What tax evasion robs us of – in NZ

Written By: - Date published: 7:07 am, April 18th, 2016 - 111 comments
Categories: accountability, class war, tax - Tags: , , ,

Last week I wrote a post – What tax evasion robs us of. It quoted an estimate that the US had $21–32tn of untaxed assets, and that if taxed properly the income would fund a UBI in America.

On The Nation on Saturday Gareth Morgan came up with an estimate for NZ:

Morgan: Tax burden falling on NZ’s working class

Economist Gareth Morgan believes New Zealand could be missing out on up to 25 percent of total income tax because the rich aren’t paying their fair share.

Morgan also told The Nation it is possible to get global corporations like Apple and Facebook to pay more tax on what they earn here.

The Government collects about $30 billion per year in income tax, but Mr Morgan says that take could be much bigger. The figures come from a soon-to-be-published report from the Morgan Foundation.

Dr Morgan says the report on New Zealand’s current tax system shows that the burden is falling on middle- and working-class families. “There’s no free lunch here. If the rich aren’t paying their fair share, someone else has to pay more than they otherwise need to,” he says. …

What could a government do with an extra $7.5bn a year? Crack down on white collar crime, add a capital gains tax and a financial transactions / Tobin tax, and what couldn’t a government do?

111 comments on “What tax evasion robs us of – in NZ ”

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  1. One Anonymous Bloke 1
    18 April 2016 at 7:18 am

    One other tiny question: how much money does New Zealand launder per annum?

    • saveNZ 1.1
      18 April 2016 at 7:50 am

      +1 OAB – and nobody seems very keen to find out either. Yep everyone seems keen to tax residents but those domiciled off shore (like pretty much anyone who wants to avoid tax) seem to be exempt from it. Even worse our government seems to be actively wanting those super rich people to use NZ as a tax haven to hide money while NZ get nothing (apart from the super rich on a shopping spree of buying up our real estate which they then pay zero tax on with complicated often quasi legal ways). Quite frankly this idea of a capital gains tax in the traditional sense will not get the super rich people because they don’t even pay high income tax, do we really think they will pay a capital gains? Most of the super rich seem to be able to make their sqillions on paper, the traders and it is a Bernie Sanders style ‘transaction tax’ that should be looked at. https://berniesanders.com/issues/reforming-wall-street/

      Remember that pivotal moment before last election when JK asked DC if trusts were exempt from the capital gains tax? And DC after a long pause said Yes.

      Ok then Labour’s scheme last election came across as yet another way to tax resident middle class kiwis without complicated tax avoidance schemes in place and make those super rich exempt AGAIN. It really did a lot of damage to Labour.

      Personally favour a stamp duty as zero avoidance – if you wan’t the real estate in your name, you pay straight away on title transfer and can’t make a loss later to offset.

      Doctors are rich (supposedly) but are they earning $50m plus? Their is a new class of super rich from shares and inheritance and so forth that seem to be exempt.

      NZ needs to start looking at legal tax evasion and make it illegal, because the powers at be have made so many loop holes for those super rich, they are just getting more and more and even honest people are being lured into complicated tax loop holes by their accountants – because it is now considered stupid not to.

      • Wayne 1.1.1
        18 April 2016 at 11:10 am

        Save NZ

        I recall that debate. John Key’s question to David Cunliffe about capital gains tax and trusts, was specifically in respect of family trusts that own the principal family residence.

        The Law Commission, in its Trusts Report, considered that there could be as many as 500,000 trusts, the great majority of which would relate to owning the family home. Therefore as many as 30% of all family homes could be owned by trusts. That is why the question was pertinent and also why David Cunliffe answered it in the way he did.

        So it was not a question that related the “super rich”, rather it was a question that was specifically about the middle class and their homes.

        The legal industry has promoted trust ownership as a means of keeping the house away from creditors in the case of a business failure (there are hundreds of thousands of small businesses in New Zealand), and also for relationship purposes particularly in respect of subsequent relationships. These situations cover vastly more people than the “super rich.”

        • saveNZ 1.1.1.1
          18 April 2016 at 1:59 pm

          @ Wayne – the problem with the proposed capital gains tax was that the rich would not have had to pay. When you are rich and in particular super rich with offshore accounts and other businesses to play with, you can just ‘lose’ money in the country and therefore run a loss. Normal people don’t have the capital to do it as the ‘loss’ needs offsetting on assets somewhere else. So those poorer would pay, those with enough wealth could just buy something at a big loss that year to offset it.

          This is how income tax is currently being used so that 50% of super rich listers turning over millions or in some cases billions somehow only earn profit on a pittance of that.

          If Labour want to proposed a tax, at least try to make it target the people who are currently earning the most and paying the least. Target those who are not even resident. Corporations and super rich individuals.

          Otherwise it looks laughable and more like targeting those who are trying to save for their retirement.

          Lets have a look at Wilson’s carparks. They earn so little but charge consumers so much? In Australia they are looking into it.

          http://www.smh.com.au/business/wilson-parkings-tax-numbers-appear-to-defy-economic-reality-20160408-go1w4u.html

      • greywarshark 1.1.2
        18 April 2016 at 11:58 am

        saveNZ
        Good points again here.

        Personally favour a stamp duty as zero avoidance – if you wan’t the real estate in your name, you pay straight away on title transfer and can’t make a loss later to offset.

        the powers at be have made so many loop holes for those super rich, they are just getting more and more and even honest people are being lured into complicated tax loop holes by their accountants – because it is now considered stupid not to.

        And those that have been lured into this supposedly intelligent and legal business
        tax model of avoidance such as Interest Rate Swaps.

        Interest swaps ‘crippled’ farmer | Radio New Zealand News
        http://www.radionz.co.nz/news/rural/273893/interest-swaps-‘crippled’-farmer
        May 18, 2015 – A former Taranaki farmer who lost her farms as a result of interest rate swaps is calling for other farmers to join her fight against the bank that …

        http://www.comcom.govt.nz/fair-trading/interest-rate-swaps-2/
        Interest rate swaps investigation | Commerce Commission
        http://www.comcom.govt.nz › Fair Trading
        … Bank New Zealand Limited (ANZ) in relation to the marketing, promotion and … Interest Rates Swaps investigation proposed legal proceedings – questions …

        https://en.wikipedia.org/wiki/Interest_rate_swap

        Interest Rate and Equity Swaps – CFA Level 1 | Investopedia
        http://www.investopedia.com/exam-guide/cfa…/interest-rate-equity-swaps.asp
        Learn the components of plain vanilla interest rate swaps and equity swaps. Contains sample calculations finding the payments for each swap. … Become one of the elite who pass these exams by using these simple study methods. Financial ..

        Or Financial Derivatives
        Derivative (finance) – Wikipedia, the free encyclopedia
        https://en.wikipedia.org/wiki/Derivative_(finance)
        In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the “underlying”…

        and –
        A page full of information on google with these key words – offshore financial trusts and tax wikipedia

      • Richard McGrath 1.1.3
        18 April 2016 at 5:56 pm

        “NZ needs to start looking at legal tax evasion and make it illegal”

        Tax evasion IS illegal by definition, so “legal tax evasion” is a self-contradiction.

  2. Tautuhi 2
    18 April 2016 at 7:27 am

    Amazing how the poor people always get blamed for NZ’s problems, unfortunately we do not have any investigative journalists left in NZ, JK’s regime and apparatus has lead to any critics being removed ?

    • aerobubble 2.1
      18 April 2016 at 11:02 am

      Morgan, wasnt he that guy who had a tv program deducate to climate change and how he wasnt sure. You know, how could anyone question the fact that digging up a liquid, or gas or solid and burning it, releasing gases into the atmosphere, quite measurable, which chemically have more bonds and so vibrate more, so storing energy more, could conceivable in any universe not increase the ability of the atmosphere to retain heat.

      Now he rocks up on the Nation declaring that tax must be levied on the family home on its equity, wtf, this from the guy who expoused a flat tax. The guy does not understand why we have progressive taxesow argues we should, but only on the home. Its creepy, he suggest that people make money sitting on homes and so push up the house price, capital farming via stagnating the housing soil, so to speak. Yet he cant fathom why a flat tax is dumb, that there if a benefit to amassung more wealth.i.e a hundred people with ten thousand dollars each has less influence than one persn with a million, yet our system requires the invisible hand of the hundred to function.

      So why do we get idiots like Morgan or Brash, tax flatters who have no love for capitalism, and want to rig it to fail speaking as authorityn finance. Morgan amassaed wealth from millions of people using a web site, how can someone function with such complete blinkers and not see how drawing up the bridge behind them makes them look idiotic or worse.

      • greywarshark 2.1.1
        18 April 2016 at 12:02 pm

        @Tautuhi
        There are real thinking investigative journalists still struggling on – don’t diss them all in one sweep of despair!

  3. James 3
    18 April 2016 at 7:43 am

    With all the talk of tax evasion from the left – how do they feel that Andrew Littles chief of staff deducts PAYE from his staffs wages then spends it as he chooses?

    If they found someone on the right doing this they would be calling for heads to roll.

    This is hardly a good look.

    http://www.stuff.co.nz/dominion-post/news/4418030/Union-asked-to-explain-36k-debt

    And yes – I know this is 5 years ago – but given all the talk of tax and evasion of it – I think its pretty topical.

    • Sabine 3.1
      18 April 2016 at 7:49 am

      You might care to explain why you link Andrew Little to an article from five years ago about the business decisions of a Union that does not mention Andre Little once.

      Also, they do pay, just late.

      Or are you saying that not paying any taxes (cause tax evasion) on time, is the same as paying the full amount of taxes late – with late penalties btw.

    • saveNZ 3.2
      18 April 2016 at 8:15 am

      Does any one else find it ludicrous that John Key and other politicians can just put all their assets into a blind trust linked to them and not have to declare what is in the trust? I mean how stupid is that? He could own property, land, vineyards, shares in assets like insurance etc, in earthquake hit Christchurch, he could own land that benefits from government irrigation schemes, he could own shares and assets around the world that benefit from the war in Iraq etc etc. No way should politicians who are clearly changing the laws to benefit the super rich and their cronies should not have to declare every last detail and connection to them.

      • BM 3.2.1
        18 April 2016 at 8:23 am

        What do you think the purpose of a blind trust is?

        • RedLogix 3.2.1.1
          18 April 2016 at 8:46 am

          The thing is BM, a blind trust is only operated by a third party. It doesn’t preclude the beneficial owner still having knowledge of the assets in it, nor does it prevent off the record discussions about it.

          In other words while they create a fig-leaf of plausible deniability when it comes to conflict of interest; they really still depend on the people involved behaving in a trustworthy fashion.

          Yet as my Dad says, “Trust and check anyway”. And that’s the problem with them, by creating this veil of secrecy blind trusts work against transparency. It then just comes down to a question of whether you personally trust John Key or not.

          Well given his long documented record in that respect … no I don’t.

          • Draco T Bastard 3.2.1.1.1
            18 April 2016 at 11:55 am

            The thing is BM, a blind trust is only operated by a third party.

            And the last time I heard about it FJKs ‘blind trust’ was operated by a personal friend.

      • saveNZ 3.2.2
        18 April 2016 at 8:26 am

        What is even more hilarious is that the worst thing the right can come up with from Labour under Helen Clark is that she tried to put in energy saving lightbulbs. My God what a sin!!! sarc. If that is the worst thing that her detractors can say about her, she deserves the UN post.

        And like this now with Little, a 5 year old return from a union is the best they can find on him. Lets face it, they will never get Little on anything. He may have faults, but Little is squeaky clean honest and most of the public can see that.

        Note no tax returns from John Key. The left should be demanding this, how dodgy is our Prime minister? It seems the panama papers have revealed that overseas PM’s have been stashing away off shore funds often in family members accounts and whether legal or illegal they should be transparent to the public. And nope it is not the banana republic states, it is the EU! Negotiating with bankrupt banks, cutting benefits and NHS etc, takes on a disgusting turn of events when the PM negotiating is stashing away funds from their country.

        If Key, Bronagh, Max and Steph, have 200m and rising in an off shore trust fund paying zero NZ tax, I feel the public should know, how much, where it is, and how they got the money. Otherwise it is money laundering or corruption and conflicts of interest. How would the public know?

        • BM 3.2.2.1
          18 April 2016 at 8:32 am

          Getting a bit hysterical.

          • saveNZ 3.2.2.1.1
            18 April 2016 at 8:53 am

            It is pretty clear that the Nats really fear discussion of tax evasion of the super rich and trusts because of the amount of trolls appearing to derail the post and desperate ‘Labour does it too’ posts appearing.

            • Sabine 3.2.2.1.1.1
              18 April 2016 at 9:16 am

              Hmmmm rich people not paying taxes………which beneficiary, poor group of people could we be bashing this time around?
              We done the single mothers, the South Aucklanders, the uneducated ones, the jobless ones, the sick ones, the homeless ones, the Labour does it too ones ……….surely we still have some part of the population to blame for our faults.

          • Stuart Munro 3.2.2.1.2
            18 April 2016 at 9:35 am

            Take deep breaths and go and have a lie down then.

        • Wayne 3.2.2.2
          18 April 2016 at 11:13 am

          Save NZ

          John Key has specifically denied in parliament, and in numerous interviews that he has an offshore trust.

          • Draco T Bastard 3.2.2.2.1
            18 April 2016 at 11:58 am

            Considering his documented lies, yeah, not going to believe him.

            • Wayne 3.2.2.2.1.1
              18 April 2016 at 12:12 pm

              Draco,

              I realise you are fond of the BliP list, but do you seriously believe that the PM would not have carefully checked his situation before he made such a statement?

              In fact he said he had spent the weekend checking this very point.

              • framu …
                18 April 2016 at 12:19 pm

                “In fact he said he had spent the weekend checking this very point.”

                i dont think you spotted the irony of that sentence

              • One Anonymous Bloke …
                18 April 2016 at 3:17 pm

                Why did you get us into bed with money laundering crims and terrorists, Wayne?

    • John Shears 3.3
      18 April 2016 at 9:09 am

      James
      “With all the talk of tax evasion from the left – how do they feel that Andrew Littles chief of staff deducts PAYE from his staffs wages then spends it as he chooses?”

      James if you are going to be a troll and trouble maker you need to be more careful with your composition.

      In the quote above you are inferring that the deductions are current but in fact the article that you used as a reference is 5 years old and has no relevance to current affairs.

      • James 3.3.1
        18 April 2016 at 9:27 am

        Did you not see the “And yes – I know this is 5 years ago – but given all the talk of tax and evasion of it – I think its pretty topical.”

        [RL: This particular troll bingo card was played out years ago. An administrative error was made and it was sorted. Not topical. Further attempts with this diversion will be deleted.]

    • Magisterium 3.4
      18 April 2016 at 2:43 pm

      National is essentially immune to attacks about tax avoidance while Matt McCarten is running Andrew Little’s office.

      • One Anonymous Bloke 3.4.1
        18 April 2016 at 3:15 pm

        Better keep cuddling up to your money laundering crim mates then.

        • Magisterium 3.4.1.1
          18 April 2016 at 3:27 pm

          In many ways it’s similar to the way National was immunised against attacks about “forgetfulness” when it turned out that the Leader of the Labour Party at the time had “forgotten” he had millions of dollars sitting in an offshore Chase Manhattan account.

          Oh yeah, that’s right, what are David Shearer’s tax obligations regarding the money in that offshore account? Is he “doing his fair share”?

          • One Anonymous Bloke 3.4.1.1.1
            18 April 2016 at 3:30 pm

            Because if it turns out that he isn’t, your piss poor excuse for ethics means it’s ok to launder money.

  4. Sabine 4
    18 April 2016 at 7:46 am

    Coming from him is a bit funny, considering that the man is on record for admitting that he does not pay his share of tax.

    But maybe some rich people are more deserving then others, or it is a case of do as I say but not as i do.

    https://www.tvnz.co.nz/one-news/business/only-half-of-nz-s-most-wealthy-paying-top-tax-rate-6200604

  5. Lucy 5
    18 April 2016 at 8:20 am

    I think James is being very selective Matt was dealing with running a union and dealing with life threatening cancer, He got pulled up by his union colleagues and it was sorted out. Unions always run on the smell of an oily rag and can make mistakes. What he did not do was evade tax or take the money off shore to minimize exposure. The 90% of us who are paying proper tax are increasingly annoyed by the 10% individuals and corporates who use our infrastructure without paying for it.

    • Nick 5.1
      18 April 2016 at 8:40 am

      +1 Yes Lucy, totally accurate summation.

    • Sabine 5.2
      18 April 2016 at 9:01 am

      i think James is one of the hopeless Kiwi Blokes the Finance Minister and Vice PM of NZ Bill English was referring too. The ones that have issues reading and such.

    • Magisterium 5.3
      18 April 2016 at 2:50 pm

      The Council of Trade Unions wants an explanation from Unite on why it failed to pay the IRD more than $36,000 in PAYE on behalf of its employees.

      Unite, one of New Zealand’s largest unions, owed IRD over $130,000 for the year ended March 2009 (its most recent filing), including more than $57,000 in unpaid GST. For the same financial year its liabilities outweighed its assets by more than $170,000.

      Unite head Matt McCarten confirmed yesterday that the union owed money to the IRD but said he had made choices to pay for union campaigns rather than clear the debt. “I don’t shy away from these decisions, I make the calls.”

      http://www.stuff.co.nz/dominion-post/news/4418030/Union-asked-to-explain-36k-debt

      Matt McCarten deliberately left union tax bills unpaid and personally decided to spend the money on campaigning.

      Presumably someone at Labour HQ realised what a suicidally-bad look this is late last week, which is why Labour has been totally silent on everything related to tax since last Thursday. Now it’s all “reshuffle”.

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 5.3.1
        18 April 2016 at 3:00 pm

        That’s worse than tax avoidance. That’s just cheating on your taxes.

      • joe90 5.3.2
        18 April 2016 at 3:02 pm

        Matt McCarten deliberately left union tax bills unpaid and personally decided to spend the money on campaigning.

        >

        Surely you can link to something detailing the outcome?.

      • One Anonymous Bloke 5.3.3
        18 April 2016 at 3:13 pm

        Meanwhile, rather than denouncing your money-laundering crim-cuddling Daddy, you’re all about “Labour did it too”. Personal responsibility? What a sick joke your ethics are.

        • Magisterium 5.3.3.1
          18 April 2016 at 3:44 pm

          Of late Labour has developed an unfortunate habit of attacking National about things that it then realises it really would rather not draw attention to.

          Blah blah offshore accounts, blah blah leafy suburbs, blah blah secret trusts, blah blah Donghua Liu, blah blah tax obligations. Every time.

          • One Anonymous Bloke 5.3.3.1.1
            18 April 2016 at 3:52 pm

            Meanwhile, this Green Party supporter is pointing out your piss-poor excuse for ethics.

      • Craig H 5.3.4
        18 April 2016 at 7:07 pm

        Most of head office was at the Young Labour Conference in Wellington and then Region 5 Conference in Blackball (Andrew Little, Grant Robertson, Nigel Haworth and Andrew Curtain all attended) – I’m not surprised they were silent on that particular issue given the amount of travelling involved to get from one to the other. Andrew was at our dinner on Saturday night as well, and had a good time from what I could see.

      • Shifty 5.3.5
        18 April 2016 at 8:14 pm

        Hardly shifty, systemic tax avoidance. The tax bill is clearly visible to IRD since they’re the ones who raised it. Its there for all to see, and some dude made a call to defer its payment. Big whoop.

      • Jenny Kirk 5.3.6
        18 April 2016 at 8:32 pm

        That was in 2010. This is now half-way (almost) thru 2016. There was an explanation given some time in 2010 – forgotten what it was, but believeable.
        Get over yourself ! stop dragging up old stuff but if you DO want to drag up old stuff look at all of Key’s stuff-ups since then.

  6. ianmac 6
    18 April 2016 at 9:07 am

    Remember when Gareth Morgan’s son volunteered that though he was worth about $300 million he paid no Income Tax? He said that this was wrong. And he was right. I bet you wont hear other very rich being this honest!

    • Sabine 6.1
      18 April 2016 at 9:19 am

      so is he paying his fair share now?

      Cause i don’t think he is. And as such, i would rather he shut up. I don’t care how much he gives to his own charities (that are surely tax exempt) to avoid paying his fare share, but fact is, the only reason we really need charity is because people like Gareth and his family do not carry their share of tax burden.

      So frankly i rather he move to Monaco and not pay taxes there.

      • saveNZ 6.1.1
        18 April 2016 at 2:09 pm

        I don’t think Gareth should shut up at all. He is making a point, it is not fair how taxation is working. It is working for inequality not against.

        Why would Gareth pay his tax if he legally does not need to. At least he is trying to use his wealth to try to readdress this through charity and to publicise the problem. Does he want to pay additional taxes so that Sky City and Saudi businessmen get more corporate welfare?

        One of the big problems with the left, is that their is a bit of a discourse against rich people even if they are socialists or at least have some sense of society. Gareth is trying to help.

        The goal should be fairness. Yep, no problem for people getting ahead but there needs to be a social contract for the good of society.

        • The Gormless Fool formerly known as Oleolebiscuitbarrell 6.1.1.1
          18 April 2016 at 3:27 pm

          I am sure he pays income tax on his income (unlike Unite). His point was that the capital gain he made on Trade Me was not taxable (as it was not income).

  7. ianmac 7
    18 April 2016 at 9:10 am

    And good article about Gareth. Thanks Rob. I bet Gareth will not be invited to any National Party Fund raising dinners. Go Gareth!

  8. Wayne 8
    18 April 2016 at 9:16 am

    Morgan is really raising two separate issues.

    The first is whether companies and individuals are paying the tax they are expected to pay, without resorting to complicated tax avoidance schemes. Obviously some tax avoidance will always occur, on the basis that it has occurred ever since the modern tax system came into existence. Successive administrations, including the current one, have been increasing the power of the IRD to get at this. I would be very surprised if tax avoidance reduces the overall tax take by anything like 25%. That would imply that nearly half of all income from high income individuals and companies is being sheltered behind tax avoidance schemes. That simply will not be happening.

    The second argument he raises is the level of tax that should be paid by high income individuals and companies. This is mostly an argument about the top tax rate and a CGT or similar. That is not a tax avoidance issue. Rather it is a political debate as to what the top rate should be.

    I argued that the top rate should be 33%, both when I was in opposition and also in govt. Others wanted lowers rates. Don Brash for instance argued for a top rate of 25%. Labour between 1999 and 2008 said 39%, but kept companies on 33%. I am not sure what Labour’s view is now, but as I recall in 2014 they were proposing a top rate of 36% and a CGT. There is hardly a huge difference between 36% and 33%.

    I presume in 2017 National will stick with 33% as the top rate. I guess Labour has yet to come up with their plan, but 39% as their top rate would be consistent with their current rhetoric, especially if they are downplaying a CGT.

    Labour’s spending plans are always about 10% higher than National’s. Going higher than that would expose Labour to the tag of being reckless, in a way which would stick.

    Labour tends to have govt at 33 to 35 % of GDP, and National 30 to 32% of GDP. It is about a $7 billion difference. And you can do quite a lot with $7 billion; more public housing and support for first home buyers, say $2 billion, free tertiary education, around $3 billion. But it is also only $7 billion. Promises can’t be over the top, and just those two alone use up two thirds of the $7 billion.

    Labour therefore has to get 10% more tax to pay for their promises, and presumably this would mostly come from higher income people. At least in theory, shifting the top rate from 33% to 39% will do it.

    Over the next few months, given that we are now only 18 months to the next election, we shall be able to discern the broad shape of Labour’s plan.

    • Sabine 8.1
      18 April 2016 at 9:25 am

      It does not matter how high or how low you set that Top Tax Rate or any tax rate, If there are mechanism in place for people and businesses to avoid paying taxes people of means will use these mechanism.

      Morgan himself is on record for stating that he does not pay taxes.
      He is part of the problem, and unless he starts paying taxes is not part of the solution, no matter how lyrically he waxes about the issues our country may have due to the shortfall in tax generated income.

      • UncookedSelachimorpha 8.1.1
        18 April 2016 at 9:42 am

        To be fair to Morgan, he is proposing measures that would result in people like him paying more tax.

      • RedLogix 8.1.2
        18 April 2016 at 9:51 am

        Given that Morgan has invested so much time and money into tax reform that would result in him paying more tax I think your comment sabine is wrong.

        It’s false logic and unjust to demand Morgan should volunteer to pay more tax, when everyone else in a similar position remains untouched. Requiring Morgan submit himself to ‘special treatment’ in order to prove his sincerity is a form of socially sanctioned bullying I have a particular loathing for.

        Put it this way. He knows the tax system is wrong and he’s doing something about it. Way more than you or I have done.

        • Sabine 8.1.2.1
          18 April 2016 at 10:12 am

          That’s not the point Redlogix.
          I dont demand that Morgan voluneer to pay more tax, I demand that he pays his fair share of tax, which as of now he does not as he has the same option of evading taxes as any rich person like him has.

          So i think it is fairly disingenuous for him to argue for a higher tax or a restructuring taxes when, at the end of the day, he still has the same vehicles that allow him to evade tax legally, and any taxes fall on those that can’t evade tax other then by working undeclared which we all know is illegal.

          If he knows that the tax system is wrong, then he can start by paying “his” share of the tax that he would have to pay if the tax evasion schemes were not in place and then essentially he can argue about changing the tax system so that others like him also end up paying their fare share.

          Until then, this is another case of do as I say and not as I do.
          Deeds always speak louder then words.

          • RedLogix 8.1.2.1.1
            18 April 2016 at 10:20 am

            I would argue that his deeds, his work around the Big Kahuna and the Morgan Foundation, have spoken far louder than our words.

            But right now I assume Morgan is paying precisely the tax the IRD requires him to. In order to pay what you deem ‘his fair share’ he’d have to voluntarily write a big check to the government.

            The next round of this game then plays out as “Morgan buys credibility with his ill-gotten money”.

            • Sabine 8.1.2.1.1.1
              18 April 2016 at 10:30 am

              The big Kahuna is nothing but a pile of paper that has lead so far to nothing.
              The Morgan Foundation is in my book a nice means to evade paying taxes.

              He can do both in his free time and on his own coin, and not expect taxpayers that don’t get props for their volontary works in hospitals, hospices, schools, kindergartens, st. john services, fire services and often hold bakesales to get the machines/vans/ambulances/trucks/books etc etc etc .

              All those volonteers could be paid if men like Gareth Morgan would pay the tax they should pay instead of weaseling the money of to a “Foundation”.

              And its not that he buys credibility with his ill gotten gains, i would assume that he has earned every cent he does legally, it is the chutzpah of being on record several years ago of not paying taxes because of using legal means to evade taxes, while not advocating that these means also be made available for taxpayers that can’t evade tax.

              Example. Why can the public transport commuter in NZ not offset their bus fares as a business expense? Because the public transport commuter is not a business but just a worker? I would assume that going to work for someone is that persons business. Can the unemployed offset the use of their computer, ink, paper, post stamps, enveloppes and business attire for their jobsearch at the end of the year on their tax returns? No they can’t. But they should, after all these are the costs of doing the business of getting a job.

              That is what I am talking about.

              Morgan Gareth can literally every five years come up with another little novel about how the system is unfair, while not changing his behavior at all. Instead he can write poetry about how he does not need to change his behavior because the pesky laws allow him to do what he does. 🙂 No, if he thinks that it is unfair on those that have to pay tax, he can start paying taxes on what he should pay tax. NO more no less. And then he can go Big Kahuna and have his Morgan Foundation and not come across a hypocrite of the Do as I say and not as I do crowd.

              • RedLogix …
                18 April 2016 at 10:43 am

                And I could argue your little essay above is nothing more than a pile of pixel dust; but you might be offended no? By contrast the BK has provoked significant discussion and debate, and provided the only fully costed and intelligently structured alternative to the existing system we have at the moment.

                You’re free to disagree with his ideas, but right now you cannot deny their existence, the time and effort invested in them and the impact on the public debate they have had. And there is no question in my mind that if Morgan was in a position of political power to implement the BK, he would.

                But Morgan isn’t PM, John Key is.

                “Oh look … Morgan’s fallen over at the impossible imaginary hurdle I erected in front of him. What a hypocrite”. Sighs.

                • Sabine …
                  18 April 2016 at 11:19 am

                  well, in fact my lyrical waxing about stuff are just that, pixel dust. You are quite right there, of no consequences and just my thoughts on the subject, no offense taken 🙂

                  And the same can be said about Morgan Gareth writing. Nothing more than his opinion on stuff on any given day.

                  And i don’t bring John Key up in this one, as this is not about John Key, but about Gareth Morgan and the taxes he does not pay and that the taxes he does not pay are part of the 7.5 billion of taxes NZ will not receive this year.

                  So yes, he can leave as much pixel dust or real meat space paper but it does not absolve him from not paying taxes and using ‘legal’ means to minimize his tax burden to the point where he does not pay them at alll only makes him a hypocryte. A well spoken one, with costing at all, but still he does not follow his words with deeds. And i am sure he will continue to avoid / evade paying taxes on any of his pennies until he absolutely has too, and then he could move his money away from NZ to an offshore location (if he has not already done so) and would still not pay any taxes.

                  https://www.tvnz.co.nz/one-news/business/only-half-of-nz-s-most-wealthy-paying-top-tax-rate-6200604

                • Sabine …
                  18 April 2016 at 11:23 am

                  well, in fact my lyrical waxing about stuff are just that, pixel dust. You are quite right there, of no consequences and just my thoughts on the subject, no offense taken 🙂

                  And the same can be said about Morgan Gareth writing. Nothing more than his opinion on stuff on any given day.

                  And i don’t bring John Key up in this one, as this is not about John Key, but about Gareth Morgan and the taxes he does not pay and that the taxes he does not pay are part of the 7.5 billion of taxes NZ will not receive this year.

                  So yes, he can leave as much pixel dust or real meat space paper but it does not absolve him from not paying taxes and using ‘legal’ means to minimize his tax burden to the point where he does not pay them at all only makes him a hypocrite . A well spoken one, with costing and all that, but still he does not follow his words with deeds. And i am sure he will continue to avoid / paying taxes on any of his pennies until he absolutely has too, and then he could move his money away from NZ to an offshore location (if he has not already done so) and would still not pay any taxes.

                  Maybe i would have more warm fuzzies for him if he were to argue that the tax avoidance schemes offered to the rich like him were to be offered to the working poor and the rest of the plebs. I am sure a few of us would be very happy if we could offset debt/interest/costs for work against our income tax.

                  https://www.tvnz.co.nz/one-news/business/only-half-of-nz-s-most-wealthy-paying-top-tax-rate-6200604

              • Thom Pietersen …
                18 April 2016 at 11:10 pm

                +1

            • The Other Mike 8.1.2.1.1.2
              18 April 2016 at 12:28 pm

              GM has said several times now that he pays exactly what is required under current tax law – BUT he thinks it is not enough. IOW he is quite happy to pay more and thinks others in the 1% should pay (quite a lot) more too.

          • Richard McGrath 8.1.2.1.2
            18 April 2016 at 5:59 pm

            “I demand that he pays his fair share of tax”

            So who decides what constitutes a “fair share” and precisely how is it calculated?

      • Mike S 8.1.3
        18 April 2016 at 11:38 pm

        He can’t pay taxes if he doesn’t owe them. If you give IRD a cheque for 50k, without an accompanying income tax return showing that you owe 50k in income tax, they will return the cheque.

        The system is the real problem because many people will always be selfish and greedy and dishonest. If the system allows a multi-millionaire to declare little or no income for tax purposes then change the system so that this can’t be done rather than waste time and resources trying to chase the individual.

        As parliament is sovereign in this country, they could even make the new rules apply retrospectively to get some extra money in the coffers.

    • Stuart Munro 8.2
      18 April 2016 at 9:39 am

      Yes a lot can be done with $7 billion dollars. For example, in 20 years the debt incurred by that incontinent wastrel Bill English could be paid off. Realistically tax rates must rise anyway to cover this period of fiscal incompetence and restore NZ to a breakeven proposition.

    • UncookedSelachimorpha 8.3
      18 April 2016 at 9:40 am

      The top tax rate – while important – is largely a sideshow, compared to the fact that most rich people don’t have taxable income. Rich people get a disproportionate amount of their wealth from capital gains (or inherited from mater and pater) – both of which in NZ are untaxed.

      • Wayne 8.3.1
        18 April 2016 at 10:08 am

        Uncooked,

        It is simply not true that most rich people don’t pay tax. In fact the bulk of income tax comes from higher earners.

        The only real way for high income earners (actually high wealth) to not pay tax is if the interest on their debt, depreciation, etc exceeds their income. To use a traditional NZ example, have large land holdings (sub-divisible land) which is not subdivided, but simply borrowed against as its value increases. Some would say many farmers have done this. Of course it does not work if land values fall.

        It could also apply to companies with high value shares but little profit as is the case with some IT companies. In that case large shareholders get their cash by selling shares. But there are avoidance rules covering this.

        Most high net worth individuals are not in these situations. They actually have taxable income (interest, dividends, rent, salaries, royalties) upon which they pay tax.

        • framu 8.3.1.1
          18 April 2016 at 10:22 am

          “It is simply not true that most rich people don’t pay tax. In fact the bulk of income tax comes from higher earners.”

          who else loves a good semantic shuffle?

        • RedLogix 8.3.1.2
          18 April 2016 at 10:25 am

          It is simply not true that most rich people don’t pay tax. In fact the bulk of income tax comes from higher earners.

          That’s misleading; yes the bulk in income tax comes from high income earners who lack the opportunity to structure their affairs so as to minimise tax. So your statement is partially true up to a point.

          But as you must surely understand, at the very top end of town the really BIG net worth individuals find all manner of ways to avoid tax. And that is Mogan’s point. That the tax avoiding structures and dodges this group have access to have cut govt revenue from PAYE by almost 25%.

          Edit: Otherwise what framu said.

          • tinfoilhat 8.3.1.2.1
            18 April 2016 at 10:31 am

            I tend to agree with you RL, the most frustrating thing is we can’t get a handle on how much or who, although i suppose if it’s difficult for the IRD it makes it almost impossible for the likes of you or me.

            • aerobubble 8.3.1.2.1.1
              18 April 2016 at 11:26 am

              Rubbish. Everyone dodges taxes. What is a cash job, what is barter, hell go into any corner shop dairy and they stock a bunch of goods they never sell, and when they expire guess who uses them up quite legally.

              The problem with the tax system banks have made too many calls on wealth, and they do this by creating debt, of course the wealth dont want a run on debt, it would cause a whole lot of booked value to disapper. So we should not be writing a tax code for peak debt, but for equilibrium, and that means progressive taxes that claw back wealth from the wealthiest, i.e 50% and higher top tax rate. Any person can figurer it out, a million people with a thousand dollars each has less influence than one with a thousand million, but for Morgan to get rich he needed a million people buying his dotcom because millions of people used his website. Our economy cant work properly when a few control it, whether a public politiburo or a private oligarchy, it invests poorly, it stagnates, it improvishes.

              There is a simple relationship, lowering top taxes means wealthiest keep more value and reinvest it in debt ponsi schemes that require even more tax cuts. Look what Key did, he raised general taxes, GST, and lowered top taxes. If Morgan had a clue he’d be demand Key reverse it. When we all pay more and the rich pay less the world becimes more fragile

        • UncookedSelachimorpha 8.3.1.3
          18 April 2016 at 4:11 pm

          “The only real way for high income earners (actually high wealth) to not pay tax…”

          Totally wrong. You carefully ignore the elephant in the room – untaxed capital gains, which make up the majority of the increase in wealth of the very rich. And that is before any other measures to minimise tax are put in place.

          In America, where capital gains are taxed, they make up a proportionally greater share of income, as an individual’s wealth increases. We can expect the situation to be the same here, or probably worse because of the lack of tax attracted by capital gains in NZ.

          ” For the 99 percent of taxpayers making less than $500,000, salaries and wages account for 75 percent of their adjusted gross income for 2012…

          But for those making $10 million or more, salaries and wages only account for around 15 percent of their income. Their real money comes from capital gains, with capital gains accounting for about half of their earnings. ”

          • Wayne 8.3.1.3.1
            18 April 2016 at 5:59 pm

            Uncooked,

            I read the article you quoted.

            It actually says around half of the income of those who earn more than $10 million per year get it in interest, dividends and business income. This is all taxed as income, and in NZ would be taxed at 33%. As I said the wealthy do in fact pay income tax. It is not as easy to avoid as some here seem to think.

            The article then goes on to capital gains, noting that many business owners receive their “income” as a capital gain when they sell their business. This of course might be many years after its initial establishment. At least in New Zealand this would not be seen, either in the ordinary sense, or in a tax sense, as taxable income.

            Now I understand the arguments for a CGT. After all most OECD countries have them.

            However, virtually no CGT in developed countries treats a capital gain, especially one received after many years of the initial establishment of the business or acquisition of the capital asset, as income received in one year to be taxed at the full income rate. CGT’s usually have a discount for the years the asset is held, and the CGT tax rate is usually lower than the top income tax rate.

            Often if the money is invested in a new capital asset there is no CGT payable, otherwise people are locked into inefficient assets. For instance a younger farmer needs to be able to sell a small farm and get a larger farm without loosing a large portion of their capital that they need to do this.

            In short most CGT’s have a lot of exceptions, which is why they do not generate much revenue.

            • UncookedSelachimorpha 8.3.1.3.1.1
              18 April 2016 at 6:53 pm

              “The article then goes on to capital gains, noting that many business owners receive their “income” as a capital gain when they sell their business. This of course might be many years after its initial establishment. At least in New Zealand this would not be seen, either in the ordinary sense, or in a tax sense, as taxable income.”

              The largest fortunes often are made this way, tax free…and the subsequent additions to such fortunes, and not always that many years after the initial establishment either! Only those with capital can play on this tax-free amusement ride.

              e.g. Sam Morgan made $277m tax-free from his trademe development . Nothing wrong with creating trademe, but why should the people working at trademe pay tax, while the people owning it make much, much more money, and pay none?

              Graeme Hart has repeatedly bought and sold companies, with large gains on some transactions. He is now estimated to have $11b – do you really think he has paid in the order of $4.7b tax on the way, which is the rough amount he would pay if he earned this wealth working for wages? Why should he pay less?

        • Mike S 8.3.1.4
          18 April 2016 at 11:41 pm

          Rubbish Wayne and you know it.

          For example, I’d love to see how much income John Key declared last year. As a multimillionaire, you’d expect his income to be in the millions surely?

    • One Anonymous Bloke 8.4
      18 April 2016 at 9:58 am

      You were a member of the executive that got us involved in money-laundering, weren’t you. What have you got to say for yourself?

    • Draco T Bastard 8.5
      18 April 2016 at 12:11 pm

      Obviously some tax avoidance will always occur, on the basis that it has occurred ever since the modern tax system came into existence.

      non sequitur. Just because it always has doesn’t mean that it always will.

      The obvious thing to do is to change the tax/money system so that tax avoidance can’t occur.

      I would be very surprised if tax avoidance reduces the overall tax take by anything like 25%.

      With estimates of around $7 billion being avoided I’d say that 25% is conservative.

      That simply will not be happening.

      Bollocks. Of course it will be happening. We’re down an estimated $7 billion every year.

      Labour’s spending plans are always about 10% higher than National’s.

      1. The economy always does better than it does under National and
      2. It’s National that’s put us into record debt

      It is about a $7 billion difference.

      Of course, this is actually about the missing $7 billion that the rich are stealing from us.

      • Bob 8.5.1
        18 April 2016 at 2:15 pm

        “The economy always does better than it does under National”
        Can someone please try to back this up with any real facts?
        I hear it repeated time and again but reality shows there is basically no difference in the handling of the economy between Labour and National, as I have pointed out to OAB on several occasions: http://thestandard.org.nz/bill-englishs-groundhog-decades/#comment-1039938

        • Draco T Bastard 8.5.1.1
          18 April 2016 at 3:17 pm

          You have to go back a little further, like until 1935, to get a full picture of the trends. That’s difficult because a) it’s difficult to get the information and b) many measurements have changed over time, i.e, we don’t employment/unemployment the same way today as we did in 1935. Yes, I do realise that National didn’t exist before 1936 but the parties that were voted out in 1935 coalesced to form National after the Labour win.

          The 4th labour government was an anomaly – it’s more accurate to call it the First Act Government.That said, it was still voted in because National had fucked up the economy – same as every other time Labour were voted in. Of course, the 5th Labour hadn’t changed much from then either.

          It’s an interesting point that a Labour MP made many decades ago: People walked to the polling booths to vote Labour in, and then drove to the polling booths to vote Labour out again.
          That’s not the precise quote but it’s close enough.

          • Bob 8.5.1.1.1
            18 April 2016 at 4:10 pm

            So the data I provided going back 56 years doesn’t go back far enough?
            Are you seriously saying we should trust Labour because they were better than National 60+ years ago and because of a quote you think once heard but can’t substantiate???

            Also, if the Fourth and Fifth Labour Governments were useless (as you infer), what evidence has Andrew Little produced that the potential 6th Labour government would be any better? It obviously isn’t based on policy because they are still trying to figure out what that might look like…

            • Draco T Bastard 8.5.1.1.1.1
              18 April 2016 at 7:36 pm

              So the data I provided going back 56 years doesn’t go back far enough?

              That one, as in ‘1’, link is only a part of the picture – and a very bad part at that. GDP isn’t the best measure even GDP/Capita.

              But, yeah, I actually missed that one. Interestingly enough, it shows GDP/capita going up under Labour and down under National.

              and because of a quote you think once heard but can’t substantiate?

              Actually, I was basing that entire comment on everything that I’ve learned over the last 15 years of study into economics and politics.

              Also, if the Fourth and Fifth Labour Governments were useless (as you infer),

              I didn’t say that they were useless. I didn’t even really imply it. I was implying that they weren’t acting like a Labour government but far more like a reactionary conservative government, i.e, Act.

              The 4th Labour government did have to make changes because of Muldoon’s mass spending but I don’t think that they should have made the changes that they did. One of the changes that they did make, IIRC, was how unemployment was measured. It’s one of those things that makes it difficult to track back because the different systems are incompatible. I’m pretty sure that it’s been changed since as well and I happen to think that it needs changing again to take into account under-employment.

              BTW, the last link you have in that comment of yours no longer works.

              what evidence has Andrew Little produced that the potential 6th Labour government would be any better?

              Because Labour, even during the 1980s, do actually try to make the economy work for the everyone and not just to make rich people richer which is how National govern.

        • mikes 8.5.1.2
          18 April 2016 at 11:55 pm

          Regardless of whether GDP growth is a good measure of economic growth, it is currently how economic growth is measured and Labour always has better growth.

          http://thestandard.org.nz/who-grows-better-labour-or-national/

          • Bob 8.5.1.2.1
            19 April 2016 at 2:35 pm

            That is because NZers always vote in Labour when economic times are good, and National when economic times are bad as shown here: http://www.tradingeconomics.com/new-zealand/gdp-growth

            1990, economy is starting to tank, 4th National government voted in to right the ship, 1999 when the economy is flying, vote in the 5th Labour government, 2008 the economy is tanking again, vote in the 5th National government…

            What you have pointed out is Labour are good at ruining a good economy, not the other way around. Looks like Labours best chance of getting back in power is for this government to do a better job of the economy!

            • mikes 8.5.1.2.1.1
              20 April 2016 at 12:30 am

              Spin it however you want bobby boy. You asked for factual proof that the economy does better under labour and the link I provided shows GDP growth (our measure of how well the economy is doing) is always better under a Labour government.

              Suck on it mate.

  9. Olwyn 9
    18 April 2016 at 9:27 am

    It is not just about what a government could do with 7.5bn. it is also about the breach of the social contract, the stultifying effect on the local economy, and the attendant increase in the chasm between rich and poor. With regard to the first point, large scale tax dodging gives lie to the idea that looking after the rich means looking after the conditions whereby all prosper. This cannot be so if prospering for one lot means collecting rents and capital gains, paying no taxes, and thus bypassing the other lot. And even putting housing to one side for a moment, if you have a street in which the wealthy use the shops to park their money, someone who needs a shop from which to sell real products finds themselves priced out. And the fact that the tax avoider can pay more for things like houses and premises etc. allows them to form a benchmark that it is impossible for others, who are not in the same position as them, to meet. It is not just about missing out on taxes they have not paid, it is also about coping with the local distortions that arise from their not paying it.

  10. Lanthanide 10
    18 April 2016 at 9:35 am

    After 15 years, this surplus would pay off National’s national debt. Although actually if we started paying the debt off in earnest, the interest cost would reduce, freeing up more cash to pay off the capital. So perhaps 12 years after you factor in that – assuming all government’s can keep their hands off this money, and keep the public happy, while also preparing for climate change and the future of work.

    In other words, National’s national debt will never be paid off.

    • aerobubble 10.1
      18 April 2016 at 11:43 am

      Remember a flat tax is designed to equalise the influence of one billionarie with a million shareholders with a thousand dollars each, of course that misses the reality that its very easy for one person to make a decision, and far better for us all that a million people do. So anyone who promotes a flat tax as a solutiin to tax fairness is nit all that bright, or understand capitalism. Yet both Morgan and Brass have. They have no integrity on tax if they cannot understand progressive taxes are necessary to facilitate the invisble hand of the market.

      Not only are National cluesless about the economy, I mean Keu does uderstand that peope move money to forieg countries that do nt tax them and so our system does not tax foriegn trust makes us a tax haven. Now thats stupid and that makes us all stupidier when the media frame the lie that we are not facilitating tax avoidance.
      Sure people want to get their money out of China or Russia, but dont pay tax is just a silver lining, tax all global trusts at the medium upper tax rate. give a third to the un a third to the tax domicles of the source and destination.

      • Richard McGrath 10.1.1
        18 April 2016 at 6:11 pm

        Good Lord, use a spell checker!

        “…progressive taxes are necessary to facilitate the invis(i)ble hand of the market.”

        Did Adam Smith ever claim that? I thought progressive taxes were a Marxian concept, part of the Communist manifesto.

        “…anyone who promotes a flat tax as a soluti(o)n to tax fairness is n(o)t all that bright, or (does not) understand capitalism.”

        Capitalism is about private property, the rule of law and voluntary interaction – what does that have to do with flat tax?

        • aerobubble 10.1.1.1
          21 April 2016 at 3:18 pm

          Progessive taxation is wat we got mate in higher taxes at higher tax bans, shows how little you know about communism. How can you know anything if you dont get that.

    • Draco T Bastard 10.2
      18 April 2016 at 12:23 pm

      National’s national debt will never be paid off.

      It’s not supposed to be paid off as it’s a permanent government guaranteed income for the rich.

      • aerobubble 10.2.1
        21 April 2016 at 3:25 pm

        No. Sure under writing debt so the wealthiest never have to pay up…

        ..but you have to be clear. There is very real value in one person having a billion dollars over a thousand people with a million each. Such a individual will have considerable more influence, yet markets as Adam Smith points out, requires lots of hands to create the invinsible market. Great concentrations of power in the hands of the few, whether a cimmunism politiburo, a fascist state, or an oligarchy, are anti market, anti democratic anti capitalist, etc.

        The fact that a couple morons, Brash, Morgan, ACT want a flat tax shows they do not like markets functioning properly.

        • Draco T Bastard 10.2.1.1
          21 April 2016 at 3:51 pm

          That doesn’t appear to apply to what I said.

          Great concentrations of power in the hands of the few, whether a cimmunism politiburo, a fascist state, or an oligarchy, are anti market, anti democratic anti capitalist, etc.

          Communism doesn’t have a hierarchy and thus no power concentrated in the hands of the few.

          • aerobubble 10.2.1.1.1
            22 April 2016 at 12:22 pm

            Communism in theory, in theory neo liberals are correct also, we are perfectly rational. Its where the tires hit the road that power concentrates making it hard to tell whether N.Korea is a oligarchy, a fascist regime, or a commie nation state, since only fools accept the lies of a dictator they arent.

            Power comes from people giving it up, communists argue the people should give up their differences. Neo-libs their flaws. Uniformity breeds contempt, peoples who conform open themselves to being corralled.

            I am not a number, i am not perfectly rational, i am not equal in all aspects, i am not a superbeing ayran, its all lies designed to gain my consent. foa.

  11. roy cartland 11
    18 April 2016 at 11:32 am

    Well obviously we could use another 288 flag referenda.

  12. Colonial Viper 12
    18 April 2016 at 11:56 am

    The Crown does not need to constantly deplete the incomes and savings of Kiwi households in order to get New Zealand dollars.

    The Crown can issue New Zealand dollars as it requires to get productive public sector work done.

    • Lanthanide 12.1
      18 April 2016 at 12:12 pm

      “The Crown can issue New Zealand dollars as it requires to get productive public sector work done.”

      Sure, the Crown can do that, and if they did they’d have to accept the consequences of those actions, which would likely extend to foreign countries skeptical of the measure and capital flight.

      But, it certainly is an option on the table.

      • Draco T Bastard 12.1.1
        18 April 2016 at 12:28 pm

        Two things would happen:

        1. The economy would be fully utilised
        2. NZ$ may decrease on the forex thus making NZ made products more viable on the NZ market

        Of course, if the government also stopped the private banks from creating money at the same time and thus ensuring that the government were the sole source of NZ$ then, IMO, the NZ$ would actually go up on the forex as the amount of money being created would seriously decrease.

        • Lanthanide 12.1.1.1
          18 April 2016 at 1:56 pm

          Other things may happen, too:

          3. Foreign countries, assuming our currency to now be worthless, could refuse to trade with us, or only trade with us on terms very unfavourable to us.

          • Draco T Bastard 12.1.1.1.1
            18 April 2016 at 3:22 pm

            That would be reflected in the forex yes?

            And why aren’t they declaring our currency worthless now considering just how much money the private banks create every year?

            You can’t have it both ways.

            • Colonial Viper 12.1.1.1.1.1
              18 April 2016 at 6:28 pm

              exactly. Lanth look at the massive increase in M1 and M2 over the last 20 years according to the NZRB.

              All at a time that we’ve supposedly had inflation well under control and the value of the NZD has soared.

          • Colonial Viper 12.1.1.1.2
            18 April 2016 at 6:25 pm

            Why would our currency become “worthless”?

            As long as NZ continued to produce high quality protein, robust building materials, innovative technologies, fresh water and skilled workers, our currency will continue to be highly valued as it can buy valuable shit.

    • Richard McGrath 12.2
      18 April 2016 at 6:12 pm

      “The Crown can issue New Zealand dollars as it requires to get productive public sector work done.”

      But doesn’t that inflate the currency, destroying the value of people’s savings, thus contradicting your first sentence?

      • Colonial Viper 12.2.1
        18 April 2016 at 6:21 pm

        No it doesn’t inflate the currency.

        But I’m just as happy for the Crown to take money from your bank account instead, if that’s what you prefer.

        • Richard McGrath 12.2.1.1
          19 April 2016 at 1:33 pm

          Do you mean printing currency that isn’t backed by gold or something similar? If so, that’s inflating the currency.

  13. greywarshark 13
    18 April 2016 at 2:08 pm

    The tax system – friend or foe? Encouraging small NZ enterprise and vitality with multiplier effects, or erecting barriers to micro and mini business with inappropriate levels of scrutiny, regulations, controls and unreasonably costly taxation scrutiny?

    Anybody who wants to see NZ prepare for a harsh future because climate change effects and giant draconian rorts from the political mafia will want to take an interest in getting better tax systems.

    Co-operatives can be a big part in this. There is a review now on co-operatives. Try to get a submission in to the FMA (Financial Management Authority) on or before Friday 6 May.
    Consultation paper: Exemption for small offers of co-operative shares > https://fma.govt.nz/compliance/consultation/consultation-papers/consultation-paper-exemption-for-small-offers-of-co-operative-shares

    It is my view as a member of the thinking public, that we need more co-operatives all over NZ. They should be a large part of the small business community. The taxes on co-operatives should be minimised as there is likely to be little cream to be poured off from any profits they make. And the audit fees be kept to a minimum for the same reason. Any fraud would be miniscule compared to the opportunities available to larger businesses, charities, trusts and government departments. (Cf $16million? from DHB in South Island.)

    Small co-operatives and charitable trusts are different to large successful ones operating under special licence as it were, because they are ostensibly charities but are equal to large businesses and profit oriented, but set aside a proportion of profits for charitable purposes. They in turn can be connected trusts dealing with large sums of money but still with taxation exemptions. We must remember that old adage, that charity begins at home, and that is where the heart is. The small business operating under regular IRD taxation system is closer to the heart of its community and more souls than any large religious, charitable, artistic, sporting or philosophic entity. that may receive concessions.
    This entity is likely to be skewed towards the larger co-ops –
    http://nz.coop/types-co-operatives/
    Transition towns advice about and an item on co-operatives – http://www.transitiontowns.org.nz/node/3557

  14. RedBaronCV 14
    18 April 2016 at 7:45 pm

    What interests me about John key’s declarations of assets is the “Bank of America” one. It looks like he has put this down for quite a few years now and my understanding is that it dates back to a period when he was employed by the Bank and received some shares.
    But that employment period was now quite some time ago so I would imagine that any lock up period for the shares has long since expired if there ever was one.

    It seems very strange that he has never diversified the money tied up in BOA into a range of other investments – after all that’s pretty much standard practice. And if he has diversified then what are the funds now invested in and why isn’t this shown?

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