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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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!!!!
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.
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?
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.
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.
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.
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.
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 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.
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?
“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.
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.
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.
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.
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.
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.
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).
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.
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)?
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.
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.
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”.
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.
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.
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?
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.
“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.
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 “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.
“ 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.
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.
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.
“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.
“…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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
… 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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
“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?
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!
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.
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.
National Party List MP Maureen Pugh for West Coast Tasman, does nada for the region, no doubt she will be using this announcement to appear like she is doing something.
Will this ‘great walk’ have a budget blow out, like the million dollar over spend on a cycle way when Maureen Pugh was Mayor of the embattled Westland District Council?
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.
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,
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.
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
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.
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.]
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.
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…
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.
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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Nothing Left To Say: Labour's pollster, Stephen Mills, remains swaddled-up in the comforting myths of the 1980s. As if the experience of Roger Douglas’s genuinely radical post-Muldoon policy agenda was literally a once-in-a-lifetime thing – as much as the party could possibly absorb for at least the next 50 years.MEMO ...
The Royal Commission on abuse in care is very significant for the disability community. For many decades last century, thousands of disabled children, and adults who managed to survive, were locked away from families and communities. This was not for anything they had done, but for the perceived threat their ...
With an unfair voting system, uneven electorates and an un-elected upper house, the UK's "democracy" is barely worthy of the name. But now the government wants to make it worse:The government has been accused of suppressing voters’ rights with the potential disenfranchisement of tens of thousands of people after plans ...
Back in the 90's and early 2000's, the building industry was building leaky homes which should never have been granted consent. Now it turns out they've been building dodgy office blocks as well:New imaging technology has revealed hundreds of major buildings nationwide have defective or missing concrete or reinforcing steel. ...
Local body election results were released over the weekend, to joy or despair depending on where you live. In Auckland, Phil Goff trounced John Tamihere, who is muttering darkly about running for Parliament again (but which party would want him?) Wellington is now a wholly-owned subsidiary of Weta Workshop, except ...
How could government evolve over the next decades? Reports of democracy’s imminent demise are greatly exaggerated. However, satisfaction with political systems in many countries is low, so there is much to do for governments of all political stripes to improve relevance and trust. Digital technologies are seen as one ...
Two years have now gone by since the Friday afternoon when my university-student son and I headed out of our Barcelona flat to a nearby primary school, designated as a polling station for the vote that was to be held the following Sunday: the referendum on Catalonia’s independence from Spain ...
Overruled: The joint decision of Finance Minister, Grant Robertson (Labour) and his Associate Minister, David Parker (Labour) arguably the two most powerful ministers in Jacinda Ardern’s government, to grant OceanaGold the consents which Land Information Minister, Eugenie Sage (Greens) had earlier denied them, offers bitter proof of how hard fighting ...
More than double the number of people who will vote in this year’s local body elections have tried marijuana or urinated somewhere they shouldn’t have. As local elections look set for the lowest turnout in decades, with many regions falling well short of 40%, the Government is exploring a number ...
A Statement on Abortion Law Reform by the Council of Disobedient Women On the eve of bringing an end to antiquated, anti-women abortion laws Green MP Jan Logie intends to write women out of the Bill. With a stroke of the pen, the woke are aiming for total erasure ...
Musings continue apace about “the experienced businessman!” soon to be taking up a National Party MP position. Or to be more accurate, being parachuted into a seat to shut down their former MP Jamie-Lee Ross, who despite his own shortcomings shed at least some more light on the inner workings ...
The Ugandan government wants to murder gay people:Uganda has announced plans to impose the death penalty on homosexuals. The bill, colloquially known as “Kill the Gays” in Uganda, was nullified five years ago on a technicality, but the government said on Thursday it plans to resurrect it within weeks. The ...
Freedom Of Speech? The Säuberung (cleansing by fire) was the work of the German Student Union which, on 10 May 1933, under the watchful eye of the Nazi Reichminister for Propaganda, Joseph Goebbels, consigned 25,000 books to the flames in a ritual exorcism of “un-German thought”. According to the logic of the ...
“There can be no such thing as kaupapa Māori political parties or politics in Aotearoa” (Willie Jackson, Labour Party (2017). Māori TV, General/List Election Special) I begin with that claim because at the time, I was confounded at first that it fell out of Willie Jackson’s mouth, and then ...
New Zealand has prided itself for decades with regard to its lack of pollution, and all will be aware that the ‘100% Pure New Zealand‘ meme is under threat through land, water and air pollution of various causes. There is another type of contamination that the country also faces: light ...
New Zealand’s media is doing its part in Japan, reassuring those in the path of the storm that they won’t miss any rugby while away from their flooded homes. New Zealand sports reporters stationed in Japan for the Rugby World Cup have had the rare and heartwarming opportunity to inform ...
Regional Development Minister Shane Jones is the only Cabinet member in favour of putting it all on green. As Finance Minister Grant Robertson finds himself with an enormous $7.5 billion surplus, the Government has begun intense, at times contentious conversations about whether to put the money on red or black at ...
by Susanne Kemp At the start of September close to 100,000 school teachers went on strike in Jordan. They demanded a 50% pay rise. A pay rise actually agreed to by the regime back in 2014. In early October, however, in the face of government repression and threats, the teachers’ ...
Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change.If you have a question you’d like an expert to answer, please send it to climate.change@stuff.co.nzWhy do people still think climate change isn’t real?David ...
Back in 2011, journalist Nicky Hager published Other People's Wars, an expose on NZDF's activities over the previous decade of the "war on terror". NZDF didn't like this, and especially didn't like the fact that it was base don leaks from their own. So, they had the SIS investigate him ...
The Zero Carbon Bill is due back from select committee in two weeks, and will likely pass its final stages in November. So naturally, farmers are planning a hate-march against it. But they're not just demanding lower methane targets so they can keep on destroying the planet; they're also demanding ...
Last year, California burned. This year, to stop it happening again (or rather, to stop themselves from being found liable if it happens again), Pacific Gas and Electric is cutting power to half the state for a week:Schools are closed. Traffic lights down. Tunnels dark. Businesses unopened. Hospitals running on ...
The Best Way: Missing from the on-line voting debate is any reference to the voting system that produces turn-out figures ranging from 77 to 93 percent of registered voters. The voting system used to collect and count the votes cast in our parliamentary elections. The system that involves citizens making ...
Among the great new bunch of political friends we have been making recently is the excellent Australian-based Marxist gender-critical site, Freer Lives. So we asked the comrade who set up that blog to write something for Redline on the blog, himself, his analysis of the rise of gender politics and ...
by Don Franks The Auckland City Mission is struggling with a 40 percent increase in demand for food parcels this year. A total of 23,020 were needed by June. Last month Missioner Chris Farrelly told the Herald the “cupboards are bare” and without an emergency food drive, he can’t see ...
by The Council of Disobedient Women Massey Wellington Student Association had a sit-in today. Imagine a sit-in. On a campus. Against a women’s rights meeting. Did the ’60s really happen or did we fucking dream it? They gathered in the student square, an echo chamber. Sitting on soft pillows ...
For some reasons, my post about the mystery message from inside the Downing Street bunker seemed to catch people's attention. Quite a lot of hits from NZ (unsurprisingly) and the USA (a bit more puzzlingly, but hi there, USAians!!) and 76 views from the Ukraine.I've celebrated my Ukrainian readers in ...
First, almost a score of Labour MPs seem to have sent a letter to the EU basically begging them to accept a deal - any deal - just so Britain can get the Heck on with Brexiting instead of being trapped in limbo:
by Phil Duncan In 2016 the National-led government suspended the Parent Visa Category, through which migrants were able to bring their parents into New Zealand. Since then over 5,700 people have been in immigration limbo, stuck on the visa wait list. Labour is now bringing back the scheme. Well, sort ...
The following was released yesterday (Tues, October 8) by the women’s liberation organisation Speak Up for Women. On 23 September Speak Up For Women announced that we would be holding an event at the Massey University Theaterette in Wellington. The event is called Feminism 2020. The intention of the event ...
The government is currently consulting on plans to improve freshwater quality. So naturally, farmers oppose it:South Taranaki farmers are preparing to fight proposed national freshwater changes that some fear will bankrupt them. The Government's proposed National Environment Standard on Freshwater Management, released in September, rated the Waingongoro River as one ...
Yesterday was the last day for (reliably) posting your vote away in local body elections. Turnouts are mostly much lower than the equivalent time last year (Palmerston North is down 2.3%), and so naturally people are pushing their online-voting snake oil again. Because the online census worked so well, lets ...
This essay, on the political legacy of the eugenics movement, by Kenan Malik was originally published in the Observer on 6 October 2019, under the headline ‘The spirit of eugenics is still with us, as immigrants know to their cost’. Birth control. Intelligence tests. Town planning. Immigration controls. It’s striking how ...
Another year, and the government has announced another enormous government "surplus". And just like last year, its nothing of the sort. When we have people homeless and sick and hungry, when we have schools and hospitals still falling down, when we have underpaid public servants and infrastucture unmaintained or unbuilt, ...
James Forsyth at The Spectator (I know, I know) has tapped one of his contacts inside Number Ten for an insight into the Johnson administration's thinking and strategy.It is fascinating, unsettling and quite, quite mad. Some key points:Negotiations have stalled and the Johnson administration are keen to blame the EU: ...
Fatal Contact: With the arrival of captain James Cook in October 1769, the islands of what would become New Zealand ceased to be the preserve of Polynesian navigators and settlers and became a part of both the world’s map and the world’s history.THE MAORI NATIONALIST assault upon the historical meaning ...
Another round of tactical talks about forming a Government of National Unity have come to nothing with the Liberal Democrats still refusing countenance putting Jeremy Corbyn into Downing Street:Opposition talks on Monday made little headway over when to try and vote down Boris Johnson's government and who might succeed him as ...
by Nick Rogers The debate around the meaning of sex and gender made an appearance at this year’s British Labour Party conference in Brighton. Women’s Place UK – an organisation that questions the demand that biological males who self-identify as woman should have access to women’s spaces, to all-women shortlists, ...
Yesterday I went down to Wellington to participate in the Extinction Rebellion protest. Its part of the latest global wave of XR actions, with actions happening all over the world. Some of those protests are massively disruptive: in Canada, XR is blocking major bridges, stopping people from getting to work. ...
Foreign Minister Winston Peters is predicting a hard Brexit for the United Kingdom, as he believes British Prime Minister Boris Johnson won’t be able to negotiate terms before the October 30 deadline. The Minister, who was one of the first to publicly come out and predict British voters would leave ...
Speaking at the Council of Trade Unions' (CTU) biennial conference, New Zealand First leader Winston Peters told unionists that any future attacks on the Government won't work. "Now, we are being attacked by the union movement in this country. You can have your views but I'm here to say standing ...
We want every New Zealander to be happy, safe, and healthy. To do this, we need to support strong, safe communities, and a robust and efficient health system. ...
Defence Minister Ron Mark has used his powers to overrule a noise complaint ruling against Whenuapai airbase on the grounds of "national security". The Environment Court last month released a ruling in favour of a private developer, declaring the Auckland airbase had to comply with noise restrictions when it performs ...
New Zealand First leader Winston Peters has opened fire against "unreconstructed morons" after NZ First MP Shane Jones was photographed on holiday holding an AR-15 rifle. Mr Peters is defending Mr Jones, telling Magic Talk host Peter Williams that his MP was just having fun "like most people do". "The ...
New Zealand First Deputy Leader and Under-Secretary for Regional Economic Development Fletcher Tabuteau was in attendance during the morning blessing of the Rotorua Lakefront development project. Around 60 people gathered on the shores of Lake Rotorua, including city mayor Steve Chadwick and deputy Dave Donaldson. The Lakefront development is a ...
Forestry Minister Shane Jones is considering reining in on conversions of farmland to forestry, and also issued a warning to foreign-owned forestry companies that make up nearly 75 per cent of the industry. He said too many foreign companies had not provided enough access for domestic processors to get timber. ...
Speaking to Radio NZ, New Zealand First leader Winston Peters said the tightening of the parental category visa is a direct result of the Party’s coalition negotiations with the Labour Party. He said the new changes switch the financial onus from the parent moving to New Zealand to the child ...
The Coalition Government is set to cut red tape in the building and construction sector in an effort to allow more houses to be built, including prefabricated houses. The changes will enable the mass factory production of "high quality" buildings, slash the likely number of building inspections for factory produced ...
Since coming into Government, we’ve worked hard to tackle homelessness and make sure everyone has a warm, dry home. And today, on World Homeless Day, we want to report back and update you on our progress so far. ...
New Zealand First leader Winston Peters has hit back at National Party leader Simon Bridges who criticized the Coalition Government’s approach to crime, and said that the latter isn't credible in his attack on the Government over gang recruitment. "We've got as massive drug problem in this country. It is ...
New Zealand Mānuka honey exporters have welcomed an initiative by the Coalition Government to help secure the term “mānuka honey” to be used exclusively by Kiwi exporters, ensuring that our multimillion-dollar industry is protected. Regional Economic Development Minister Shane Jones had recently announced that a Provincial Growth Funding of $5.7 ...
Political commentator Mike Hosking has labelled New Zealand First leader Winston Peters as “the voice of reason in a government soft on drugs”, for the Party’s stance on drug testing at music festivals. “If common sense is worth a vote, Winston Peters is quids in,” Mr Hosking said. The Labour ...
Parliamentary Under-Secretary for Regional Economic Development Fletcher Tabuteau has announced Provincial Growth Funding to ensure work opportunities in Turangi and Whanganui, through its skills and employment programme, Te Ara Mahi. A fund of $500,000 will go to Rafting NZ in Turangi for a 16-week river guide training course to train ...
Treasury has shown that the Coalition Government has a $7.5 billion surplus, which is $4 billion higher than what was expected in the 2019 Budget unveiled last May. It is also $2 billion higher than the actual surplus unveiled this time last year, and at a size that has not ...
Official Information Act figures released to NZME show there were 350 assaults on officers in the year to the end of June, 79 more than the year before. The increase in attacks have sparked calls for more legal protection for first responders to be enacted. The assaults included officers being ...
“Nobody wants to see babies uplifted”, this was the pronouncement of Minister for Children Hon. Tracey Martin as her department, Oranga Tamariki, faces multiple inquiries into the number of babies being taken from their families. “But a baby can die with a single punch, “the Minister continued. “So sometimes, Oranga ...
We're making progress on tackling the long-term challenges: from homelessness, to strengthening border security, to bringing banking back New Zealand's small towns. ...
Associate Transport Minister Shane Jones has backed the ambitious plan to move Auckland’s port to Northport, at Whangarei harbour, which he says will be the “King Kong of infrastructure”. The plan is part of the recommendations of a six-person independent working group, which has recommended the Ports of Auckland be ...
A six-member independent working group selected the option of moving Auckland’s port to Northport, in Whangarei, ahead of other options. In what could be New Zealand’s most ambitious infrastructure project yet, a major expansion of the Marsden Point port could happen within 15 years. The project, officially called the “Upper ...
The final Electricity Price Review recommended prohibiting prompt payment discounts but allowing “reasonable” late fees. The findings of this review was welcomed by the Coalition Government, but they hope companies will follow through with its recommendations without regulations needed to be passed. Meridian Energy had already stopped prompt payment discounts, ...
Fletcher Tabuteau, Parliamentary Under-Secretary for Regional Economic Development The Provincial Growth Fund (PGF)through its skills and employment programme, Te Ara Mahi,will invest nearly $600,000 to ensure work opportunities for locals in Turangia and Whanganui, Parliamentary Under Secretary for Regional Economic Development Fletcher Tabuteau announced today. “I’m pleased to announce the PGF ...
An export-led economy is one of New Zealand First’s key principles, and our commitment to achieving this is shown by the continuing skyrocketing demand for our beef and sheep meat exports. Beef + Lamb New Zealand's New Season Outlook 2019-20 report forecasts beef, lamb and mutton prices to lift from ...
Regional Economic Development Minister Shane Jones announced today in Gisborne an investment of $17.27m into bringing “world-leading” food-growing technology and the creation of more than 100 new jobs in the East Coast city. The funding comes from the Provincial Growth Fund, and included a $15 million loan to LeaderBrand, a ...
Hon Shane Jones, Minister for Regional Economic Development More than 100 people in Tairāwhiti’s Tolaga Bay will benefit from two employment initiatives supported by the Provincial Growth Fund, Regional Economic Development Minister Shane Jones and Employment Minister Willie Jackson announced today. “Tolaga Bay is an incredibly tight-knit community, but one in ...
Hon Shane Jones, Minister for Regional Economic Development The Provincial Growth Fund (PGF) is supporting Gisborne business Leaderbrand to produce salad vegetables year round and create more jobs in the Tairāwhiti region, Regional Economic Development Minister Shane Jones announced today. “Our support for Leaderbrand will help them build large greenhouses ...
“Nobody wants to see babies uplifted”, this was the pronouncement of Minister for Children Hon. Tracey Martin as her department, Oranga Tamariki, faces multiple inquiries into the number of babies being taken from their families. “But a baby can die with a single punch, “the Minister continued. “So sometimes, Oranga ...
Regional Economic Development Minister Shane Jones has praised the promise by New Zealand’s biggest banks not to close any provincial branches while the Coalition Government trials regional banking hubs across the country. The Minister said the announce was the “first sign of hope for regional communities”, many of which have ...
Rt Hon Winston Peters, New Zealand First Leader New Zealand First is proud to have delivered an upgrade of the SuperGold Card website and a new smartphone app, which will help unlock the full benefits of the SuperGold Card for 750,000 New Zealand seniors.Party Leader Rt Hon Winston Peters, ...
Delivering a key election campaign promise, New Zealand First is proud to have accomplished a long overdue upgrade of the SuperGold Card today. At an event in Auckland, New Zealand First leader Winston Peters joined Minister for Seniors Hon. Tracey Martin in unveiling the new website and smartphone app which ...
The Government today announced its support for a project that could substantially reduce agricultural greenhouse gas emissions from cattle. The announcement was made as part of Prime Minister Jacinda Ardern’s and Agriculture Minister Damien O’Connor’s visit to Nelson’s Cawthron Aquaculture Park. The Cawthron Institute will receive $100,000 from the Government’s ...
Social Development Minister Carmel Sepuloni has welcomed the first reading of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill. “Every New Zealander has a stake in New Zealand Superannuation and Veteran’s Pension,” says Carmel Sepuloni. “They are our most common form of social assistance – nearly 800,000 New ...
Babies in Auckland aged six months and over can receive a free vaccination and children will all have access to vaccines, Associate Minister of Health Julie Anne Genter announced today at Papatoetoe High School. The move comes as part of Government efforts to step up the fight against measles. ...
***Check against delivery*** Good morning. It is a pleasure to be here, and to have the honour of opening this important conference on behalf of the New Zealand Institute of International Affairs. Let us take the opportunity to acknowledge all the people who have helped make today possible, including our special ...
Police Minister Stuart Nash says the safety of frontline officers and members of the public will be the focus of a new trial of specialist Police response teams in three of our largest urban centres. Police have this morning released details of an initiative to be trialled in Counties Manukau, ...
The Minister of Fisheries is calling for entries for a new public award to celebrate innovation in our seafood sector. “I have established the Seafood Sustainability Awards to recognise and celebrate those throughout industry, tangata whenua and communities who demonstrate outstanding dedication and innovation towards the sustainability of New Zealand’s ...
Minister for Women Julie Anne Genter welcomes leaders in the private sector taking action on closing their gender pay gaps to ensure a fairer workplace for all New Zealanders. Ms Genter today launched a new report, Addressing the gender pay gap and driving women’s representation in senior leadership, from the Champions for ...
Government Ministers today welcomed the release of a marine environment report highlighting the four key issues affecting our oceans, estuaries and coastlines. The release underlines the importance of government proposals to combat climate pollution, ensure clean freshwater, protect biodiversity, make land use more sustainable, and reduce waste and plastic. Environment ...
The Government has approved funding for a new acute mental health facility for Waikato which will provide better care and support to people with mental health and addiction issues. Prime Minister Jacinda Ardern and Health Minister Dr David Clark announced the $100 million project to replace the aging Henry Rongomau ...
The Government is making progress on its goal to integrate te reo Māori into education by 2025, with over 500 teachers and support staff already graduating from Te Ahu o te Reo Māori, Associate Education Minister Kelvin Davis announced today. Kelvin Davis made the announcement at an awards ceremony in Waikanae today, for ...
Statistics Minister James Shaw has welcomed the first release of 2018 Census data. The first release of data today, 23 September, includes key data on population, regional growth, the number of homes and the size of different ethnic groups in New Zealand. Data from the 2018 Census will support the ...
Minister for Statistics James Shaw today announced a public consultation on a proposed algorithm charter for government agencies. The charter has been developed by the Government Chief Data Steward in response to growing calls for more transparency in government use of data. Computer algorithms – procedures or formulas for solving ...
Agriculture Minister Damien O’Connor, Climate Change Minister James Shaw and visiting Dutch Prime Minister Mark Rutte co-hosted a business roundtable in Auckland this morning focused on working together to address climate change. “The Netherlands is an important partner for New Zealand. We share a strong agricultural history. Sustainable agribusiness and ...
The Government is taking action to build an inclusive economy where more of us receive our fair share at work and businesses can compete on great products and services, not undercutting wages and conditions, Immigration and Workplace Relations and Safety Minister Iain Lees-Galloway says. Two consultations launched today seek feedback ...
The future for New Zealand’s threatened indigenous freshwater fish looks brighter with the passing of the Conservation (Indigenous Freshwater Fish) Amendment Bill in Parliament today said Minister of Conservation, Eugenie Sage. “Until now, our freshwater fish legislation has been 20 years out of date. We have lacked effective tools to ...
At 1.30pm tomorrow, hundreds of thousands of Kiwis will join about 65 million people around the globe in ShakeOut, the world’s biggest earthquake drill. The annual drill is to remind people of the right action to take during an earthquake which is to Drop, Cover, Hold, and to practise their ...
Kiwis are benefiting from higher wage growth and low inflation under the Coalition Government. Stats NZ data out today shows the rise in the cost of living remains low, as annual Consumers Price Index (CPI) inflation fell to 1.5% in September from 1.7% in June. “The low inflation comes as ...
New Zealand’s economic strength and resilience has been recognised in a major update on the state of the global economy. The IMF’s latest World Economic Outlook released overnight shows a reduced global growth forecast over the next two years as issues like the US-China trade war and Brexit take hold. ...
Justice Minister Andrew Little has today introduced a new Bill to prevent terrorism and support the de-radicalisation of New Zealanders returning from overseas. The Terrorism Suppression (Control Orders) Bill gives the New Zealand Police the ability to apply to the High Court to impose control orders on New Zealanders who ...
A Bill that proposes targeted changes to simplify the processes for Māori land owners when engaging with the Māori Land Court has had its First Reading today. “The approach taken by the Government is to ensure that the protection of Māori land remains a priority as we seek to improve ...
Let me first thank all the new unionists and members in the room. There is nothing more important to improving people’s working lives than people making the decision to care, to get on board and help, to take up the reins and get involved. Congratulations to you. You bring the ...
Minister of Defence Ron Mark has signed a certificate exempting the activity of engine testing at Whenuapai Airbase from the Resource Management Act 1991. The Act gives the Minister of Defence the power to exempt activities for the purposes of national security. The certificate will mean the recent Environment Court ...
Finance Minister Grant Robertson has announced New Zealand will join the Coalition of Finance Ministers for Climate Action while attending APEC meetings in Chile. The objective of the 39 member Coalition is to share information and promote action to tackle climate change. It was formed in April this year, in ...
Feedback sought– Lyttelton commercial zone parking The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal to remove on-site car parking requirements for new developments in the Lyttelton commercial zone. The proposal, by Christchurch City Council, asks that powers under section 71 of the Greater ...
Hon Minister Poto Williams Associate Minister for Greater Christchurch Regeneration MEDIA STATEMENT Tuesday 15 October 2019 Feedback sought – Hagley Oval The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal about Hagley Oval. The proposal was developed by Regenerate Christchurch ...
Ladies and gentlemen, NZCTU President Richard Wagstaff, members of respective unions – thank you for the invitation to speak to you today. This might be preaching to the choir, but the importance of trade unions in New Zealand’s historical arch is difficult to understate. And it is my belief that ...
"Let’s start by acknowledging that it has been a huge year. " Police Association Annual Conference James Cook Grand Chancellor Hotel Wellington Nau mai, haere mai. Tēnā koutou, tēnā koutou, ka nui te mihi, ki a koutou katoa. President of the Police Association, Chris Cahill; Members of the Association and ...
Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark have announced the New Zealand Government’s decision to again deploy a Royal New Zealand Air Force P-3K2 (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea. New ...
Foreign Affairs Minister Winston Peters says New Zealand continues to have serious concerns for peace and stability in north-east Syria. “Recent reports that hundreds of ISIS-affiliated families have fled from a camp are deeply concerning from a humanitarian and security perspective”, Mr Peters says. “While we acknowledge Turkey’s domestic security ...
Biosecurity Minister Damien O’Connor is warning travelling Kiwis to be vigilant as the high-season for the crop-eating brown marmorated stink bug (BMSB) is under way. “We’re on high alert to stop BMSB arriving in NZ. The high season runs until April 30 and we’ve strengthened our measures to stop stink ...
The Government is moving swiftly to change the law to improve the welfare and pastoral care of students living in university halls of residence and other tertiary hostels. Cabinet has agreed to several changes, including creating a new mandatory Code of Practice that sets out the duty of pastoral care ...
The Minister for Conservation Eugenie Sage has launched a new comprehensive trapping guide for community trappers to help them protect our native birds, plants and other wildlife, at Zealandia in Wellington today. ‘A practical guide to trapping’, has been developed by the Department of Conservation (DOC), and was launched during ...
Associate Health Minister Julie Anne Genter welcomes PHARMAC’s move to improve access to long-acting reversible contraception (LARCs). PHARMAC has today announced it will fund the full cost of Mirena and Jaydess for anyone seeking long term contraception, lifting previous restrictions on access to Mirena. “I welcome women having greater choices ...
The Government has approved the next stage of a major redevelopment of Taranaki Base Hospital, which will deliver new and improved facilities for patients. Health Minister Dr David Clark has announced details of a $300 million dollar project to build a new East Wing at the New Plymouth hospital. It ...
Extra funding will allow Rural Support Trusts to help farming families, says Minister for Rural Communities and Agriculture Damien O’Connor. “I know that rural families are worried about some of the challenges facing them, including the ongoing uncertainty created by the Mycoplasma bovis outbreak. “Those concerns sit alongside ongoing worries ...
Thank you for the opportunity to be here to present certificates to the 16 graduates who have completed a beekeeping course delivered by the Howard League. Let us start by acknowledging Auckland Prison’s Deputy Prison Director Tom Sherlock, and Acting Assistant Regional Commissioner of Corrections Northern Region Scott Walker - ...
Finance Minister Grant Robertson leaves this weekend to attend the APEC Finance Ministers meeting in Santiago, Chile. Discussions between APEC Finance Ministers at the meeting will include the effects of the current global economic uncertainty, risks for APEC economies and sustainable development of the region. While at APEC Grant Robertson ...
The Minister for Pacific Peoples Aupito William Sio says for Pacific people, language can be a source of strength. It can help ground us and give us confidence. When we speak them, our languages provide us with an immediate and intimate access to our identity and our story - and ...
The Coalition Government has announced an action plan to improve the wellbeing of disabled New Zealanders by addressing inequalities in play, active recreation and sport. The initiative includes training to develop a workforce that understands the needs of children and young people with a range of impairments, advocacy for fit ...
The construction sector is being freed up to allow more homes to be built more quickly as the Government cuts through some of the red tape of the Building Act. “Every New Zealander deserves a warm, dry, safe home and old inefficiencies in the Building Act make building slow and ...
Winston Peters says his party is a handbrake on bad ideas and a "supercharged turbo" for good ones - but will it be in the driver's seat come 2020? ...
Our former prime minister secured a meeting with Chinese premier Xi Jinping outside all normal diplomatic channels. Interest’s Jenée Tibshraeny asks what it means for New Zealand’s evolving relationship with the superpower.Former prime minister John Key secured a meeting with Chinese President Xi Jinping this week without the involvement of ...
David Robiecontinues his three-part series about travelling in Iran. I stumbled on the scene by chance. Our host family in Iran’s second city Mashhad, a modern and beautiful metropolis that would comfortably fit in New Zealand’s entire population, was taking us on a drive to the outskirts to ...
New Zealand First leader Winston Peters has lashed out at the media, in particular, MediaWorks, just a day after the company announced it was selling off its television arm. ...
About a hundred disgruntled licensed gun owners have descended on the New Zealand First conference to tell the party leader Winston Peters that they feel like victims. ...
New Zealand First members will vote on a policy today that would allow businesses of all sizes to enforce 90-day trials when they employ people straight out of prison. ...
"Each time she held her lighter underneath the pipe and sucked the smoke into the back of her throat, the promise was there": a New Zealand tragedy by Alice Tawhai. ...
With the future of Mediaworks’ TV business hanging in the balance, Al Jazeera news presenter Kamahl Santamaria reflects on what the imperilled channel meant, and continues to mean, to him.I always liked the logo. The fresh bright colours, the nod to a koru in its shape, and just the fact ...
There are still many barriers preventing people from voting in local elections. Laura O’Connell Rapira proposes some social solutions.The Spinoff local election coverage is made possible thanks to The Spinoff Members. For more about becoming a member and supporting The Spinoff’s journalism click here.To vote in the local elections, I cast ...
What’s really stood out for me being back in Tokyo is the unique qualities of Japan’s spectators, writes Richard Light, professor of sport coaching at the University of Canterbury.The Rugby World Cup has thrown a global spotlight on Japan over recent weeks. Not just the rugby: the distinctive culture and ...
As the New Zealand First Party gathers for its annual conference, the question swirling in the year is how it can carve out a path to avoid electoral defeat in 2020, writes Jo Moir for RNZ. It’s not you, it’s me. It’s a familiar break up excuse that’s used ...
To the early intervention therapists, to the teachers, to the speech therapists, the occupational therapists, music therapists, diabetes nurses and all: you change the world.When I was married almost a decade ago we had the following reading at our wedding:You are holding up a ceilingwith both arms. It is very ...
The faces said it all. The smiles of the European leaders crowded round Boris after the Brexit deal was struck. The deal his opponents – no, pretty much everyone – said was impossible.So what’s in it? The detail is still opaque, but subject to gremlins in the fine print, ...
Iran attracts an onslaught of negative media in New Zealand and Western media. But is it fair or deserved? David Robie has spent several weeks travelling in the country on sabbatical and finds the media negativity far from the reality of the “most friendly” country he has ever visited ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra [embedded content]University of Canberra Deputy Vice-Chancellor Professor Leigh Sullivan discusses the week in politics with Michelle Grattan. They talk about Alan Jones accusing Prime Minister Scott Morrison of failing the immediate needs of drought-striken farmers, ...
Source: The Conversation (Au and NZ) – By Anita Parbhakar-Fox, Senior Research Fellow in Geometallurgy/Applied Geochemistry, The University of Queensland Last month, scientists uncovered a mineral called Edscottite. Minerals are solid, naturally occurring substances that are not living, such as quartz or haematite. This new mineral was discovered after an ...
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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.
http://www.top.org.nz/top1
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.
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.
Yeah I cant see $200 for every young adult making the news…
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.
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.
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.
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.
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.
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.
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.
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.
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.
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!!!!
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.
Absolutely correct Adrian, and I expect that’s exactly what would happen – mass sell down to overseas interests.
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?
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.
Then again I have no idea how Colin Craig got 4% last time making a huge jump from 1% in a couple of months.
Maybe his poetry and prose struck a chord?
He could hold a reading together with Prostetnic Vogon Joyce.
“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 😉
That would hand the Nats a 4th term. Hopefully enough people see the risk and vote accordingly.
Too many lefties still thinking it doesn’t matter (i.e. that it doesn’t help Nact).
Correct Sacha.
Gareth Morgan is a dyed in the wool tory always was.
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.
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.
Dyed in the wool tory who’s somewhat good at convincing progressives that he’s not.
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.
https://home.kpmg.com/content/dam/kpmg/nz/pdf/Dec/taxmail-issue1-december-2016-kpmg-nz.pdf
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.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11762096
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 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.
@ 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?
“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.
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.
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).
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.
what unspoken motives could anyone have?
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.
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.
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.
so farms are one rate, personal homes another, deferrments for pensioners and the unemployed… this is getting a bit convoluted.
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.
ah, ok – not quite so convoluted, still odd lol
Bloody messy Mc Flock.
“Getting a bit convoluted”
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).
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.
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)?
How much would they get under the current Green Party UBI policy that they’ve had for more than a decade?
Current answer = nothing.
One thing they’d get is a 20% increase.
Funny how you can’t even explain TOP policy to me.
http://www.top.org.nz/top11
It wasn’t hard to find.
“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!!!!
“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.
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:
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.
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”.
Again the KPMG note explains it well. Or at least I think so:
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.
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.
http://www.top.org.nz/top1
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.
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?
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.
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.
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.
“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.
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 “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.
See my comment at 1.3.2.2.3 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.
“ 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.
OK so you have an asset worth $400k. How poor are you again?
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.
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.
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.
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.
also what i would like to know,
can this tax be used as a write off – business expense?
“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.
“…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.
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
… 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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
Well if people want to throw good money away in some pathological pursuit of minimising tax, is that Gareth Morgan’s fault?
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.
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.
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.
Besides who has a CGT that would apply to your $20m family home? No-one.
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.
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.
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.
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.
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.
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.
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.
http://www.newshub.co.nz/home/politics/2017/07/get-your-mental-health-right-national-mp-s-advice-for-todd-barclay.html
Didn’t know Chris Bishop was also a tobacco peddler.
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.
“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?
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!
https://www.stuff.co.nz/the-press/news/94913867/todd-barclay-says-hes-hard-at-work-tackling-roading-issues-in-queenstown
Another sneaky way big pharma rorts us all and boosts their profits: unreasonably short expiration dates.
http://www.motherjones.com/politics/2017/07/the-myth-of-drug-expiration-dates/
Generally speaking you can tell when drugs go off. That’s what I go by…*opens tube of locoid exp 2010 and still good*
Ummm…..okaaay…personally I prefer a more objective standard based on actual measurements, but hey, whatever works for you.
The placebo effect never expires 😉
Mike Hosking: Most New Zealanders could not, should not and would not stomach Winston Peters as PM
Someone’s is panicking!
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11892403
Oh, the irony!
I suggest you mean labour who’s options look rooted, especially as greens will also tumble at next poll, as trump would say Sad
I wonder what part of 20% youth unemployment in Northland can be considered as a regional boom?
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.
Wow, that is crass. But then it’s Nick Smith.
What a prick Smith is, an utter prick
National Party List MP Maureen Pugh for West Coast Tasman, does nada for the region, no doubt she will be using this announcement to appear like she is doing something.
Will this ‘great walk’ have a budget blow out, like the million dollar over spend on a cycle way when Maureen Pugh was Mayor of the embattled Westland District Council?
http://www.stuff.co.nz/the-press/news/west-coast/83412015/westland-district-council-could-end-up-15-million-over-budget-for-cycle-trail
What is it with these bike trails running over budget? Is someone running a wee scam?
Maybe it should be on the National parties BUCKET list first. Fuckers.
“Sanitised Democracy”
It’s good to see Labour taking action on this:
https://www.stuff.co.nz/national/94896547/intercepting-politicians-email-a-constitutional-outrage
Find out if your local council’s code of conduct could be used to quieten criticism from elected members.
https://www.stuff.co.nz/dominion-post/comment/94838375/cathy-strong-some-councils-using-code-to-quash-dissent
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
Might be an improvement on all the Aucklanders with too much money we’re getting currently.
NOTHING TO SEE HERE _ MOVE ALONG!
http://www.independent.co.uk/news/tritium-nuclear-plant-tokyo-electric-power-company-nuclear-regulation-authority-japan-a7842931.html
So by now they have already done this, umm and we still have relations with this government?
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.
http://www.radioactivity.eu.com/site/pages/Tritium.htm
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,
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.
http://www.scoop.co.nz/stories/PO1707/S00281/press-release-by-kim-dotcom-20-july-2017.htm
Court acts to protect GCSB from kim dotcom liability.
+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!
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
Isn’t ACT a fan of euthanasia?
Dutch Euthanasia – Dutch doctor drugged patient’s coffee and got family to hold her down
http://bobmccoskrie.com/?p=19902#
I think there was a damn sight more to the case than McCoskrie and the daily fail would have you believe.
https://translate.google.co.nz/translate?hl=en&sl=nl&u=https://www.euthanasiecommissie.nl/binaries/euthanasiecommissie/documenten/publicaties/oordelen/2016/niet-gehandeld-overeenkomstig-de-zorgvuldigheidseisen/oordeel-2016-85/Oordeel%2B2016-85.pdf&prev=search
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.
https://en.wikipedia.org/wiki/Scottish_Parliament_election,_2016
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.]
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.
Anyway.
From the Scottish Government site
http://www.parliament.scot/gd/visitandlearn/Education/16285.aspx (my emphasis)
Portugal – their success shows with the lowest rate of drug induced deaths in the EU.
http://www.zerohedge.com/news/2017-07-19/which-european-nation-suffers-most-drug-induced-deaths
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?
All the houses in the world can’t save France’s nastiest man from being a laughing stock…
http://normanfinkelstein.com/2017/07/11/isis-arent-the-only-barbarians/
Here’s France’s nastiest man in a less salubrious moment…
http://normanfinkelstein.com/2017/05/11/bhl-has-gotten-so-inured-to-the-cream-pies-that-it-might-be-time-to-leaven-them-with-dog-feces/
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.