as they're passed on to consumers.

   Trying to get valuations on trusts is likely to cost more than it's worth, and run into major issues with payment for property-only trusts (Grandma is a widow and lives in the house, but half is in a trust under Grandpa's will for the benefit of the children/grandchildren)
   • Descendant Of Smith 7.1

     6 March 2023 at 10:34 am

     I also continue to support a trust registry where beneficiaries of all trusts are registered and you can look up if you are one and it records all disbursements and to whom.

     There are so many trusts where those named as beneficiaries are not even aware as the controlling of them is by others (often older family members) or they are sham trusts with no intention of disbursing any money to anyone apart from the person who set up the trust.

     I helped get payouts to a few people who had no idea they had trusts set up in their name – often when young. The payouts changed their lives. (hint think about who benefits from the trust if no payouts are made during its lifetime and the intended primary beneficiary, often with disabilities dies).

     Or then there are just people like my Aunty who had investment trusts in all our kids names – unknown to any of us or my parents to reduce her tax. These trusts were then quickly dissolved just before we turned 18. I only found out cause she hadn't dissolved mine and the bank sent me a letter when I turned 18. No I didn't get a cent but she paid heaps less in tax over the years.

     Visibility of if you are a trust beneficiary and who is getting the disbursements would be of great help in tidying up this space.
8. tsmithfield 8

   6 March 2023 at 10:36 am

   Looking through the comments, it seems that most commentors want to see some new tax or another introduced. I think this is a very one dimensional approach to the problem.

   Firstly, we should be considering the life span of the infrastructure to be replaced. If it is public infrastructure that future generations will benefit from, then borrowing ahead is entirely appropriate since those future generations will enjoy the benefits of the loans they will be repaying.

   Secondly, we should be looking to create superb, highly resilient roads that reduce distances to locations, and make travel as efficient as possible. This will be great not only for drivers but also for the environment.

   These roads could be paid for through tolls. This is the way we funded the Lyttleton tunnel. If the roads are well designed, and minimise distance as much as possible, then there should be little net cost to road users as what they pay in tolls would be largely offset by savings in fuel use and vehicle wear and tear.

   Finally, the system as it is, is highly expensive in terms of maintenance and recovery. By relocating at risk houses and industry away from the areas there will be considerable future maintenance and repair work eliminated. The projected savings in this respect could be brought forward to help fund any necessary borrowing.
9. Peter Bradley 9

   6 March 2023 at 2:01 pm

   NZer's have consistently voted for lower taxes and I expect this upcoming election to be no different. We already have some of the lowest tax rates in the OECD so one has to wonder where this incremental but persistent reduction in government revenue will end. National lowers taxes and Labour won't raise them so a one way ratchet is applied to current and future taxation levels.

   There is a short sighted, user pays mentally which loads our younger generations with student debt and low wages and then expects them to pay for everything themselves through future taxation.

   Those of us who've done well falsely assume that it's down to our incredible hard work and tax contributions. In reality it's the work of previous generations with a vision of the future that provide us with our quality of life – something we conveniently ignore.

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