There was good news this week for those who don’t like paying tax: one political party ruled out not just a capital gains tax, but all taxes.
Income tax, corporate tax, goods and services tax, road user charges… you name it, it's gone.
How will the party continue to fund public services without tax revenue, you ask? Well, those (minor) details will be provided “in the coming weeks” it said.
The political party was conspiracy theorist Liz Gunn’s new NZ Loyal Party and it has the luxury of promising a tax-free utopia because there is zero chance it will be asked to follow through.
This is an extreme example of what I like to call “micro-populism”.
Minor parties propose outlandish ideas that are popular with their voter base, but have little-to-no chance of becoming government policy.
Examples include the Act Party’s proposed referendum to redefine treaty principles, the Maori Party’s plan to establish a separate parliament, and now the Green Party’s wealth tax.
A wealth tax is not a particularly outlandish idea compared to the other two examples cited above, both of which would be significant constitutional reforms.
But, for over a decade, there has been consensus that the Labour Party cannot win an election with even a faint whiff of a capital gains tax in its manifesto.
Phil Goff campaigned on it in 2011 and lost. David Cunliffe campaigned on it in 2014 and lost.
Jacinda Ardern was elected in 2017 without ruling it out, but ended up doing so before the next election. And now, Chris Hipkins has followed suit.
The rest of the Green Party’s marquee income policy rests on the extra revenue that would’ve been brought in by its wealth taxes. You can’t do one half without the other.
Herein lies the problem for would-be governing parties this election: there is no money in the bank for shiny new policies. If you don’t raise more cash, you can’t do more stuff.
Something has to be done
In the Budget 2023 process, Treasury told ministers there were “fiscal challenges” that would make it difficult to maintain operating surpluses and meet fiscal objectives.
There was a “strong case” for considering raising revenue to support the $4.5 billion operating allowance and the self-imposed fiscal rules, it said.
In 2021, Treasury wrote a long-term fiscal position briefing document which warned net debt would reach unsustainable levels by 2060 unless governments did something about it.
This was based on historical spending trends (not just Covid-era spending) and factored in demographic change.
The Treasury said there was “no immediate need” to reduce debt, but some combination of lower spending and/or more taxes will be necessary over time.
Some commentators have criticized Labour and National for their lack of policies, but the truth is that there isn’t much room for new initiatives without lifting taxes.
Micro and macro populism
And so, many of the bright ideas are coming from minor parties which will never have to hold the finance portfolio or win over ‘middle New Zealand’ in an election.
The Act Party wants to hack the public sector to facilitate tax cuts across the board. The Green Party wants to tax the wealthy to support low income earners. Te Pati Maori wants to take GST off all food. The Opportunities Party wants a universal basic income.
National and Labour face their own macro-populist issues when it comes to tax policy.
Homeowners still make up 65% of all households, even though ownership rates have been falling for decades. Since voter turnout and ownership rates are higher among older groups, we can assume the voter base has an even higher proportion of homeowners.
These voters are afraid of what a capital gains or wealth tax might mean for their most important asset, even with the ‘family home’ ruled out of the equation.
Farmers, and the rural communities that surround them, are another important demographic that hates the idea of wealth, capital, or land taxes. They often earn thin margins from a very expensive asset and worry about being hit hard by these types of taxes.
Only a small minority of NZ’s population lives rurally, but they hold a lot of political sway due to the importance of exports.
Wage and salary earners already shoulder the bulk of the tax burden and asking them to carry more would be a tough sell. Particularly when some other types of income remain untaxed.
And so, it is very hard to corral a winning coalition that will support tax increases.
The minor parties can craft a micro-populist policy for their 5% to 15% of voters, while the big parties stick their populist heads in the sand.
Dreamwalking
There’s an interview that former prime minister Jim Bolger gave during the 2020 election campaign that I never stop thinking about.
He was being interviewed about Todd Muller’s shock resignation and RNZ’s Kathryn Ryan is pushing him to endorse possible replacements, but Bolger wasn’t interested in that at all.
The only thing he wanted to discuss was “the stark reality” that New Zealand would need higher tax rates in the aftermath of the pandemic.
“All political parties [are doing] a little bit of dream-walking at the moment,” he said.
There had been massive (and essential) spending during the Covid-19 pandemic to protect people and the economy, but nobody was talking about getting budgets back on track.
“We have been drifting along, all comfortable, and the virus has thumped us. We need to respond by acknowledging we have to take some very radical and bold steps”.
While Ryan tried in vain to bring the conversation back to the leadership contest, Bolger said political leaders needed the courage to lift rates and implement a capital gains tax.
“I know some will scream blue murder and I'll get some nasty emails. But that’s the stark reality of what New Zealand has to do,” he said.
Remember, this is a life-long National Party member and a prime minister who oversaw the Mother of All Budgets in the 1990s. He’s not exactly a Marxist.
When Ryan pushed again on who should lead the National Party into the 2020 election, the only thing he’d say was that it needed to be a bold leader.
The way New Zealand was taxing and spending was “totally out of kilter with reality” and needed to be confronted.
“I just hope that there are leaders out there, in all parties, that will step up to that [challenge]”.
Three years later, he must be disappointed.
214 Comments
Exactly my question. I keep hearing this blanket statement about consultants and wasteful spending... but with no detail on what the plan is. That scares me. Luxon is a very one dimensional character (so far) ,and I'm hoping there is more to him than just a mission statement.
The government does have a way of conduct that adds another layer of monitoring and auditing to proceedings that the private sector doesn't seem to add.
My feeling is this adds around 20% to the cost of making decisions and doing things, but in the scheme of it, our largest costs are really things like health and social welfare, which are only going to increase in spend.
Yes, healthcare, welfare, essential services will all increase in comparative cost over the next however long. Any cuts in spending will be consumed fairly quickly and be short lived last grasp efforts. Tax is coming, we just need to agree on what and who.
Cant support a system where FHB is forking over half their income over for interest and PAYE
Thomas Couglan (NZ Herald) mentioned recently that Luxon had insigated KPI's for National Party MP's. Perhaps we need good KPI's for all MP's and their staff, and all government departments, this will allow all to be measured. Then we may get some improvement and productivity from our government services and the taxes that pay for these. Just an idea that could be looked at, run government departments like the businesses that they are, effective measurement of inputs and outputs.
When I was in government we transitioned from a KPI outputs performance framework to a KPI outcomes performance framework. It's all a matter of bureaucratic fashion trends :-). Anyone who thinks government departments don't measure performance is wrong - just about every aspect of your work gets quantitatively measured in some way. The switch to qualitative (outcomes) measurement was an interesting one, but no less bureaucratic.
Communications people in all departments, Māori departments- after all we are one country, Reduction in head count in departments like education - at departmental level that is, same applies for all government agencies, departments. Cost analysis on spending and public reporting on spending vs target with outcomes.
It won’t save much. People think the government spends its money on itself, when really most of the money is spent on actual stuff (whether it be pensions or health or teachers or welfare or roads). Even if they found a billion of waste, that’s only a few dollars per taxpayer per week, a tiny fraction of my tax bill.
Yea that’s what I’m seeing. No wholesale change just trimming. The additional hole of $x billion in PAYE cuts to follow.
Even if we found an effective way to cut, that’s going to hurt more than it needs to considering we’re already in recession.
As it states in the article, tax. Hard pill to swallow.
Labour hired 14,000 extra bureaucrats over their term. Getting rid of them would save about $2 Billion dollars a year. Then you can get rid of all the duplicate departments like the Maori Health Authority. And all the consultants and hanger ons that siphon off taxpayer money like Mahuta's mates.
If they cut 10,000 civil servants on 100k each that would save around 1 billion dollars. A significant amount of money but it still pales in comparison to the deficit and the rising costs in the near future such as superannuation and healthcare costs for an aging population. Not to mention the reduction in tax revenue from slicing off that many people all at once so that 1 billion becomes something more like 700 million.
New Zealand is facing some almighty challenges and realistically I'm not sure how we are going to afford it if parties are insisting on tax cuts and not shifting at all how revenue is gathered in the first place considering how much burden is placed on PAYE earners.
Benefits and giving away free money for whatever reason to win an election.
We should make a law in country that political parties cannot just give away in their policy. This is not a way to manage any country or rule sensibly.
If we have more money to spend, then give tax cuts to those who give you that money by working hard.
“If we have more money to spend, then give tax cuts to those who give you that money by working hard.”
Yeah because they’re the only ones worth a damn in this society as far as you’re concerned. Screw all those that donate their time, without remuneration, for the benefit of others.
I’ve heard this sort of self righteous garbage for decades now. Worthless then, worthless now!
There was nothing in the original comment that even remotely insinuated that volunteers aren't valued so not sure what you are so outraged at.
Donations are drying up, so many, if not most charities are struggling at the moment. Ever wondered why... it is because no matter how much time/effort is given, they ultimately need money, money that is provided by workers donating from their post tax income. Something which if you aren't aware has pretty much evaporated.
Reducing tax burden on workers means they have more disposable income, this can impact charities positively in many ways;
- People become less reliant on charity, so the charity can focus resources on those more in need.
- People are able to donate more money or goods to the charity
- People are under less pressure to constantly work, and thus have more free time to volunteer for the charity.
For those who volunteer their time in non-official capacity (and there are probably more than in the official channels), they are often either earning income elsewhere, or are supported by another income earner. So I fail to see how they wouldn't benefit from lower tax rates.
So again, why the outrage?
Maybe you could vote TOP, I feel like these volunteers you speak of are providing more value than me, so should be taxed on the imputed earnings they should be receiving. Otherwise I am being taxed unfairly.
The above italics are sarcasm by the way, with a good dose of irony. I highly value volunteer workers and do a lot of volunteer work myself.
Means testing on its own is preferable to lifting the age, I think. I do wonder if anyone has quantified what the savings might be if a means-test were applied. Defining the parameters of 'means' would be the first task and then the number crunching could be done.
Many years ago I proposed a searchable public register of individuals who had voluntarily foregone their super payment. If nothing else, it might apply some peer pressure.
Totally disagree.
Lift the age - it is only fair to keep steady the average number of years of receiving Super; luckily, we live longer therefore start Super later. As do most other countries. When Labour started their election campaign promising to keep the age unchanged, they lost my vote.
Means testing? Well Super is taxed so more income means more tax. And if you have zero wealth and retire at 65 you can get accommodation benefit and various other benefits, so that is a form of means testing. A means test based on wealth and you will be surprised how fast my house and bank accounts will change from being in my name to one of my children. Just a recipe for employing lawyers and tax accountants. If means tested against income then low-paid workers will stop work at 65 and well-paid workers will continue working.
A means test based on wealth and you will be surprised how fast my house and bank accounts will change from being in my name to one of my children.
LOL. How very mean-spirited of you - pun intended.
Our children and grandchildren deserve all the accumulated wealth, I agree. That's precisely what means-testing is meant to achieve. If you are so inclined to help your children out in such a way - why not just transfer all your wealth now!
Kate - so often you misunderstand human nature and what the quote was a example of this, you may not agree especially if it doesn't affect you but its what people do, same with democracy, when govt does stuff people don't like they try to avoid the effects and then vote them out - govts are always voted out.
Wealth tax: the righteous such as Kate and myself will suffer extra taxation while the cheats will thrive untaxed. I've no trouble with the concept of those who have being taxed to the benefit of those who don't. But a tax that can be evaded is a bad tax. Other countries have wealth taxes but they rarely work nor contribute much to total tax take.
We do have a wealth tax in so far as those with bigger incomes pay higher rates of tax and when the wealthy buy something expensive then they pay more GST to the govt than the poor buying the cheap item.
GST is a shit tax that affects low-income earners disproportionately.
Someone on minimum wage basically has to spend all their income just to survive, those on higher incomes can avoid it by investing in assets that do not have GST applied or saving their income, which is impossible for someone on minimum to do as they have to spend so much more of their take-home pay on basic necessities.
Its a very simple solution. You sack everyone who was hired in the last 5 years. The Govt ran just fine under National 5 years ago with far less people. In fact, it ran better. I dont notice how the thousands of extra workers employed at Kainga Ora on six figure salaries have contributed to more new houses, or the hundreds taken on at Waka Kotahi have filled in more potholes.
Waka Kotahi - In 2020 there were 1874 employees, by 2022 there were 2,375. The PR team alone has grown from 32 staff in 2017 to a team of 88. 65 of whom are earning $100,000 or more
Reserve Bank - its employee numbers have almost DOUBLED under Labour from 255 to 454. Is the Reserve Bank doing twice the work it used to do under National? Obviously not.
Now multiply that through every single Govt department. None of these people have contributed anything meaningful as Labour hasn't delivered anything. All of them need to go.
I am sure there are lots of things, they managed to increase spending without any significant improvements in outcome.
I don't know specifics because I am not involved, however I do know that the company I work for seems to be every layer of management adds unnecessary expenses, and makes things less efficient not more. For example our CEO needs to approve every spending decision, and it a medium company and I am sure they get paid well.
You do need oversight however too much is just as bad you need a balance.
I have seen examples of this in hospital, where a GP has said a patient needed to be urgently admitted, however they had to be seen by a doctor in ED. Sure I can why a second opinion my be helpful but when no on is available your doctors are overloaded you need to make do. Or a doctor spending 30 minutes on a discharge form, after seeing the patient for 5 minute. Take for example the dropping of prescription fees, to me a much better solution would be to allow a doctor to simply write an ongoing prescription for as long as they see fit (maybe baring addictive substances), that way we save the doctors time, and money of having to get a new prescription every 3 months for a medication you are going to be on for the rest of your life.
We need to move more into trusting the people who do stuff to do stuff they are good at, and yes less on consultants writing up documents that hardly anyone reads. To me in many ways technology not made our lives better but rather become a way of monitoring and controlling us, forcing us to constantly meet its demands.
The working population are taxed out. But there are plenty of people who make a lot of money and pay bugger all tax. Labour have mostly fixed the property investors, but there are others too. An even playing field would raise a lot more revenue. The only question is how can it be achieved. Maybe land tax.
The bright line is a capital gains tax and also a very high rate I.e. marginal tax rate. Under national you will be able to offset interest expense against rental income, not debt (principal). I don’t think that’s that bad. Maybe by targeting entities that pay little tax…..Māori iwis etc after all its equity that we are after.
The brightline test is easily avoided especially under national. I know property investors that ensure their rentals are always maxed out with their own debt (they improve their own home etc and load the debt into investments), in what planet is that fair? That debt is what is making them rich yet they get to call the interest an expense.
Untrue. Intent is certainly part of the discussion however reality is there are other factors at play. The example you give is completely false, that would not pass the sniff test. If there is tax avoidance going on that is a govt failure for not auditing property sales properly, and I agree there should be more auditing going on.
Sell your investment property, use the money to improve your personal house, buy another investment with debt. Perfectly legal isn’t it? Rinse and repeat, never pay tax on the rent, never pay tax on the capital gain, supposedly you haven’t made any profit yet somehow you are rich.
It was Labour that has caused the housing crisis in the last 6 years. How is voting for the group responsible for sky high housing prices and rents going to make houses cheaper? If anything, they will implement policies that will drive house prices and rents even higher. Because that's how they roll.
We'll probably end up like Ireland with only 700 houses available to rent in the entire nation, all while importing 200,000 immigrants a year. Then your kids won't be complaining about how much they pay to live somewhere, they'll be complaining that they cant find anywhere to live. They'll still be moving to Australia, just for a different reason.
Yep, K.W's either got his blinders on or not using a lot of critical thinking if they blame it all on one government. Successive governments have caused this issue.
It's hardly a localised issue either as multitudes of countries around the world are facing the same asset inflation issues.
My memory is definitely not failing me. I bought a house in 2014 for $3000 more than what the vendor had bought it for in 2007. Under Labour, that house has now doubled in value. Its about the only thing Jacinda Ardern ever did for me. Back in 2014 housing was affordable for the bulk of NZ, especially outside of Auckland. In early 2019 I bought another house in another city for the exact same price the vendor paid for it when it was built in 2016. That house has gone up 48% (to date, was more last year) under Jacinda's Rule.
Not if it's done as TOP proposes (offset the amount of land tax raised with income tax free threshold ie no income tax on the first 15k).
A land tax will hit overseas based property owners that otherwise wouldn't be tax resident, so it will create 'new taxpayers' - a win for anyone currently paying tax in NZ as the total tax bill just got spread over more people.
Yep start on all MPs wages and perks along with the gold plated super they get. Then the civil servants that get paid extremely well because out in the world they could earn so much difference is those out in the real world f...up they pay and they don't get the gold plated super and then council employees like every council CEO how much does the 44 CEOs earn plus then the regional CEOs all duplicated then the CEF and so on and on. There are so many unproductive civil servants sucking at the tax payer tit while the productive sector is hamstrung by the civil servants inefficiency
A wealth tax is an outlandish idea solely because the green party proposed it?
Yet treasury ran the numbers on a nearly identical policy for the government?
Don't around 60 %of the population support some kind of capital gains tax? Yet, it is seen as incredibly risky to propose one.
I think those (the TVs and electronics stuff) were import taxes that were dropped overnight. Yes, before that our first purchase as newlyweds (we were renting an otherwise furnished house) was a 14" black and white TV - the cost of which (compared to our joint weekly income) was such that we had to hire purchase it :-). But had to have it urgently because this was on;
https://en.wikipedia.org/wiki/1978_New_Zealand_rugby_union_tour_of_Brit…
Those were the days!
Inheritance tax in the UK has a base exemption of 325,000 GBP about NZ$677,000 so on death a single persons estate would probably be liable for IHT of approx $123,000 @ 40% $49,200 and for a couple nil on first death then 40% a likely increased value of average home. UK is considering dropping IHT due to hatred of the tax and those who have failed to index as well as being unfair.
On a long enough timescale, it becomes a real issue. Take the UK or India for instance, where people are divided into classes by the circumstances of their birth. Once wealth is built up enough it becomes self-sustaining regardless of the merit behind it and reduces social mobility and cohesion.
It's fair enough if you save up for your kids, but at what point does it become problematic? Do we return to a feudal system where a select few own everything and rent it out to the lower classes whose parents weren't able to pass down wealth and property? It doesn't happen overnight but we are seeing this kind of thing starting to take route where your lot in life is not determined by merit but by how wealthy your parents are.
When working hard is no longer correlated to higher incomes the disassociation of effort and reward makes society as a whole more fragile.
That last line could apply to governments who have realised they can get fat on tax revenue and provide fewer and fewer public services while the basics of the social contract that underpins their right to collect taxes falls apart at the seams.
Inheritance taxes won't solve that problem, nor will letting the government snaffle a share of Nana's estate because she had the audicity to die.
The irony of claiming that an estate is 'unearned income' to families and should be ceded to the state - who has also provided literally no additional services to justify a stake in it - is not lost on me. As usual, I suspect the answer is 'as long as someone else pays and not me'.
It's not jealousy though, the reality is over time wealth gets concentrated into fewer and fewer families and social mobility is reduced.
We've seen this play out historically all over the world. Its the backbone of entrenched inequality in place like the UK, India, South Africa etc where the circumstances of your birth matter more than your own work ethic and merit. People's lot in life shoudln't be determined by how wealthy their parents it should be determined by their own merits which is the egaltarian principles the West was built on. The best thing you can give your children is a good upbringing so they can seize opportunities when they show themselves and earn their own lot in life.
Like I said above, when working hard is no longer correlated with higher incomes the dissaosciation of effort and reward makes society signinfcantly more fragile.
Yes, their policy is basically "everyone should be as poor as the poorest person". Just like the Labour education policy is that "everyone should be as dumb as the 73% of Maori kids who dont bother turning up for school". That's what Equality Of Outcomes looks like.
Until people are reluctant to move so job transfers become problematic - govt interference always results in undesirable yet totally predictable effects, Govt should concentrate on reducing Govt waste and encouraging innovation and improved productivity to increase total NZ income.
There is a reality to a wealth tax most don’t comprehend.
The wealthy won’t just take this. They will move their ownership structures to other places without a wealth tax. (This clearly is harder to do with property though)
NZ really needs these people to keep their ownership structures in New Zealand, as the wealthy pay the majority of our tax. Globally there is competition to attract these people and they have good options.
Unfortunately a wealth tax having been worked on by one the major parties probably means some have already started the process of shifting their wealth.
And what you will see is these gated communities (yes I know we have some now) but alot more with these multi million dollar homes like 25 mill plus up. As they will be owner occupier homes just like in Miami etc. That won't be put to providing rentals so if you look at San Francisco which is quickly becoming the new Detroit along with LA the real wealthy have the security guards to protect these homes while the middle class get burgled and shot but still pay alot of tax. Yet the homeless and poor still have nothing. And that's happening in most western countries France Germany. Yet they all have wealth taxs and inheritance taxes
That’s the reality of all these stupid taxes, the rich can minimise them because they have the means, the middle class have the burden of paying them and the poor just get more handouts. Reduce government spending is the only answer. I would income test super…..not means test as this includes assets such as a house. That again would hurt the middle class. The guts of it for NZ is that government is too large and we have a racist split system, with iwis not paying tax.
The more obvious effect is that people with money are no longer interested in moving here. That's why we can't attract business people or surgeons.
https://www.nzherald.co.nz/nz/dwindling-number-of-wealthy-foreign-inves…
https://www.nzherald.co.nz/bay-of-plenty-times/news/nz-out-of-favour-re…
No problems recruiting unskilled water boilers or Uber drivers though.
This good think piece suggests the obvious - Reality is going to hit at some stage. We can either pro-actively address it ourselves, or leave it to time to do the job for us. Either way, it's coming, and giving the inevitable more time will just make matters worse when it happens. 2060 seems a long way off. But in social and economic preparation terms, it's virtually tomorrow.
(The answer? It's all there in the above, and everyone believes that they so clever and sure, that they will be able to jump off the sinking ship before it goes down. If what we see in our Property Sector today; the underpinning of the NZ economy is any guide - wrong)
I've no issue with a CGT if it is indexed for inflation, applies to all investment assets, and comes paired with a similar inheritance tax, so people can't get around it by leaving those same assets for the next generation.
We would have one by now if Cullen hadn't effectively made it a tax on the devaluation of the dollar by insisting it be taxed at the top tier rate, which sunk the idea early. Of all the idiotic moves by the current Labour government, that stands out as one with the biggest long-term implications.
I don't think the country can afford the water and climate-change (whatever that means) infrastructure that it needs without increasing taxation in some form and a CGT is a logical place to start. It makes a lot more sense than a wealth tax because in theory you will always have the means to pay the tax.
The problem is you have a small group of people actually paying a huge chunk of the tax in this country. The conversation cannot just be about making them alone pay even more if it's going into core utilities that everyone will benefit from. This logic never seems to pop up when people start piping up about 'fair share's although a CGT that drags everyone's Kiwisaver into the net would be a huge missed opportunity to set up a proper super tax regime.
We can all get a 15% tax cut if we stopped giving away free money in benefits or any other stupid policies which governments make up and make a policy where everyone needs to do work for their feed and shelter.
But but but, our useless policy makers can't get work for everyone in this country because we are not innovative and others lack the will to get up in the morning to go to work.
So yeah the minority has to work hard and pay a huge amount of tax to feed the others who love to get high in the evening and sleep till late in the afternoon.
Specially for you nguturoa
That figure is particularly telling.
NZ Super spending looks to be about 50% of all core government spending.
(I'm almost a boomer) That is simply insane. 15% of the population are taking 50% of core government spending.
NZ has been completely and still is being screwed over by the boomer generation.
1) Massive free capital gains on their houses (i.e. no capital gains tax)
2) No inheritance tax
3) No wealth tax
4) No increase in the age of entitlement for super-annuation
5) No means testing of super (I dont support this but it is a possible policy)
6) Boomers had free university
7) And politicians pandering to this demographic.
... yet still managing to rake it in by simply not adjusting tax thresholds. How much more would you have them collect? I will have lived a life of chaste and virtue so my kids can be fed, clothed and educated out of whatever is left from my wages; you would have the state now getting inbetween my children and my estate after I've picked up the slack through private healthcare, education and all the other stuff the booming tax take is seeing crumble anyway?
Trusting the same idiots who got us into this mess to get us out of it, if only they had just one more dollar, is frankly getting near gambling addict behaviour at this point. Look at the evidence. Governments in NZ do not know how to govern.
Kiwi overseas - wrong super as % of GDP is 34.41% - https://www.google.com/search?client=opera&q=nz+state+super+as+%25+of+g…. Demographics do indicate this will increase partially offset by NZ super fund which was $60 Billion in 2021 (increase $15 Billion) so current value likely to be $70+ Billion so will likely produce a decent return as a % of super costs over time - only praise I give Cullen. But age of eligability does need looking at and I suggested to Bill English moving the age 1-3 months every year but was ignored. Whilst Kiwi saver is beneficial a purely private and voluntary scheme would also help if aligned with state super - its probably indifferent if contributions would tax deductible or income non taxable - perhaps a choice both of which have real benefits to NZ and it citizens with no discernible downside to govt.
🤔🤔🤔🤔 Wow.. Thanks.
I do not see so many old poor people around. So why do they need super? Rotten model I would say.
But why would any one beleive on only taking as much as they need. No wonder so many of them are sick too and clog the hospital beds too.
I am no Saint but I try to only take as much as I am hungry but I guess hunger for some is not in the stomach but the mind and mind is never satisfied.
Problem been , they paid tax to support a smaller number of Grandparents (or more kids per parent), who lived shorter lives.
We haven't paid more tax to save to pay for our own retirement.
I am still on favour of universal at 65 , We just need to start paying for it now. via the fund or kiwisaver , however.
I am not against it but what I am saying, take if you need it and can't survive or thrive otherwise.
I teach my kids to be responsible, respectful and wise. Only use as much as you need. Do not hog or take what you do not need. Because the nature will give you as it gives to a bird who gets up at 5 am to find it's feed.
But so many have so much but still want money coming into their super accounts as they think they can take it to heaven in their graves. (apologies if this is harsh but it's true)
Here is a paper on the history of superannuation in New Zealand. It's from 2008 before National stopped contributing to the super fund so our situation is actually a lot worse, but the overall history is accurate.
Super in New Zealand is unique that is funded from general taxation rather than from a dedicated fund. It is explicitly a "pay-as-you-go" scheme. Super as it is structured was not a contributory scheme like you and many others seem to assume that it was. The Muldoon government scrapped the super fund when they came in and since then people have not been contributing to their own retirements, but funding the generation before them. This was fine in the 20th century when demographics were far more balanced and people didn't live as long, but that is not the case now and the demographic situation is worsening.
The social contract is not a legal argument, there would be a legal basis for your claims there if people had been contributing to a superfund during their working lives but the majority have benefitted from not having to pay into one and getting super funded by the current generation. As I have repeatedly stated on this forum a setup as we have it is inherently unsustainable. At a certain point, we will have too many people collecting super vs working and actually paying taxes, that also need to fund other services such as healthcare and infrastructure.
I would love for everyone to get universal super but it's becoming inherently unaffordable, people are receiving more from superannuation than they paid tax during their working lives. For me personally, I would rather not burden my hypothetical children with something that financially cripples them and would rather they had a functioning society to live in.
B-b-b-b-b-but they paid taxes all their lives, they deserve the super. It's not welfare or a benefit, it's a loyalty scheme or a rebate for doing the extraordinary thing called working a job their adult life. Hell, if you were a top income earner you're even more deserving considering how much tax you paid.....
People don't work full time these days, everyone's either a lazy beneficiary or an overpaid bureaucrat.
It's a benefit. Simple as that. Should really be lumped under the luxury "nice to haves" when the economy is purring along nicely. Unfortunately the economy is stuffed because previous generations prioritized housing speculation over productive enterprise for their lazy retirement gains, yet they still think we can afford to not show any discretion when it comes to frivolously handing out money to anyone over 65?
This article fails to address why we have structural operating deficits now when under the Clark government, they were running surpluses. Is there not vast waste that we cannot cut first? The article presupposes that all government spending is absolutely warranted.
And it fails to note our tax take, as a percentage of GDP, is around the average of the OECD, so it's not as though we are currently taxed lightly. And that most of the tax is paid by a relatively small percentage of the population, who might be sufficiently mobile to move to away to another country should their tax burden here increase. What about multinationals, supposed charities and iwi - are they paying their fair share?
This article fails to address why we have structural operating deficits now when under the Clark government, they were running surpluses.
It's a long time since the Clark government, meantime our population has got older and sicker and inflation in things like healthcare and infrastructure has been massive. Not to mention things like earthquakes and storm events giving us a hiding.
Merely pointing out previous labour governments had fiscal discipline, not just a case of right wing governments cutting essential services. Our population has grown materially and we are taking in more tax than every before. Agree however that natural disasters have taken a toll but they are not structural components of the deficit.
Clark was able to run surpluses because the private sector (households and businesses) were going further and further into debt. Currently, change in private debt is static, so Govt can only run a surplus if they are able to reduce private sector savings, or reduce overseas savings by reversing our current account deficit.
You know who doesnt need more tax money? Australia. They are awash in money, spending like drunken sailors and giving big tax cuts. And the irony is guess where NZers with money will emigrate to? Australia. So while Australia gets richer, NZ gets collectively poorer, and the difference in standard of living between the two countries will increase and even more people will be attracted to Australia.
So Chris Hipkins gets Labour over the line anyway he has to.
In his first press conference, he says "It's taken an unexpected toll, and I'm stepping down". Grant Robertson becomes the replacement PM and, unencumbered by Hipkins "Not under my watch" commitments, enacts all the changes he's already right up to speed with?
The problem we have is that everybody wants change, as long as it doesn't adversely affect them. And what better example could Hipkins set us than sacrificing himself in the name of necessity.
The fact is the government already raises entirely sufficient taxes, its the wasteful spending which needs to be pulled back into line. You could increase the tax take by another 20% and this government would still run a deficit, simply by throwing it around like confetti. A wealth tax would simply have the effect of pushing the most wealthy out of NZ, capital is mobile and many high net worths will simply take up residence in another jurisdiction. The small minded Green Party would probably say "great we don't like them anyway", but the high net worths are the ones that back new start ups and build businesses that employ thousands of people. The Green's would do all this to 'end poverty'. In reality their ending poverty initiative was to increase benefits by $20 per week. What a joke.
If you're going to means-test super to the point where I can't get it then I don't want to have to fund it. I have a family in the here and now, that tax revenue would be better taking mortgage pressure off me and my family. Why should people who have managed to save miss out because others blew the lot over the course of their entire working lives?
Maybe a complete overhaul of the tax system is needed. Income test superannuation, LVT (or some other tax to reduce PAYE burden), mortgage interest deductibility for owner occupiers.
There you go. In that short list, you potentially miss out on an old person's benefit due to an income test, but mortgage interest deductibility gives you the option of a) paying off the mortgage a lot quicker b) investing the difference into your own scheme. Added bonus is under PAYE your tax is reduced too.
That's the level of discussion we need. Unfortunately in NZ we get "Other countries have this tax so we should have it too!" often with the aim of merely extracting more and more from the populace, with little thought given to the carve-outs and caveats that make those taxes palatable in those countries to begin with. Instead we have to settle for "one tax rate is higher than the other!" levels of analysis that a child could muster.
The chart is a good argument for cutting Super and delaying Super but not for means testing. I get Super and chose to get married - so I get less Super than if I had stayed single - isn't that a kind of means test? Maybe we should divorce and live apart and both of us claim accommodation allowance?
Thank heavens for universal benefits alongside universal taxation such as GST.
If you means test Super then you may as well means test education and charge the wealthy for sending their kids to school.
And they spend all that money on rubbish people. Instead of giving it to surgeons to attract them here to fix our health system, they pay welfare beneficiaries to have more babies. Instead of funding entrepreneurs to create businesses and jobs, they give it to people who simply refuse to work for a living. This is the Labour/Greens mentality, and its why NZ is now going backwards at a great rate of knots. Give them another term and we might as well declare ourselves a third world country and start asking for foreign aid. At least we have a friendly in the UN to grease the way.
Many surgeons are simply moving to the private sector more than public so they can cream the profits. Investment in imaging has increased substantially over the last couple of years and as the public sector crumbles, they have to rely on private clinics to pick up the slack where surprise surprise, the same surgeons work and charge more.
The Greens have done NZ no favours with their proposal for a wealth tax at a very low threshold that would make small and medium sized businesses not worth the effort. The Greens have no basic understanding of the economics involved. They would simply kill investment in New Zealand, and those with money who pay the most in tax would leave for one of the many countries that do not have a wealth tax. The Greens could have gotten some traction talking about a capital gains tax, which many countries have, but most of the countries that had a wealth tax have discarded them for good reason. The Left believes the government always needs more tax, no matter how much money is wasted as we have witnessed the last six years.
New Zealand is low-taxed: The average tax-wedge of worker wages in the OECD is 34.6%. Of 39 countries, New Zealand, at 20.1% is 36th, with only Chile and Colombia lower.
Everybody, read Bolger again.
https://www.oecd.org/tax/tax-policy/taxing-wages-brochure.pdf
We have a sales tax GST overall NZ taxation is high
worldpopulationreview.com/country-rankings/highest-taxed-countries
Note the high tax levels of the poorest countries in the tables
High taxation is anti growth, all policy is a compromise.
taxfoundation.org/income-taxes-affect-economy/
With your above link it's probably better to look at something like the OECD tax comparison rather than looking at the top tax rates with zero further context.
And not all tax carries deadweight loss like income tax or sales tax, a land value tax doesn't does not deter production, distort markets, or otherwise create deadweight loss. I am against a wealth tax as capital flight is a huge risk and capital gain taxes are ok but have some negative effects such as encouraging people to hold onto assets without selling them and attempts to get around the tax by using equity rather than selling.
With a land value tax if landowners choose to leave the land doesn't go with them, it still remains in the country and is likely to be purchased by someone else and continue doing what it was doing before. Obviously a land value tax shouldn't be bought in overnight but phasing it in over a period of time and giving people time to plan and adjust whilst implementing reductions in income tax (e.g tax free threshold) would genuinely do a lot to help broaden the tax base and take pressure of income earners.
https://i.stuff.co.nz/opinion/132547885/damien-grant-what-labours-wealt…
"...in nominal terms this Government will, if re-elected, have doubled the tax take in eight years."
And what magnitude of improvements have Labour delivered on with that ?
Here's the relevant page. Keep in mind many of these countries also have capital gains, inheritance and gift taxes.
I don't understand why many think we have high taxes. They are very low and it shows.
And the cost of living is so high due to the spiraling cost of land that has bled into literally everything. It's always going to be somewhat expensive to live in New Zealand due to our geographic location but there is no reason why land costs needed to be as high as they are, it's crippling to productive industries and set us back decades.
Which is why we have 50% of the population who are not net tax contributors. Sure they pay tax, but they're not paid enough for their labour to adequately meet the living costs.
If rents were 1/3rd less than they are for example, then I'm sure we could do away with most of the tax payer funded tax credits and this whole finger wagging from the right wing, many of whom a) lobby for low wages and b) have a few rental properties might cease.
Fabricate a crisis, benefit personally from said crisis, and then blame the victim for needing assistance.
https://www.interest.co.nz/property/119377/katharine-moody-takes-look-r…
Will report back when the SC reports back :-).
Low taxes? Or just low wages? I think you will find it the latter. With an average of just 26 hours a week being worked.
https://buildremote.co/schedules/average-work-week-in-new-zealand/
Just because people in NZ dont work much, and dont get paid much, doesnt mean that those who do choose to work hard are not highly taxed. Its just that there are apparently very few of them. Most of them have probably gone to Australia.
Strange. According to this it's 31 hours for women and 37 hours for men. https://figure.nz/chart/5kwujxp84PCE3k40
Ohhh, did you read the section headed "Notes About The Average Work Week In New Zealand"? Your link includes full time, part time and self employed and nets out any leave entitlements etc
37 x 52 = 1924. Less 80 hours of sick leave, 160 hours of annual leave, 96 hours of stat days = 30.5 hours per week net full time. So you average part time/full time/gender numbers, not surprising you'd get 26 hours a week "worked".
The actual number of hours worked is immaterial, the fact that its one of the lowest in the world does. If you want to compare tax takes between countries you need to compare wages and hours worked between countries. NZers are very unproductive. They are not paid very much. And they don't work a lot of hours. Thats why the tax take per worker seems low. Everyone elsewhere works harder, so they pay more taxes, even if their tax rate is lower than ours.
Do you look anything up before you say it? Can you give me some data showing that New Zealanders don't work a lot of hours? If we look a the OECD numbers the amount of hours worked by Kiwis doesn't seem particularly low in comparison to our peers.
Looking further into his link I am left a bit confused as the cited data and what is in the author's tables aren't matching up. The "buildremote" site is listing the hours worked as 1,369 hours a year vs cited source (which is the actual OECD data...) lists the hours worked as 1,752 hours a year.
Even the previously sceptical might be seeing what's coming. And not as far off as 2060.
Alexander says history shows financial crises are relatively common. Limiting risk for individuals results in limiting risk for countries. “It’s to limit the downside the next time it hits the fan, which it will sometime in the next five years,” Alexander says. (Stuff. Today)
Bolger - he had his opportunity and now at 80+ should probably butt out
We have as a country shifted our views to a reliance on Govt. instead of self to support self, family and community. Bolger's govt. didn't arrest that trend, nor did John Key's and Labour's certainly hasnt. As a result we have lots of policies aimed at providing support to those that can and should support themselves. Think Super for all and winter energy payments
Compounding this is a plethora of ineffective policies that make earning money to pay taxes difficult as well as funneling money to ineffective programmes - eg the EV subsidies, Regional grant bribes etc
and yes the numbers for both types of payments are large and do have an impact
So more taxes of any sort wont solve a problem unless the expenditure side and associated attitude is repaired -and it may take a while to get to this point
Populist tax policy is sleepwalking New Zealand into fiscal trouble
We are not alone.
US individual income tax payments are running almost half a trillion behind last year (same months). Withholdings are down, "other" payments are way down, and refunds have been extraordinarily high. Soft landing? Link
US budget deficit nearly triples – Treasury
The gap from October through June came in at around $1.4 trillion, according to the department
This tax debate is so frustrating. If Govt spending and taxation are about the same - the private sector (us) are no richer or poorer however much Govt spend. When Govt spends they literally make us richer, when Govt taxes they make us poorer. So, if Govt spend $200bn a year building solar power plants and wind farms, high speed railways, or affordable housing, we get $200bn richer, if they tax $200bn back again, we're all square again.
If you disagree, be prepared to state your case factually!
I don't understand your logic! If the Gov spent wisely on things that helped the population do things more efficiently and cut wastage then your argument might have merit. Please explain to me how the countless billions given to a small percentage of the population over the last six years has made the country richer? All the metrics for that group are unchanged or worse! Or how has the dopey electric car subsidy that is basically giving a handout to wealthy people to buy a Tesla enriching the people? All it.s doing is driving up inflation because all those industries that need utes just pass on the extra cost to buy them! Your argument just doesn't stack up.
Yes, it is absolutely about the quality of the spending. If Govt gives $20bn to companies and people to pay for things that dramatically reduce the cost of our electricity and then they tax $20bn back, this will be fiscally neutral for 'us' but we will have cheaper electricity and more disposable income in the future.
My point is that Govts are not restricted financially on how much they can spend - Govt does not have to make us poorer to spend more. Yet, this is how the debate is framed - that Govt can't afford to do more without a wealth tax. It's nonsense.
Try less of the sweeping generalisations about EVs. The data has shown a huge upswing in 2nd hand Leaf imports during the period it's been running. It's frequently one of the most registered cars eligible for the rebate, ahead of newer models launching here. It's not 'basically' anything of the sort you claim it is. Pretty laughable that you're busting out nonsense like this and then lecturing others on their arguments not stacking up.
What is "laughable" and "nonsense" is that we are now importing 2nd hand junk heading fast towards the end of it's useful life and then paying a taxpayer subsidy on its resale here! Absolute madness that could only be justified by half-wits! Nor was my comment a lecture you moron!
Further to your comment regarding "sweeping generalisations". Please provide hard data showing your assertions on the Nissan Leaf. I can't find any data that supports your sweeping generalisation. In fact Tesla sales far outweigh all other EV sales. There is plenty of data to support that if you care to look!
The registration numbers are published monthly. The Tesla registrations surge when a new model comes online or a boat shows up, but the Leaf is a constant. But context is a trifling matter if you barely have the intelligence to string together a sentence without an insult, so I shouldn't be surprised you can't get your head around this.
Go back to ZB with the rest of your kind.
Yes but - the quality of the spend is therefore very important so its not really a zero sum game
and if the quality of the spend is low I will have my money back thanks as I will invest it in my business
and if they give me money so that I dont have to go to work and make widgets thats also a NZ loss
So, do you think that it is a mistake to scrap Auckland's light rail project;
https://www.national.org.nz/if_labour_doesn_t_scrap_light_rail_national…
All government's spend money - isn't it more a case of 'on what'?
I don't know enough about the light rail to comment. But, yes, of course the question is 'on what'. My point is that Govt is not financially constrained at all - they give us money when they spend, and they take it back when they tax. So, why are we getting so fixated on needing a 'wealth tax' to 'fund' public services.
No it isn't a mistake to scrap the light rail project. The original project was a light rail/ tram type proposal for the inner city which was converted over time to a single Auckland to Mangere/Airport rail link.
So the proposal as it stands now is actually not of much benefit to Auckland commuters.
Why are Labour politicians so keen on it? I didn't understand why apart from it is a proposal that services South Auckland which is Labour's voting area. Then I learnt that it was proposed to use the land taken alongside the rail track for a corridor of social housing. Then the light dawned - it's a real estate deal that has the potential to cement in the Labour vote from Balmoral southwards for decades to come.
The light rail project is not about the gridlock, it's about changing the voting landscape.
People seem to be advocating for austerity by having the government cut its spending but without an understanding that this spending is a key component of the economy and employment. Cutting spending creates a spiral where spending is lower but then the tax take reduces also so then the government has to cut spending further and so on and no one ends up better off.
I about 99% agree, but I imagine it’s a difficult situation to pull money out of speculative debt. I disagree with a wealth tax, somewhat disagree with CGT, but feel like one effective tool could be land tax. If not to increase overall tax take, but to balance investment out of non-productive spending and back into productivity.
If you look at spending during covid, it all ended up in trading houses. Now we have to try pull it back out again and it’s hitting the wrong wallets multiple times. What could have been in place in 2019 that would have allowed the same spending via government without the asset bubble? I think that’s a fair place to start
No, the Govt COVID money did not end up in houses!! Where is it, under the mattresses? The COVID money ended up in the bank accounts of people and businesses that sold houses and over-priced goods and services during COVID. Some of the Govt money will have been swapped for Govt Bonds and will be sat in overseas investors' accounts earning interest (overseas bond holdings have doubled during the last three years to $70Bn).
Let me rephrase my question. You’ve agreed above that spending is not the issue so long as there is sufficient tax. However we have had a misallocation of spending (in/on overpriced housing and goods and services as you mentioned this has ended up wherever, overseas).
Is the same not true for our tax system? We have a misallocation of tax which supports spending in overpriced housing and goods and services..? Or is there some other tool we should be considering?
I wonder if we are chasing the wrong target.
I suspect that no matter how hard we try to level up inequality through the tax policies, we will not fix the problem. Maybe we need to look more carefully at what is causing it and address that. I don't think that it is tax and I suspect that playing around with tax may well not change much..
There are far more fundamental elements of our economy that are putting money into the pockets of the wealthy and impoverishing many people. I believe that if we do not address these problems, then as quickly as we put money in peoples pockets, it will just as quickly removed by the forces that are at the heart of our problems.
If i were government i would focus on reducing the costs that our people face and make it a lot easier for government by reducing the every increasing need for well fare and subsidies. I would
strongly require the Commerce Commission to ruthlessly pursue the monopolistic nature of NZ Business and ruthlessly break up the vertically integrated supply monopolies like the power, food, petrol, building material companies, etc banks.
I would force councils to release an enormous amount of land for residential development and if they did not, take the matter out of their hands. One of the few things that I agree with national over.
I would all but stop immigration, Clearly it is keeping wages artificial suppressed while maintaining house prices at unaffordable levels. How anybody can allow people into the country while the number of homeless people is increasing is unbelievable.
I would would completely overhaul the reserve bank operating regimen. In particular the functioning of the OCR/CPI model when prices are dropping. What is wrong with lower prices? surely we are all better off. The current prevention of falling prices supports a lack of competition and prevents the raising of productivity. Further, it does next to nothing to boosting economic activity and productive investment, but rather, the low interest rates just serve to encourage and reward an explosion of speculative asset investment.
I would completely eliminate the farming of inflation by borrowing. The Labor Govt have gone some way on this with their investment property mortgage rules, but it needs to be more transparently principles based and all encompassing. Basically any loan or interest baring deposit would have to be incremented at the same rate as inflation (tax free), then interest paid and taxed or tax deducted as you would expect. This way the true value of the money loaned or borrowed is preserved which is only fair and logical.
The simple qestion should be "How much is enough"? The tax take is booming. We have a government with an absolute majority trying to blame a government that hasn't been in power since 2017 for things they can't get done. They have chosen to spend huge amounts of money on centralisation projects that could have been spent on front line services, which are now decaying.
If the politicians can't make this stonking huge tax take (which is being collected as if everyone's living costs are the same as they were in 2011, which they are not) then arguing over reform is pointless. Likewise, why would you trust them to design a sensible system after the mess of the TWG and the fact they can't accept the need to index brackets once a decade (and counting)?
So 'we' have WWIII on the horizon and forever inflation fueled by fuel that has to be imported which perpetuates rising CPI and inflation forever. The new target for the RBNZ will become 3%-5%.
With mass immigration that will amplify housing shortages and inflation.
Then the political scene with not one party having a complete coherent plan of how to deal with the changing world around us, Macro-Micro.
Just get use to it, there'll be a unicorn or a mushroom cloud turn up at some stage?
Like when the 39% top tax rate was introduced, I recall someone mentioning their "doctor friend" had enough of being taxed to death over here so was going to Australia. Didn't have much to say when I pointed out the 45% top tax rate over there.
$250k salary tax $83,167 in Aus. $77,620 in NZ. Sure, if you spent 100% of net income then you'd pay $9k less in GST in AU. Assume a mortgage at 1/3rd your income, the other 2/3rds of income at 10% & 15% GST respectively results in basically a net 0 difference, but $5.5k extra goes on the mortgage.
Go google "salary sacrificing" in Australia. You will find that anyone earning $250k will be salary sacrificing $50k in order to bring their taxable income down to $200k, which from next year will be taxed at 30%. This enables them to pay $50k towards their mortgage or child care or private schools out of pre-tax income. Super contributions will be on top of that salary. Heck, Aussies get the first $30k of income tax free simply by being employed in the health field. You cannot just take the stated income tax rate and compare it to NZ without understanding how Australian salaries are packaged, and what tax benefits are available to be utilised, none of which are available to employees in NZ.
I would happily adopt the Australian tax system. I would be able to channel all my investments via a self managed super fund where income is taxed at 15% and capital gains is taxed at 10%. Over there you can also still tax deduct interest income, depreciation, and claim investment losses against personal income. There is a 6 year CGT exemption if you rent out your old home.
If you think the Australian tax system is worse than NZs its because you don't understand how it works. Most commenters on here seem to not have even heard of salary sacrificing, for instance. Yet blithely compare an Australian salary with a NZ one.
Australian income tax is changing massively next year
https://www.abc.net.au/news/2023-04-28/stage-three-tax-cuts-to-scale/10…
Never fear, NZ - the Pothole Repair Fund will fix all our most serious woes;
To pay for the Pothole Repair Fund, National promised to move around spending within the National Land Transport Programme, stopping the speed reductions and “excessive speed bump installations, or the failed Road to Zero advertising campaign”.
LOL. I somehow don't think NZTA are installing "excessive speed bumps" on our state highway network - are they?
These folks are a barrel of laughs.
https://www.stuff.co.nz/national/politics/132554097/national-promises-p…
And even funnier that Stuff made it front page news! hahahahahaha.
We really are going to pot :-).
No, but they are installing them everywhere on suburban streets. Like my neighbourhood is full of them now - they are everywhere where there is a 30 or 40 kmph speed restriction, which will soon be most of New Zealand. They have even been installed on major arterial routes into the city, just to force you to slow down at traffic lights.
The only thing that needs to be done is to bring more income INTO NZ
They are merely taxing the haves for the have nots to spend
Stop OCR increases, lower the NZD
Promote our natural agriculture
Incentivise innovation ON SHORE
In South Auckland, a 7% income rise means more new cars on tick
More fat people ordering UBER to their brand new government subsidised housing
The retired get richer and spend more on travel
The productive are crushed to suicide
Meanwhile the children get rapidly dumbed down on woke science
Labour are not "in it for [me]" they are in it to crush me and they very very very nearly did!
Who was it who said "the poor will always be with us"?
You can give the poor money, but many of them don't know how to budget or run a family responsibly, they breed like flies from a young age, don't encourage education and clock up vehicle debt.
Taking money off the productive and giving it the non-productive will never work - there's always the ultimate fix...sell up and go to Australia. Both my kids are already there and it won't take much for me to join them.
Me keeping people busy, spending millions of dollars "makes you sick". No wonder NZ's in the mess that it's in. Remember the '80's? Corporal Muldoon gouged the movers and shakers, the marginal tax rate was 66%, first mortgage interest rates got to 23% and thousands of wealthy kiwis decamped to QLD encouraged by (ex-kiwi) Premier Joh Bjelke-Petersen.
The Great NZ Clobbering Machine rolls on.
You’re landbanking and presumably developing a flood prone basin, shrouded in council red tape that you’re trying to push through. Spend all you like, it will likely end in a tearful bailout by taxpayers and ratepayers, or a mortgage lock in as no buyer can get insurance to buy the 2br townhouse. Then you’re on here blasting non-productivity on the basis that you’re creating far more work than is ever necessary to build these homes. So yea nah not my kind of risk/reward.
The land I've bought in Riverhead is at the top of a rise.
Has a great view, guaranteed to be a terrific bet, not far from the city and right next to NZ's most expensive suburb. I'm not stupid enough to buy low-lying flood-prone land. I've owned lots of properties, and I'll tell you one thing for sure......I will not be paying any wealth tax. I will give enough money to my children, who live in Australia, to get me below the threshold, or move there, if necessary.
I've paid a lot of tax in my life, I've nearly always been in the top bracket and way over, I don't mind, but double-dipping is theft, and I won't be paying if I'm caught in it.
The stats comparison for the last quarter, 2023;
Labour Force, Australia
unemployment rate remained at 3.5%. participation rate remained at 66.8%. employment increased to 14,003,400. employment to population ratio remained at 64.4%.
Labour Force, New Zealand
unemployment rate remained at 3.4%. Labour force participation rate at 72.0%. employment to population ratio at 69.5%, up 0.9% annually.
Much a muchness. And, yes, they pay unemployment benefits in AUS too. They also means-test super. And as an employer, I think it's a 7% min contribution to their equivalent to Kiwisaver? Or did they just up that to 9%?
We clearly need to cut taxation on working people because they are carrying far too much of our tax burden:
- 38% of tax revenue is collected from income taxes compared to 24% across the OECD.
- 31% of revenue is collected from sales taxes (GST) compared to 20% across the OECD.
In an increasingly competitive global market for talent New Zealand is really uncompetitive.
The other thing is with an aging population we just won't be able to provide the same level of social services because we have fewer tax payers. This was a choice made decades ago when we didn't fully provision healthcare and state pensions as our fertility rate fell.
- Individual/PAYE = Tax on Earnings
- GST = Tax on Earnings
- RWT = Tax on Earnings
- Trusts = Tax on Earnings
- CGT (where applied) = Tax on Earnings
- FBT = Tax on Equivalent Earnings
- Corporate Tax = Tax on Profit
In the wise words of Sesame Street... "One of These Things (Is Not Like the Others)"
Very disappointing to see this review doesn't mention TOP. My reason is that TOP has an 'economists- sanctioned' residential land value tax offset by lowered income tax, that leaves only the top 20% paying more. There's a tax calculator on their site. This is a practical proxy wealth tax. More, I think this review illustrates the difficulties of a challenger party when someone like Dan Brunskill doesn't think to mention TOP when his topic is a search for new tax revenue. Can we please see a better effort in future? There is no dream walking at TOP.
The principle of a capital gains tax is sound and many would agree. The problem is how it would be implemented and how easy it would be for future govts to change it. Look at GST, Douglas got the formula right with 10% and reduction of income tax rates from 66% to 33%. Successive govts have ruined the original concept. To be acceptable to the electorate, a CGT would need cross party support, require 75% of parliament to change it, recognise inflationary impact on gains (say only 50% of gains would be taxable like Canada), not be taxed at marginal tax rates (say Canadian flat rate of 25%), allow some spread forward/spread back years (say 5 years back and 3 years forward).
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