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Open Mike 20/07/2017

Written By: - Date published: 6:00 am, July 20th, 2017 - 142 comments
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142 comments on “Open Mike 20/07/2017 ”

  1. Andre 1

    Gareth Morgan’s TOP is creeping back into the news with more controversial proposals. So I reckon it’s time to take another look at their Comprehensive Capital Tax proposal, and I really don’t like it. It’s crap enough to completely put me off TOP, even though I would otherwise be quite enthusiastic about the proposal to tax capital, and their environment policies really appeal to me.


    My objections to the CCT are:
    1) Social effects on the asset rich/cash poor. Already thrashed to death and gets the most attention, but I don’t really want to go over it again right here. I’ll just say the suggested mitigations are unconvincing to me.
    2) Because it’s a continuous drain on cashflow regardless of profitability, it may cause the collapse of businesses going through lean times that would otherwise survive. Just glibly waving that away by saying they can defer payment while building up debt to the IRD doesn’t cut it with me.
    3) Discourages foreign investment. Why would any business want to set up where they start getting taxed long before they earn a penny of profit? Come to think of it, even home-grown start-ups like Xero would have a strong incentive to start up elsewhere if they’re going to be taxed long before they’re profitable.
    4) It favours low-capital businesses. The likes of 42 below, Charlie’s, Trademe, Infometrics are low-capital businesses that built up enormous capital gain in value at time of sale that the CCT would not capture (but a CGT would). Importers are also low capital businesses that would have low liabilities under the CCT. It discriminates against businesses that need expensive capital equipment, ie businesses producing complex tangible goods such as Buckley Systems, Magritek, F&P Healthcare etc.
    5) Because land is such a high-capital item, it pushes farmers towards a high-intensity high-input farming model. Which is a high-pollution low resilience model, exactly the opposite of what we want
    6) The proposed CCT also only applies if the entity is not earning enough income to pay more income tax than the CCT. If an entity pays more in income tax than their CCT liability, their only tax liability is their income tax. It’s the highest of their income or CCT liability, it’s not a combined levy. While it’s wrong in our current system that the asset-rich/income poor escape tax, a fair system would tax the asset-rich income-poor at a lowish fair level, the income-rich asset-poor at a lowish fair level, and the income-rich asset-rich at a somewhat higher level. But TOP’s proposal lets the income-rich asset-rich off of contributing at a level equitable to their doubly good fortune.
    7) The CCT is levied only on equity. So it encourages the use of debt as a tax-minimisation strategy. I can’t see anything good about encouraging that.

    All up the CCT proposal looks like something that would be dreamed up by an economist that only sees value in things in terms of the income that can be produced. That has no appreciation of the differences between a service business and a business that produces tangible goods. And that is siloed amongst a group of like-minded economists. To me, that’s a real shame because the main point of the policy, that capital needs to pay a fair share of tax and doesn’t pay any at all currently, is absolutely spot-on.

    On the other hand, a simple Capital Gains Tax like the one I’m familiar with from the US as it stood in the 90’s strikes me as a fair way to tax capital. In particular, levying the tax at time of sale when there’s the cash in hand to pay the tax is a much better way to go than the continuous cash demands of the CCT.

    • Carolyn_nth 1.1

      TOP is creeping back in the news because the rightees in the media are worried the Green Party is getting a lot of traction. They probably would prefer TOP to siphon off some potential GP votes.

      • mauī 1.1.1

        Yeah I cant see $200 for every young adult making the news…

      • CLEANGREEN 1.1.2

        Yep Carolyn,

        That is the express function of TOP, to tip the tables of the election.

        Gareth Morgan is not electable material, more like a boil on Bill English’s arse!!!!!

        Fact is Maori party are aligning themselves closer to the Green Party now, and that is scarring the hell out of National.

        As our family are traditional Labour/NZ First voters we don’t have any interest in TOP or other minor parties now as they are more of a distraction we feel.

        We used to like the Green Party when Rod Donald & Jeanette Fitzsimmons/ Sue Kedgely were running it, but now we are confused at them as they sometimes loo like a youth Gatsby era gig.

    • AsleepWhileWalking 1.2

      I think TOP is a bit weird. It’s just a sort of nebulous feeling I have about them.

      Or it might be that they promote changing our welfare system rather than trying to fix the underlying problem which is opportunities for those at the bottom are almost non existent. Their party name is offensive rich person satire.

      • Incognito 1.2.1

        I agree that Gareth Morgan is a little different, odd even. I find his ‘cerebral’ super-rational ‘common sense’ approach a bit difficult to digest even though some of his ideas do appeal. Sometimes he comes across as an economist on steroids but his rationality is ‘cleaner’ or more ‘objective’ than that of the likes of Don Brash, Shamubeel Eaqub, or Eric Crampton.

        • Andre

          Maybe it’s a bit of his worldview and philosophy isn’t as noxious as the likes of Brash, Crampton et al, but like them he puts his economist training and arguments in service of motivated reasoning.

          • RedLogix

            I guess it can only be expected that after 40 years of bad neo-liberal economics, the left is now deeply suspicious of ALL economics.

            Yet this paranoia is not serving us well in a world where the extremes of wealth and poverty lie firmly at the root of so many problems we want to address.

            • Andre

              To give Morgan and TOP credit, they openly put their worldview front and centre for all to see and critique:

              “At TOP, we acknowledge that all productive assets generate income (either in cash or kind) and by deeming that they produce
              a minimum level of assessable income, such capital will be deployed in the most efficient manner. This is critical for maximising jobs and incomes. Those that already declare at least that level of income will be unaffected. Those that don’t, will pay more.” – from the link at my comment 1.

              I just think it’s a really crap limited economist’s worldview that ignores the social value many people derive from secure home ownership. Or even the social value derived from the many businesses started and run by people that care about what they’re doing and for whom earning a living from the business, while absolutely necessary, isn’t the major reason for doing what they do.

              • RedLogix

                I just think it’s a really crap limited economist’s worldview that ignores the social value many people derive from secure home ownership.

                If you read the KMPG link above, they make the point that this idea is really nothing new, it was first proposed in the 2001 Tax Review. Imagine if instead of chickening out the Labour govt of the day had gone ahead. We may well have avoided the worst of the crazy house price ponzi scheme we’ve seen this past decade or more.

                Sure homes do have a social value, but you have to be able to afford one first.

                • Andre

                  From another angle, I’ve paid a lot of capital gains taxes in the US, including on what was a family home. It’s no more irritating than paying any other income or sales taxes, the cash flow is there to support it, and the reason for levying the tax is instinctively “fair enough”.

                  I’ve also paid a lot of deemed rate of return tax, in the form of New Zealand’s Foreign Investment Fund tax (thank you very fucking much Michael Cullen). It pisses me off every time, because the cashflow isn’t necessarily there. I’ve had to pay it in lean times when I’ve had to sell something to raise the cash, and that really grated. To levy a similar tax on a literal necessity of life, the shelter of my home, would really really grate hard.

                  But to levy a Capital Gains Tax at the point of sale, when my former home becomes purely a financial instrument, just doesn’t carry the same oppositional emotional reaction.

                  • RedLogix

                    Step back from the CCT specifically and look at the entire package as a whole. Only the top 20% would pay more tax overall, the bottom 80% pay less.

              • CLEANGREEN

                Good comment Andre,

                I Iike the point that you raised “limited economist’s worldview that ignores the social value many people derive from secure home ownership.”

                I have always placed a high value on Public residential health and well being.

                We are hot on this bloody government pushing our country into a road freight empire and killing off rail as the prime mover of freight as rail should again be the prime mover today.

                NZTA cost of one road death is now set at $3.4 Million each death and rising.

                So if we run all our freight on the single lane roads we will kill many more in future and government don’t even cost this loss against our productivity yet!!!!

                Most overseas countries do so but not good old dumb NZ eh!!!!

    • Adrian 1.3

      It would also push far more farmland into overseas ownership. Farmland is worth a false value far in its excess of its productive value for a whole lot of complex reasons,
      mostly distortions and non-productive reasons.
      If a 2million dollar property earning 200k gross and probably only 80k net was taxed on its capital value it only option is to go tits up or sell to dirty money from offshore.

      • Sam C 1.3.1

        Absolutely correct Adrian, and I expect that’s exactly what would happen – mass sell down to overseas interests.

        • ianmac

          The TOP Meetings seem to be drawing big crowds and from the photos there are many non-grey heads among them.
          If TOP gained 5% of the vote I wonder how that would affect the balance?

          • Sam C

            I don’t think there’s any show of TOP getting anywhere near 5%. Although it doesn’t sound like that great a barrier, previous elections have shown that it is a hell of a hurdle to overcome.

          • weka

            “If TOP gained 5% of the vote I wonder how that would affect the balance?”

            Or more importantly, if TOP gained 4.9% how would that affect the balance 😉

            • Sacha

              That would hand the Nats a 4th term. Hopefully enough people see the risk and vote accordingly.

              • weka

                Too many lefties still thinking it doesn’t matter (i.e. that it doesn’t help Nact).

              • CLEANGREEN

                Correct Sacha.

                Gareth Morgan is a dyed in the wool tory always was.

                • Carolyn_nth

                  I see TOP’s communications guy (Sean Plunket) is still trolling the #IamMetiria thread on Twitter – in company with the likes of Hooton, etc. Not giving the impression Morgan and other’s in his party have any empathy for those struggling with a broken social security system.

              • RedLogix

                Only if you assume that all their votes come from the left. Well it’s too soon to tell if this is true or not, but it’s a claim in stark contrast with the idea that Morgan’s a ‘dyed in the wool Tory’.

                If you really believed that you’d welcome TOP wasting 4.9% of right wing votes.

                • weka

                  Dyed in the wool tory who’s somewhat good at convincing progressives that he’s not.

                  • RedLogix

                    As you already know, I was convinced back more than a decade ago when I started donating to Gareth and Jo’s various UNICEF projects, and have been doing so ever since. The total number over the years is starting to add up to some real ding. And they’ve matched it dollar for dollar.

                    And in every case the projects are all about making concrete differences to some of the most impoverished, struggling and truly vulnerable people in the world. Especially for women and girls.

                    I’ve read his books, followed his blogs on and off for years. My conclusion is that they’re actually way radical people who are good at convincing Tories they’re safe to invite around for a barbecue.

                    Besides anyone who has at the core of their tax policy a commitment to slug the top 20% with more tax and make the other 80% pay less is by definition NOT a Tory. Really.

      • RedLogix 1.3.2

        TOP’s proposal is to deem a minimum rate of return for housing, land and business assets, on which tax is payable. Put simply:the net value of the asset x minimum deemed rate (not confirmed in TOP’s policy statement but, say, 5%) = minimum taxable income from that asset.


        The proposed asset tax is not all that onerous. For your $2m farm with say a $1m mortgage the net value is $1m. The minimum deemed rate of return would be say $50k. This is less than the $80k of income already being taxed, so nothing extra would be paid by this business.

        Morgan stressed the policy wasn’t a tax grab. Overall, the fledgeling party’s package would be tax neutral, with every additional tax dollar collected given back via income tax cuts, which Morgan said he would make bottom-ended so those on lower incomes get more.

        When questioned whether the policy would be a hard sell to house-owners, Morgan said “I’m going to give you more money back in tax cuts than you have an increase in rates. You’re better off. Only 20 percent of people won’t be better off and they will hate me.”


        Disclosure: Personally I would pay more tax under this policy. I don’t hate this policy because I want NZ to be a safer, saner and happier place to live for everyone.

        Roughly the top 20% would pay more, the other 80% would be better off. Hard to see quite why so many lefties see this as a bad thing. Really.

        • The Chairman

          “The minimum deemed rate of return would be say $50k. This is less than the $80k of income already being taxed, so nothing extra would be paid by this business.”

          That scenario highlights another problem with Morgan’s tax. Despite having assets, the farm’s assets won’t be captured by Morgan’s CCT. As a result, the farm won’t pay any extra tax.

          Yet, a good number of home owning pensioners and low income earners will.

          • RedLogix

            @ The Chairman

            That scenario highlights another problem with Morgan’s tax. Despite having assets, the farm’s assets won’t be captured by Morgan’s CCT.

            In this case because it is already paying tax on productive income in the normal way. Because this exceeds the deemed CCT income, then it doesn’t apply.

            Someone above put this scenario up complaining the CCT would put this farm out of business. Now when it’s clear that it wouldn’t, you grizzle that it’s not being taxed enough. Sheesh … you really just don’t want this to work do you?

            • The Chairman

              “Someone above put this scenario up complaining the CCT would put this farm out of business.”

              That wasn’t me. Nevertheless, it’s another hurdle a struggling, asset rich income poor business would have to deal with or possibly face going under.

              As for my initial comment, the income rich asset rich largely get to avoid this new tax burden but the income poor get “punished” by it. Ergo, the rich continue to get richer, hence the problem.

              Therefore, when all is taken into account, its got negative impacts whichever way you look at it.

              Morgan needs to take it back to the drawing-board.

              • RedLogix

                the income rich asset rich largely get to avoid this new tax burden but the income poor get “punished” by it

                In every scenario the income cash rich still get to pay MORE tax than the cash poor. Your argument is a total fail at the point where it ignores the usual tax on income or profit involved.

                If you have a sodding great asset that’s hidden away from tax because you’ve arranged for it to earn no taxable cash income … then exactly what is your excuse again?

                There are so many people here so exercised by this scenario I’m beginning to wonder exactly just how many of you have unspoken motives here.

                • The Chairman

                  Your argument overlooks one of the touted reasons for introducing a CCT, that being, to tax the capital of assets that aren’t currently taxed.

                  Yet, as you yourself pointed out, this tax won’t capture the assets of the rich. Thus, it’s a fail.

                  And as a result, it fails on tax redistribution (from the rich to the poor).

                  • RedLogix

                    this tax won’t capture the assets of the rich. Thus, it’s a fail.

                    The only fail here is the way you cannot seem to work out how the CCT and normal income/profit tax work together. They don’t exist in isolation, they’re just two aspects of the same thing … total tax paid.

                    And that is all that matters is it not? And in every possible instance the wealthy would pay more total tax than the poor.

                    There is a close parallel here with the same uncomprehending response I used to get years ago when I first tried explaining how a UBI and a flat PAYE tax regime would combine to produce a progressive total tax regime. Most people have worked it out by now, but it took time.

                • Sabine

                  what unspoken motives could anyone have?

        • McFlock

          My caution about this policy is how it deals with your home – on a 200K home that’s ten grand a year in tax I would need to pay regardless of whether I have a job.

          Similar to Andre at 10:33, I’m ok with paying tax on profit if I sell up. But if I lose my job I’ll be paying tax on profit I’ve not gained yet -which might actually force me to sell the damned house. That would piss me off.

          • Sabine

            what you don’t have several homes and could just simply quickly sell one to make some cash?
            You mean you are not Garreth Morgan? doh then, and suck it up butter cup.

          • mauī

            The number I have heard TOP saying recently is your home would be taxed at around 1.5% every year.

            If you’re unemployed you wouldn’t have to pay the yearly tax, but the combined amount would come out when the house is sold.

            • McFlock

              so farms are one rate, personal homes another, deferrments for pensioners and the unemployed… this is getting a bit convoluted.

              • Andre

                Your home and/or farm would be deemed to produce an income of 5% of capital value. That deemed income then gets taxed (real money not deemed money) at your personal income tax rate. So 5% deemed income rate x 30% income tax rate = 1.5% for a moderate earner with a low value house.

              • CLEANGREEN

                Bloody messy Mc Flock.
                “Getting a bit convoluted”

            • weka

              One of TOP’s big problems currently is that it can’t explain its policy clearly and consistently to people who aren’t boffins.

              I had another go on twitter last night trying to get clear about the UBI and the youth UBI. I was tweeting to one of the TOP candidates (so not ‘fuck off punter’ Morgan/Simmons), and he was happy to engage, but he simply couldn’t answer the questions (which were very basic).

              • mauī

                I think the issue is that their people talking about policy are economists or numbers people and they find it easy to talk about this stuff where a lot of regular folks don’t.

                In saying that I think Morgan and Simmons are good at explaining things to regular people. UBI and a tax on property aren’t difficult concepts to get across. Personally I think concepts like Working for Families are more complex and my grasp of that still isn’t great.

                • weka

                  Yes, but then if you set up a political party you bring in people who know how to talk to people and explain things. The number of times I’ve seen Morgan and Simmons not be able to explain policy and end up telling people to just go read the policy (or worse, Morgan’s book). This alone tells me they shouldn’t be in government. It’s elitist.

                  Maybe Morgan and Simmons are better in person. Online they’re really bad at it.

                  Anyway, see if you can answer my question on the youth UBI. How much would a 19 year old currently on SLA get under the TOP policy (excluding supplementary benefits which are untouched for now afaik)?

                  • RedLogix

                    How much would they get under the current Green Party UBI policy that they’ve had for more than a decade?

                    Current answer = nothing.

                    • weka

                      One thing they’d get is a 20% increase.

                      Funny how you can’t even explain TOP policy to me.

                    • RedLogix

                      However we have to take into account what this age group already receives. Around $284m is currently received by this group in benefits. The UBI would replace the first $10,000 (after tax) of benefits received by 18-23 year olds. The benefit of the UBI to this group as opposed to targeted benefits is that people would not lose it if they moved into paid employment.

                      Currently the government also spends $500m on student allowances and another $150m on student loan living costs (i.e. the cost of borrowing on the loans) each year. Around 41% of people at university are aged 18-23, so we can expect to save around $267m there.

                      No one aged 18-23 would be worse off, and in fact those on student allowances and jobseeker support will be better off than they are currently. Of course all those not currently receiving any benefit will also be better off. It is particularly worth noting that there are 20,000 people aged 18-23 who are not in education, employment or training and are not receiving a benefit.


                      It wasn’t hard to find.

              • CLEANGREEN

                “he was happy to engage, but he simply couldn’t answer the questions (which were very basic).”

                MMMMMMMM = perfect bloody politician isn’t Morgan! WEKA!!!!

            • The Chairman

              “If you’re unemployed you wouldn’t have to pay the yearly tax, but the combined amount would come out when the house is sold.”

              With interest adding to the fiscal burden.

              The tax will be another cost of home ownership.

          • RedLogix

            My caution about this policy is how it deals with your home – on a 200K home that’s ten grand a year in tax I would need to pay regardless of whether I have a job.

            From the KPMG link above:

            As transitional measures, TOP proposes:

            • Stepping up to the deemed rate over a few years, to give asset owners time to adjust.

            • Allowing homeowners aged 65+ to pay tax on change of ownership of their home, to avoid cash-flow issues.

            • Allowing businesses facing a temporary/cyclical downturn to defer the tax up to 3 years (with interest payable on the deferral).

            Of course almost no-one owning a home outright has NO income. If you are drawing Super the second item above covers you off. If you are on a very low income then TOP’s policy has decreased your PAYE already.

            The ONLY people worse off are bastard landlords like me who have substantial assets not returning a taxable income more than the deemed rate of return.

            If you’re going to slag a policy at least make an effort to understand it before typing. It’s not ‘boffin’ territory at all, just different to what everyone is used to. And while I understand most people are change resistant, I’ve always imagined progressive people were less resistant than most.

            • McFlock

              I am trying to understand it. But if something is different from what everyone is used to, then don’t expect everyone to pick up all the details immediately – especially when the actual tax amount is a % of a projected “revenue” % of the value that you’re not actually making from the home you just live in.

              So what’s TOP’s proposed income tax rate? Doesn’t seem to be on their website, other than to say it’s “slashed”.

              • RedLogix

                Again the KPMG note explains it well. Or at least I think so:

                The policy is very much based on an economist’s view of what should be taxed. Your house is an investment. “What doesn’t go out” (rent saved) and “what comes in” (rent earned) are both income and should be taxed identically.

                For (almost) everyone else, their house is their home. And it is only what comes in that is income. These are understandable and, for many, personal deeply-held convictions. The 2001 Tax Review’s RFRM suggestion did not attract public or political support. The family home was a sacred cow.

                The difficulty in bridging these perspectives is that most will not see anything that should properly be taxed. However, it is a debate worth having. One that needs to be based on facts, rather than misinformation and emotion.

                And there is the crux; essentially a CCT is a charge on the use of capital. Money is after all a public good, and when used for private profit there is an argument for the collective to claim some share back to the public domain.

                It’s an interesting, and I accept for many people a challenging thing, to get their heads around. But essentially it’s about motivating people to use capital for productive purposes. We’re very used to the idea that once we have paid for something, we get exclusive use and profit from it. This is the essence of capitalism, private benefit from private ownership.

                The family home is of course most ordinary people’s biggest asset, so it has by far the most visibility. And naturally the closet capitalist in all of us struggles to understand.

                • McFlock

                  Look, you argued that the top plan offsets any pain for someone who reduces their income but keeps their house because TOP reduced their PAYE.

                  All I asked was how much they’ll reduce the PAYE by.

                  • RedLogix


                    Download the Full Policy Document. It’s only a couple of pages long. Clearly the numbers would have to be political decisions made by the govt of the day, but the principles are clear and detailed enough to understand how it works.

                    The bottom line is that the changes will be tax neutral, that 80% will either pay no more or even less tax, while the top 20% will pay more.

                    Again, hard to see quite how so many lefties find this objectionable.

                    • McFlock

                      I already did download it. It didn’t have anything on PAYE.

                      Morgan has talked about 5% for his new tax, hasn’t he done the numbers for the old tax?

                      I don’t find it “objectionable”. There’s not enough information to object to – or to support. The “fiscally neutral” tax change promise we’ve heard before.

                      How can they have an 80/20 “bottom line” when they don’t even have the actual numbers to base it on? What range of tax cuts are they at least estimating? Is “80:20” and absolute, or a nice to have? Or are we just supposed to trust that gareth morgan’s back of the envelope arithmatic is correct?

                    • RedLogix

                      If you start with 80/20 as the goal, it’s not a difficult exercise for the govt of the day to derive numbers to achieve tax neutrality.

                      But of course a left wing govt may well go about achieving this with numbers different to a right wing one.

                      So if you can tell me right now what sort of govt TOP might finish up working with, then maybe we could make some educated guesses on the numbers.

                      But if you have reason to think TOP is lying about the stated intent and goals of it’s policy, now would be a good time to present the evidence.

                    • McFlock

                      But of course a left wing govt may well go about achieving this with numbers different to a right wing one.

                      Exactly. The devil is in the details. But if they can give an indication of the rate of their capital tax, they can do the same with paye.

                      But if you have reason to think TOP is lying about the stated intent and goals of it’s policy, now would be a good time to present the evidence.

                      Lying? Nah.

                      Presenting improvised numbers that morph into gospel based on the conceit of of a leader who strikes me as having an inflated sense of his knowledge of the NZ economy and a predisposition to simply assuming he’s right rather than adapting to the opinions and analyses of other people? That’s the possibility that makes me cautious.

      • alwyn 1.3.3

        “If a 2million dollar property earning 200k gross and probably only 80k net was taxed on its capital value it only option is to go tits up or sell to dirty money from offshore.”

        It probably wouldn’t make that much difference actually.
        I haven’t really kept up with the latest tweaks in Gareth’s proposal but he was originally talking about an effective tax rate of about 1%. Thus you would have to pay $20k/year on the $2 million, out of your proposed $80k/year net income. That is probably what you would have to pay nowadays under the current system.

        His original proposal, if I remember what I read in the Big Kahuna correctly, talked about a deemed income of 5% or so which would then attract tax. You would be deemed to have an income of $100k rather than the actual $80k you surmise but the tax rate was going to be lower.
        I refuse to be judged on the accuracy of this though. I read it a long time ago and my memory could easily be astray.

    • mikesh 1.4

      I agree that CCT has problems when applied to ¨productive¨ businesses, since it seems counterproductive to apply an extra tax to businesses which may just be going through hard times. I made a comment to this effect on the Morgan Foundation website, and received a reply that allowances would be made for businesses in this position. They did not say how.

      However the proposal would seem to have merit when applied to residential property; Susan St John came up with a similar scheme to levy such a tax on such property, both owner-occupied and rented, which would have the advantage of taxing the untaxed benefit of home ownership.

      • The Chairman 1.4.1

        The “untaxed” benefit of home ownership is what’s keeping a number of pensioners and low income earners above the poverty line.

        Therefore, removing that advantage would have a devastating effect upon them and the rate of poverty (and all it’s ills) within society as a whole.

        You say you were informed ‘allowances’ would be made for businesses, it’s a shame ‘allowances’ (exclusions) can’t be made for pensioners and low income earners.

        • RedLogix

          See my comment at above.

          Anyone over 65 is not required to pay until the property is sold.

          Most people on very low incomes are likely renting anyway it doesn’t affect them.

          And if they do own the property TOP policy has reduced their PAYE tax to compensate. Only people in the top 20% of wealth are affected.

          • The Chairman

            “ Anyone over 65 is not required to pay until the property is sold”

            Yet, in many cases it’s the downgrading (selling and buying a cheaper home) that allows them some savings which produces the interest that helps to keep them above the poverty line going forward.

            “Most people on very low incomes are likely renting anyway it doesn’t affect them.”

            Most but not all. Moreover, do you honestly think in this largely overheated market landlords won’t attempt to pass the cost burden onto tenants? Of course they will be impacted.

            “And if they do own the property TOP policy has reduced their PAYE tax to compensate. Only people in the top 20% of wealth are affected”

            The tax compensation falls short. Offhand, owning a home valued at around $400,000 or more while being on a low income will lead to one being fiscally worse off.

            • RedLogix

              OK so you have an asset worth $400k. How poor are you again?

              • Sabine

                it is only worth 400.000 if you sell it at that price.

                it might be more, it might be less, it might be fuck all depending on where you are in NZ.

                • RedLogix

                  Well only if you could afford the damn house in the first place.

                  The median house in NZ right now at about $550k and the median household income around $45k pa this ratio of about 12:1.

                  Historically and globally it should be in the range of 3-5:1, or in other words the median house price in NZ should be around $180k. Do you remember when house prices were that level?

                  And a CCT on that sort of number is probably less than $3k pa.

                  • Sabine

                    sorry to be so mean

                    but i bought a house for much less then that.

                    a year ago.

                    but it also has no big city where i live, just a really small community with no jobs 🙂

                    and three thousand of nothing is three thousand you don’t have.
                    heck at 200 a week UBI, that would be 1 third of your UBI.

                    • RedLogix

                      Yes. I’ve often said more people should consider buying in regional towns. We lived in Masterton for some years and still own property there. So I completely agree with you on this.

                      So on say $100k equity in house in Masterton the CCT would amount to roughly sod all.

                      But on such low incomes the effect of TOP’s proposed UBI across a household and their reduction in PAYE or other taxes would make up the difference.

                      The core idea is that people in the bottom 80% would either be better off or stay the same.

                  • Sabine

                    also what i would like to know,
                    can this tax be used as a write off – business expense?

                • The Chairman

                  “It is only worth 400.000 if you sell it at that price.”

                  Dead right. Which highlights another flaw in Morgan’s tax. He plans to tax assets on their estimated value and not their true market value, based on an estimated and then set annual increase, which may or may-not reflect the market reality.

      • Andre 1.4.2

        “…received a reply that allowances would be made for businesses in this position.”

        Following links on TOPs website to a fuller explanation of the CCT, I seem to recall there was one bit saying businesses going through a rough patch would be able to defer paying the CCT and build up the deferred payment as a debt to the IRD for up to three years. I don’t recall what would happen if the business failed with a CCT debt owed to the the IRD. Personally, I’d find that a strong incentive to just pull the plug early on a struggling business.

    • Andre 1.5

      I’m a bit disappointed. I made 6 substantive criticisms of the CCT that aren’t to do with family homes (points 2 to 7). But so far, only point 2 and partially point 6 have been addressed in comments and yet again family homes have taken up most of the discussion.

      But it seems to me that the effects of the CCT mentioned in those other points would be seriously damaging to the economy and particularly the startup entrepreneurial part of the economy.

      Anyone want to tackle those points?

      • RedLogix 1.5.1

        Sorry been busy but I’ll give it a go.

        1) Social effects on the asset rich/cash poor. Already thrashed to death and gets the most attention, but I don’t really want to go over it again right here. I’ll just say the suggested mitigations are unconvincing to me.

        I’m surprised the left gives this so much prominence. As I’ve said above the ONLY people this really has any impact on will be bastard landlords like me who have a substantial asset base returning less taxable income than the deemed rate of return. I appreciate your concern, but I assure you it’s misplaced.

        If you are over 65 then payment is deferred until sale of the property and it effectively turns into a CGT, something that most lefties enthusiastically embraced when Labour proposed this a while back.

        If you are on a low income, your PAYE tax reduction will compensate. I should go away and clarify the exact numbers here, but that’s my understanding. Only the top 20% will pay more, everyone else is better off.

        • Andre

          Point 1 was mostly about family homes, already thrashed to death and taken even more of a beating today.

          I’m really interested in people’s views about points 2 to 7, which have a lot to do with how the CCT imposes inequities on different kinds of businesses and looks likely to stifle startups and be a general drag on the economy. Particularly in comparison to the effects of a capital gains tax.

      • RedLogix 1.5.2

        2) Because it’s a continuous drain on cashflow regardless of profitability, it may cause the collapse of businesses going through lean times that would otherwise survive. Just glibly waving that away by saying they can defer payment while building up debt to the IRD doesn’t cut it with me.

        Any business making less than the deemed rate of return on it’s assets for more than the 3 years beyond which they can defer it, is likely to go under anyway for reasons that have nothing to do with a CCT.

        The upside is that it would weed out a lot of fake businesses that get set up to hide assets and manipulate tax liabilities. I see this as a good thing.

        Again it’s important to look at the whole package. The intention is to gradually push investment away from ‘farming for capital gain and tax minimisation’ into genuinely productive activities. Introduced over time, the business environment would adapt quite readily.

      • RedLogix 1.5.3

        3) Discourages foreign investment. Why would any business want to set up where they start getting taxed long before they earn a penny of profit? Come to think of it, even home-grown start-ups like Xero would have a strong incentive to start up elsewhere if they’re going to be taxed long before they’re profitable.

        Given that foreign investors are notorious for paying as little tax as possible, I’m impressed to see you going into bat for them like this.

        Tax regimes are different the world over, but if an overseas investor shies away from coming to NZ just for tax reasons alone, it’s safe to say it was never a viable business model that we wanted here in the first place.

        • Andre

          Let’s consider the example of Core Composites, Oracle’s boatbuilder. (For the sake of this argument let’s ignore the $10M plus R&D giveaway they got from the govt which I seem to recall came after the were already set up).

          The attraction to them of moving operations to NZ (from the US) is a large resource of skilled boatbuilders. They invested a lot into the likes of big 5-axis CNC machines, curing ovens. I know nothing about their finances, but I wouldn’t be surprised if Tim Smyth and Paul Turner sunk a hefty chunk of their own savings into it. But I really doubt they would do anything like that if making that investment immediately triggers a tax liability. Instead they would have simply stayed in the US. Or they would have done something like keeping the ownership in an offshore holding company to ensure there was very little capital here, which would also make a convenient structure for sucking profits offshore as well.

          I can think of several other companies that would have similar considerations about whether to invest capital into NZ to take advantage of skilled workers here. But they would be severely discouraged if they were to be immediately taxed on that capital investment. But if the tax is on profit, then it’s not a consideration until profits are actually made, so there’s less of a risk to come here to make use of the resource of skilled workers.

          • RedLogix

            If Core Composites are not returning more than the RFRR (ie more taxable profit than govt bonds) … exactly what’s so great about this business model?

            If they’ve put a huge lump of equity in, then they logically have very low debt, low interest costs, and really should be able to to turn a profit. In which case the CCT consideration vanishes.

            Your objection about sucking profits into overseas holding companies applies right now in any case. It’s a big problem that needs addressing quite separately to any CCT.

      • RedLogix 1.5.4

        4) It favours low-capital businesses …

        An interesting point. I think we could have a complex discussion unraveling all the interacting factors here. But at a first stab it’s worth noting that a low asset companies also cannot claim depreciation and finance interest on the assets.

        In general I suspect when you take everything into account, the effect you are thinking of may well be less (although not zero) than you might expect.

        Stands a bit more thought; if I find anything more I’ll add it here.

        • Andre

          Notably low-capital companies like TradeMe and Infometrics attract very little tax as their worth grows and then get sold under the current regime and under the proposed CCT. But would get captured by a Capital Gains tax.

          Now if Gareth Morgan had the ethics of the average Nat I’d suspect that would be by design. But Gareth being Gareth, I’m more inclined to the view that’s a consequence he just hasn’t fully thought through.

      • RedLogix 1.5.5

        5) Because land is such a high-capital item, it pushes farmers towards a high-intensity high-input farming model.

        Quite the opposite I would expect. The big problem for agriculture is that for decades they’ve literally been ‘farming for capital gain’ rather than cash flow. A typical cockie takes very little cash out of the farm, until the day he/she retires and then makes a massive tax-free windfall.

        In many ways farming has the same disease that our housing market has, grossly over-inflated land values that have nothing to do with their productive value. If a CCT takes the steam of farm values, so much the better.

        Keep in mind that if the declared taxable income is greater than the CCT, then it doesn’t apply. Nothing is paid. And frankly if your farm isn’t returning more than Govt Bonds, you are running a failed business model. Period.

        • Andre

          The thing about farming for capital gain is that it’s quite easy to do just ticking along with lowish stocking rates, then you don’t need massive grass growth so you don’t need lots of fertilizer. You’re just sorta pretending to be busy until you sell up and reap the capital gain. I don’t see that farming for a capital gain is inherently a bad thing, as long as the government gets a fair share at some point. Capital gains tax levied at time of sale makes sure the government gets a fair share.

          But if you’re being charged a hefty tax on an asset, then you want to make sure it’s working as hard as it can making money for you. In fact, that’s the explicit stated goal of the CCT. So in the context of farming, that means jamming as much stock on as you can, which then means you need lots of fertiliser to stimulate feed growth, as well as buying in feed.

          • RedLogix

            Two parts to this:

            1. Current land values are grossly over-priced. This is a direct result of decades of farming for capital gain. Get land values back into line with productive value over time, and the CCT on it reduces as well.

            2. Then if land values return to sensible levels, and you still cannot pay CCT you really aren’t trying. If you really do run into a bad patch, the 3 year deferment idea kicks in. Hell if a farmer needs 5 or more years … the policy can be altered to suit any special case they care to justify.

            It’s actually quite generous really. You try asking IRD if you can defer PAYE liability because you’ve hit a bad patch.

      • RedLogix 1.5.6

        … But TOP’s proposal lets the income-rich asset-rich off of contributing at a level equitable to their doubly good fortune.

        Well not really. As you correctly say, the CCT is best thought of as a minimum level of taxation based on how much economic capital you are tying up in assets. Given that money is really something that only has value in the context of an entire collective economy a CCT can be seen as a charge for it’s private use.

        So yes if you are silly enough to tie up a lot of capital in an asset that produces very little return, then you are going to be penalised for this.

        If on the other hand you are smart enough to make a zillion-load of dosh from it, then you get to pay a stonking great income tax bill in the usual way.

        I sort of get where you are coming from, but honestly I’d say you’re over-thinking it.

        • Andre

          Ok, take several acquaintances of mine with high incomes. They’re in the habit of purchasing expensive properties. Under the current regime, the ones with high salaries pay high PAYE, while those with businesses are successful in claiming lots of expenses so their income tax isn’t quite so much. Nevertheless, they are able to enjoy those properties tax-free, with tax free capital gains. Under the proposed CCT, they would still be able to enjoy those properties tax-free, since their income taxes would be higher than the CCT on their property portfolios. Their capital assets would still not be contributing to the tax base.

          However, with a capital gains tax, the government would get a fair share of the capital income when those properties get sold. In contrast to the current system and in contrast to TOP’s proposed CCT.

          • RedLogix

            So what … they’re on high incomes and pay high taxes. Don’t see the problem really.

            It’s just that a CCT means there is no incentive to hide that income into non-productive assets that currently pay no tax.

            • Andre

              It’s a case of the CCT giving an extra reward to the already successful, while delivering a fresh kick to those that are struggling through a rough patch.

              • RedLogix

                That makes no sense at all. The successful continue to pay taxes, and those who hit a bad patch have a chance to recover. You seem to be determined to get this backwards.

                I’ve done my best to answer your questions as you asked but I’ve other things to do now.

                • Andre

                  No, those going through a rough patch don’t get a special chance to recover. At best, the kick is simply deferred, to be delivered as they climb out of their rough patch (if they make it that far).

      • RedLogix 1.5.7

        7) The CCT is levied only on equity.

        Yet above you were trying to argue that startup companies … typically loaded to the gunwhales with debt …. are unfairly penalised. Well this answers that issue does it not? Because they have so little equity, they also have a very low CCT. Problem solved.

        Does it encourage debt to minimise tax? Probably not so long as the commercial interest being charged on the debt exceeds what might be avoided in paying the CCT.

        Given the deemed rate of return is proposed to be the same as the interest paid on Govt Bonds, then using debt to minimise the CCT seems unlikely.

        • Andre

          The companies I saw that weathered the GFC comfortably were those that owned their premises and had little or no debt. Some were fairly fresh startups, funded by family wealth or a wealthy investor. I also saw a lot more businesses, young and established, that ran on borrowed money and leased premises go under or just barely scrape through. So I really think structuring a tax system to discourage capital equity and encourage borrowing is a really bad idea.

          • RedLogix

            Again you are contradicting yourself and reaching a bad conclusion.

            If as you say a company has loads of debt and no assets … then by definition it will pay little or no CCT. Your objection vanishes.

            So I really think structuring a tax system to discourage capital equity and encourage borrowing is a really bad idea.

            As long as commercial interest rates on debt exceed the rate of interest paid on Govt Bonds, or what is termed the Risk Free Rate of Return (RFRR), this objection vanishes also.

            Paying down debt and reducing interest will always be better than minimising CCT liability.

            • Andre

              Surely you’ve had the experience of seeing otherwise intelligent people do strange things because it reduces their taxes? No? You’ve been a lot luckier in the managers you’ve had than I have, then.

              Yes, as long as the CCT liability is less than commercial interest rates, then it still makes sense to pay down debt. But the CCT really reduces the benefit of paying down debt. Even under our current tax regime, reducing taxes gets given as a reason to take capital out of a company and take on debt instead. That will happen a lot more if a CCT is implemented, which will make those companies much more vulnerable in adverse conditions.

              • RedLogix

                Well if people want to throw good money away in some pathological pursuit of minimising tax, is that Gareth Morgan’s fault?

                • Andre

                  If Gareth Morgan designs and implements a tax system that encourages them to do so, yes it is his fault. Particular if there’s an alternative that’s widely used around the world that achieves the same goal of taxing income from capital without encouraging strange behaviour. Such as a Capital Gains Tax.

                  • RedLogix

                    So as you say, people if people already mismanage their affairs so they throw away good money in order to just not pay tax … whose fault is that?

                    And what makes you think they won’t do idiotic things to avoid a CGT? Is Gareth Morgan to blame for all the idiots in the world?

                    Besides experience clearly demonstrates that the deferred nature of CGT means they are not very effective in reducing asset inflation bubbles at all. And besides the political problem is that when you sell a house and want to buy in the same market, a whacking CGT liability at that point is extremely unpalatable.

                    • Andre

                      Governments can make policies that discourage stupid behaviour. And they can make policies that encourage stupid behaviour. Personally, I prefer the discourage stupid behaviour ones.

                      My preferred option for dealing with the problem of CGT liability for people moving their family home is simply a rollover provision.

                      I have my doubts a CCT will be fully effective in preventing bubbles either. Particular if the capital tax part of it goes away if your income is high enough or you’ve borrowed enough money to make it go away.

                    • RedLogix

                      Besides who has a CGT that would apply to your $20m family home? No-one.

                    • Andre

                      Well, the Greens exempted family homes from their proposed capital gains tax, presumably as a concession to electability.

                      Give them a chance, and a good argument around rollover provisions for family homes, and I think there’s a good chance they would try to bring family homes into the tax net in a way that didn’t harm vulnerable people.

                    • RedLogix

                      So TOP is being upfront about the need to tax asset wealth hidden in family homes. And this according to you is a bad thing.

                      The Greens want to do much the same, but they’ll keep quiet about it until maybe after they get into power. And this according to you is a good thing.

                      Oh and you keep making up shit about a CCT ‘harming vulnerable people’ when it’s been clearly, repeatedly established it will do no such thing. Because I tell you who really ARE vulnerable … it’s a whole fucking generation of young people who at the moment are stuck renting their whole bloody lives because we’ve allowed house prices to become utterly unaffordable.

                      That crumpled little thing lying on the floor under your computer desk may be the needle off your moral compass.

                    • Andre

                      I’m saying that TOPs proposed way of charging a tax on capital has a lot of downsides. Which may explain why nowhere else in the world uses a similar tax.

                      I’m also saying there’s a better way to tax capital than TOPs proposal, which is widely used in the rest of the world. Which is a capital gains tax, that includes the family home.

                  • RedLogix

                    Sorry that was excessively grumpy of me.

                    Now essentially you have boiled it down to a choice of CCT or a CGT, the difference being essentially one is a pay as you go, and doesn’t apply if the asset is decently productive … while the other accumulates over time and then hits you in one whacking lump.

                    If you sell the family home and need to buy in the same market, suddenly you have a big tax liability that leaves a shortfall on the day. That’s the reason why CGT’s on the family home are a tough sell politically.

                    You point to the effect of CGT’s around the world as evidence of their success; yet I only have to point to house prices in Sydney and Melbourne to suggest otherwise.

                    • Andre

                      All good, I managed to choke down some snark in reply 🙂

                      As far as family homes go, the concession I favour for people moving home is a rollover provision. So CGT isn’t payable until the final estate sale or some cases of downsizing.

                      No, a CGT won’t stop a bubble. I really have my doubts any tax provisions can prevent bubbles, at best they’ll slow the inflation and maybe reduce the maximum size. Since the tax provisions around housing have been the same for a long time before the bubble inflated, I think we should be mostly looking at other factors for the causes and mitigations of the bubble.

                      Overall, my view of a capital tax is a fairness argument: for capital to retain value or grow, a stable just society is necessary, so it’s fair that those who benefit from capital growth contribute back to that just stable society when they enjoy the benefits of that growth. Which means at the time of sale, when the gains are realised.

                      It’s important the tax system retains legitimacy in the eyes of the taxpayers. Earlier I mentioned a time when I needed to sell something to pay a FIF levy. As it happened, that year I was out of regular work, my US investments actually lost money in US dollar terms although a dropping NZ dollar meant the NZD value went up. So I ended up thinking “I’m fucking being charged a fucking wealth tax on something losing fucking money?!!!?! You fucking IRD Cullen cunts really fucking need to go fuck yourselves”.

                      Now imagine the CCT gets implemented, and it works as intended to bring down property values. So then we’ll get around 60% of the population thinking “I’m continually being fucking charged a fucking tax to live in my own home that is losing value because of this fucking tax !?!!?!”. Happy times all around!

                      Whereas even in a bubble situation like we’ve got now, a CGT will just take a bit of the edge off the enthusiasm of investors expecting future gains. So I expect it would lead to a long plateau in prices rather than a crash. Which isn’t as good as those wanting to buy now but is a lot better for those that have recently bought and would really be harmed by a crash.

                    • RedLogix

                      It’s important the tax system retains legitimacy in the eyes of the taxpayers

                      Just because it’s a new form of tax you aren’t used to, doesn’t automatically mean it’s wrong or illegitimate. It just means like most people you’re resistant to change. If you had grown up with with a CCT all your life it would be like the furniture, and someone coming along with a ‘nutty’ new idea like a CGT would be shouted down.

                      And as I keep explaining, but everyone chooses to ignore, TOP’s CCT cannot be considered in isolation. For 80% of the people, and this includes all the vulnerable, cash poor and elderly the complete TOP tax reform package would ensure no change or they’d be better off.

                      The only people it would have significant impact on are people just like me who have substantial assets that return less cash than the RFRR. And exactly why all the lefties here are getting so excised about this, when people like Morgan and myself are actually happy to pay more … kind of baffles me really.

                      As I said above, your concern is appreciated, but entirely misplaced.

  2. Muttonbird 2

    Nats now giving each other advice in public. Reading between the lines Todd Barclay is a megalomaniacal alpha type and unrepentant, so I’m sure he won’t enjoy reading Chris Bishop’s paternalisms.


    Didn’t know Chris Bishop was also a tobacco peddler.

    • Cinny 2.1

      They better not be using mental health as a scape goat narrative for dodgy Todd.

      Cheers for the link Muttonbird.

      Hey Todd, WHAT WAS ON THE TAPES? Scared to tell the public, because we both know the contents of the tapes will shock the public more than the fact you were illegally taping people.

      • james 2.1.1

        “They better not be using mental health as a scape goat narrative for dodgy Todd.”

        If he is having mental health issues why not?

        “Hey Todd, WHAT WAS ON THE TAPES? Scared to tell the public, because we both know the contents of the tapes will shock the public more than the fact you were illegally taping people.”

        really? got anything to back that up. since you KNOW I assume you have heard the tapes?

    • mary_a 2.2

      Hey Muttonbird (2) & Cinny (2.1)… our elusive Mr B has been very busy improving the roads in Queenstown. Whew that’s a relief. And here was I thinking he was skiving off on full pay avoiding public scrutiny for being a very naughty boy!


  3. Andre 3

    Another sneaky way big pharma rorts us all and boosts their profits: unreasonably short expiration dates.


    • AsleepWhileWalking 3.1

      Generally speaking you can tell when drugs go off. That’s what I go by…*opens tube of locoid exp 2010 and still good*

      • Andre 3.1.1

        Ummm…..okaaay…personally I prefer a more objective standard based on actual measurements, but hey, whatever works for you.

      • Incognito 3.1.2

        The placebo effect never expires 😉

  4. Tautoko Mangō Mata 4

    Mike Hosking: Most New Zealanders could not, should not and would not stomach Winston Peters as PM

    He will tell us provincial New Zealand is broken, that they’re missing out and all the latte sippers have forgotten them.
    The reality of course is – and look at any forecasters’ sentiment or the growth surveys – the regions are booming.
    Provincial New Zealand, with the exception of a couple of areas, hasn’t seen growth and prosperity like it for decades.
    You cannot roll into town in your bus, tell the locals that their life is hopeless when it isn’t.
    I admire Peters for still being relevant for all these years, but, if you’re new to all this, look up the history books to the last time Peters was in government. None of us who were there wants a sequel.

    Someone’s is panicking!

  5. Adrian 5

    Late news on 3 last night, Nick Smith was spruiking the new “Great Walk ” from Blackball to Punakaiki that runs past the Pike River mine entrance as a “commemoration” trail and ,I kid you not , ” ..it should be on everybodys BUCKET list”.
    For fucksake Nelson, wake up and get rid of this clown.

  6. The Chairman 6

    “Sanitised Democracy” 

    It’s good to see Labour taking action on this:

  7. amirite 7

    I can’t even – 😀
    Maori Party sets out scheme to send immigrants to regions http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11892773

    • weka 7.1

      Might be an improvement on all the Aucklanders with too much money we’re getting currently.

  8. adam 8



    So by now they have already done this, umm and we still have relations with this government?

    • Tautoko Mangō Mata 8.1

      Despite the fact that I am opposed to nuclear power, there is some truth in the fact
      that tritium produces only a low energy beta electron. See the graph in the link below.

      A low-energy beta electron
      The energy carried away by a tritium electron is exceptionally low as can be seen from this comparison of average energies from a variety of beta decays: 5.7 keV when compared to several hundred keV for the others. The total energy liberated, shared between the electron and the antineutrino, is 18 keV. As the decay directly produces a ground state helium nucleus, there is no excited state and hence no gamma emission.


      • Tautoko Mangō Mata 8.1.1

        From the same article referred to above:
        Luminous dials
        Tritium has replaced radium in the luminous paint used in the dials of watches and navigational instruments. Today, the luminescent letters contain tritium as well as fluorescent substances which glow under the beta radiation emitted by the tritium. The manufacture, as well as the use, poses no problems to health. The beta electrons do not leave the paint and no gamma radiation is emitted.

        I am more concerned about the amount of plastic that is entering the food chain via the water,

        • Tautoko Mangō Mata

          Adam, I share your rage at the attitude that some large corporations have that the ocean is a convenient place to get rid of their waste, regardless of the impact that this has either on the environment or the local population.

    • savenz 9.1

      +1 Shocking. The government agencies needs to be held to account as much (if not more) than the public! One law for all in this country!

      • Xanthe 9.1.1

        What possible “national security” reason could there be for witholding this info (that has not already been canvassed on wikileaks). The only reason i can think of is the US would not like it. This is just not yood enough

  9. savenz 10

    Isn’t ACT a fan of euthanasia?

    Dutch Euthanasia – Dutch doctor drugged patient’s coffee and got family to hold her down


  10. dukeofurl 11

    It baffles me the wording “[SNP]..almost won an outright majority for a second time”

    What really happened in Scotland is the SNP lost seats in the last two elections .

    Is that so hard to say?

    Holyrood election ..down 2.3% -6 seats
    Westminster ….. down 13% -21 seats

    A system designed to not produce outright majority ? You mean they had a weird version of MMP where the country was divided into 8 regions with equal numbers of seats, and proportionality was only in those regions not the country as a whole.

    The gerrymandering to get the rural regions having the numbers meant they are had parts of the Central Strathclyde regions hived off.

    SNP had 46% of electorate vote but won 59 seats, party vote they got 42%, so the final result was nearly 49% of the seats
    [This is how national will re juggle MMP at some stage]

    [TheStandard: A moderator moved this comment to Open Mike as being off topic or irrelevant in the post it was made in. Be more careful in future.]

    • Bill 11.1

      I mean the voting system was designed to avoid majority government. And I was very specific about the elections I was referring to because UK Labour breaking to a Social Democratic platform had an obvious impact in Scotland that was absent when Miliband was leader.


      From the Scottish Government site
      http://www.parliament.scot/gd/visitandlearn/Education/16285.aspx (my emphasis)

      Features of the Additional Member System
      Voters get two votes – to elect 1 constituency MSP and 7 regional/ list MSPs
      Each person living in Scotland has a total of 8 MSPs to represent them.
      The overall result is fairly proportional.
      It is unlikely that one party will get an overall majority and therefore coalitions are likely. (For example, see the 1999 election results when Labour and the Liberal Democrats formed a coalition government – the Scottish Executive)
      New parties and smaller parties are more likely to get representation than by using ‘first past the post’. (e.g Green Party, Scottish Socialist Party)
      General elections for the Scottish Parliament take place every four years, normally on the first Thursday in May…

  11. AsleepWhileWalking 12

    Portugal – their success shows with the lowest rate of drug induced deaths in the EU.


  12. Union city reds 13

    So let’s see if I have it right if you want to change the government at the general election.

    As it stands, in the electorate seats, you have to vote for the labour candidate, unless you’re in Epsom, where you have to hold your nose and vote for the nat to block Smeghead.

    Then you party vote the greens or labour, unless you want to risk a 50/50 toss up, when you’ll vote NZ1st.

    If you wish to keep the nats, you vote blue, act, uf or Maori party or waste your vote by chosing Top or Mana.

    Simple, right?

  13. Morrissey 14

    All the houses in the world can’t save France’s nastiest man from being a laughing stock…


    Here’s France’s nastiest man in a less salubrious moment…


  14. This is essentially an open letter to the media asking why is it that the media, in all its manifestations, continue to promote the party line on politics and economics. Time and time again the institutional view is presented as fact, oblivious to any possible alternative and most disturbingly, without any critical review of either what drives these views or what agenda is being promoted. In accepting these institutional positions, without question, the media is effectively abrogating their obligations as the fourth estate. 
    So what specifically, am I referring? Firstly the institutional view of sovereignty, that Parliament has sovereign supremacy. Given that the Treaty of Waitangi explicitly recognises and enshrines the sovereign authority of both Maori and the Queen, any legally constituted Parliament must recognise this in order to have a mandate to govern. Quite clearly, Parliament only recognises the Queen’s sovereign authority and further has conflated this sovereign authority into own juristic person. This is a flagrant rejection of the Treaty and can only be viewed as a post-colonial power grab. This position then frames all aspects of politics and society, where this self-proclaimed sovereign authority is presented as the legal authority by which the people are governed. This firmly places the Government as the masters, not the servant of the people. This is precisely why a third of the voting public have turned their backs on the political system, as no matter which party attains power, all seek to be the master, all seek to wield the whip.
    The media are complicit in this post-colonial affirmation of parliamentary sovereign supremacy, none question the rejection of Maori sovereign authority, all accept, without question, that Parliament is legally constituted. This is an aberration given that Parliament’s very own court of inquiry has upheld the Treaty of Waitangi as the sovereign agreement between two peoples, an agreement that affirms the sovereign authority of each, thus as Parliament does not acknowledge its subordination to this authority, it surely has no legal mandate to govern. So why does the media continue to promote this institutional position?
    If we as a nation “honour the Treaty”, we recognise the Sovereign relationship between the Māori and the Queen. In honouring the Treaty, we acknowledge the sovereign authority of Māori and in doing so, implicitly reject un-mandated, self-proclaimed Parliamentary sovereign supremacy. This immediately re-establishes the social contract between the people and the sovereign entity and in doing so demands the subordination of Parliament to the Sovereign and by extension to the people. In separating sovereign authority and governance, political intrigue is removed from the directorship of the nation as the office of Sovereign is not subject to a political process. Matters of sovereignty and principles of governance are mandated by the sovereign office, in turn directed by the obligation to effect the social contract. In effecting governance, Parliament is directed by the Sovereign. The Sovereign reigns and Parliament rules, just as it is envisaged today, however now Parliamentary rule is by the true mandate of the people, the Government truly a servant off the people.
    Secondly, the economic system that underpins our national economy. This is indirectly related to the first subject, sovereignty. On the premise that whomever controls the money supply controls the economy, [happy to argue this point], quite clearly it is not the Government who does this, rather it is the banks, be they foreign or New Zealand owned. An economy is a closed system and is a measure of the goods and services in circulation.  As a tool to aid efficient trade, the money in circulation, must clearly equate to the same measure of goods and services. As the value of these rise or fall, the amount of representative money must be controlled to maintain equilibrium. To ensure this happens with an eye to benefitting society, this control of the money supply must be managed by an entity that has the welfare of society at its heart. One could argue that the best entity to do this is the Government, on behalf of the Sovereign authority. Quite clearly this is not the case in New Zealand, where it is the banks who control the money supply and at the heart of their control is the monetary return to the shareholders, most certainly not the welfare of the people. In order to accrue this wealth, a debt based model is employed, where ever increasing debt is encouraged so that in its repayment, interest is accrued. This interest is wealth over and above the initial debt and can only be repaid by additional productivity, either a person’s labour or the mining of resource [timber, milk, meat, fish, water, etc]. This model is thus the principal pressure on our environment. Again, this is no secret, yet the media continue to give succour to those who promote the institutional view that economic control is the purview of the banks rather than the Government. GDP is held up as the Holy Grail, the OCR slavishly reported and the TWI determines the prosperity of the nation. Immigration, tourism and foreign investment are all metrics of growth, lauded as necessary for the prosperity of the nation.
    However, any objective assessment must recognise that this economic model is damaging to society and the environment, yet the media allow commentary that explicitly promotes this as the only economic model available. There is a clear alternative, that of a sovereign reserve that creates [and destroys] money and injects the money into the economy, controlled to ensure equilibrium of the economy. There are many benefits to this model but the most important being that now economic growth is not important, rather it is equilibrium that is the driver of monetary policy. A further difference, taxation is not generally required as a means to accrue revenue, meaning that GST, PAYE, Business taxes etc. are not required. This totally changes the role of Government, now charged with delivery of public services and the administration of the state.
    Finally, the health of the environment. The pressure on the environment can be managed without the dependency on the need to extract wealth to service debt. National resources, are just that – belonging to the nation, the people. The Sovereign, as the manifestation of the people’s authority, is charged with the guardianship of all the nation’s treasures, both natural and manmade, for the benefit of the nation. This identifies the true “owner” of the resources, the people.  Gone are the contentious issues of seabed and foreshore, of water rights, conservation areas and customary fishing rights. As national treasures, all are managed on behalf of all the people.
    Today, the indoctrinated media adhere, without question, to a framework that is predicated on a self-proclaimed, parliamentary sovereign supremacy. As a result, all commentary and discourse deals exclusively with the activities that are a result of such a system, none question the voracity of a different frame of reference, that of sovereign authority, as enshrined in Te Tiriti o Waitangi. The automatic acceptance of such a framework also prevents the consideration of a sovereign economy and thus binds the state within a debt based monetary system, a system controlled by third party entities that are not motivated by economic equilibrium, rather are only motivated by the need to increase the wealth of their shareholders, at the expense of the nation’s people.

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