Here's our summary of key economic events overnight that affect New Zealand, with news mainland Chinese buyers are again very active in Sydney's new housing markets.
But first, there were just under 220,000 US jobless claims last week which was not as big a fall as was expected. (The seasonally adjusted number was higher.) There are now just under 1.7 mln people of these assistance programs.
All eyes are now on non-farm payrolls, and it is expect these will have risen only a modest +180,000 in April when the data is released tomorrow morning. The number of layoffs in April came in at their lowest level of the year.
And the American trade deficit came in at its lowest in four months, and its second lowest since November 2020. Exports rose +2.1%, imports fell marginally.
Canada's widely-watched Ivey PMI slipped slightly but is still expanding at a very solid rate.
The Caixin China General Manufacturing PMI fell to a small contraction in April which mirrored the official PMI contraction. But analysts had expected the Caixin PMI to be a bit better than that. It was not to be. The latest result was the first contraction in factory activity since January, amid an ongoing property downturn and fears of a global slowdown. New orders shrank after rising in March, while employment declined the most in 3 months.
Hong Kong reported its March retail sales overnight and they were strong, even after accepting they were off an unusually low base. The strong recovery of inbound tourism helped.
The ECB raised its benchmark policy rate by another +25 bps overnight to 3.75%. This was as expected. The previous three rises had been +50 bps each, and is up from zero in July 2022. They also signaled they won't be reinvesting all its QE holdings as each tranche matures, letting it run off at the rate of -€15 bln per month. Essentially they are signalling their recovery is now on track on a solid enough footing to ease off the loose money policies put in place for the pandemic.
European producer prices continued their retreat in March and are now 'only' +5.9% higher than year ago levels. Recall they were up by more than +40% in August last year at the peak of the pressures.
Australia's trade surplus rose to +AU$15.3 bln in March from an upwardly revised result in the previous month, handily beating market forecasts of +US$12.7 bln and their second largest on record (in June 2022). It was founded on strong mineral exports. Total exports to China, the country's largest trade partner, surged by more than +28% and now account for 17% of all goods exports.
Staying in Australia, the latest NAB Residential Property Survey found the overall share of foreign buyers in new property markets rose to almost 8% in the March quarter, up from 5.2% in Q4-2022. Buyers from China are driving this. The sharp rise was underpinned by +16% rise in NSW, up from 6.7% in the previous quarter. Foreign buyer market share in NSW is now at its highest level in eight years. Even before lockdowns were lifted, Foreign Investment Review Board figures show approved mainland Chinese investment in residential real estate totalled AU$1 bln in Q3-2022. It reached only AU$2.4 bln for the entire prior financial year.
Global container freight rates slipped again last week but only marginally as they have reached -34% below their 10 year average (even if this does include the pandemic spike). Bulk cargo rates were little changed too.
Global air passenger traffic in March rose strongly from depressed year-ago levels but it is still -12% lower than pre-pandemic levels. It is domestic travel that has made the best recovery. The weakest sector is international travel in the Asia/Pacific region.
The UST 10yr yield starts today at 3.37%, and down another -3 bps from this time yesterday. Their 2-10 yield curve is less inverted at -39 bps. Their 1-5 curve is unchanged by -137 bps. And their 3 mth-10yr curve is now more inverted by -120 bps. The Australian 10 year bond yield is now at 3.27% and down -10 bps from this time yesterday. The China 10 year bond rate is little-changed at 2.78%. And the NZ Government 10 year bond rate is now at 4.16%, and that is down -2 bps from this time yesterday.
Wall Street is down -0.8% on the S&P500 in its Thursday trade. More woes from regional bank stocks are depressing this market. Overnight, European markets were all down about -0.6% except London which fell -1.1%. Yesterday Tokyo was closed for a holiday. Hong Kong recovered +1.3% and Shanghai up +0.8% in its first day back. Yesterday, the ASX200 ended down a minor -0.1% while the NZX50 ended up +0.5% in a late burst higher.
The price of gold will start today at US$2046/oz and up another +US$23 from this time yesterday. (Remember its all-time high was US$2070 on August 6, 2020.)
And oil prices have stabilised from yesterday to be just under US$69/bbl in the US. The international Brent price is just under US$73/bbl.
The Kiwi dollar is +½c firmer against the USD and now at 63 USc. Against the Aussie we are also +½c firmer at 93.9 AUc. Against the euro we are up +½c at 57.1 euro cents. That means the TWI-5 is now at 70.7 and up +40 bps since this time yesterday.
The bitcoin price is firmer today, now at US$28,829 and up +1.3% this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.0%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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149 Comments
$1 reserve house... https://www.stuff.co.nz/business/131930975/slow-market-pushes-palmersto…
Property coach Steve Goodey said he first became aware of Faber’s auction after the seller got in contact, and asked if the selling method was likely to work.
Goodey said a similar situation played out in Wellington this week, when a court-ordered sale for a Karaka Bay property valued at $1.2 million was put up with a reserve of $250,000, and that ended up going for $880,000.
“They got pretty much fair market value for it .... If we’re in a downturn $880,000 is a pretty good price,” Goodey said.
I actually felt sorry for the clown and did just that.... It shows that buyers want true price discovery by low reserve auction..... most will not do it as they are too scared it won't make last years price, this poor guy wants to pay his mom back... A man of Honour perhaps.
Purely out of curiosity I attended a $1 reserve auction after the gfc. The auction room was chocka and the agent was all smiles, until the bidding stalled at just 20% of the sale price of the neighbouring block. At the 3rd and final call the auctioneer looked like he might cry so I put in a bid to help him out (well actually to bag myself a bargain). A couple of others were similarly prompted to take advantage of the unfolding tragedy and the bidding got going again. It sold for 40% of the neighbours price when I stopped bidding because I had never set foot on the place.
Edit: I just looked at the subsequent sales and valuations and it looks like that poor auction result just dragged down the whole neighbourhood to a new market price. So a lesson there for when you think you are about to get a bargain.
Well done him for meeting the true market. As more and more of these forced sales occur and expose the true market price by real price discover, the more pressure will come on the speculative trying to fudge price BS. At some stage agents will start to push this because they dont really care what you sell for, just that you actually sell.
Further evidence we are turning into a third world country. Cook straight ferry services have been a failure for months, Wellington and now Auckland train services fail and an outbreak of Measles that forced school to close!
Until we find a political party willing to get focus on the basics on education, health and productivity we won’t move forward.
Just wait til we see the result of Wayne Browns cost cutting exercises....
We can afford tens of billions for shiny new underground rail systems, renaming govt departments, we are about to sign off a new stadium in tauranga. But we dont have any money to maintain basic public services and transport.
Something is seriously amiss.
We can't afford those shiny infrastructure projects either. The government is on a fool's errand spending tens of millions on concept designs when there will never be an economic case for NZ in its current state.
We don't have enough world-class industries to pay for world-class urban infrastructure in Auckland, plain and simple.
We don't have enough world-class industries to pay for world-class urban infrastructure in Auckland, plain and simple
The public infrastructures of Korea, Japan, and S'pore were built to complement the might of the industrial sectors of each respective country. In the case of Korea and Japan, NZ might be 70+ years behind them in terms of infrastructure. Furthermore, low public debt is usually accompanied by an infrastructure deficit.
NZ needs good ideas, and Raf Manji and TOP are the only team that has put out policy with good ideas. Go to their website www.top.org.nz and read.
Lol. I had a look.
So with top if i own a house on land worth $500k i pay $4k tax. And that tax goes to support the increasing numbee of people that refuse to work?
If not.. pls correct me. If so its not progress. They need broader policies and a long term vision of how nz should look in all areas -to sell to us all. Then tell hard working mid class people why they should pay an additional tax on their home/land.
Cgt makes sense for all but primary residence.
If i were top i would have in the home page of my website descriptions of NZ in 5 10 and 20 years...
It's not inane Chebbo. Our history tells us clearly of the politicians record on tax. Even now they refuse to fix the bracket creep issue. TOP's policy suggests replacing part of PAYE with a land tax (?) Guess what, the promise of GST was that it FULLY replace PAYE. What happened there?
Fundamentally the issue is with the electoral system, but choosing to vote for a party based on their tax policy is at best problematic, unless there is a way to keep them accountable over it, and not have to wait for the next election.
I'm a swing voter, so I view parties quite critically over their policy merits rather than the mindless following of ideology. I haven't voted for the same party twice in a row in the last few elections.
Did you read all of my comment? TOP's policies have been thoroughly dissected on this site in the past and in my view are at least as flawed as any other party. Most of them more so. They tend to play on populist envy based principles that do not stand up to scrutiny. But then that can also be said of most of the other parties too. Try keeping your discussion to the the merits or lack of, of the policies please. The comment you made was demeaning, especially of yourself as it demonstrates character.
I'm not sure how it's envy, the top tax rate is more of an envy tax than a land value tax. It's about shifting our revenue source from income earners to a broader range of sources to prevent everything from collapsing in on itself. I wouldn't say their policies have been thoroughly disected, you just don't agree with them which is fine as everyone is entitled to their own opinion.
Land is a unique asset class and holds a natural monopoly, and unlike wealth and other capital it cannot be removed from the country. We already had a LVT in the past so it is hardly an unprecedented thing to bring in and would likely have less negative externalities than something like a capital gains tax.
Powerdownkiwi has an excellent point that everything is inherently unsustainable and long term we are screwed but I am not sure how to respond to that so I won't.
When did we have a LVT? Some argue we have one now called Rates.
I disagree with LVT's because they will be an additional barrier to ordinary people owning property. The fundamental assumption is that if you can afford to own property, then you have an income source to pay tax on it. That is patently incorrect. And because of that an untended consequence will be the creation (or re-creation) of a 'landed gentry' class of people. Yes they might be paying tax, but human behavioural history tells us that they will then seek to influence the politicians to minimise that exposure in someway. (likely in offsets to protect their class privilege). The other consequence will be forcing many who own land, but without the income to pay an additional tax on it, off that land. This will result in some of them at least becoming homeless. Interestingly some of the commenters who support the TOP policy on this seem to think this is an acceptable outcome (forcing them to sell too big family homes etc). The alternative, which in some form is already beginning to appear, is that the tax becomes a debt against the capital value of the property. But what happens when the person lives for a much longer time and the debt against the property becomes more than the capital value? Are they forced out? Policies have real consequences to real people. What if you were one of those people?
PDK's comments are essentially referring to too many people. It is evident every where where consumption is exceeding the planet's capability to cope, and that is why it is unsustainable. Until we start talking about reducing the population we are screwed.
We had a land value tax from 1891-1991. As far as I am aware it had none of the effects you are describing here.
I would fundamentally disagree with you on your second point. We already have a landed gentry. A LVT is a tax to prevent landed gentry from spiralling out of control as you are taxed on the idle use of land. There is zero evidence that a land value would create a landed gentry. I don't see how keeping land as a protected asset that is shielded from tax will prevent a landed gentry from taking root as it evidently is now.
We can see this playing out, people who weren't lucky enough to be born with land owning parents have a much, much harder time accessing the property market than those who can borrow equity from their parents.
The proposed LVT rate would be unlikely to exceed the value of the property. If you had a property with a land value of 300,000, the proposed rate of 0.75 percent would be $2250, for that yearly cost to add up to the value of the property it would take 133 years. If your land value was to somehow drop 50 percent your it would still take nearly 67 years of stacked-up payments to exceed the value of the property, not even taking into account the fact that your LVT rate would of halved as well. And since it is only on the land value, not the entire property value the owner would still have some equity left if the total LVT bill came out to more than what the property is worth in this scenario.
Yes there is probably to many people, I suppose one solution to the superannuation is to simply kill everyone off once they reach retirement age and are no longer economically useful, but that is genocide and a unilaterally terrible idea. The reason I can't respond to it is because I literally don't know what we can do about it.
I bought my first home in the mid 80's and don't recall any tax other than rates? How was the LVT applied do you know? And I doubt it would have had the effect that I described then as land values were very much less then than they are now, especially in proportion to median incomes.
You refer to the "idle" use of land, what do you mean? Does residential property fall into that? I suggest residential properties held empty (land banking) should be taxed, rigorously. But I take the view looking forward. I have received no help from parents or anyone to get what I have today and know how hard, and touch and go it was for me, so I certainly understand how hard it is for later generations, especially with the current pressures. But I still hold with my suggestion of the potential risk of a 'landed gentry'.
But I would suggest there is an alternative solution that I suggest would be much more effective. This whole problem stems from the high cost of housing today, especially for later generations. In part this has been caused by too many people trying to get into the land-lording business, but also land banking (referred above) and foreign buyers (In Aussie at the moment). I have argued many times the proper regulation of the housing market is required, including social housing. Proper regulation would I suggest drive property values down, making it much harder for property investment. If you're talking about taxing to provide Government funding that is just perpetuating a myth about taxation that is wrong.
A small LVT wouldn’t keep people out of the market, it would make it harder for landed gentry to hold on to lane in perpetuity without contributing anything productive themselves.
You say proper regulation but you don’t actually put forward any specific achievable goals. A LVT may have the effect of dampening speculation and encouraging land to be used more productively. Maybe you could give FHB’s a 5 year holiday before a LVT starts like an inverse brightline tax or something to better encourage people moving into their own homes. LVT is looking forward, it’s structuring a tax system that evens out the inequalities between landowners and non landowners which ultimately the crux of the issue. People have invested in land explicitly because the tax system is so slanted towards it that anything else gets taxed at a higher rate. Fix this and we can start to change property from an investment vehicle back to what it should be, places for people to live.
Once you've let in the tax, you won't be able to get rid of it easily. That is why I argue for regulation. You want achievable goals; try affordable housing cost across the whole society (affordable as in 25 - 30% median take home pay for rents max) Home ownership will be higher due to purchase costs but the goal there should be between 2.5 and 4 time the gross median wage. You have to be at least resident in NZ to won residential property. Banks are constrained on the ability to create money etc?
You sound as if you're coming from a socialist perspective of envy (which I disagree with) or you're trying to modify behaviour with some vague, ill defined tax when regulation would be simpler and easier.
And to your earlier comment about shooting people when they reach retirement age; Its a little rough when it is your turn and you aren't ready for the bullet! But that also highlights a flaw in a lot of arguments; most people argue from the perspective of imposing their solution on someone else, and don't appear to consider what they would feel if it was imposed on them.
It's a pigouvian tax, it's not from envy it's from modifying people behaviour through tax incentives. Tax is effectively just a regulation so it should have as much effect as any other regulation.
A land value tax is not socialist in any way. Can you explain to me what regulation you are going to bring in that makes housing costs affordable across all of society? How do you actually achieve that? Any policy that you bring in to do that will be more oppressive and socialist than a straight land value tax.
I thought it was pretty obvious that I wasn't actually proposing to shoot everyone, a land value tax would be applied to everyone, directly or indirectly. We all utilise land and have a choice in how much we use. It's a fair and progessive tax.
I pretty much detailed the core of regulation that would drive the cost of housing down. The pigouvian taxes "influence" behaviour, they don't drive it. An example is tax on carbon and fuels. The theory behind it is an increase in cost makes people do it less. But with the price of fuels more than doubling this century travel hasn't halved has it? Something much stronger is required. Carbon and GHG production hasn't dropped with the imposition of a cost on the gases either has it?
And I did get your sarcasm/facetiousness but it is useful to use it to identify a perspective on many arguments. But I disagree that a LVT tax is fair or equal. Add a tax to landlords and their rents go up. Add a tax to home owners and their costs go up with no way to offset them. "We all use land" - extend that and you apply a charge to use and access anything and everything on the ground. Regulate the markets though and then you can ensure fair and equal access to all who want it, while dealing to a lot of related issues like poverty and crime.
Add a tax to landlords and their rents go up
I disagree on this, Landlords can only charge what tenants can pay. When landlord costs went down with interest rates we didn't see rents go down or stabilise did we? Especially if landlords own the house outright and don't pay any interest costs. Rent costs are a product of supply and demand.
We haven't seen speculation on carbon on fuel to the same degree as land values either. If anything they have been kept artifically cheap to encourage more consumption.
Personally as a low income earner that owns a property a land tax would be catastrophic. CGT would be okay but atm almost all money goes back into rates and insurance and maintenance (and mortgage), almost all written off as a company. If you were to replace income tax with land tax I would almost certainly be bankrupt.
It's the thin end of the wedge, allows any future government of any party to "adjust" the tax rate to match their fiscal incompetency.
TOP are like any other socialist party, focusing on stealing other peoples part of the pie instead of effective policies to grow the size of the pie. No need to hand them the gun and ammunition.
It’s not socialism. It’s about how revenue is gathered rather than how it is spent. They’re two different arguments.
Land and housing has been massively under taxed in this country compared to other assets. It’s been hugely distortionary and had a lot of negative externalities that haven’t been addressed at all. We literally cannot afford to keep going on like this, incomes alone aren’t enough to support a first world nation especially with rising superannuation costs.
Smith was energy-ignorant; not his fault, just happened to be his timing.
A sunlight-capturing-capability tax might be more interesting.
Land tax only forces an overshot population to over-use their habitat MORE, in pursuit of proxy. That's madness; we need to repatriate a goodly percentage of land, even now.
You taking the p?
I mean re-establishing biodiversity, I mean re-establishing wetlands, I mean de-monoculturing, I mean runoff good enough to support Koura (they're a good litmus-test of water quality). In some cases, I mean de-paving.
We've commandeered most of the planet's acres for ourselves. We and ur attendant animals are now 97% of animal biomass - and that total is MORE than it ever was, pre our commandeering. And we're overshot - which is unsustainable. Part of backing off to an equilibrium, is relinquishing some of seid commandeered land.
You sure you're not taking the p?
No, that tax goes towards reducing the income tax burden of working Kiwis. With TOPs Phase 1 tax policy you will pay less tax, regardless of your income, than you pay now. In fact, for incomes between 70,000 and 100,000, you'll pay about $4k less income tax per year. It's designed to broaden the tax base and be neutral or beneficial for ordinary kiwis.
Included in the IRD report was this
If you take into account income tax, GST and transfers, the net effective tax rate for each income decile is:
- Decile 1: -52%
- Decile 2: -55%
- Decile 3: -36%
- Decile 4: -2%
- Decile 5: 6%
- Decile 6: 18%
- Decile 7: 21%
- Decile 8: 23%
- Decile 9: 26%
- Decile 10: 29%
So the bottom 40% of income earners receive more in transfers than they pay in tax. Even those in the 5th decile only pay an effective tax rate of 6%, because the vast vast bulk of tax is paid by those in the top deciles.
Yep so how about we stop taxing income and start getting revenue from a broader range of sources.
It’s insane to me that everyone is ok with taxing income at 39 percent in the top rate yet any other form of tax to take the load off of incomes is met with screeching and complaints.
Let people keep what they earn.
I guess anything that is clipped by the tax brackets.
- salary or wages
- a Work and Income benefit
- schedular payments
- interest from a bank account or investment
- earnings from self-employment
- money from renting out property
- overseas income.
Of the above I assume the majority comes from salary or wages so that is what I mean.
It is deferred until the asset is sold or ownership is transferred. It would encourage retirees to downsize earlier to minimise their tax liability. In the end when the bill comes due either the sale of the asset covers it or the beneficiaries of the estate can pool together to pay for it if they wish to keep ownership of the property.
It is deferred until the asset is sold or ownership is transferred.
You've just sprung on why it's incomes that are taxed. The crown wants a steady stream of funds to pay its expenses, and taxing income is the best way to do that. The alternative is a string of IOUs, far more expensive to fund, and less reliable.
It's no different than rates Pa1nter. The vast majority of land owners will still be working and it's not like we are completely scrapping income tax all together.
Part of the concept is also encouraging people to downsize earlier to better utilize land rather than keeping it all locked up in equity and land banking to avoid tax liability.
LVT could just park against the property, and accumulate for when the property changes ownership. Thus, you don't have to worry about it as a current owner in your twilight years, and your kids either cash the house in when you're gone, and the LVT gets settled then, or they inherit it - and the ownership change triggers a bill for them.
You could say the bottom 40% get more than what they pay in, but the way I look at it is that the taxpayer is subsidising businesses that don't/won't pay a living wage, and the accommodation supplement goes straight to subsidising residential property investors. The low income earner doesn't benefit.
The issue with TOP's policies as far as I understand them is they run counter to "save and invest and take care of yourself". The better you position yourself to not be a burden to the state, the more money you have to pay to the state.
Also, having someone else decide what counts as productivity or not runs a little close to Chairman Mao's ideas for comfort. Particularly when it's the public sector running the rule over the rest of us. Yuk.
But you’re not getting taxed on your kiwisaver or anything, it’s purely land value? There are other ways to set yourself up for retirement apart from buying property. Other ways that have been hugely discouraged due to the favourable tax advantage that property gets over other assets.
I am open to other ideas but of the proposals I have seen LVT seems like the least worse option.
Look I am not saying it's perfect or it's going to solve all our problems but I don't see how putting the entire tax burden on peoples income is fair or economically ideal.
Land is a limited resource as well. And owning it in perpetuity without having to pay for any of the infrastrucutre or services that it partly derives it value from isn't an ideal setup. An economy is driven by people working, not by owning a non productive asset and then extracting rent from it.
There is merit to the statement, but you forgot the other bits, so I will adjust them for you:
The issue with TOP's policies as far as I understand them is they run counter to "save and invest in landlording and take care of yourself and f everyone else and the society that supports me"
Instead it gets flipped around a little to "save and invest in businesses and take care of yourself and those coming after me"
I will leave it up to you to decide which is better.
If by people who refuse to work you mean retirees on superannuation then yes I guess it does.
Super costs more than all the other benefits combined, the pool of taxpayers is retracting whilst the bulge of superannuants is growing.
From a pure practicality point some kind of asset tax needs to be bought in as incomes alone won’t be able to support the cost and a land value tax is ultimately more efficient with less deadweight losses than any other form of asset tax.
E46 you seem to be part of a chorus that seems to resent that older people who have spent their lives working, sacrificed somewhat and provided themselves a home that they own.
I'm not sure of your age group but when you're nearing retirement do you expect to have provided yourself with a home, and have the means to pay a tax on it as well as providing yourself with a reasonable living standard? I know for a fact that there are a lot of people who do own their own homes but are barely getting by in retirement, and any increase in tax would put them on the street? You seem to be arguing that this is a fair outcome?
Murray it’s really not about that. It’s because of how our tax structure is set up where superannuation is paid for by income earners rather than by something like a super fund. When it was originally put in place we had 6 taxpayers for every one superannuant, we are trending towards having 2 taxpayers for every superannuants. This isn’t sustainable from a purely fiscal level.
I am not advocating for kicking retirees out of their homes, there is a carve out in the policy to be able to defer the LVT until the property is sold or ownership is transferred.
I am aware of how hard it is on superannuation, I don’t hold any resentment towards them on a personal level but our current setup is structured like a pyramid scheme and isn’t a sustainable setup.
Politicians and business lobbies in NZ believe the solution is mass migration. More workers = more taxes to pay for rising super bills. I guess it's the fault of our broken education system when even our elected leaders and overpaid policymakers think about solving complex issues with simple arithmetic.
Using Stats NZ optimistic population projections and Infra NZ's future cost estimates for critical infrastructure, you could even get a Treasury grad to work out the capital and operating costs per new migrant. Next, pull out IRD records of recent migrants and compare the worked-out costs against what the average migrant contributed in taxes (extrapolated across the board).
Crude analysis but much better than blindly stamping visas and hoping a bigger army of Uber drivers and cooks can pay for rising Crown expenses and expensive infrastructure buildouts.
I agree it is another pathetic attempt to kick the can down the road, though I believe we'll arrive at the end of the road soon and those doing the kicking will also suffer.
Boomers who believed they could milk gains out of an endless stream of low-wage workers/renters are now bearing the brunt of a capacity-crunched healthcare system, and are can't call it quits and move to Aussie.
What kind of logic is this. I don’t think it is unfair for people to expect a livable planet and not being handed a massive hospital pass is asking to much.
are you advocating for deferring problems indefinitely over actually attempting to solve them? Basically “f you I got mine” but applied to all of society? What an absolutely braindead position that is to take. Why should our comfort take precedence over future generations?
I’m reminded of the proverb “A society grows great when old men plant trees in whose shade they may never sit”.
I think we agree on what we want the result to be, we just disagree on how to get there.
I am advocating for an imperfect solution that can be implemented within the existing framework. It’s from a pragmatic point of view as I don’t see the electorate or our politicians tearing the whole system down to build something more sustainable any time soon. And even if we do, we are screwed unless every other nation on earth does the same thing and I have zero idea how we are going to do that.
You do know NZ's history don't you? We used to have a super fund which was big enough to be an embarrassment to the politicians of the time so they re-wrote the law to dump it into the consolidated fund to squander it. The ordinary people didn't really have much chance to counter it due to the options of the time, or to really investigate and challenge the premises on what it was based. The end result was that the politicians lied to us at least in effect. But you are right the current economic structure IS unsustainable, but LVTs are NOT a solution. Radical change is required, but no one in politics has the vision.
Murray, I look at my MIL who over the last five years has had 30K per year in Super, 100K in public healthcare, and 500K in tax free capital gains on her property (which she's now spending, having sold a share of to a family member). There's no way that was paid for over a working life in a middling job.
Then I look at my 25 year old son, a STEM graduate working long hours at a demanding job, with a big student loan, high rent going to his property investor landlord, and taxed on every cent he earns. No wonder the young people are looking to escape.
So you're suggesting your MIL should have paid tax on what she got when she sold the share of her property? I agree if she realised a significant gain. But you're not talking about what she did, you're talking about the impacts of an unregulated market that was manipulated by a few.
I do know NZ’s history. 1974 is when the super fund was scrapped. But we live in a democracy Murray, we cannot pin all the blame entirely on the government people need to take some personal responsibility for the situation we are in now.
We have had near 50 years to sort this issue out and yet nothing has been done, because the people didn’t want to deal with it. It was popular to not have to pay more for retirement. People chose this and now we are coming to the logical conclusion of underfunding retirement and relying on a shrinking pool of wage earners to pay for everything, as well as now having to fund their own retirements through kiwisaver.
It seems like people assumed this issue wouldn’t effect them and would be someone else’s problem in the future but it’s starting to show that this isn’t the case. Yes we need massive structural change on many fundamental levels but nobody will be able to get those through. A LVT is an achievable goal in order to keep the system running for a bit longer without completely screwing over the next generation.
You acknowledge radical change won't happen. Then demand radical change.
LVT will be a significant change, to shift tax burdens from income producers to land owners. Those that are productive, to those that aren't. This makes land part of the productivity equation, which means we will end up with more productive use of land, something that is clearly lacking in NZ if you have travelled almost anywhere else. It will help to slow urbarn sprawl and reduce the need for water/power/road/rail infrastructure spending. There really isn't good arguments against it, other than "its a change" which you just said we needed?
No Blobbles I don't acknowledge it won't happen. I do suggest it needs to happen to achieve what is required. As to the rest of your comment, a lot of land should be retired. We over use the environment while we over consume. The only real answer is reducing the population.
It really depends on your situation. My grandad was bedridden by a stroke a couple years after he hit 65, he spent the next 15 years confined to a hospital bed. It's great if you want to keep working and should be encouraged, but to say that it's universally great doesn't take into account aging and the health.
‘….retiring at 65 sounds like nuts to me.’
Really? Try finding an employer who will let you take the summer off so you can go tramping in the South Island. An employer who is happy for you not to come into the office on the sunny Wednesday because you want to smash a100km ride on the bike. It takes all sorts but I’m fine if people want to work at 65. For me it is abject failure. There is a life to be lived and I’m done next year prior to my 58th. When will you walk the Santiago de Compostela or sit on a beach mid week when it’s quiet?
NR - Can we can the silly party political broadcasts, please?
It is not the fault of Government that entropy is accelerating; that is merely physics - and unalterable. Nor will any future Government do any better.
The problem is that we overpopulated - NZ as well as the planet - and built too much infrastructure, too wide and too shallow (too instant-gratifyingly self-indulgently, in other words). Now there are too many balls to keep in the air, and they are all deteriorating.
How we deal with that, is the only game in town. Or would be, if we weren't so blinkered by economic-talk.
The solution is right in front of us. And NZ is leading the way.
Simply to make living so unaffordable and working so hard and boring - that nobody can afford to feed let along house and care for children. Throw in a bit more pollution, some wars and massive stress/anxiety. And tada In 100 years there will be nobody left to turn off the lights :) Planet fixed.
PDK you have been living in your Ohu for to long
Incompetent management of existing resources is a leadership problem - and Kiwirail clearly has problems
Politicans funding new baubles when we should do a better job of looking after what we have is different -and plenty of what we have is very good
Your position seems to be that we should sit around and wait for everything to decay while we die off - not really a winning strategy
Kiwirail was screwed by the way it was sold, and to whom. Neoliberal get-our-hands-on-the-cash-cow-101.
It was run into the ground.
We have the maintenance-deferred remnant (same as other suck-the-cash-defer-the-maintenance outfits; I can trace the Aurora rotten-poles problem to the Chin-era DCC demanding good enough book-returns to justify the white-elephant stadium build). We do it all the time, to everything; discounting the future across the board.
But that era was as a result of scarcity - if it wasn't we could have all consumed at Elite levels - and entropy is starting to bite. So we have to ask what we triage; what we keep, what we discard and what we replace. Kiwirail is a symptom - as are the rotten poles, as are the bursting pipes, as is our crumbling road network, as is 3 Waters, the polytech merger, the Health ditto - the latter being reactions to the increasing shortfall.
No, I don't advocate waiting until it collapses; I advocate triage, NOW. But I also am resigned to the fact that the stupidity will continue (both Parties committed to immigration, on the basis of proxy-held, for instance) until it does crash. At that point, good local leadership and skill-sharing will be needed.
I specialise in the re-purposing of existing infrastructure - you seem to specialise in mounting straw-man avoidance arguments. Which is the best approach, do you think?
Here's a starter that PDK has written up, well worth the read.
https://www.interest.co.nz/public-policy/120142/murray-grimwood-argues-…
That article had no examples of what should be triaged now.
Also, the article had 20 year old graphs predicting the inflection points in Limits to Growth would happen about now. When I challenged pdk to show an updated graph with actuals to back up his assertion we are indeed at the inflection point, he couldn't. If I presented 20 year old forecasts instead of actual results to a company's board of directors I would be rightly sacked.
Straw-man argument.
101.
https://advisory.kpmg.us/articles/2021/limits-to-growth.html
Late enough for you?
You could get there with logic - although that requirement would see almost all BoD's sacked.
No wonder you have not been forthcoming with these updated graphs. They do not fit your narrative that we are past the inflection point and the crash has arrived.
Note: This is a more direct way to the graphs in pdks link above.
https://onlinelibrary.wiley.com/doi/abs/10.1111/jiec.13084
no need to buy the report, just click on the supporting information near the bottom.
PDK, I think you should re-read NR's comment again, doesn't seem like a party political broadcast really. To me, as issues become more ingrained, these comments are going to become a lot louder. People want leadership and if the current lot aren't providing it adequately, then there needs to be change. In this fall off the seneca cliff - population included, we still as a country/community have to focus on important areas and NR is saying a focus on the basics of education, health and productivity is important. Have a listen to Nate Hagens latest podcast. A lot of parallels between sugar and oil - both being the energy overstimulating the system. Why do I mention it, education and health were the primary topics in that podcast.
I hate saying it but China are really getting ahead in technology, Only if they were an open democracy and rest of the world could trust them.
But I know that they are hard working and intelligent people which Americans used to be in last century. Now Americans are just full of hate for each other and that's what they are exporting to the world.
My hope is to have a democracy with intelligent and hard working people. But it's only a hope.
Ultimately both lose out, and so do we. Look at the dearth of mobile innovation since Huawei was crippled by patch-protecting sanctions. Phones cost more and more each year but the pace of innovation (particularly in mobile imaging) has slowed dramatically. The P30 Pro was equally the measure of the best Samsung in its heyday.
Now China has OK-ish phones but with a disjointed software experience while globally, smart phone innovation has slowed to a crawl.
China's undemocratic leadership wasn't much of an issue a couple of decades ago when all they did with their unchecked authority was rally workers into sweatshop for mass production of cheap goods.
Once we realised the high-paying jobs associated with manufacturing (design, engineering, technology, etc.) also began moving East gradually, we're angry at everyone when in all honesty we should be kicking ourselves.
Christine Lagarde has signalled that interest rates in the eurozone will have to rise towards record highs to stop the economy from overheating as she warned that the fight against inflation was far from over...."We are not pausing, that is very clear," she told reporters after the ECB lifted all three of its key interest rates "
35% pay rise here, 15% there, and we'll all soon be in the same boat.
Australia's pumped hydro scheme in serious trouble with delays and cost overruns
https://www.abc.net.au/news/2023-05-04/ex-snowy-boss-blows-fuse-over-bu…
Druckenmiller Warns US Debt Crisis Worse Than He Imagined
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Billionaire investor says Fed is fueling reckless behaviors
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US fiscal problems go far beyond debt-ceiling battles, he says
"The economic storm spurred by reckless spending could dwarf the economic pains of 2008."
“The fiscal recklessness of the last decade has been like watching a horror movie unfold,” So has been the Monetary Recklessness as well.
At some stage debt cost will fall, and we will get sucked into the deflationary black hole that follows as rates are slashed. But given the certainty of "they'll never let that happens" still about, there's probably a bit of time left before that happens. Anyway. We'll all know in due course.
The online valuations are such a joke.... Are they under pressure from someone to hold them high? I guess if they put them at current prices real estate companies will not advertise through them? Anyone with some inside knowledge of the revenue streams of the companies?
The RE Agent can change those numbers when they login.
Real estate market in NZ is very tightly controlled... at least everything we seè except the real prices.
It highlights why its been so dangerous to invest in it. All related stories, adverts, rate moves, developments and government policies are all controller by or largely influenced by the industry itself.
RE agents are lying through the nose to get the buyers to the auctions. It's a sham place, those RE offices and auction rooms.
I am sure these RE office buildings are built on graves of really really evil people and evil spirits reside there, hence all those working there are under bad influence and anyone they touch becomes evil too.
Will you be shouting out the OAth to your King and God this weeked IT Guy?
The Coronation oath in full reads: "I swear that I will pay true allegiance to Your Majesty, and to your heirs and successors according to law. So help me God."
(Wonder what the cost is to the poor UK tax payer)
I am not a religious person though I may be counted in the census as belonging to The Church of the Flying Spagetti Monster.
I am the Flying Spaghetti Monster. Thou shalt have no other monsters before Me (Afterwards is OK; just use protection). The only Monster who deserves capitalization is Me! Other monsters are false monsters, undeserving of capitalization.
— Suggestions 1:1
I may well watch it though as the Poms do Pomp so well
Here is some education for you
One of New Zealand’s most enduring political institutions, the Kīngitanga (Māori King movement) was founded in 1858 with the aim of uniting Māori under a single sovereign. Waikato is the seat of the Kīngitanga. The early years of the reign of the second king, King Tāwhiao, were dominated by the New Zealand wars of the 1860s. The longest-serving Māori monarch has been the beloved Queen Dame Te Atairangikaahu, who reigned for 40 years until her death in 2006.
Waaaaay to complicated and far to many graphs, however other articles on that Website are excellent. You can reduce it all to one sentence, the USA is teetering on the edge of GFC 2. Where do I see it going from here ? Perfect timing, total economic collapse in the USA this year under Biden or before the election, the Americans will then get so desperate they will put Trump back in, this will results in a full on civil war.
Nah. The outcome is gonna be all the small banks getting acquired by the big banks for one hundreth of their true value.... they wont have any deposits left so the big banks jist get the assets for zilch.
Outcome will be 4 to 5 big banks controlled by the elite and hyper profitable (like here).
The big banks guarentee deposits i think.. or will. So no need for a run.. its unfair on the smaller guys but thats how things work now. I understand a significant amount of money is already moved from regional banks to the big boys anyway.. so they have to sell up or be forced under.
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