Government Propaganda: Corrected

20 comments on “Government Propaganda: Corrected ”

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1. Adolf Fiinkensein 1

   21 May 2010 at 12:52 pm

   “Those on the lowest incomes were paying 14.5% of income in GST as they spend more than their incomes that’ll now rise to 17.4%. ”

   And where, pray tell, do these low income people get the ‘more than their incomes’ to spend?

   If it from gummint top ups then that is income. To suggest someone pays 14.5% of their income on GST when the GST rate is 12.5% has a pythoneque ring abo0ut it.

   [lprent: You should really avoid words that put you straight into auto-moderation. Then I have to extract you from it, and my fingers naturally lean towards the ‘spam’ button when I see people with an apparent inability to spell who are wasting my time. ]
   • Bright Red 1.1

     21 May 2010 at 2:20 pm

     Adolf.

     It’s called ‘dis-savings’ in economic speak. You and I call it living in debt.

     The poor end up spending more than they earn and hence paying GST at higher % of their income.

     The wealthy, in contrast, do not spend most of their income and so face GST at lower % of their income
2. ianmac 2

   21 May 2010 at 1:00 pm

   Mr Guest. Those figures cannot be true. I have it on good authority from Mr Key and Mr English that no one would be worse off. Why would they lie? The experts on radio and TV applaud these changes, so Mr Guest you must have it all wrong! 🙂
3. MikeG 3

   21 May 2010 at 1:22 pm

   You just don’t get it do you Ianmac. The changes make an even greater incentive for Scott to get a job, so he can aspire to be Peter and spend his tax cut on another trip to Hawaii.

   Now that nice Mr Bollard is talking about interest rates going up sooner so that inflation doesn’t get out of control. Next year there will be clamouring to raise the tax thresholds because of tax creep.
4. george 4

   21 May 2010 at 1:51 pm

   Gooner, because a lot of low-income people spend more than their income. And what they spend this debt on attracts gst.
5. Billy 5

   21 May 2010 at 1:59 pm

   Im on 30,000 a year, and will be 16.00 a week better off, after gst is taken into account (approx. $10.00) I am $6.00 a week better off, thats still an increase, if small, so I will take it. I do like the idea of having more of my own money to spend even if items of need or luxury will cost more, maybe I wont buy as many energy drinks and drink water from home instead??
   • rod 5.1

     21 May 2010 at 4:54 pm

     $6.00 a week better off, wow, that’s not even half a block of cheese, enjoy.
6. kiwinewt 6

   21 May 2010 at 2:06 pm

   So how about the 2 parents with 2 kids on a total of $36k a year (one salary) with rent of $290py… /sigh.
   • Bright Red 6.1

     21 May 2010 at 2:23 pm

     You don’t exist in the National mindset. Sorry.

     speaking of which, did anyone hear Fran O’Sullivan on the radio this morning saying the bottomw rate was now 17.5%? the 0-$14,000 band, which is over 1 million taxpayers doesn’t even exist to her.
7. Nemesis 7

   21 May 2010 at 2:08 pm

   Show me one major economist who argues that rents will go up by 15% as a result of the budget. Just one. That’s right you can’t.
   • Bright Red 7.1

     21 May 2010 at 2:24 pm

     Everyone’s saying they don’t know what will happen to rents. Except the landlords, who say they will be putting them up to maintain their returns.

     What a wonderful basis to make public policy on.
   • RedLogix 7.2

     21 May 2010 at 3:12 pm

     At the end of the the long thread, and well after folks had moved onto other topics Mark made this excellent comment.

     He makes the rather obvious point…that I wish I had thought of sooner…”Another thing I’d be curious to know is whether you think the same “supply and demand’ principles apply to the labour market and wages?”.

     In other words if this Budget had for instance, imposed a new Compulsory Employer Superannuation contribution (like Australia’s 12%)…then we would have been reading arguments about how inflationary this was because employers would recovering the increased costs by raising prices.

     Yet they don’t think landlords will do the same.
   • RedLogix 7.3

     21 May 2010 at 3:33 pm

     Let me do some very nominal numbers.

     The unit is worth $400k. The building value is say $220k. The rent on it is say $320pw.

     $4% depreciation on this building value is $8.8k. (And this is an absolutely conservative way of doing this.)

     If this was deductable from other PAYE income at a 33% marginal tax rate then the decreased tax liability over the whole year is $2.9k. This would be something like $55pw or a 17% of the current rent.

     Now at this point in time it’s not obvious to me what position most landlords are going to be in. It seems that if building depreciation is no longer permitted then most will be looking to restore the reduced cashflow by increasing rents in the range 10-20%

     15% is a very feasible number.
     • frustrated 7.3.1

       21 May 2010 at 3:45 pm

       Thanks for that example Red – I still believe the renoval of this ability to claim depreciation makes sense on an appreciating asset as it has always seemed like somewhat of a rort for the taxpayer to be subsidsing property development in this manner (disclosure I own several properties and have taken advantage of depreciation to considerable pecuniary advantage)
8. Carol 8

   21 May 2010 at 2:08 pm

   What is this “my own money”? This oversimplifies things when there isn’t that much fairness in how people get paid? For instance, most jobs that have traditionally been done by women get lower pay than sill & training level equivalent jobs traditionally done by men.

   And none of the jobs would exist without the infrastructure that the government & society provides to enable businesses and other workplaces to thrive. And then there’s all the not-for-profit, NGOs, unpaid work that many people do that keeps the wheels ticking over.

   And we need a lot of that infrastructure and services to participate in many of our non-work activities. Society is a cooperative enterprise, not just a number of individuals earning a living.

   “my own money” is a superficial, red-herring kind of concept in retation to taxes & the workings of society.
9. Billy 9

   21 May 2010 at 2:28 pm

   money in my bank account is my own,
   • ianmac 9.1

     21 May 2010 at 2:39 pm

     Glad Billy that you owe loyalty to no one. When my family was growing up it was our moneyand I had just a very few dollars per week for discretionary spending. And the Bank stole some of it too! Lucky Billy :).
10. ieuan 10

    21 May 2010 at 3:18 pm

    Your CEO probably has a couple of kids in private school, at $15K each the GST increase on that alone is going to be $700 per year. Plus they are probably on their second or third marriage and paying a big chunk of cash to their ex-wife (or wives). Add the cost of a personal trainer, tennis lessons, golf club membership and at least two big fat overseas holidays a year and they are lucky to scrape by on $400K.
11. zonk 11

    21 May 2010 at 3:48 pm

    “Anyone saying that this is unfair to lower income earners is either really stupid or just greedy.”-Cynic

    This is the quote that has been on the front page of the Herald all day courtesy of the Your Views section…
12. Marco 12

    22 May 2010 at 10:27 am

    Ok he is still going to be worse off but ifs Scott’s rent goes up so does his Accommodation Supplement.

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