Tax reform: tax cuts for rich, paid for by poor

Written By: - Date published: 3:09 pm, January 20th, 2010 - 135 comments
Categories: economy, national/act government - Tags:

The Tax Working Group has given its recommendations for tax reform to the Government. It predictably recommends:
Dropping the tax income tax rates to 30% in line with the corporate tax rate.
Dropping the corporate tax rate (and presumably the top income tax rate) further in the future.
Paying for this with 15% GST, a land tax, a tax on investment properties, and closing the tax advantages for housing investment
In judging these recommendations, the first question is: will this lead to better economic incentives and the second question is: who will end up paying more, and who will end up paying less?
A tax on property investment and closing the loopholes has a lot of positive elements to it – it should discourage over-investment in housing and make home ownership more affordable – but it’s not the landlords that end up bearing the cost. A large part will be passed on to renters, who are mostly low income. So, this will result in a decrease in disposable income/standard of living for the poor.
As will increase in GST. People on lower incomes spend a higher portion of their incomes and pay GST when they do.
These tax increases for people on low incomes need to be balanced with a cut in income tax at the bottom. Say, a tax-free bracket that would see each taxpayer get exactly the same size cut to their income tax bill.
But the Tax Working Group hasn’t even looked in that direction (none if its scenarios even contemplate retaining the 38% rate). Instead, they’ve insisted that income tax cuts must go to the few people on higher incomes by reducing the top tax rates. In what surely must be a coincidence, that means big tax cuts for the members of the Tax Working Group, the economists who advised them, and the politicians who employed them – paid for mostly out of the pockets of the poor.
Fixing the tax loopholes that has caused over-investment in property and even a GST increase are ideas with merit that could make for a better economy but only if the money raised is redistributed fairly. The Tax Working group has failed to do that. They have taken a wonderful opportunity and turned it into a money grab for the rich.

135 comments on “Tax reform: tax cuts for rich, paid for by poor ”

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  1. Monty 1
    20 January 2010 at 3:21 pm

    How predictable you lot are. Some of the best brains in the country come up with a solution to fix a very corrupted tax system and all you can do is moan. Those at the bottom of the economic ladder probably pay little is no tax at present. They may be affected a little because of the GST increase – well tough luck. The low income earners have not been paying their way for a very long time. Their benefit will accrue with a more preductive economy, more work (Higher demand on labour will increase demand)

    My sympathies are with those “rich pricks” who have been funding the Labour Government’s social programmes for the past ten years (National have not been able to deconstruct those programmes yet). They will benefit from a restructure of the tax system and I am pleased for them – hell it may even give an incentive for the low income earners to improve their lot in life by upskilling.

    • snoozer 1.1
      20 January 2010 at 3:26 pm

      So, no answer to the fact that these reforms would just be a payoff the rich? Just some waffley attack on the standard’s authors?

      and what does “Their benefit will accrue with a more preductive economy, more work (Higher demand on labour will increase demand)” even mean? Are you seriously proposing trickle-down economics?

      • Pete 1.1.1
        20 January 2010 at 3:47 pm

        Agreed snoozer – I’m a bit boggled on this.

        And the ‘tough luck’ comment is unfortunately delivered from a place of unbridled ignorance.

        The last comment however is the best: “hell it may even give an incentive for the low income earners to improve their lot in life by upskilling”.

        Monty, mate, seriously? You do understand that even upskilling does not increase wages for the necessary roles at the bottom of the labour ladder? Do you think that if a rubbbish collector upskills to become a doctor or a lawyer that someone else won’t have to come a fill that role? And do you think that the role will magically pay more if enough people upskill? Or is this once again down to individual responsibility and the people who have to work these jobs by necessity (family obligations, learning difficulties, geographical dislocation, disability etc etc) should all be climbing the ‘upskill’ ladder.

        And Santi (below) do low-wage workers (such as the rubbish collector) not contribute to ‘productivity’? Or should we send the bankers, lawyers and politicians out to collect rubbish – I can start a roster if you want.

        Wake up. I know ignorance is supposedly bliss, but in the meantime real people suffer from policies such as this.

    • Draco T Bastard 1.2
      20 January 2010 at 3:46 pm

      The rich aren’t the productive sector of the economy. They’re the bludgers.

      • The Baron 1.2.1
        20 January 2010 at 3:54 pm

        Another insightful comment. Thanks Draco.

      • jagilby 1.2.2
        20 January 2010 at 4:21 pm

        “The top 10% of earners now pay 44% of all personal income tax”
        pg 17 TWG report.

        Yeah bludging. Hard.

        Don’t let the facts get in the way of a good soundbite though.

        Filthy kulaks
        When should we issue the hanging orders?

        Captcha: Realitys
        [How apt… even if I’m unsure if that is really how it’s spelt – Realities perhaps?]

        • snoozer 1.2.2.1
          20 January 2010 at 4:40 pm

          jagibly. The top 10% of earners also earn 32% of income. Of course they pay a slightly larger share. The poor can’t afford to.

          And you display a disgusting ignorance no idea when you compare the 10% richest New Zealanders, who have net worths of $650,000 on average, to the kulaks, who were just farmers a little above peasant level.

          How dare you comapre this discussion to the extermination of the kulaks. Hell, this isn’t even about putting tax up on the rich, it’s about not giving them a tax break at the cost of the poor.

          captcha: sense – like a sense of proportion, eh?

          • The Baron 1.2.2.1.1
            20 January 2010 at 4:54 pm

            “How DARE you” indeed.

            oooh mock outrage as well. Yawn.

          • gitmo 1.2.2.1.2
            20 January 2010 at 5:03 pm

            A net worth of $650k is considered rich ? WTF ?

            • jagilby 1.2.2.1.2.1
              20 January 2010 at 5:20 pm

              I think we’ve found that illusive definition of “rich” that we’ve been asking the left for since… well… since forever.

              $650k net worth. There it is.

              One thing I forgot to mention in my post below is that the average cost of raising a single child in NZ is $250k (http://bit.ly/li3iD).

              Anyone having a child doesn’t have much room to move to avoid the rage of the left.

              • Descendant Of Smith …
                20 January 2010 at 5:29 pm

                I’m sure you mean the rage of the right. The only people I’ve heard moan about people having children are those from the right who say you shouldn’t have em if you can’t afford em.

                Could you clarify whether you are supposed to have the $250,000 up front before you should have children or can you pay it off over time – with interest of course.

              • SHG …
                20 January 2010 at 5:59 pm

                What’s the estimated carbon footprint of a human being born in the 21st century, across his/her entire lifetime?

            • snoozer 1.2.2.1.2.2
              20 January 2010 at 5:32 pm

              Well, the bottom 50% of people have a net worth that averages $3,000. So, yeah. $650,000 net is a lot.

              In fact, it’s a f#cken fortune, it’s like you and your partner owning a good house in a good suburb with no mortgage and each having another few hundred grand in the bank or other investments, with no debt.

              You people are deluded if you think that is not rich in this country. You simply have no idea how most people live, which is probalby why you are so obsessed with getting yourself more tax cuts.

          • jagilby 1.2.2.1.3
            20 January 2010 at 5:12 pm

            So given that the wealthy pay proportionately more income tax than they make (44% vs 32%) you agree with my point then that the wealthy are, contrary to Draco’s assertion, “bludgers”.

            I guess this all comes back to how do you guage productivity. Is productivity physical work and toil or is productivity putting everything you have (all your capital) at risk, risk employing others and the stress that comes with it.

            FFS, get off your high horse.

            “Ignorance” is calling the rich bludgers… implying that that anyone earning over $70k must just sit on their estate drinking martinis all day – a life funded through passive income derived from their army of minions on minimum wage.

            It’s exactly the same notion i.e. Let’s hate on people for having more than us. Doesn’t matter how much more – envy is envy in anyone’s language.

            Given inflation how much is $650,000 of net worth on average compared to a kulak in 1918? At a guess $650,000 is probably enough to own a modest home in a main NZ city (circa $450,000-550,000), a car and home furnishings. Is that “rich” is it?
            You go look at homes for $450,000 – $500,000 on the market and tell me if that’s rich. Then think about that as an “average” and all the people who must have less than that but still be in the top 10%. Sounds more like middle class to me – hardly a “boats and hoes” lifestyle.

            • Descendant Of Smith 1.2.2.1.3.1
              20 January 2010 at 5:22 pm

              I suspect for many of the low paid simply owning a home makes you rich

              At $15-00 per hour working 40 hours per week owning a home at that price is not likely. It would take 14 years of gross income just to pay the capital.

              Depends on your perspective really. Maybe you don’t really appreciate how well off you are.

              • jagilby …
                20 January 2010 at 5:35 pm

                Oh i appreciate that there are people far less well off than me (as I suspect the kulaks did).

                OK guilty as charged – I own a home. I would be bordering on that terrible position of being in the “top 10%” (a curse of locusts be placed on my family).

                Problem is as someone on a salary, with no employees, close-to-but-not in the top tax bracket, working my arse off (so much so that I have calculated my salary as being less than minimum wage given the hours I work some weeks), having to have others rent rooms in my place to service the mortgage… I don’t see how someone in my position can be lambasted as a “rich” bludger on society. Yet Draco has clearly cast that aspersion on my character and others in a similar who are in similar circumstances.

            • ben 1.2.2.1.3.2
              20 January 2010 at 5:30 pm

              The 44% is only half the story because the wealthy are (quite correctly) disproportionately unlikely to receive assistance from the government. This is why a large fraction of New Zealanders pay no net tax. The wealthy pay far more tax, both proportionately and absolutely, and, in addition, receive disproportionately less. It is beyond ludicrous to refer to this high tax paying individuals as bludgers – they’re the ones funding the lion’s share of the welfare system!

              • Descendant Of Smith …
                20 January 2010 at 5:43 pm

                I agree that just like most people on benefit or low incomes are not bludgers nor are most of the middle class and nor are most of the well off.

                New Zealander’s are pretty honest and fair.

                A small proportion across all sectors are not. Let’s not lose sight of that.

                Also remember when you talk about funding the welfare system the greatest and ever increasing portion of that welfare system in spent on NZS. Should this be income and asset tested – as it is by the way in the much touted as a better place to live Australia.

                That’s why arguing over .3% of the unemployed population seems a waste of time and effort.

            • snoozer 1.2.2.1.3.3
              20 January 2010 at 5:42 pm

              “you agree with my point then that the wealthy are[n’t], contrary to Draco’s assertion, “bludgers’. ”

              What you’re missing is that the rich are already benefiting from a system that makes them rich. that’s what Draco means when he calls them bludgers.

              “Given inflation how much is $650,000 of net worth on average compared to a kulak in 1918? At a guess $650,000 is probably enough to own a modest home in a main NZ city (circa $450,000-550,000), a car and home furnishings. Is that “rich’ is it?”

              Remember, in your scenario that house has no mortgage and you have no other debt, and you own it yourself, not with your partner.

              I hate to break it to you but more Kiwis don’t live in anything like a half million dollar home, let alone own it outright in their name alone.

              The kulaks? They didn’t even come close. “Anyone who employed hired labor was considered a kulak, but so was anyone who owned two horses or two cows or a nice house (by early 20th century rural Russian standards)”

              Nah, the Soviets would have regarded that wealth as upper bourgeoisie

              • jagilby …
                20 January 2010 at 6:45 pm

                “What you’re missing is that the rich are already benefiting from a system that makes them rich.”

                What you’re missing, and what the left generally misses, is that the capitalist economy is not a zero-sum game. If someone makes wealth it does not result in someone else losing wealth.

                If I designed a revolutionary new widget and sold 100,000 units then who is the contra to that??? No-one. In fact I would benefit others within the economy by offering them jobs in the production of my widgets.

                What you’re missing is the link between widget developers of this country and jobs in this country. Instead the left would rather demonise the widget developer, tax the shit out of him/her and his/her enterprise for daring to make the big bucks. Then what happens he/she and the business moves offshore and takes the jobs with them.

              • Descendant Of Smith …
                20 January 2010 at 7:06 pm

                “What you’re missing, and what the left generally misses, is that the capitalist economy is not a zero-sum game. If someone makes wealth it does not result in someone else losing wealth.”

                Tell that to the thousands of people who lost their savings in 1987 or the ones who invested in Bluechip, or the ones who invested in many of the other legal things where people lost lots of money.

                Tell that to the small businessmen who lose loads of money when a building development doesn’t work out and the firm declares bankruptcy and doesn’t pay their bills. Tell that to the state of Nevada who have multi billion dollar costs to try and clean up after the mining companies walk away.

                Tell that to our own people when the banks manipulated to pay less tax than they should or go back a little further to the wine box enquiry, timeshare apartments, and so on.

                I’m sure you mean “may” not – equally there are plenty of examples when it does.

          • jagilby 1.2.2.1.4
            20 January 2010 at 5:27 pm

            “How dare you comapre this discussion to the extermination of the kulaks.”

            The “extermination”. I think your “ignorance” exceeds mine here given that not one kulak was killed as a result of the hanging orders. It actually led to Lenin becoming enraged that no one was following his orders.

            How about this… kinda like the impotent calls here for people to rise up against the rich. Oh no… did it again… made a comparison between the left of yesterday and the left of today.

            • snoozer 1.2.2.1.4.1
              20 January 2010 at 5:44 pm

              the kulaks were liquidated you dick.

              I’ve met people whose parents were Kulaks and were sent to Siberia with them as children. Only they returned, their parents died in the camps.

              • jagilby …
                20 January 2010 at 6:29 pm

                They were but not as a result of Lenin’s 1918 hanging orders.

                Their persecution started in 1937 under Stalin.

                You dick.

              • jagilby …
                20 January 2010 at 6:36 pm

                Sorry, correction, execution of kulaks started in 1930.

                Still a good 12 years after Lenin issued the orders.

              • Marty G …
                20 January 2010 at 10:31 pm

                I don’t care what date the liquidation of the Kulaks began. You’re still making light of mass murder and comparing it to the rich not getting a tax cut.

                That’s not acceptable behaviour on this blog. Cut it out or you’ll be gone.

        • Draco T Bastard 1.2.2.2
          20 January 2010 at 7:55 pm

          “The top 10% of earners now pay 44% of all personal income tax’
          pg 17 TWG report.

          But do they produce the 32% of all the wealth?

          The answer is no – it’s physically impossible for them to do so. Ergo, they’re taking that wealth from those who do produce it which means that they’re bludgers.

    • Clarke 1.3
      20 January 2010 at 4:04 pm

      Those at the bottom of the economic ladder probably pay little is no tax at present.

      It might help if you did a little bit of background research on this – I can highly recommend Keith Ng’s interactive taxation diagram, which explains things in a far more effective fashion than I could.

      The takeaway message: the bottom 50% of income earners in the country earn just 17% of the income and pay 12% of the tax.

      • The Baron 1.3.1
        20 January 2010 at 4:55 pm

        Good deal then really – sounds like progressive taxation is working pretty well then eh.

        • Clarke 1.3.1.1
          20 January 2010 at 7:32 pm

          Indeed. But it does rather destroy this Rightie myth that only the rich pay tax.

          • Pascal's bookie 1.3.1.1.1
            20 January 2010 at 8:01 pm

            The comparison with Australia is interesting too. Another few myths get popped there.

  2. Santi 2
    20 January 2010 at 3:27 pm

    About time. Time to let the productive sector of the population keep more of the money they earn.

    • Descendant Of Smith 2.1
      20 January 2010 at 3:29 pm

      You do mean the low paid workers don’t you – the ones that actually do most of the work?

      • vto 2.1.1
        20 January 2010 at 3:36 pm

        yes and they already keep more of the money they earn. Why not others too?

        • felix 2.1.1.1
          20 January 2010 at 3:57 pm

          No they may keep more of the money they are paid, but certainly not more of the money they earn.

          • vto 2.1.1.1.1
            20 January 2010 at 4:00 pm

            Oh, ok. I’ll try again.

            yes and the already keep more of the money they are paid. Why not others too?

            • felix 2.1.1.1.1.1
              20 January 2010 at 4:04 pm

              Santi was referring to the productive sector not keeping enough of the money they earn.

              DOS pointed out the fatal flaw in that line of reasoning.

              I fear it may have gone over your head. Do keep up.

  3. randal 3
    20 January 2010 at 3:34 pm

    so the question is who is bob buckle. I have never heard of him before or seen his credentials and now suddenly he is up there telling me I have to pay more tax.
    secondly if the present tax system is incoherent then how can he understand it.
    thirdly if it is unfair then who is it unfair to?
    fourthly if there is any connection between gst, personal tax rates and investment then it is up to him to show us plebs.
    otherwise he just another geek doing the dirty work for the round table.

  4. Peter 4
    20 January 2010 at 3:39 pm

    As someone in the top tax bracket I would welcome the reduction, As I am unable to structure my income into a trust or any other devious mechanism to pay less tax.

    And yes I do feel that I deserve what I earn,, and I do deserve to keep more of it.

    I am unable to claim working for Families as although I have 3 kids our income is too high…

    Friends of mine that can claim the working for families rebates appear to do quote well out of it…

    • Descendant Of Smith 4.1
      20 January 2010 at 3:54 pm

      As someone in the top tax bracket I do quite well nicely. I’ve worked hard to get where I am.

      I’m more than happy for some of my income to go towards helping those less well off.

      I remember being rung by a power company once wanting to know what they could do to keep my business – discounts for early payment, gift vouchers and so on.

      Apparently offering me nothing cause I could afford to pay my power bill and making power cheaper for those on lower incomes wasn’t one of their choices. They were a bit non-plussed when I suggested it.

      • Pete 4.1.1
        20 January 2010 at 4:00 pm

        Love it DoS – a bit of a shame really.

        After a recent move my partner and I decided to go with a power company that funds medical research (in New Zealand even!). Not quite as good as a break for those who can’t afford what I can, but better than nothing, I guess.

    • snoozer 4.2
      20 January 2010 at 4:10 pm

      As someone in the top tax bracket, I don’t want to take a tax cut at the expense of those worse off than me.

      It saddens me to see the greed mentality of others on high incomes.

  5. randal 5
    20 January 2010 at 3:40 pm

    who is bob buckle.
    never heard of him and I have never inspected his credentials.
    secondly.
    if the tax system is incoherent then how can he understand it?
    thirdly if the present tax system is unfair then who is it unfair to?
    and fourthly exactly waht is the connection between investment, g.s.t. and personal tax rates.
    when is the tax working group going to explain this instead of doing a whitewash job for the BRT.

    • Clarke 5.1
      20 January 2010 at 3:57 pm

      who is bob buckle. never heard of him and I have never inspected his credentials.

      Professor Bob Buckle is Pro Vice-Chancellor and Dean of the Faculty of Commerce and Administration at Victoria University, and an ex-Treasury analyst. His details are here.

      Don’t you have Google at your house?

  6. Lanthanide 6
    20 January 2010 at 3:47 pm

    I don’t understand this obsession with the 30% figure. 33% is too high, it has to be 30%!

    If they really want to do something about the top tax rate, why can’t they keep it at 38% but shift the bracket out to $150k or so? That way all of the working professionals with high paying jobs will get a tax cut, but the cream from the CEOs and the others will still be collected. But no, that simply isn’t acceptable, the rate itself must be brought down to 30%, for no clear reason.

  7. Clarke 7
    20 January 2010 at 3:54 pm

    It’s not the landlords that end up bearing the cost. A large part will be passed on to renters, who are mostly low income.

    I’m not sure I agree with your statement, Marty. Property rentals are very much set by the ability of people to pay them, which in turn is linked to income levels rather than the arbitrary costs of the landlords. For instance, there seems to be little correlation between higher local body rates and higher weekly rental for tenants – the linkage appears to be quite weak.

    What I do think will occur is that some amateur investors will divest themselves of their rental properties if the tax benefits are removed, which may help to depress the capital values as excess supply pushes the price down. This may well benefit first home buyers, but I don’t think it will impact tenants much unless the bulk of rental properties stop being available for rent altogether.

    • Pete 7.1
      20 January 2010 at 4:09 pm

      Totally disagree with your first point Clarke.

      While there have been exceptions, the majority of landlords I’ve dealt with (as have my friends and family) over the years have used any excuse to arbitrarily increase rent by whatever amount they so choose. Most will offer a reason (the tax one suggested in the blog post seems like a typical one, but also local rent/rates rises) without any backing or reason for the amount of the increase. The rent in our flat went up $15 per week between January and May last year and is going up $20 per week from February – supposedly because rental prices have risen in the area (no evidence/report given or necessary). It’s too brutal looking for another place to rent at this time of year so we’ll have to suck it up – but this is typical of landlords we’ve had to deal with.

      Maybe it’s simply that Wellington is like this and the landlords are nicer in your part of the country/world?

      • Clarke 7.1.1
        20 January 2010 at 4:21 pm

        Maybe it’s simply that Wellington is like this and the landlords are nicer in your part of the country/world?

        Given that I am a landlord in the Wellington area, I’m probably part of the problem rather than the solution! 🙂

        I think we’re actually in violent agreement on this one … my contention is that rents rise to whatever the market will bear, but no further, and that the limit is set by whatever tenants can afford to pay as a portion of their income rather than by the arbitrary costs to the landlord.

        In some cases the proposed taxation changes would see costs to landlords increase by up to 38%, as that’s the marginal effect of no longer being able to claim the tax losses of the property against their main income. However there seems absolutely no likelihood that the same landlord would be able to raise the rent on the property by 38% to compensate, as the tenants would simply move – and couldn’t afford to pay such a huge increase anyway.

        However I fully accept that some landlords will use any excuse to try and ratchet up the rent a few more dollars, and some will undoubtedly use taxation changes as a reason. Bad behaviour is still bad behaviour. But I don’t think that the primary cost of these tax changes will fall on the tenants, as Marty suggests.

      • jagilby 7.1.2
        20 January 2010 at 4:47 pm

        I’m a landlord in Wellington as well. Before the pitchforks come out it’s my first home and I rent other rooms in my place just so I could afford it – I find the pure investment property notion just as abhorent as many of you do even though my basis for animosity is the fact that it’s unproductive (which probably slightly differs from blind hatred of anyone with money).

        Is your landlord holding you there against your will or something?

        If you don’t like the rent then move to somewhere else cheaper.
        Vote with your feet.
        If an annual increase of $35/week is unreasonable for your place then presumably the landlord will have difficulty finding someone else.

      • ben 7.1.3
        20 January 2010 at 5:35 pm

        It’s too brutal looking for another place to rent at this time of year

        What does that mean? Is this a reference to hangovers and getting up before 5pm?

        • Pete 7.1.3.1
          21 January 2010 at 8:47 am

          Nice ben.

          No, it means that between about now and the end of March in Wellington you tend to look at overpriced flats with roughly 30-40 others groups of people. This is not hyperbole, it’s because students are returning to study and looking for accomodation and because many landlords/tenants agree to leases that run roughly the calendar year. We also don’t have a car here so have to live centrally to get to our jobs (that do not start at 5pm).

          Essentially “it’s brutal” mean that it is NOT a renters market. And people will pay over the odds just to get something, anything.

          And rather than being held against our will we simply want to bide our time until this lessens – and pay the increase in the interim – ya know – common sense.

          But – even if we move I don’t imagine the price will go down – do you?

    • snoozer 7.2
      20 January 2010 at 4:13 pm

      There’s a bit in the report that talks about how landlaords will pass on the cost of the tax. If I remember rightly there was something more definitive in one fo the sessional papers.

  8. J Mex 8
    20 January 2010 at 4:19 pm

    I don’t understand this obsession with the 30% figure. 33% is too high, it has to be 30%!

    If they really want to do something about the top tax rate, why can’t they keep it at 38% but shift the bracket out to $150k or so? That way all of the working professionals with high paying jobs will get a tax cut, but the cream from the CEOs and the others will still be collected. But no, that simply isn’t acceptable, the rate itself must be brought down to 30%, for no clear reason.

    Because that’s tax cuts for the rich. And that sounds bad.

    It also makes a great deal of sense to have the company, trust and top tax rate aligned. Otherwise, a whole non productive industry springs up to use companies, trusts etc to make sure income doesn’t hit the top threshold.

    It’s a massive industry. There was an amazing (and statistically improbable) amount of people earning $60,000 (the cutoff before the 39% tax rate kicked in). Amazingly, when the tax threshold moved out to $70k, the anomalous $60k spike picked up and moved itself to $70k. Proof of the tax avoidance industry.

    NZ’s company rate needs to be competitive with our neighboring countries. And because people can use companies to shelter income, it makes sense for the top tax rate to be the same as the company rate. You do away with an industry that is a waste of energy.

    • Daveski 8.1
      20 January 2010 at 4:38 pm

      Excellent point and particularly so when the facts are so blindingly obvious.

      I see (OK I scanned so may have missed it) but the irony of course is that the problem was caused by Labour playing politics with the taxes – creating an incentive to motivate people to legally pay less tax is completely irresponsible yet the cheering masses applauded here. It was politically based, made no sense, and in fact contributed to a housing boom that penalised the lower paid.

      Again, where’s the criticism of this here?

      The actual figure is irrelevant – the principle has to be that whatever the figure, align trusts, companies and the highest paid unless you want to use the tax rates to buy votes as Labour did.

      • Descendant Of Smith 8.1.1
        20 January 2010 at 5:04 pm

        Though wasn’t much of the the big boom is trusts in the 80’s generated by tax issues but by the baby boomers wanting to arrange their assets to have the state pay for their residential care and the then their desire to also get into rental properties as their own mortgages were paid off.

        These things were promoted strongly by vested interests from lawyers and accountants, to politicians, to real estate agents, bankers and so on.

        I now know lots of people with trusts but the initial motivation was never one of reducing the tax burden. In relation to the rental properties the lawyers and accountants simply told that that was what they should do.

        For many of those trusts they just wasted their money – the need for it was totally unnecessary.

        Now I guess you may be only really referring to those at the top who are high earners who may have had that degree of conscious sophistication.
        You know the well off who get a new car every year and go overseas all the time through the family trust but have a community services card that they brag about to people who earn just over the threshold but are struggling to survive.

    • snoozer 8.2
      20 January 2010 at 4:48 pm

      “It also makes a great deal of sense to have the company, trust and top tax rate aligned. Otherwise, a whole non productive industry springs up to use companies, trusts etc to make sure income doesn’t hit the top threshold.”

      This point has been made before, but it should be made again. What you’re saying is ‘people are ripping us off and it’s costing them money to do it, so rather than make them be tricky to rip us off, let’s just let them have the money’

      Here’s a little quiz, of the countries that are wealthier than us, how many have aligned their top income, corporate, and trust tax rates? And which countries are they?

  9. Policy Parrot 9
    20 January 2010 at 4:47 pm

    Gee – if the tax working group wanted to promote the exalted principles of Horizontal Equity they should look at increasing the corporate rate back to 33%, at least that way the top personal rate would not have to come down so much.

    This, of course, with the reinstatement of the R+D Tax Credits for those who run actual businesses which do research and development.

    National may as well have got the 2025 Taskforce to write their tax prescription, as this group seems to be from the same echo chamber.

    It is highly disappointing from an accounting point of view, because its recommendations were supposed to be fiscally neutral, when it is obvious that this report assumes a 2004 level of government spending, conveniently the level just prior to the introduction of Labour’s flagship Working for Families.

    Any increase to GST will be an administrative nightmare, as small businesses who have relied on the 8/9 and 9/8 ratios will now have to adapt to an otherwise irrational number, let alone the impact of a 2.2% rise on all prices on those who can least afford it.

  10. taranaki 10
    20 January 2010 at 4:47 pm

    I really enjoy the dissociation between the “Bludging Beneficiary” and the “Avoiding Tax Payer” narratives.Both claim charcacters money from the state that they aren’t entitled to, but only the Beneficiary is greeted with howls of outrage. The Avoider is treated as merely a gamer of the system and people propose massive tax cuts to validate their tax avoidance.

    The fact that people game the system doesn’t necessarily mean that the system is unfair and that rates need reform – a rational response to the big Aussie banks tax scam isn’t to lower company tax to 6% because these big corporates tried to escape their obligations. By the tax working groups logic a top personal rate of 45% (the same as Australia) doesn’t work as it is above the company rate – this simply doesn’t make sense.

    The issue is enforcement and disincentive.

  11. Greg 11
    20 January 2010 at 4:53 pm

    “People on lower incomes spend a higher portion of their incomes and pay GST when they do.”

    When will this myth go away? Income, by definition must be spent. Savings is just deffered spending. GST is not a regressive tax. Its a flat tax, it hits all income groups equally.

    • TightyRighty 11.1
      20 January 2010 at 4:59 pm

      well put. explains succintly why consumption taxes encourage saving.

    • logie97 11.2
      21 January 2010 at 8:27 am

      Greg it’s no myth. Perhaps you could explain
      the analysis on my 12:03 comment. “Fairness of GST.”
      Burt has gone strangely quiet.

      • Greg 11.2.1
        21 January 2010 at 11:04 am

        I read your post at 12.03. From what I see your suggesting that we shouldn’t raise GST because the rich will just go and avoid it? While those on lower incomes won’t.

        Well this is exactly what the TWG had a problem with, but for the most part tax avoidance occurs on income tax. Fair enough? Which is why they talk about broadening the tax base by increasing GST. No tax system is perfect but if you increase GST and lower marginal tax rates less tax avoidance will occur on income tax and the asssumption is this will not lead to a corosponding rise in GST avoidance because its harder to avoid.

        When GST was introduced it was supposed to be ‘revenue neutral’ , it just funded a cut on income tax. But revenue actually increased because of decreased tax avoidance. If you broaden the tax base fewer rich pricks can use their accountants to avoid it.

  12. vto 12
    20 January 2010 at 4:56 pm

    I always liked the left idea re nationalising industries. The govt could simply buy back Telecom, the railways, um maybe Foodstuffs, Fletcher Building, etc – you know, all those essential industries. And then keep the profits here in the govts hands.

    That way the govt could get its revenue from operating these businesses and reduce all taxation to zero.

    This was Jim Anderton’s brainwave.

    [lprent: Huh? What are you trying to do here – some weird diversion? ]

    • The Baron 12.1
      20 January 2010 at 5:07 pm

      Wow, WAY off topic, no?

      The problem was always that you start with “nationalising the profits”… then next you move onto “lets give people more jobs”… then next is “lets subsidise products”… and before you know it, you have a massive bloated mess that is costing millions in tax, and delivering very little – AKA railways pre-1987.

      Jim, and perhaps you too, thinks that is utopia. I think that it is so goddamn wasteful that it makes me weep. Different values I guess.

      • vto 12.1.1
        20 January 2010 at 5:37 pm

        I was being sarcastic and trying to expose some left lunacy..

        • Clarke 12.1.1.1
          20 January 2010 at 7:43 pm

          The last time this was tried it was done under a bloke from the National Party called Muldoon. And you’re right – it was a complete disaster.

        • Descendant Of Smith 12.1.1.2
          20 January 2010 at 8:03 pm

          Though isn’t it lunacy in this country to think that the Railways could run at a profit.

          There are some aspects to NZ that make this extremely difficult. These include a small population, a long narrow country, a large amount of coastline and exposure to salt, extremes of temperature, soft soils with plenty of rainfall and lots of earthquakes.

          Comparing directly to trucking is a nonsense as trucks don’t have to pay for the total cost of the roading system they travel on for instance – just imagine if they had to build and maintain their own roads – how profitable would they be then. Rail of course has to do this.

          It’s not like we can set up a central hub and branch out in all directions for hundreds of miles like you can in Texas, or use rail as a means for trans-country distribution.

          Not everything needs to exist on a profit basis. Actually there are lots of things we fund on a non-profit basis – parliament, the justice system, the fire service.

          There are plenty of other good reasons for having a rail system once you get past the notion it has to exist only if it makes a profit and that in NZ this is pretty near impossible.

          I for one would happily pay some of my tax to maintain and subsidise a rail system and have a reduction in trucks, in particular, on the road.

          Whether the social and economic outcomes outweigh the cost to the tax payers is the issue. Certainly the social aspects will be greater over the next 30 years as the population ages and the demand for public transport increases.

          Maybe the alternative is to have no rail at all.

          • Sam 12.1.1.2.1
            20 January 2010 at 10:25 pm

            Well fucking said.

          • ben 12.1.1.2.2
            21 January 2010 at 10:11 am

            DoS: Dave Heatley at ISCR recently found that road user charges on all traffic on roads raises about the amount of money required to pay for the roads. Now I don’t know whether trucks pay their fair share against cars or not (how long is a piece of string) but bottom line: in totality road users do pay for the cost of the roads they use, and the much greater demand for roading is not the product of a subsidy. In 1999, Lew Evans researched whether rail subsidies matter and also concluded no. This suggests road’s advantage is a product of its superior utility.

            • Armchair Critic 12.1.1.2.2.1
              21 January 2010 at 12:17 pm

              “I don’t know whether trucks pay their fair share against cars or not”
              I do know. They don’t pay their fair share. The cost of transporting goods by road is subsidised, to well beyond the point of being fair.
              This provides a significant advantage to road transport over rail transport and other alternatives such as coastal shipping. The subsidy distorts the market.

  13. Policy Parrot 13
    20 January 2010 at 4:58 pm

    “People on lower incomes spend a higher portion of their incomes and pay GST when they do.’

    Dude, seriously, are you a complete muppet?

    GST affects those on a lower income more it is assumed because these people generally spend more of their income on economic necessities (i.e. providing the basics of life), whereas those with more disposable income spend more on luxuries as they have more income spare. Economic necessities are hardly a rational choice, whereas as luxuries are.

    Get it?

    • TightyRighty 13.1
      20 January 2010 at 5:03 pm

      Maybe higher gst will encourage less buying of luxuries, then less imports, then a better BOT. I read that the report also suggests recompense to low earners for higher gst. though maybe i imagined it.

      on the subject of economic neccessities, is sky tv an economic neccessity?

      • Sam 13.1.1
        20 January 2010 at 10:27 pm

        Because you see heaps of satellites on roofs when you drive through GI, right?

        Idiot.

        • Graham 13.1.1.1
          21 January 2010 at 7:52 am

          Don’t know about GI, but in fact yeah I do see loads of Sky dishes on roofs when I drive through (just to name two places I’m relatively familiar with) Clendon and Moerewa.

          • Marty G 13.1.1.1.1
            21 January 2010 at 8:10 am

            well, as long as they’ve got Sky I guess it’s OK to increase their tax burden so that the CEO of Telecom can pay $400,000 less tax a year.

            • Uroskin 13.1.1.1.1.1
              21 January 2010 at 2:42 pm

              A satellite dish does not indicate a Sky subscription. Freeview via satellite is what it says.

              • felix …
                21 January 2010 at 2:57 pm

                Furthermore the dishes supplied by sky are almost never removed when not in use.

                The presence of a dish can therefore only indicate that someone has had some sort of satellite tv service at that address at some time between 1990 and now.

  14. J Mex 14
    20 January 2010 at 5:03 pm

    What I am tired of is that in these discussions, you never hear people talk about “optimal tax rates”.

    They merely argue from the current position. If the top tax rate was 99c in the dollar, it would be grossly inefficient and would be harming the country. If National wanted to move the tax rates from 99c to 80c, there would be howls of outrage “Aaaaaarghh! tax breaks from the rich!”

    It’s a stupid discussion. Tax rates should be based on incentives and optimization, otherwise it’s just politics and is based on where we are today. There is nothing optimal about the rates we have now.

    An interesting discussion would be for people to outline their personal preferred tax structure. Not argue over the relative merits of moving the arbitrary one we have now.

  15. The Baron 15
    20 January 2010 at 5:03 pm

    Sigh, same old same old at the standard.

    Leftie trolls versus rightie trolls – the former think that no tax is ever enough, and the latter the opposite. Both roll out amateur arguments, both fail to back them up, both demanding proof from each other, both offering lame personal anecdotes as evidence. Here’s a bet – none of you have actually read the report. I hope I am proven wrong.

    FFS, this is probably one of the most balanced reports you could ask for – particularly considering that it is from a right wing government. The net net – something has to change, cos the current system is “unsustainable”; and if we have to change it, we will make those changes as fair as possible.

    So, what is the issue here again? Ooooh, only the classic ideologies that I outlined above. You commenters are so predictable its boring.

  16. ben 16
    20 January 2010 at 5:18 pm

    Haven’t read your post, but in short: tax cuts for rich = how boringly predictable of The Standard.

    The Baron: spot on.

  17. Sanctuary 17
    20 January 2010 at 5:29 pm

    So let me see. We are going to use a land tax to force retired farmers off their land and make people now on fixed incomes sell their nice homes, so the CEO of Telecom can have a huge tax cut.

    Seems fair to me, and entirely consistent with National Party philosophy.

  18. bobo 18
    20 January 2010 at 6:32 pm

    Just seeing Bill English saying “he was shocked to discover only half the top earners pay the top tax rate” with a smug smirk .. then he goes on to suggest some kind of rort is going on with working for families. Anyone else dry reaching watching Mr Double Dipton with the adoring media?

    The tax group says they want to encourage savings and investment when this government has undermined the kiwisaver scheme making it less attractive.

  19. mike appleby 19
    20 January 2010 at 6:58 pm

    that first post from ‘Monty’ was…unbelievable. The ignorance behind this view still shocks me. As if anyone earning under $40K is just lazy..or doesn’t ‘work hard’ …as if we could all just ‘work harder’ and there’d be no one on low incomes. How would society work without …to pick a few examples: retail sales staff…bus drivers..petrol attendants…bank tellers….clerical staff….teachers…..cafe workers…

    [lprent: Haven’t seen it – but yep – thats monty. Scourge of anyone who isn’t him. ]

    • Descendant Of Smith 19.1
      20 January 2010 at 7:12 pm

      From productivity gains in the management sector. In their spare time they will be behind the counter, drive the buses, serve the public.

      I pleased they are offering to work harder as well.

  20. Adrian 20
    20 January 2010 at 7:46 pm

    If I’m not mistaken the point being missed here is that someone on 70k or100+k is paying the same tax on their first 20k or 40k or whatever as the poor bloody grafter getting ONLY 20 or 40k. That’s the iniquity.

  21. RedLogix 21
    20 January 2010 at 7:54 pm

    Be absolutely clear. This report is recommending very large tax cuts for the wealthy, and for them to be paid for by increased taxes from the rest of us.

    Effectively the tax system has been subsidising rents for several decades now. Removing them will cause rents to rise. Most landlords will raise rents 15-25% immediately… and tenants will either have to pay them or resort to overcrowding. Tenants are typically lower income people, many of whom already struggle with overpriced substandard accomodation.

    Increasing GST impacts lower income people disproportionately because almost all of their income (other than rent) is spent on goods and services, whereas the wealthy tend to invest, save or reduce debt with a large portion of theirs.

    Removing WFF will hit families and children the hardest. These are people with the highest fixed costs, and most are on very ordinary incomes in the 30-50k range.

    Progressive taxation systems are a feature of decent democratic countries everywhere; what this this Working Group is proposing will move NZ very much in the opposite direction.

    • notopinkopropertyinvestors 21.1
      20 January 2010 at 9:29 pm

      Effectively the tax system has been subsidising property investors for several decades.

      There fixed that for you

      • RedLogix 21.1.1
        20 January 2010 at 11:16 pm

        Idiot. Most properties these days run at a cash flow loss, ie the rent income does not cover the mortgage, rates, insurance and maintenance costs. In other words the landlord is putting cash into the business in order to provide a home for the tenant.

        It is only because depreciation and mortgage interests costs can be used as tax losses (as they can with any other business) against other income streams … is the reason why rents in this country are so cheap compared to the value of the house. Historically the usual benchmark for annual rental income was about 10% of the value of the house; these days it is often 3-5%. Often tenants are paying 50-60% of the cash they would if they owned the property themselves.

        Get rid of depreciation and rents will have to rise.

        • SPC 21.1.1.1
          20 January 2010 at 11:58 pm

          And that is with accommodation allowances being available to reduce the cost of rent even lower to the tenant.

          So people can live in a house and provide cheap labour to employers, but still never be able to afford to own their own home.

          • SPC 21.1.1.1.1
            21 January 2010 at 12:01 am

            In the old days low wage employers provided the cheap housing as well, now via subsidy to landlords and their tenants, we have the modern way.

            And the biggest business in Enzed is providing housing for the cheapest local labour in the OECD.

    • burt 21.2
      20 January 2010 at 9:38 pm

      Be absolutely clear. This report is recommending very large tax cuts for the wealthy on income tax, and for them to be paid for by increased taxes from the rest of us on other proxies.

      Come on Redlogix, the tax paid by the wealthy will still be way more then their share of the costs of the social services they consume.

      I fully understand that lefties want all rich pricks chopped down so hard they leave the country but you will notice that mobility of the high earners is a concern noted in the report. Additionally you will notice that the avoidance of tax (not only among the wealthy) is also a big driver in simplifying and broadening the base.

      • RedLogix 21.2.1
        20 January 2010 at 11:20 pm

        Yes burt, but those other proxies are of course… paid for by the rest of us. In other words a net transfer of wealth from the poor to the rich.

        Which is morally just fine in your world.

  22. burt 22
    20 January 2010 at 9:20 pm

    I can understand why the people who supported the polices that caused a domestic recession ahead of the global crisis don’t like this. Working people are going to end up with more in their hands than beneficiaries.

    How the hell is Labour ever going to get elected again if tax policies are put in place that limit the ability of the govt to pick the winners and the losers with random lolly scramble polices a few weeks out from tightly contested elections?

  23. Descendant Of Smith 23
    20 January 2010 at 9:48 pm

    Given the swing was only something like 5% it might be that these tax policies get National unelected again as the workers feel the bite of the shift in the tax burden to them.

    There’s always unintended consequences as well as the intended ones. Something Labour forgot also with some of their policies.

    Certainly there are already quite a few disgruntled people who voted National and are feeling ( and are actually) worse off. I’ve haven’t come across anyone yet who voted Labour who now wishes they voted National.

    It will be interesting over the next year or so how this all pans out. I won’t be trying to predict the outcome for one.

    • Pascal's bookie 23.1
      20 January 2010 at 9:52 pm

      That 50+ dollars a week for the average wage earner doesn’t seem to be in the report. That was the tax policy I remember National running on.

  24. firsttimer 24
    20 January 2010 at 10:02 pm

    Seems the author is a bit removed from the real world, do you work outside of the union?

    • Descendant Of Smith 24.1
      20 January 2010 at 10:14 pm

      Actually I have nothing to do with unions – though I was a union delagate over 10 years ago.

      I do mix with a lot of people though of all ages and am only reflecting what they have said. Some are parttime workers who now pay more tax and other have either lost their jobs or have family members do so.

      Now you and I know that National didn’t cause them to lose their jobs but they do feel that little was done to help them retain it. Some are older people pissed off that National put their effort into youth and forgot about them.

      No doubt you mix with people who have other thoughts and views. Lots of people I know are quite happy with having voted national and quite happy with their performance.

      I think I probably do live in the real world. It’s made up of a mix of viewpoints and opinion.

  25. burt 25
    20 January 2010 at 10:20 pm

    I think the policies of envy are making some people a bit myopic, either that or they simply didn’t read the report. Given the report has substantial notes about tax thresholds and avoidance of tax by people who can arrange their tax affairs it is entirely perceivable that the genuinely wealthy will end up paying a lot more tax if the recommendations to broaden the tax base are adopted.

    For example, a mega rich prick paying income tax on $70K and owning considerable property property assets in a trust. What effect will the recommendations in this report have for this person compared to a minimum wage worker who rents ?

    It is obvious that low earners cannot fund tax cuts for the rich, low income earners are not even paying their own share of social services – to suggest the poor will fund tax cuts for the rich is just head in sand la-la-land policies of envy ranting.

    [the person on $70K gets a $660 a year tax cut and passes on the property tax changes to the minimum wage person who has no where else to go, and who is not paying 2.5% more tax on their food. Of course, the real money comes in for the truely wealthy – if your income is a million dollars, your tax cut is $75,000, all paid for by higher rents and higher GST. Not envious at all, just don’t want a change that will make an unequal society even more so]

    • burt 25.1
      20 January 2010 at 10:30 pm

      Please explain how the property tax changes for the holiday home(s) are passed on.

    • burt 25.2
      20 January 2010 at 11:59 pm

      whoever that was;

      The tax report also notes under (point 11, page 11)

      Most members of the Group consider that increasing the GST rate to 15% would have merit on effi ciency grounds because it would result in reducing the taxation bias against saving and investment. However, any increase in the GST rate would need to be accompanied by compensation to those on lower Incomes. This would signifi cantly reduce the net revenue raised from a higher GST.

      If the assumption is made that people on benefits and minimum wage spend all their income then the adjustment for GST is simple. Increase net income (the legally protected minimums) by 2.5%. With GST it most certainly is essential that adjustments are made for the regressive effect of the taxation, I have never heard any party argue with that.

    • burt 25.3
      21 January 2010 at 12:06 am

      There is also a note about effects on rent on page 16;

      Additional taxes on rental housing to some extent may lead to increases in rents and so, in part, fall on tenants. As a result, our discussions on the incidence and distributional effects of taxes need to be treated with a good degree of caution because of the uncertainties concerning the extent of tax shifting.

      • RedLogix 25.3.1
        21 January 2010 at 12:19 am

        Their uncertainty demonstrates how little they understand the business they are fiddling with. Most landlords (not all but most) have little to no positive cash flow in their business at present; therefore most of them will attempt to pass an effective increase in costs straight onto their customers…who in most cases will have little recourse but to either pay, go back to living with parents, or overcrowd. None of these are especially stable arrangements, and over time the demand for rental property has been either stable or slowly increasing. Affordability for first time buyers is still not that flash.

        The minority of landlords who have enough cash flow to not be under this pressure to raise rents immediately, will find their tenants reluctant to move to higher priced properties… and they cannot rent the same place twice. And in the longer run they will simply raise rents to match new market rentals and take the windfall.

  26. SPC 26
    20 January 2010 at 10:30 pm

    A simple question, what countries in the OECD have the top rate of income tax and the company tax rate at the same levels?

    If it’s such a good idea and necessary for fairness, would it not be adopted near universally amongst the OECD?

  27. logie97 27
    21 January 2010 at 12:03 am

    On the fairness of GST.

    15 percent on 1000 dollars = 150 dollars
    15 percent on 1500 dollars = 225 dollars

    The average and lower income families pay 75 dollars more for the same item that the top earner buys.

    You see the executive doesn’t pay retail for his larger capital items – he buys at warehouse price, usually off one of his mates. (That’s if he buys it for himself in the first place. He is likely to buy through his business and therefore claim the GST back anyway.)

    • burt 27.1
      21 January 2010 at 12:09 am

      The average and lower income families are also not going to get slapped with a $5,000 bill every year for their $1m holiday home. Read the report with both eye’s open, think about the statements about making the base broader and the rates lower.

      • logie97 27.1.1
        21 January 2010 at 12:15 am

        Burt – I don’t see much in your comment regarding fairness of GST as a revenue gatherer

      • felix 27.1.2
        21 January 2010 at 12:24 am

        They also won’t be paying extra gst on fuel for their private jets burt.

        The poor really don’t know when they’ve got it good eh?

  28. Policy Parrot 28
    21 January 2010 at 12:16 am

    “A simple question, what countries in the OECD have the top rate of income tax and the company tax rate at the same levels?

    If it’s such a good idea and necessary for fairness, would it not be adopted near universally amongst the OECD?”

    It is relatively important that all sources of income are taxed in the same manner, if possible, otherwise this leads to decisions not made on an economic basis but on a tax-preferred basis. The idea of horizontal equity is a good one. However, it is not an altar for all social spending to be sacrificed upon.

    There is no reason why the rates, trustee, corporate, and top personal rates could not be set at 33% or even higher if necessary. This would be fairer than 38%, because it is usually the most wealthy who would also bear the highest burden of any land tax.

    Unequal tax rates do allow opportunities for less scrupulous individuals on upper income levels to attempt to get around them.

    However, whilst horizontal equity is a good thing, vertical equity is not. Progressive income tax is part of the price of living in a stable, democratic, and developed country. The benefits are that individuals who would otherwise not contribute much to GDP can in fact, do so.

    • SPC 28.1
      21 January 2010 at 5:42 pm

      I have no objection to a higher company and trust tax rate – say 36%.

      But this would have to entail, depreciation write-off for equipment and plant, 25% R and D tax incentives and the full range of assistance to maintaining after-tax profits for operating businesses.

  29. RedBack 29
    21 January 2010 at 2:16 am

    When Labour in the UK introduced the 50p income tax rate on all top earners those affected threw the usual childish wobblies and threatended to take their business elsewhere. The response from the govt was “Ok. If you can find that mythical OECD country in which to make your money that hasn’t been hit by the recession be our guest”. Funny that not many of them packed up and left.

    Burt – A bit of economics 101 – A progressive income tax is the most fair way of ensuring that those at the top of the socio-economic ladder are not enjoying more of society off the back of those struggling at the the sharp end. If you are lucky enough to be in the position to afford a second home worth $1m then well done. But how does that exclude you from paying your proportional fair share back into that same society that helped you get to that affluent position in the first place? Unless you never went to school or ever used a hospital or driven your car on a state road. Answers on a postcard please.

    • ben 29.1
      21 January 2010 at 6:28 pm

      Oh you are good, Redback

      Burt A bit of economics 101 A progressive income tax is the most fair way

      The one thing economics is not about is fairness. Fairness is a value judgement that economists have no particular expertise in. You won’t find an economics course on fairness.

      You not knowing this basic idea tells me you probably don’t know much about what economists do have to say.

      And if the wealthy only had to pay a proportional share of their income in tax, they should be so lucky. Fact is they pay many times in tax than proportional once ggovernment transfers are accounted for.

      • Pascal's bookie 29.1.1
        21 January 2010 at 6:32 pm

        I’ve heard a lot of “fairness” talk from this tax group ben. They’ve not defined what exactly they mean by it though, probably that expertise thing you mention 😉

        Rawls would be one place for them to start I guess. Wonder if he was on the reading list.

  30. burt 30
    21 January 2010 at 9:44 am

    logie97

    I did address the GST thing above.
    see;
    http://www.thestandard.org.nz/tax-reform-tax-cuts-for-rich-paid-for-by-poor/#comment-185123

    also this is interesting in the context of this post;
    ——————————————————————————
    Tax Cuts Explained

    from David R. Kamerschen, Ph.D. Professor of Economics 536 Brooks Hall University of Georgia

    [Spread this stupid story if you wish Burt, but don’t spread the misinformation that it was written by Prof Kamerschen, he denies it on his web site: http://davidk.myweb.uga.edu/ — r0b]

    Let’s put tax cuts in terms that everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

    ? The first four men (the poorest) would pay nothing.
    ? The fifth would pay $1.
    ? The sixth would pay $3.
    ? The seventh $7.
    ? The eighth $12.
    ? The ninth $18.
    ? The tenth man (the richest) would pay $59.

    So, that’s what they decided to do.

    The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

    “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.”

    Now, the dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes.

    So, the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his ‘fair share’?

    The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being ‘PAID’ to eat their meal. So, the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

    And so:
    ? The fifth man, like the first four, now paid nothing (100% savings).
    ? The sixth now paid $2 instead of $3 (33% savings).
    ? The seventh now paid $5 instead of $7 (29% savings).
    ? The eighth now paid $9 instead of $12 (25% savings).
    ? The ninth now paid $14 instead of $18 (22% savings)
    ? The tenth now paid $50 instead of $59 (15% savings).

    Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.

    “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man “but he got $9!”

    “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got nine times more than me!”

    “That’s true!!” shouted the seventh man. “Why should he get $9 back when I got only $2? The wealthy get all the breaks!”

    “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

    The nine men surrounded the tenth and beat him up.

    The next night the tenth man didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

    And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are other places offshore with nice restaurants and good business opportunities

    • snoozer 30.1
      21 January 2010 at 10:08 am

      burt. that dumb old story again? Is that the best you can come up with?

      That might fly on Kiwiblog, but here you’re a laughingstock.

      Did you ever consider why the one man has a lot more money than the others? Did you ever consider that he probably can’t just take his money and go?
      Did you ever consider the social impacts of making those with the least turn more of their income over to pay the bill?

    • logie97 30.2
      21 January 2010 at 10:38 am

      Burt – you don’t deny the rorts then? Because you know it goes on. And here is another aspect. Those same rorters will do something else. They will offer to do things for cash. And another incentive for creative accounting. GST is an unfair tax.

    • felix 30.3
      21 January 2010 at 11:05 am

      Of course in real life the tenth man owns the restaurant and is still making a tidy profit however you carve up the bill.

      He also writes off the meals as business lunches and claims back the gst.

    • Draco T Bastard 30.4
      21 January 2010 at 11:16 am

      The fact that you believe that load of codswallop proves your delusion burt. It’s got so many logic holes it’s not funny.

  31. burt 31
    21 January 2010 at 10:06 am

    RedBack

    Burt A bit of economics 101 A progressive income tax is the most fair way of ensuring that those at the top of the socio-economic ladder are not enjoying more of society off the back of those struggling at the the sharp end. If you are lucky enough to be in the position to afford a second home worth $1m then well done. But how does that exclude you from paying your proportional fair share back into that same society that helped you get to that affluent position in the first place? Unless you never went to school or ever used a hospital or driven your car on a state road. Answers on a postcard please.

    You missed my point, I don’t have any issues with people who own $1m properties paying tax on that “wealth’. According to IRD 50% of the 100 richest people in NZ don’t pay the top income tax rate. The entire premise of progressive taxation is being undermined by the structures these people can use. If these people still pay 10x more tax than the average person then the fact a tax cut might give them a bigger tax reduction than some people earn is not relevant, they still pay 10x the average amount of tax.
    But the problem is they are not doing this so before we cry that the tax cut they might get is more than some earn, we need to read the document and see that they might also get slugged with new taxes that they cannot avoid by tricky accounting structures.

  32. Seti 32
    21 January 2010 at 10:37 am

    “The top 10 per cent of income earners now pay 44 per cent of all personal income tax, the working group has found.

    The group says the burden on high income earners is even higher once those on Working for Families, New Zealand Superannuation and other benefits are included. Under that scenario, the top 10 per cent of taxpayers shoulder 76 per cent of the tax burden.

    It said that the effect of Working for Families, which distributes state-funded benefits to families with children, was that many who received it effectively paid no income tax at all. ”

    Surely that cannot be correct. The top 10% pay more than three quarters of all income tax?

    • ben 32.1
      21 January 2010 at 6:24 pm

      I have no seen figures for New Zealand, but in the US the bottom 50% of income earners pay no net tax after myriad government assistance is accounted for. The New Zealand story is probably not much different with WFF so the 76% sounds right.

  33. burt 33
    21 January 2010 at 11:51 am

    Draco

    The fact that you believe that load of codswallop proves your delusion burt. It’s got so many logic holes it’s not funny.

    Without making up stories about the rich guy owning the restaurant, please list the logic holes in that. I’m waiting.

  34. Rich 34
    21 January 2010 at 12:52 pm

    I think this policy is win-win, really.

    If the Nats put up GST, they’ll be hugely unpopular with the grumpy vote.

    If they introduce taxes on property speculation, those taxes can be maintained by a future progressive government, which could then cut GST and reinstate higher rate income taxes. And might even be on a roll to introduce inheritance tax.

  35. Jon 35
    15 February 2010 at 5:58 pm

    Suppose that every day, ten men go out for beer and they order 10 glasses of beer (or 120 ounces of beer). If they split up the beer the way that wealth is distributed in the U.S.A, it would go something like this:

    The first five men (the poorest) would get a sip of beer each or 0.672 ounces.
    The next four men would get a small glass of beer each or 8.22 ounces.
    The tenth man (the richest) would get 7 glasses of beer or 83.76 ounces.

    The ten men went to the bar every day and the tenth man seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Inflationary pressures are rising,” he said, “I’m going to reduce the amount of your daily beer by 20 ounces. You will now receive 10 glasses of 10-ounces each, or 100 ounces total.”
    The group still wanted to split up the beer the way that wealth is distributed in the U.S.A. How could they divide the loss of 20 ounces of beer so that everyone would lose his ‘fair share?’ They realized that 20 ounces divided by ten is 2 ounces.
    But if they subtracted that from everybody’s share, then the first five men would have to pay the bartender 1.328 ounces of beer each. So, they decided to only take 0.672 ounces of beer from each of the first 5 men and take the remaining 16.64 ounces from the remaining 5 men.

    Each of the first five men would give up the sip of beer (0.672 ounces) that they received (a loss of 100%).
    Each of the sixth, seventh, eighth, and ninth men would give up 1.17 ounces each (a loss of 14.2%).
    The tenth man would give up 11.95 ounces of beer (or a loss of 14.2%).

    The result:

    Each of the first five men would receive no beer.
    Each of the next four men would receive 7.05 ounces.
    The tenth man would receive 71.81 ounces of beer.

    Each of the first five was worse off than before, having lost all of their beer. The next 4 were worse off, since they no longer received a full 8-ounce glass of beer. The tenth man still received 71.81 ounces (~ a six-pack), and was still happy.
    But once outside the restaurant, the men began to compare their losses.
    The first five men said, “We lost a sip of beer each. We don’t get beer any more.”
    “Well, we lost more than a quarter of our beer” said the next four men “It’s unfair that you only lost a sip of beer. We lost twice as much as each of you did.”
    “Wait a minute!” yelled the tenth man. “I gave up a whole glass of beer! I gave up more than all of you combined!!! The poor get all the breaks! First, they get free beer, and then they complain when they lose their free beer! The middle class are always whining about everything because they’re too dumb to get as much beer as I do.”
    The tenth man called security, and the first 5 men were told to leave the premises, since they could not afford to pay for any beer.
    The next 4 men stood silently watching, not wanting to risk the loss of any of their remaining beer.
    The tenth man got into his chaufferred limo and went home.
    The next night the first five men didn’t show up for drinks, so the remaining five sat down to have beers without them. But, they discovered something important.

    The first five men didn’t show up to:

    * harvest the grain and hopps to make the beer
    * drive the trucks to bring the beer to the bar
    * clean the beer glasses and sweep the floor of the bar
    * serve the beer
    * and, most importantly, work as the security guards to protect the tenth man and his beer

    And that, boys and girls, journalists and college professors, wingnuts and supply-siders, big-c and little-c conservatives, is how wealth is distributed in the U.S.A. The people who have the most money get the most beer. Take too much “beer” from the poorest people, belittle them for being poor, and they just may not show up anymore to make and serve your beer.

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    This is a re-post from Andrew Dessler at the Climate Brink blog In 2023, the Earth reached temperature levels unprecedented in modern times. Given that, it’s reasonable to ask: What’s going on? There’s been lots of discussions by scientists about whether this is just the normal progression of global warming or if something ...
    Skeptical Science
    2 days ago

  • Backbone, revisited
    The schools are on holiday and the sun is shining in the seaside village and all day long I have been seeing bunches of bikes; Mums, Dads, teens and toddlers chattering, laughing, happy, having a bloody great time together. Cheers, AT, for the bits of lane you’ve added lately around the ...
    More Than A FeildingBy David Slack
    3 days ago

  • Ministers are not above the law
    Today in our National-led authoritarian nightmare: Shane Jones thinks Ministers should be above the law: New Zealand First MP Shane Jones is accusing the Waitangi Tribunal of over-stepping its mandate by subpoenaing a minister for its urgent hearing on the Oranga Tamariki claim. The tribunal is looking into the ...
    No Right TurnBy Idiot/Savant
    3 days ago

  • What’s the outfit you can hear going down the gurgler? Probably it’s David Parker’s Oceans Sec...
    Buzz from the Beehive Point  of Order first heard of the Oceans Secretariat in June 2021, when David Parker (remember him?) announced a multi-agency approach to protecting New Zealand’s marine ecosystems and fisheries. Parker (holding the Environment, and Oceans and Fisheries portfolios) broke the news at the annual Forest & ...
    Point of OrderBy Bob Edlin
    3 days ago

  • Will politicians let democracy die in the darkness?
    Bryce Edwards writes  – Politicians across the political spectrum are implicated in the New Zealand media’s failing health. Either through neglect or incompetent interventions, successive governments have failed to regulate, foster, and allow a healthy Fourth Estate that can adequately hold politicians and the powerful to account. ...
    Point of OrderBy poonzteam5443
    3 days ago

  • Matt Doocey doubles down on trans “healthcare”
    Citizen Science writes –  Last week saw two significant developments in the debate over the treatment of trans-identifying children and young people – the release in Britain of the final report of Dr Hilary Cass’s review into gender healthcare, and here in New Zealand, the news that the ...
    Point of OrderBy poonzteam5443
    3 days ago

  • A TikTok Prime Minister.
    One night while sleeping in my bed I had a beautiful dreamThat all the people of the world got together on the same wavelengthAnd began helping one anotherNow in this dream, universal love was the theme of the dayPeace and understanding and it happened this wayAfter such an eventful day ...
    Nick’s KōreroBy Nick Rockel
    3 days ago

  • Texas Lessons
    This is a guest post by Oscar Simms who is a housing activist, volunteer for the Coalition for More Homes, and was the Labour Party candidate for Auckland Central at the last election. ...
    Greater AucklandBy Guest Post
    3 days ago

  • Bernard's pick 'n' mix of the news links at 6:06 am
    The top six news links I’ve seen elsewhere in the last 24 hours as of 6:06 am on Wednesday, April 17 are:Must read: Secrecy shrouds which projects might be fast-tracked RNZ Farah HancockScoop: Revealed: Luxon has seven staffers working on social media content - partly paid for by taxpayer Newshub ...
    The KakaBy Bernard Hickey
    3 days ago

  • Fighting poverty on the holiday highway
    Turning what Labour called the “holiday highway” into a four-lane expressway from Auckland to Whangarei could bring at least an economic benefit of nearly two billion a year for Northland each year. And it could help bring an end to poverty in one of New Zealand’s most deprived regions. The ...
    PolitikBy Richard Harman
    3 days ago

  • Bernard's six-stack of substacks at 6:26 pm
    Tonight’s six-stack includes: launching his substack with a bunch of his previous documentaries, including this 1992 interview with Dame Whina Cooper. and here crew give climate activists plenty to do, including this call to submit against the Fast Track Approvals bill. writes brilliantly here on his substack ...
    The KakaBy Bernard Hickey
    4 days ago

  • At a glance – Is the science settled?
    On February 14, 2023 we announced our Rebuttal Update Project. This included an ask for feedback about the added "At a glance" section in the updated basic rebuttal versions. This weekly blog post series highlights this new section of one of the updated basic rebuttal versions and serves as a ...
    Skeptical Science
    4 days ago

  • Apposite Quotations.
    How Long Is Long Enough? Gaza under Israeli bombardment, July 2014. This posting is exclusive to Bowalley Road. ...
    Bowalley Road
    4 days ago

  • What’s a life worth now?
    You're in the mall when you hear it: some kind of popping sound in the distance, kids with fireworks, maybe. But then a moment of eerie stillness is followed by more of the fireworks sound and there’s also screaming and shrieking and now here come people running for their lives.Does ...
    More Than A FeildingBy David Slack
    4 days ago

  • Howling at the Moon
    Karl du Fresne writes –  There’s a crisis in the news media and the media are blaming it on everyone except themselves. Culpability is being deflected elsewhere – mainly to the hapless Minister of Communications, Melissa Lee, and the big social media platforms that are accused of hoovering ...
    Point of OrderBy poonzteam5443
    4 days ago

  • Newshub is Dead.
    I don’t normally send out two newsletters in a day but I figured I’d say something about… the news. If two newsletters is a bit much then maybe just skip one, I don’t want to overload people. Alternatively if you’d be interested in sometimes receiving multiple, smaller updates from me, ...
    Nick’s KōreroBy Nick Rockel
    4 days ago

  • Seymour is chuffed about cutting early-learning red tape – but we hear, too, that Jones has loose...
    Buzz from the Beehive David Seymour and Winston Peters today signalled that at least two ministers of the Crown might be in Wellington today. Seymour (as Associate Minister of Education) announced the removal of more red tape, this time to make it easier for new early learning services to be ...
    Point of OrderBy Bob Edlin
    4 days ago

  • Bryce Edwards: Will politicians let democracy die in the darkness?
    Politicians across the political spectrum are implicated in the New Zealand media’s failing health. Either through neglect or incompetent interventions, successive governments have failed to regulate, foster, and allow a healthy Fourth Estate that can adequately hold politicians and the powerful to account. Our political system is suffering from the ...
    Democracy ProjectBy bryce.edwards
    4 days ago

  • Was Hawkesby entirely wrong?
    David Farrar  writes –  The Broadcasting Standards Authority ruled: Comments by radio host Kate Hawkesby suggesting Māori and Pacific patients were being prioritised for surgery due to their ethnicity were misleading and discriminatory, the Broadcasting Standards Authority has found. It is a fact such patients are prioritised. ...
    Point of OrderBy poonzteam5443
    4 days ago

  • PRC shadow looms as the Solomons head for election
    PRC and its proxies in Solomons have been preparing for these elections for a long time. A lot of money, effort and intelligence have gone into ensuring an outcome that won’t compromise Beijing’s plans. Cleo Paskall writes – On April 17th the Solomon Islands, a country of ...
    Point of OrderBy poonzteam5443
    4 days ago

  • Climate Change: Criminal ecocide
    We are in the middle of a climate crisis. Last year was (again) the hottest year on record. NOAA has just announced another global coral bleaching event. Floods are threatening UK food security. So naturally, Shane Jones wants to make it easier to mine coal: Resources Minister Shane Jones ...
    No Right TurnBy Idiot/Savant
    4 days ago

  • Is saving one minute of a politician's time worth nearly $1 billion?
    Is speeding up the trip to and from Wellington airport by 12 minutes worth spending up more than $10 billion? Photo: Lynn Grieveson / The KākāTL;DR: The six news items that stood out to me in the last day to 8:26 am today are:The Lead: Transport Minister Simeon Brown announced ...
    The KakaBy Bernard Hickey
    4 days ago

  • Long Tunnel or Long Con?
    Yesterday it was revealed that Transport Minister had asked Waka Kotahi to look at the options for a long tunnel through Wellington. State Highway 1 (SH1) through Wellington City is heavily congested at peak times and while planning continues on the duplicate Mt Victoria Tunnel and Basin Reserve project, the ...
    Greater AucklandBy Matt L
    4 days ago

  • Smoke And Mirrors.
    You're a fraud, and you know itBut it's too good to throw it all awayAnyone would do the sameYou've got 'em goingAnd you're careful not to show itSometimes you even fool yourself a bitIt's like magicBut it's always been a smoke and mirrors gameAnyone would do the sameForty six billion ...
    Nick’s KōreroBy Nick Rockel
    4 days ago

  • $41m to support clean energy in South East Asia
    New Zealand is demonstrating its commitment to reducing global greenhouse emissions, and supporting clean energy transition in South East Asia, through a contribution of NZ$41 million (US$25 million) in climate finance to the Asian Development Bank (ADB)-led Energy Transition Mechanism (ETM). Prime Minister Christopher Luxon and Climate Change Minister Simon Watts announced ...
    BeehiveBy beehive.govt.nz
    15 hours ago

  • Minister releases Fast-track stakeholder list
    The Government is today releasing a list of organisations who received letters about the Fast-track applications process, says RMA Reform Minister Chris Bishop. “Recently Ministers and agencies have received a series of OIA requests for a list of organisations to whom I wrote with information on applying to have a ...
    BeehiveBy beehive.govt.nz
    17 hours ago

  • Judicial appointments announced
    Attorney-General Judith Collins today announced the appointment of Wellington Barrister David Jonathan Boldt as a Judge of the High Court, and the Honourable Justice Matthew Palmer as a Judge of the Court of Appeal. Justice Boldt graduated with an LLB from Victoria University of Wellington in 1990, and also holds ...
    BeehiveBy beehive.govt.nz
    17 hours ago

  • Education Minister heads to major teaching summit in Singapore
    Education Minister Erica Stanford will lead the New Zealand delegation at the 2024 International Summit on the Teaching Profession (ISTP) held in Singapore. The delegation includes representatives from the Post Primary Teachers’ Association (PPTA) Te Wehengarua and the New Zealand Educational Institute (NZEI) Te Riu Roa.  The summit is co-hosted ...
    BeehiveBy beehive.govt.nz
    18 hours ago

  • Value of stopbank project proven during cyclone
    A stopbank upgrade project in Tairawhiti partly funded by the Government has increased flood resilience for around 7000ha of residential and horticultural land so far, Regional Development Minister Shane Jones says. Mr Jones today attended a dawn service in Gisborne to mark the end of the first stage of the ...
    BeehiveBy beehive.govt.nz
    18 hours ago

  • Anzac commemorations, Türkiye relationship focus of visit
    Foreign Affairs Minister Winston Peters will represent the Government at Anzac Day commemorations on the Gallipoli Peninsula next week and engage with senior representatives of the Turkish government in Istanbul.    “The Gallipoli campaign is a defining event in our history. It will be a privilege to share the occasion ...
    BeehiveBy beehive.govt.nz
    19 hours ago

  • Minister to Europe for OECD meeting, Anzac Day
    Science, Innovation and Technology and Defence Minister Judith Collins will next week attend the OECD Science and Technology Ministerial conference in Paris and Anzac Day commemorations in Belgium. “Science, innovation and technology have a major role to play in rebuilding our economy and achieving better health, environmental and social outcomes ...
    BeehiveBy beehive.govt.nz
    21 hours ago

  • Comprehensive Partnership the goal for NZ and the Philippines
    Prime Minister Christopher Luxon held a bilateral meeting today with the President of the Philippines, Ferdinand Marcos Jr.  The Prime Minister was accompanied by MP Paulo Garcia, the first Filipino to be elected to a legislature outside the Philippines. During today’s meeting, Prime Minister Luxon and President Marcos Jr discussed opportunities to ...
    BeehiveBy beehive.govt.nz
    1 day ago

  • Government commits $20m to Westport flood protection
    The Government has announced that $20 million in funding will be made available to Westport to fund much needed flood protection around the town. This measure will significantly improve the resilience of the community, says Local Government Minister Simeon Brown. “The Westport community has already been allocated almost $3 million ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Taupō takes pole position
    The Government is proud to support the first ever Repco Supercars Championship event in Taupō as up to 70,000 motorsport fans attend the Taupō International Motorsport Park this weekend, says Economic Development Minister Melissa Lee. “Anticipation for the ITM Taupō Super400 is huge, with tickets and accommodation selling out weeks ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Cost of living support for low-income homeowners
    Local Government Minister Simeon Brown has announced an increase to the Rates Rebate Scheme, putting money back into the pockets of low-income homeowners.  “The coalition Government is committed to bringing down the cost of living for New Zealanders. That includes targeted support for those Kiwis who are doing things tough, such ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Government backing mussel spat project
    The Coalition Government is investing in a project to boost survival rates of New Zealand mussels and grow the industry, Oceans and Fisheries Minister Shane Jones has announced. “This project seeks to increase the resilience of our mussels and significantly boost the sector’s productivity,” Mr Jones says. “The project - ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Government focused on getting people into work
    Benefit figures released today underscore the importance of the Government’s plan to rebuild the economy and have 50,000 fewer people on Jobseeker Support, Social Development and Employment Minister Louise Upston says. “Benefit numbers are still significantly higher than when National was last in government, when there was about 70,000 fewer ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Clean energy key driver to reducing emissions
    The Government’s commitment to doubling New Zealand’s renewable energy capacity is backed by new data showing that clean energy has helped the country reach its lowest annual gross emissions since 1999, Climate Change Minister Simon Watts says. New Zealand’s latest Greenhouse Gas Inventory (1990-2022) published today, shows gross emissions fell ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Earthquake-prone buildings review brought forward
    The Government is bringing the earthquake-prone building review forward, with work to start immediately, and extending the deadline for remediations by four years, Building and Construction Minister Chris Penk says. “Our Government is focused on rebuilding the economy. A key part of our plan is to cut red tape that ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Thailand and NZ to agree to Strategic Partnership
    Prime Minister Christopher Luxon and his Thai counterpart, Prime Minister Srettha Thavisin, have today agreed that New Zealand and the Kingdom of Thailand will upgrade the bilateral relationship to a Strategic Partnership by 2026. “New Zealand and Thailand have a lot to offer each other. We have a strong mutual desire to build ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Government consults on extending coastal permits for ports
    RMA Reform Minister Chris Bishop and Transport Minister Simeon Brown have today announced the Coalition Government’s intention to extend port coastal permits for a further 20 years, providing port operators with certainty to continue their operations. “The introduction of the Resource Management Act in 1991 required ports to obtain coastal ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Inflation coming down, but more work to do
    Today’s announcement that inflation is down to 4 per cent is encouraging news for Kiwis, but there is more work to be done - underlining the importance of the Government’s plan to get the economy back on track, acting Finance Minister Chris Bishop says. “Inflation is now at 4 per ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • School attendance restored as a priority in health advice
    Refreshed health guidance released today will help parents and schools make informed decisions about whether their child needs to be in school, addressing one of the key issues affecting school attendance, says Associate Education Minister David Seymour. In recent years, consistently across all school terms, short-term illness or medical reasons ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Unnecessary bureaucracy cut in oceans sector
    Oceans and Fisheries Minister Shane Jones is streamlining high-level oceans management while maintaining a focus on supporting the sector’s role in the export-led recovery of the economy. “I am working to realise the untapped potential of our fishing and aquaculture sector. To achieve that we need to be smarter with ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Patterson promoting NZ’s wool sector at International Congress
    Associate Agriculture Minister Mark Patterson is speaking at the International Wool Textile Organisation Congress in Adelaide, promoting New Zealand wool, and outlining the coalition Government’s support for the revitalisation the sector.    "New Zealand’s wool exports reached $400 million in the year to 30 June 2023, and the coalition Government ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Removing red tape to help early learners thrive
    The Government is making legislative changes to make it easier for new early learning services to be established, and for existing services to operate, Associate Education Minister David Seymour says. The changes involve repealing the network approval provisions that apply when someone wants to establish a new early learning service, ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • RMA changes to cut coal mining consent red tape
    Changes to the Resource Management Act will align consenting for coal mining to other forms of mining to reduce barriers that are holding back economic development, Resources Minister Shane Jones says. “The inconsistent treatment of coal mining compared with other extractive activities is burdensome red tape that fails to acknowledge ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • McClay reaffirms strong NZ-China trade relationship
    Trade, Agriculture and Forestry Minister Todd McClay has concluded productive discussions with ministerial counterparts in Beijing today, in support of the New Zealand-China trade and economic relationship. “My meeting with Commerce Minister Wang Wentao reaffirmed the complementary nature of the bilateral trade relationship, with our Free Trade Agreement at its ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Prime Minister Luxon acknowledges legacy of Singapore Prime Minister Lee
    Prime Minister Christopher Luxon today paid tribute to Singapore’s outgoing Prime Minister Lee Hsien Loong.   Meeting in Singapore today immediately before Prime Minister Lee announced he was stepping down, Prime Minister Luxon warmly acknowledged his counterpart’s almost twenty years as leader, and the enduring legacy he has left for Singapore and South East ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • PMs Luxon and Lee deepen Singapore-NZ ties
    Prime Minister Christopher Luxon held a bilateral meeting today with Singapore Prime Minister Lee Hsien Loong. While in Singapore as part of his visit to South East Asia this week, Prime Minister Luxon also met with Singapore President Tharman Shanmugaratnam and will meet with Deputy Prime Minister Lawrence Wong.  During today’s meeting, Prime Minister Luxon ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Antarctica New Zealand Board appointments
    Foreign Minister Winston Peters has made further appointments to the Board of Antarctica New Zealand as part of a continued effort to ensure the Scott Base Redevelopment project is delivered in a cost-effective and efficient manner.  The Minister has appointed Neville Harris as a new member of the Board. Mr ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Finance Minister travels to Washington DC
    Finance Minister Nicola Willis will travel to the United States on Tuesday to attend a meeting of the Five Finance Ministers group, with counterparts from Australia, the United States, Canada, and the United Kingdom.  “I am looking forward to meeting with our Five Finance partners on how we can work ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Pet bonds a win/win for renters and landlords
    The coalition Government has today announced purrfect and pawsitive changes to the Residential Tenancies Act to give tenants with pets greater choice when looking for a rental property, says Housing Minister Chris Bishop. “Pets are important members of many Kiwi families. It’s estimated that around 64 per cent of New ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Long Tunnel for SH1 Wellington being considered
    State Highway 1 (SH1) through Wellington City is heavily congested at peak times and while planning continues on the duplicate Mt Victoria Tunnel and Basin Reserve project, the Government has also asked NZ Transport Agency (NZTA) to consider and provide advice on a Long Tunnel option, Transport Minister Simeon Brown ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • New Zealand condemns Iranian strikes
    Prime Minister Christopher Luxon and Foreign Minister Winston Peters have condemned Iran’s shocking and illegal strikes against Israel.    “These attacks are a major challenge to peace and stability in a region already under enormous pressure," Mr Luxon says.    "We are deeply concerned that miscalculation on any side could ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Huge interest in Government’s infrastructure plans
    Hundreds of people in little over a week have turned out in Northland to hear Regional Development Minister Shane Jones speak about plans for boosting the regional economy through infrastructure. About 200 people from the infrastructure and associated sectors attended an event headlined by Mr Jones in Whangarei today. Last ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Health Minister thanks outgoing Health New Zealand Chair
    Health Minister Dr Shane Reti has today thanked outgoing Health New Zealand – Te Whatu Ora Chair Dame Karen Poutasi for her service on the Board.   “Dame Karen tendered her resignation as Chair and as a member of the Board today,” says Dr Reti.  “I have asked her to ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Roads of National Significance planning underway
    The NZ Transport Agency (NZTA) has signalled their proposed delivery approach for the Government’s 15 Roads of National Significance (RoNS), with the release of the State Highway Investment Proposal (SHIP) today, Transport Minister Simeon Brown says.  “Boosting economic growth and productivity is a key part of the Government’s plan to ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Navigating an unstable global environment
    New Zealand is renewing its connections with a world facing urgent challenges by pursuing an active, energetic foreign policy, Foreign Minister Winston Peters says.   “Our country faces the most unstable global environment in decades,” Mr Peters says at the conclusion of two weeks of engagements in Egypt, Europe and the United States.    “We cannot afford to sit back in splendid ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • NZ welcomes Australian Governor-General
    Prime Minister Christopher Luxon has announced the Australian Governor-General, His Excellency General The Honourable David Hurley and his wife Her Excellency Mrs Linda Hurley, will make a State visit to New Zealand from Tuesday 16 April to Thursday 18 April. The visit reciprocates the State visit of former Governor-General Dame Patsy Reddy ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Pseudoephedrine back on shelves for Winter
    Associate Health Minister David Seymour has announced that Medsafe has approved 11 cold and flu medicines containing pseudoephedrine. Pharmaceutical suppliers have indicated they may be able to supply the first products in June. “This is much earlier than the original expectation of medicines being available by 2025. The Government recognised ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • NZ and the US: an ever closer partnership
    New Zealand and the United States have recommitted to their strategic partnership in Washington DC today, pledging to work ever more closely together in support of shared values and interests, Foreign Minister Winston Peters says.    “The strategic environment that New Zealand and the United States face is considerably more ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Joint US and NZ declaration
    April 11, 2024 Joint Declaration by United States Secretary of State the Honorable Antony J. Blinken and New Zealand Minister of Foreign Affairs the Right Honourable Winston Peters We met today in Washington, D.C. to recommit to the historic partnership between our two countries and the principles that underpin it—rule ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • NZ and US to undertake further practical Pacific cooperation
    Foreign Minister Winston Peters has announced further New Zealand cooperation with the United States in the Pacific Islands region through $16.4 million in funding for initiatives in digital connectivity and oceans and fisheries research.   “New Zealand can achieve more in the Pacific if we work together more urgently and ...
    BeehiveBy beehive.govt.nz
    1 week ago

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