Open mike 18/05/2011

Written By: - Date published: 6:00 am, May 18th, 2011 - 61 comments
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61 comments on “Open mike 18/05/2011”

  1. ZeeBop 1

    Someone unemployed with savings is paying more tax than a farmer make $500,000 from a Fonterra dairy payout! Because the farmer was incentivised to borrow to much grow exports, so much so that they had to borrow yet more to pay for weekly groceries. And there’s no debate about how both Labour and National administrations have allowed this? Its like some Australia media-banking complex has been playing farmers and home buyers off against one another to load up on profits and insure that many citizens are indebted, serfs. The harder these people worked the more into debt they got, and the only people who survived the eonomical mauling were out of work bennies or those pocketing the fees to offshore the profits (like John Key). And so the hate against people who are not in debt because their not employed is merely another sign of how upside down the NZ economy is. Its like a Earthquake, where because all the land drops it looks like the river has risen! The farmers are claimed to be the backbone river of our economy, and yet the policies of successive governments were working faster and harder to make sure that the land was falling away faster. The reality is the debt on the economy is flooding the whole economy because of this massive parliamentary bait and switch. Parliament claiming its own competence on the economy because Fonterra was paying out heaps in profits! What a scam, they were writing themselves bonuses left, right and centre! Nice limos and all!
    Allowing foreign owned banks to gouge on the hard working farmers and urban employees.
    And National, the supposed bastion of business expertise, where taking heaps of donations from the top end of town who were profiting so much from he gouging of us all.

    • vto 1.1

      You lost me a bit there zeebop but if you are referring to the media release exposing the fact that the 17,000 dairy farmers paid $26 million in tax while the PAYE wage and salary earners paid $23 billion in tax, then I hears ya.

      The entire agriculture, fishing and forestry industry paid just $319 million.

      Or to put it another way the average dairy farmer paid just $1,500 in tax in 2009. This is about half of what a pensioner couple paid in tax in 2009.

      This leads to many questions and matters that completely undermine several developments in the agricultural sector..

      Such as the Fed Farmers constant carping about being the true New Zealanders paying for everything like teachers and doctors and police and etc. They just don’t.

      Such as, if the farmers are that unprofitable with commodity prices at such high levels then how on earth can they dare to have the cheek to take more money again from the real payers for New Zealand (the wage and salary earner) for such ideas as irrigation projects? (farms already unprofitable, and on top of that, cannot get private funding for the investment because it does not stack up. I mean, ffs there some bullshit going on)

      Such as, …… on it goes.

      • PeteG 1.1.1

        It’s good current practice for farms to be run as businesses on the profit borderline. They make their big money from capital gains. And they also have an advantage in being able to cover normal living expenses as business costs (ie tax free), like housing, vehicles and fuel, some food, power, phone/internet etc.

        • mickysavage 1.1.1.1

          But don’t you agree PeteG it is bad for the country?
           
          We get stuff all tax, polluted waterways and increased debt as farmers keep borrowing.
           
          This particular article has convinced me more than ever that a capital gains tax is a must.

          • PeteG 1.1.1.1.1

            It has it’s down sides for sure, and I think the tax burden should be more evenly spread – but we do rely a lot on the primary sector for business activity, employment and exports, so it has to remain viable.

            • Pascal's bookie 1.1.1.1.1.1

              It looks to me like any viability problems they have are far less to do with the tax that they don’t pay, and much more to do with the speculation on land prices.

              Surely, land is a cost in a farming business (just like ‘taxes’).

              Turning it into the profit centre is just too stupid for words, if you want ‘farming’ to be a business

            • Draco T Bastard 1.1.1.1.1.2

              What your saying there is that, as it’s so unprofitable, we have to keep subsidising the farmers. This is, of course, taking the wealth away from more profitable work and more important community work.

          • Lanthanide 1.1.1.1.2

            John Shewin (sp?) from Price Waterhouse Coopers and the Tax Working Group was on the radio talking with Kathryn Ryan about it. Basically he said a capital gains tax is problematic because it’s usually only charged when an asset is sold, and this also creates a lock-in effect. A land tax is much better because we could start charging it quickly (although it would need to be phased in over a few years).

            • Colonial Viper 1.1.1.1.2.1

              Yep a land tax is the way to go (= a form of asset tax).

              • KJT

                Adam Smith, the capitalist’s guru, did not believe in taxing workers at all. he believed it was better to tax the owners of land and capital. Taxing workers was an extra cost on productivity, while taxing owners encouraged efficient use of resources, including monetary capital.

              • Herodotus

                CV problem with the likes of a land tax, is that there are many out there who have min cash incomes. The likes of pensioners, mum and dad (especially after buying energy shares) are struggling to cope with rates, mortgage and the general cost of living, lets just add on another, unless there is a tax rebalancing ;-).
                Dairy farming on a technical economic bases does not add up. Those enjoying the idnustry are long timers who had little debt, but once they sell he new owner is now a slave.
                In Sydney a mate is paying $1700/week rent yet this does not even cover the land tax for the land owners, and yet in Sydney there is no signs of a property collapse (not yet)the bubble is still expanding.

                • Draco T Bastard

                  It’s really easy:
                  1.) Rates (Payable to loacl government) set as a low %age of income
                  2.) Land tax (Payable to central government) set at a flat rate (probably about $1) per m^2 per year.
                  3.) Capital gains tax (Payable to central government).

                  This make rates and the land tax affordable by everyone (It’s likely that most peoples rates+land tax would be cheaper than present rates) so we don’t have to put silly limits on it. It also brings in immediate revenue for the government and stops speculation and farming for capital gains.

        • Colonial Viper 1.1.1.2

          It’s good current practice for farms to be run as businesses on the profit borderline.

          Good for whom? Not for the country and not for the people of the country who are being told that their home help is being cut, their special education services are being cut, their training entitlements are being cut.

          And not just a capital gains tax, a straight out asset tax is what we need, on net asset holdings over $2M.

          • ZeeBop 1.1.1.2.1

            A Japanese housewife looks at investing in OZ or NZ, OZ has a Capital Gains Tax.
            So NZ whores itself for cheap to attract their investment, then we have to flaunt
            the wears a little, boom the bubble, and return those investments with a risk premium.
            It could be different, we could actually work harder for the investment, you know
            by having competent government which targets unproductivity, like lack of
            public transport alternatives, like holding back low level sprawl and build higher.
            NZ has huge potential, and huge risks, its just shocking Wellington is on a fault,
            Auckland is on a isthmus of volcanoes, and nobody cares to build
            sustainable efficient city southwards. Its always more talk of maybe proper
            rail in Auckland, well if they don’t want it build in in S.Auckland. Build a
            circle line around the Bombay Hills! Do something already, because oil
            is quickly becoming a luxury.

        • vto 1.1.1.3

          PeteG “They make their big money from capital gains”. Speculators of the highest order.

          “they also have an advantage in being able to cover normal living expenses as business costs (ie tax free), like housing, vehicles and fuel, some food, power, phone/internet etc.” Makes them tax cheats. You are not able to claim many of those things as expenses yet you and I know they do. It makes them tax cheats.

          • PeteG 1.1.1.3.1

            IRD must know, politicians must know, so it seems it’s an allowed form of tax cheating.

            Many small businesses tax cheat as well, for example not declaring all cash sales as income. Many individuals tax cheat too, mates rates, under the table sort of stuff.

            • Colonial Viper 1.1.1.3.1.1

              Wow ‘allowable tax cheating’

              Let’s see what the IRD thinks of your naive concept lol. BTW I heard the IRD was cracking down on restaurants suspected of doing cash business.

          • ZeeBop 1.1.1.3.2

            The way a speculator makes money is by entering and leaving positions, buy low sell high, farmers are not speculators on land price, they are pansies for speculators. Its like the Fonterra needs more investment now story, where the farmers allowed any farm owner to trade in future calls on profits, allowing the speculators. Now all a invested need do is own and run a dairy farm and buy up all the poor indebted farmers future profits.

            Same goes for housing, to win as a speculator you need to buy a home, talk it up, sell it again, buy more. So the speculators who won in the bubble where those that moved further out from the main centres talking up each suburb in turn, buying in cheap, sitting on properties, and selling once the scarcity had forced up prices. Borrowing the whole time and leveraging to the hilt.
            Those caught when the music stopped would have large numbers of homes, and huge leveraged debt positions. Nasty.

            Farmers are kidding themselves if they thought they’d see much of the speculative profits, since only a few could buy a chain of farms, that’s what Carfer was trying but turns out he didn’t get why, so was caught trying to keep them running rather than selling down debt the moment the oil infused bubble in property came to an end. Now we’re all in free fall, we just have no reach bottom yet.

            Oh, and I welcome our new foreign overloads, UK-OZ-US-Japan-China.

      • todd 1.1.2

        Excuse my ignorance vto, but where might I find these figures on the internet?

        • vto 1.1.2.1

          On stuff http://www.stuff.co.nz/business/farming/5017285/Is-the-rural-sector-paying-enough-tax

          I think the situation is appalling. PeteG above refers to farmers making their money via capital gain, which is entirely true… which means…

          That farmers are speculators of the highest order, taking on huge unmanageable debt in the hope of increasing property prices. At the exact same time as they lambast urban types for doing similar (though on a much smaller scale). Honestly, I have become increasingly disappointed in the attitude and approach of the farming sector.

          They are not paying their way. In an environmental sense, in a tax paying sense, in a smarmy ‘we are the real New Zealanders’ sense.

          Someone prove me wrong, please..

          • mickysavage 1.1.2.1.1

            Dead right VTO.
             
            One of the worst aspects is the speculation and continued price rises of farmland that this has encouraged.
             
            To paraphrase Selwyn Pellett Kiwi farmers have been borrowing more and more money from Aussie banks to buy the same farms off each other.  And paying more and more interes to Aussie banks rather than tax to the Government.  This is unsustainable and silly.
             
            Bring on a Capital Gains tax or as suggested by CV a land tax.
             

            • vto 1.1.2.1.1.1

              I just noticed something truly sad and mirthful at the bottom of that stuff.co.nz article…

              At the bottom it has a link entitled “Next Farming Story” and do you know what it is ??? Get this… “Bumper Year for Fonterra Farmers”.

              I don’t know whether to laugh or cry.

              • todd

                Thanks vto, I appreciate the link. What else is sad is that in light of how much tax farmers are paying, there is no I repeat no justification for the millions of dollars the Natz are planning to throw at their irrigation systems.

              • Draco T Bastard

                Get mad. It’s the only way we’re going to get the system to change so that farmers and their like aren’t bludging off the rest of us any more.

                • logie97

                  Wouldn’t mind betting that the majority of NZ university students who come from down on the farm, have parents who have organised their finances so that their children qualify for student allowance. Gee they must be an impoverished lot. I wonder what colour the diesel is in their run-around-town SUV.

                  • logie97

                    …apparently their annual subscription to the New Zealand Herald is tax deductible as well … the list goes on.

  2. ianmac 2

    Hey. About 80% of NZ Debt is private debt. Billions involved. Are there any figures which show if the Agriculture/dairy farms make up significant proportion of that debt?
    If dairy farms hold the great proportion of that debt (elephant in the room) then the Budget austerity would be down to dairy farming rather than Mum and Dad spendthrifts. Serious if so?

    • Josip Blow 2.1

      You could therefore argue that selling all the farms to overseas interests would be benefical in reducing NZ’s private debt issue.
      I think though that the larger issue is property speculation across all sectors, and the debt we have as a result of that. Whether capital gains tax or some other mechanism is employed NZ would be in a much stronger postion if we carried less debt at a personal level, and for the most part that debt is incurred in a property purchase.
      I would be interested though in seeing total tax take for the sector over a number of years, possible last year could be somethign of an anomoly?

      • Colonial Viper 2.1.1

        I would be interested though in seeing total tax take for the sector over a number of years, possible last year could be somethign of an anomoly?

        The only anomaly dairy farmers suffered last year was near record payouts.

        You could therefore argue that selling all the farms to overseas interests would be benefical in reducing NZ’s private debt issue.

        Sure, if you didn’t give a shit about our balance of payments, that would be an argument you could make.

        I think though that the larger issue is property speculation across all sectors

        So do you reckon these guys are farmers or are they property speculators?

        • Josip Blow 2.1.1.1

          “So do you reckon these guys are farmers or are they property speculators?”

          At the moment a growing number of them are both.

          My concern is based on the debt level that farmers are carrying and associating that with the debt levels that homeowners are carrying after a speculative property boom, we are in a commodoty boom at the moment and that is likely to reflect in higher demand/pricing fro farmland which will exacerbate the situation we have at the moment. And possible end in a bust if the commodity pricing falls sharply.

          “Sure, if you didn’t give a shit about our balance of payments, that would be an argument you could make.”

          Sorry that was with tongue firmly in cheek. I think that there is a lot of merit in protecting the ag sector ( it is too big to fail) if necessary from itself. And looking at strategies to limit the demand or cost of agricultural land, Labour i think want to limit land sales >5ha to oversees interests. I think thats a good starting point. I don’t object to farmers making a capital gain over time, but protecting them, and NZ, from a boom bust in land prices is in the national interest.

          As far as tax take goes though i do think we should look at the contribution over a numebr of years to get a better understanding of their tax contribution ( or perhaps lack of it)

          • Colonial Viper 2.1.1.1.1

            It isn’t technically difficult to deflate the farm asset price speculation bubble, and get the land back to its core business of making food instead of feeding Australian banks interest and fees.

            Mate you’re being completely disingenuous suggesting that if we looked back an extra couple of years we’ll discover that farmers have only started not paying tax this latest year.

            This has been a known issue for many many years.

            • Josip Blow 2.1.1.1.1.1

              How is it disingenous to suggest looking at one year in isolation may not give a thorough picture?
              IIRC 2009-10 was a year of devastating drought for the major dairying regions, and we were warned at the time that most farms would run at a deficit for the year.

              • Colonial Viper

                IIRC 2009-10 was a year of devastating drought for the major dairying regions

                Yeah, so devastating that the average Fonterra farmer payout in 2010 was over $800K

                Maybe they should have “droughts” like that more often eh buddy?

                BTW I am sure you know, but tax is assessed annually based on financial years, not on averages over whatever time period you deem convenient.

                • Josip Blow

                  So you want to only look at revenue in assessing a tax bill interesting..
                  No acknowledgement that expenses may form a part of a tax calculation.
                  BTW I am sure that you know that the av$800k payout isn’t bankable profit. And you accuse me of being disingenous.
                  I will say again that attempting to draw a conclusion based on one years figures ( and ignoring contributing factors) may well be unfair and inaccurate.

                  • Pascal's bookie

                    I’m still waiting for people to show us the comparable figures from other years then, seeing they are complaining that these figures are such an outlier.

                    But for some reason, they seem reluctant to.

                  • Draco T Bastard

                    Any significant law changes happen regarding farm finances over the last decade? No? Then one year is pretty much the same as another.

                    Oh, except that the farmers got massive subsidies in 2010.

                    Hmmmm, it appears that we pay and pay and pay but never seem to get the benefits from the payments. We get lots of negatives though – polluted rivers, stream and lakes, disappearing water tables and high food prices.

  3. jcuknz 3

    Interesting summary of some books which I suggest is a case for socialism …

    Human beings, Haidt argues, are “the giraffes of altruism.” Just as giraffes got long necks to help them survive, humans developed moral minds that help them and their groups succeed. Humans build moral communities out of shared norms, habits, emotions and gods, and then will fight and even sometimes die to defend their communities.

    http://www.nytimes.com/2011/05/17/opinion/17brooks.html?nl=todaysheadlines&emc=tha212

    • Draco T Bastard 3.1

      Sounds to me like the biologists need to be talking with the psychologists. Psychopathy has a tendency to have no conscience but also has a tendency towards excessive selfishness is regarded as an illness. There’s been some discussion about psychopathy being genetic. This would indicate, especially in association with the linked studies, that being selfish isn’t in peoples nature as the RWNJs say. In fact, it’s the exact opposite. This would suggest that we should be passing laws that encourage cooperation between people rather than competition.

      In other words, for the last three decades we’ve been following the wrong course – thanks Labour 👿

  4. Thanks for the link jcuknz. 

    I remember when I studied zoology in the late 70s just after ‘Sociobiology’ and ‘The Selfish Gene’ were published. I had a chat with a classmate who got really depressed at the implications (i.e., we’re all ‘seflfish’). I said to her then that that was a misunderstanding and that Dawkins misunderstood what he was talking about (I’ve always been very sure of myself). I pointed out that natural selection was a process of replicating genes – you can call that ‘selfish’ if you like – but there’s no reason why natural selection wouldn’t select genuine altruism in individual organisms (i.e., in people). People, that is, can evolve to be genuinely unselfish in the right (social) environment of selection and that could help replicate genes.

    She wasn’t really convinced – which was a shame.  Still, it’s good to see the science catching up with me after all these years. 🙂

    One correction to the info in the link – as I understand it, classic ‘group selection’ is still pretty much a heresy (or, at least, controversial); what isn’t is selection for ‘groupiness’ which, in the right environment, can help with individual (ultimately gene) ‘replication’. That is, it isn’t so much that one group out-competes another in head-to-head competition but that, within a group, being generally cooperative increases one’s own chances of survival (partly because the group is more effective/efficient at various tasks than are lone individuals and partly because, once sociality occurs, you’d better not buck the group too much or too often because others have a lot to lose from a breakdown of the group!). (I could be wrong, though, and should read Sloan-Wilson more closely to check.)

    This link and this follow on link (which is the abstract for a paper by Nowak et al. – Nowak is mentioned in your link) on the evolution of ‘eusociality’ (in Nature) lead to the paywall but show that this issue is very much still at the forefront of evolutionary thinking.

  5. Peter 5

    NZIR have provided some facts from an organisation that measures international competitiveness and ranks the results;

    “New Zealand’s business efficiency dropped two places from 22 to 24.
    Government efficiency fell three places, from 5 to 8.”

    We know that the plan to increase Government efficiency is to cut back on resources and hope it makes a difference. What is the plan for improved business efficiency, they have a long way to go to catch up with Governments excellent 8th in the rankings?

  6. Tiger Mountain 6

    “Joycie” has made a tactical change re the 10 year Commerce Comm. ‘hands off’ period on Ultra Fast. There is ample scope for opposition parties here re potential broadband price rises given the million plus households with broadband.

    http://business.scoop.co.nz/2011/05/18/joyce-gives-up-on-ufb-regulatory-holiday/

    • Lanthanide 6.1

      Yay! I’m so glad! That was by far the stupidest provision to include in there.
       
      I could have bought into a 3-year holiday, during the significant initial roll-out stage. But any longer than that was sheer lunacy.
       
      Good job Labour & Greens!

      • Draco T Bastard 6.1.1

        According Clare Curran it was the Maori Party but what they managed to get is actually worse.

        • Lanthanide 6.1.1.1

          Right, sounds like a bait and switch. They replaced the provision with another one that will have almost the same outcome.

  7. Carol 7

    God, John key comes across as an arrogant ass in the House, while shouting at people and sneeringly denying the unfairness of the tax switch & pronouncing black is white.

    • Lanthanide 7.1

      The budget papers say the tax switch was:
      1. Broadly fiscally neutral, and
      2. GST raise was more-than-compensated for everyone with tax cuts.
       
      Key doesn’t care about reality, he has the budget papers with the maths on it that prove him right.

      • prism 7.1.1

        Lanthanide – I noted while listening to some intelligent guru about nz finances yesterday that the idea of the fiscally neutral tax cuts and GST rises blah blah was that the whole premise relied on growth in the economy which hasn’t happened and that is why we are fiscally neutered instead.

  8. prism 8

    On yesterday’s radionz news there was an item on Filipino caregivers being refused renewal of work permits apparently on the basis that they are considered unskilled workers. This underlines a long-term disdain for the work of people who care for other people, from mothers, to caregivers, foster parents, as well as aged care perhaps even teachers!

    If the decision makers had to do the job of caregiver to the aged, or some with an intellectual disability for even a week they would find that not only is it hard testing work, but summoning up the reserves of human concern for patients/clients who may be all of difficult, demanding and heavy to move, would leave them exhausted and drained.

    The middle class, and in fact,all classes, want good standards when dealing with vulnerable people, but there is not respect for the people who are working to those standards. Anybody can do their jobs is the refrain. Well they can’t, won’t and don’t and these workers deserve more consideration. They are needed now and it is well known that elderly numbers are growing.

    Most Filipino women who have a background of appropriate training would have more Skill, Concern for proper treatment of people and Integrity in their little fingers than immigration ‘officiousals’ have in their whole department.

    • Vicky32 8.1

      Absolutely. I heard a lot of that interview as well, and while I could be wrong, I think she said that many of these Filipina women are actually trained nurses, who have not managed to get registration in New Zealand, perhaps because of their English.. At least one of the women killed at the language school in the CTV building in Christchurch was exactly that, a Filipina nurse studying English in order to get her registration with the Nursing Council.

      • prism 8.1.1

        Yes Vicky32 I remember that there was a reference to previous training and status in thePhillipines. How sad about the woman being in the CTV building and ironic that she was trying to improve her English at the same time that the immigration’s dalek leader was planning to get them out of NZ.

    • Bill 8.2

      x2+ wage rate for care givers in Australia. Nuff said?

  9. rd 9

    No-gratitude-just-your-car-thanks

    I thought this was a story about the worlds banks.
    http://www.stuff.co.nz/the-press/news/5018810/No-gratitude-just-your-car-thanks

    Lo

    • Draco T Bastard 9.1

      Na, the world banks wouldn’t have been worried about getting caught.

  10. Pascal's bookie 10

    Just heard john key talking about the budget on’t radio the day before the budget.

    “Labour this Labour that Labour Labour Labour Labour Labour Labour” after that I got bored.

    • lprent 10.1

      Yeah, you get the impression he is less concerned about what his own government is screwing up on now.

      John Key – much better in opposition.

      That is almost worth a billboard.

  11. logie97 11

    On Mora’s Afternoon

    Just heard the Penguin give us some more of his knowledge.
    “If Banks wins Epsom and Act only get 4 percent, it could give Banks a lot of power in the party, particularly as his seat would bring Brash in on the Electorate rule.” Then the Penguin opined that if Banks was to have a falling out and resigned his seat, Act would be gone.” I think not. At the time of the Election is the determining issue. Act list members would remain (but without validity).

    Actually, National could work this gerrymander to their advantage. They could get the 2nd party support of Act on Banks’ back. Banks could then resign and force a bye election in Epsom and stand for the National Party. The National party supporters of Epsom could then vote for Banks. He would then return to parliament as a member of the party he really pays allegiance to and everyone is happy. National get an extra electorate member, and have a support party that has got less than 5% support.

    • logie97 11.1

      John Banks, learnt all he knows as a member of Rob’s Mob, is the ACT candidate for Epsom. “Rob this, and Rob that… was his mantra.” Rob must be turning in his grave right now… Banksy is aligning himself with Douglas, Brash, Richardson et al. What an opportunist Banksy has become.

    • Lanthanide 11.2

      I think if National and Banks played such a game, they’d be vilified far more than Hone is.
       
      I mean really, it would look like this:
      1. Resign National
      2. Join Act
      3. Win Act seat to get them into parliament
      4. Quit act
      5. Join National
      6. Re-win seat under National

      • logie97 11.2.1

        You got it in one. Okay your point 5. National don’t select you and put up their own man.
        6. Re-win seat under National.

  12. willie maley 12

    Just watched Back Benches and I must say if Jami Lee Ross was the answer, then what the f*** was the question?

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