Oh for a department that takes less

Federated Farmers president Bruce Wills says fewer taxes will help the economy grow:

The best translation I’ve found for Te Tari Taake, IRD’s Maori name, is “the department which takes”. “Taking” is the existential truth about taxes, including Labour’s proposed capital gains tax. Given taxes take money off people after they’ve earned it, is it possible taxes can directly grow an economy? Of course not.

While taxes support economic and social endeavours, economies grow by people taking risks and being rewarded for those risks. Right now, we need to grow our economy and that means exporting goods and services. The challenge we all face is how to expand the economic cake so that everyone can get a slice, whether that’s a farmer, a factory worker or a primary school teacher.

More taxes and higher tax rates don’t necessarily mean a higher tax take but they do hamper productivity.

Conversely fewer taxes and lower tax rates can lead to a higher tax take because people are rewarded better for working and risk taking and don’t waste time and energy trying to avoid taxes.

What’s now before us all is a clear choice. In the “red corner” Labour has gone where David Lange and Michael Cullen feared to go. Lange was blunt, saying a capital gains tax “is the sort of tax you introduce if you want to lose not just one election, but the next three”.

Over in the “blue corner” is the partial privatisation of state assets and a gradual reduction in the Government’s overall size. Perhaps Chris Trotter was right when he suggested we are a nation of socialists, but it’s also a question of degree.

Even Labour voters own properties, businesses, shares and even farms.

Labour doesn’t appear to understand that and also underestimates the large number of people who don’t own assets yet but aspire to in the future.

For farmers, the prospect of yet more asset taxes on top of taxing agriculture’s biological emissions is fairly unattractive.

Farmers are already included in the Emissions Trading Scheme (ETS) and like everyone else are paying extra for fuel and energy.

Labour’s plan to fast-track agriculture into the ETS is something else, though. While New Zealand may be the odd one out in the OECD for not having a capital gains tax, this logic equally applies to the ETS; New Zealand is the “odd one out” for bringing biological emissions into such a scheme. Strangely, all this talk about gleaning tax income through the ETS seems to have skipped right past its intended purpose, to reduce emissions.

It would be bad enough if Labour’s policy was intended to reduce emissions, but it’s not. It’s a simple tax, imposed on farmers to be redirected elsewhere.

A capital gains tax, central to Labour’s revenue model, doesn’t raise much money until 2018. To meet what could be seven heavy budget deficits, the choice is either to borrow more or to cut spending. Greece, which has a capital gains tax, remains “Exhibit A” as to why borrowing is extremely risky.

Meanwhile, a close examination of government spending is notably absent from Labour’s policy.

Of course it is, they spent up large through the good times and have no idea how to cut things back now there’s very real need for restraint.

We also hear much talk from politicians about building an entrepreneurial culture but, to do that, risk-takers need to be rewarded for those risks they take.

No capital gains tax and reasonable personal and company tax rates are big positives in attracting people, ideas and capital to New Zealand. Shouldn’t we be extolling this internationally?

This proposed capital gains tax includes foreign currency transactions making it like a financial transactions tax on exporters.

Labour’s proposed tax will make things a lot worse for exporters already struggling with a high kiwi dollar. It will hit them hard, whether that’s a dairy company or a movie studio.

Exporters buy currency hedges in order to smooth exchange rate volatility and their overall financial risk. Taxing this is baffling and will only increase risk when exporters least need it.

Exports are one of the major ingredients in the recipe for recovery, holding them back will hobble economic growth.

The United States also has a capital gains tax and while it benefits accountants and lawyers, it did not prevent or minimise the sub-prime-fuelled real estate bubble.

As the fallout from this continues today, all a capital gains tax does is create added compliance costs and complexity. In a financial version of “Whac-a-Mole”, regulators move on one side while an army of expensive advisers counter that move on the other.

A CGT didn’t stop Australia’s housing bubble either. Does anyone know of any country where it did?

So perhaps the biggest question voters need to ask themselves is one of trust. If a capital gains tax is introduced by any party, there’s absolutely no guarantee a future government won’t widen its scope. As the GST increase shows, a proposed capital gains tax of 15 per cent is not cast in stone.

All it takes is a regulatory amendment. With more loopholes than Swiss cheese to make it electorally palatable, it seems more like a bureaucratic throwback to the 1970s.

Oh yes, once the tax is established, it could easily be increased.

Rather than believe a tax will save the economy, it is time to have a discussion about growing the economic cake for all New Zealanders. On current evidence, that is the one discussion we’re not having.

A department which takes less would help.

So would more of what National is doing – encouraging savings, investment and export-led growth.

Epsom stitch-up?

Labour is accusing National of a stitch-up in the selection of Paul Goldsmith as the Epsom electorate candidate.

National has the most democratic selection process and most difficult to rig of any party in New Zealand.

At least 60 members in the electorate, who have been in the party for at least 6 months, choose the candidate by preferential voting.

It would be impossible for National’s board or leadership to influence selection. Such is the feeling about the importance of local selection, any attempt to sway the vote would almost certainly have the opposite affect.

It’s more than a bit rich for Labour to make this accusation against National when its selection process can be not just swayed but determined by unions and/or the party hierarchy.

It’s even richer if the rumour Kiwiblog reports is true – that Labour’s leadership and council have selected list MP David Parker as their Epsom candidate.

Keeping Stock has another example of Labour’s leadership exerting its power in last year’s selection for Mana.

July 20 in history

356BC Alexander the Great, Macedonean king and conqueror of Persia, was born (d. 323 BC).

70 Siege of Jerusalem: Titus, son of emperor Vespasian, stormed the Fortress of Antonia. The Roman army was drawn into street fights with the Zealots.

911 Rollo laid siege to Chartres.

1304 Wars of Scottish Independence: Fall of Stirling Castle – King Edward I  took the stronghold using the War Wolf.

1402  Ottoman-Timurid Wars: Battle of Ankara – Timur, ruler of Timurid Empire, defeated forces of the Ottoman Empire sultan Bayezid I.

1656  Swedish forces under the command of King Charles X Gustav defeated the forces of the Polish-Lithuanian Commonwealth at the Battle of Warsaw.

1712 Riot Act took effect in Great Britain.

1738  French explorer Pierre Gaultier de Varennes et de la Vérendrye reached the western shore of Lake Michigan.

1810 Citizens of Bogotá, New Granada declared independence from Spain.

1822 Gregor Mendel, German scientist, father of modern genetics, was born (d. 1884).

1864 American Civil War: Battle of Peachtree Creek – Confederate forces led by General John Bell Hood unsuccessfully attacked Union troops under General William T. Sherman.

1866 Austro-Prussian War: Battle of Lissa – The Austrian Navy , led by Admiral Wilhelm von Tegetthoff, defeated the Italian Navy.

1881 Indian Wars:Sioux Chief Sitting Bull led the last of his fugitive people in surrender to United States troops at Fort Buford, North Dakota.

1885  The Football Association legalised professionalism in football under pressure from the British Football Association.

1893 George Llewelyn-Davies, English Peter Pan character model, was born (d. 1915).

1898  Spanish-American War: A boiler exploded on the USS Iowa off the coast of Santiago de Cuba.

1902 Jimmy Kennedy, Irish composer, was born (d. 1984).

1903 Ford Motor Company shipped its first car.

1907 A train wreck on the Pere Marquette Railroad near Salem, Michigan killed thirty and injured seventy.

1917  World War I: The Corfu Declaration, which led to the creation of the post-war Kingdom of Yugoslavia, was signed by the Yugoslav Committee and Kingdom of Serbia.

1918  Cindy Walker, American singer, was born (d. 2006).

1919  Sir Edmund Hillary, New Zealand mountaineer and explorer, was born (d. 2008).

1921 Air mail service began between New York City and San Francisco.

1921 – Congresswoman Alice Mary Robertson became the first woman to preside over the US House of Representatives.

1922 The League of Nations awarded mandates of Togoland to France and Tanganyika to the United Kingdom.

1924  Teheran, Persia came under martial law after the American vice-consul, Robert Imbrie, was killed by a religious mob enraged by rumors he had poisoned a fountain and killed several people.

1925  Jacques Delors, French President of the European Commission, was born.

1926 A convention of the Southern Methodist Church voted to allow women to become priests.

1928 The government of Hungary issued a decree ordering Gypsies to end their nomadic ways, settle permanently in one place, and subject themselves to the same laws and taxes as other Hungarians.

1930 Sally Ann Howes, English-born singer and actress, was born.

1932  In Washington, D.C., police fired tear gas on World War I veterans part of the Bonus Expeditionary Force who attempted to march to the White House.

1932  Crowds in the capitals of Bolivia and Paraguay demanded their governments declare war on the other after fighting on their border.

1933 Buddy Knox, American singer and songwriter, was born (d. 1999).

1933  Vice-Chancellor of Germany Franz von Papen and Vatican Cardinal Eugenio Pacelli sign a concordat on behalf of their respective nations.

1933  In London, 500,000 marched against anti-Semitism.

1933  Two-hundred Jewish merchants were arrested in Nuremberg and paraded through the streets.

1934  Police in Minneapolis fired upon striking truck drivers, during the Minneapolis Teamsters Strike of 1934, killing two and wounding sixty-seven; Seattle police fired tear gas on and club 2,000 striking longshoremen, and the governor of Oregon called out the National Guard to break a strike on the Portland docks.

1935  A Royal Dutch Airlines plane en route from Milan to Frankfurt crashed into a Swiss mountain, killing 13.

1936 The Montreux Convention was signed in Switzerland, authorising Turkey to fortify the Dardanelles and Bosphorus but guaranteeing free passage to ships of all nations in peacetime.

1938    Dame Diana Rigg, English actress, was born.

1938  Natalie Wood, American actress, was born (d. 1981).

1940 – U.S. President Franklin D. Roosevelt signed the Hatch Act of 1939, limiting political activity by Federal government employees.

1941 Soviet leader Joseph Stalin consolidated the Commissariats of Home Affairs and National Security to form the NKVD and named Lavrenti Beria its chief.

1942  World War II: The first unit of the Women’s Army Corps began training in Des Moines, Iowa.

1943  Chris Amon, New Zealand racing driver

1943  Wendy Richard, English actress (d.2009).

1944   World War II: Adolf Hitler survived an assassination attempt (known as the July 20 plot) led by German Army Colonel Claus von Stauffenberg.

1944  Franklin D. Roosevelt won the Democratic Party nomination for the fourth and final time at the 1944 Democratic National Convention.

1944   Fifty are hurt in rioting in front of the presidential palace in Mexico City.

1944 Attempt to assasinate Adolf Hitler at his Rastenberg headquarters as part of Operation Valkyrie.

1945 John Lodge, English musician (The Moody Blues), was born.

1945 The US Congress approved the Bretton Woods Agreement.

1946 World War II: The US Congress’s Pearl Harbor Committee said Franklin D. Roosevelt was completely blameless for the Japanese attack on Pearl Harbor and called for a unified command structure in the armed forces.

1947  Police in Burma arrested former Prime Minister U Saw and 19 others on charges of assassinating Prime Minister U Aung San and seven members of his cabinet.

1947 – The Viceroy of India said the people of the North-West Frontier Province overwhelmingly voted the previous day to join Pakistan rather than India.

1948  U.S. President Harry S. Truman issued a peacetime military draft amid increasing tensions with the Soviet Union.

1948 Twelve leaders of the Communist Party USA were indicted under the Smith Act including William Z. Foster and Gus Hall.

1949 Israel and Syria signed a truce to end their nineteen-month war.

1950 Cold War: In Philadelphia, Harry Gold pleaded guilty to spying for the Soviet Union by passing secrets from atomic scientist Klaus Fuchs.

1951  King Abdullah I of Jordan was assassinated.

1953 Dave Evans, Australian singer (AC/DC), was born.

1953 Marcia Hines, American-born Australian singer, was born.

1954  Otto John, head of West Germany’s secret service, defected to East Germany.

1954 – An armistice was signed that ended fighting in Vietnam and divided the country along the 17th parallel.

1955 Jem Finer, English musician and composer (The Pogues), was born.

1958 Mick MacNeil, Scottish musician (Simple Minds), was born.

1959  The Organization for European Economic Cooperation admitted Spain.

1960 Ceylon elected Sirimavo Bandaranaike Prime Minister, the world’s first elected female head of government.

1960 – The Polaris missile was successfully launched from a submarine, the USS George Washington, for the first time.

1960  The head of the Physics Department at the Israel Institute of Technology, Kurt Sitte, was arrested for espionage.

1961  French military forces broke the Tunisian siege of Bizerte.

1964 Vietnam War: Viet Cong forces attacked the capital of Dinh Tuong Province, Cai Be, killing 11 South Vietnamese military personnel and 40 civilians (30 of whom were children).

1964 – The National Movement of the Revolution was instituted as the sole legal political party in the Republic of Congo.

1968  Special Olympics founded.

1969 Apollo Program: Apollo 11 successfully landed on the Moon.

Left to right: Armstrong, Collins, Aldrin

1969 – A cease fire was announced between Honduras and El Salvador, 6 days after the beginning of the “Football War“

1974 Turkish occupation of Cyprus: Forces from Turkey invaded Cyprus after a “coup d’ etat”, organised by the dictator of Greece, against president Makarios.

1976  The Viking 1 lander successfully landed on Mars.

1977 Johnstown was hit by a flash flood that killed80n people and caused $350 million in damage.

1982   The Provisional IRA detonated two bombs in Hyde Park and Regents Park  killing eight soldiers, wounding forty-seven people, and leading to the deaths of seven horses.

1984 Officials of the Miss America pageant asked Vanessa Lynn Williams to quit after Penthouse published nude photos of her.

1985  The government of Aruba passed legislation to secede from the Netherlands Antilles.

1989 – Burma’s ruling junta put opposition leader Daw Aung San Suu Kyi under house arrest.

1992 Václav Havel resigned as president of Czechoslovakia.

1996  In Spain, an ETA bomb at an airport killed 35

1999 Falun Gong is banned in China, and a large scale crackdown of the practice is launched.

2000 – In Zimbabwe, Parliament opened its new session and seats opposition members for the first time in a decade.

2000  Carlos the Jackal sued France in the European Court of Human Rights for allegedly torturing him.

2001  The London Stock Exchange Group plc  went public.

2001  The 27th Annual G8 summit opened in Genoa and Carlo Giuliani, was shot by police.

2002  A fire in a discotheque in Lima, Peru killed more than 25 people.

2003  Sixteen people were injured after two bombs exploded outside a tax office in Nice.

2006 Ethiopian invasion of Somalia Ethiopian troops entered Somalian territory.

Sourced from NZ History Online & Wikipedia

Word of the day

Nugacity – trifling talk or behaviour; triviality,futility, drollery.

Snow good for the holidays

The ski season started late but so did the school holidays and the two week delay has delivered much better snow  on Central Otago ski fields than there was a fortnight earlier.

The Ministry of Education’s decision to move state school    holidays back two weeks this year for the Rugby World Cup    proved to be a blessing in disguise for Queenstown and Wanaka    skifields, which enjoyed their busiest days of the season so    far at the weekend.

Usually, the school holidays would have fallen earlier this      month, when the district’s skifields were battling to open      because of a lack of snow. While the district suffered from      visitor cancellations during the Australian school holidays      over the past fortnight, last week’s heavy snowfalls came      just in time for the New Zealand school break.   

Wanaka was very, very quiet in June and early July.

Good snow for the school holidays will be welcomed not just by the ski fields but by other businesses in the town which benefit from the presence of skiers.

Just wondering . . .

. . . if any child ever says, when I grow up, I’m going to be a parking warden?

Biographer vs Banks

Paul Goldsmith, a former Auckland City Councillor who wrote John Banks’ boigraphy, has been selected as National’s candidate for Epsom.

Banks is Act’s candidate in that seat and unless the party’s dire polling improves in the next four months he will have to win the electorate to keep Act in parliament.

Once more the voters in Epsom will have a big say in Act’s future, the make up of the next parliament and possibly the next government.

Owner-operator farming would decrease with CGT

When I was studying Spanish in Spain the class usually had some new students each Monday and we’d all have to introduce ourselves.

As part of my introduction I’d say my husband es granjero – is a farmer.

One day my teacher corrected me and said, no, pienso es estanciero. (No, I think he’s a rancher/station owner).

The difference between farmer and rancher or station owner in New Zealand is usually just one of scale but in many other countries it is the difference between the person who farms the land and the one who owns it.

Most New Zealand farms are owner-operated. That has shaped not only how we farm but the culture of farming.

If Labour’s proposal to impose a capital gains tax on farmland is enacted that will change.

Families will be less likely to sell farms, they’ll lease them instead. Owner operated farms will decline in number to be replaced by absentee-owners who lease the land or employ others to farm it.

That will reduce the amount of CGT Labour expects to collect. It will also change our farming culture and I don’t think it will be a change for the better.

July 19 in history

711 Battle of Guadalete: Umayyad forces under Tariq ibn Ziyad defeated the Visigoths led by their king Roderic.

1333  Wars of Scottish Independence: Battle of Halidon Hill – The English won a decisive victory over the Scots.

1544 Italian War of 1542: The Siege of Boulogne began.

1545 The Tudor warship Mary Rose sank off Portsmouth.

1553 Lady Jane Grey was replaced by Mary I of England as Queen of England after  just nine days.

 

1588 Anglo-Spanish War: Battle of Gravelines – The Spanish Armada sighted in the English Channel.

1692  Salem Witch Trials: Five women were hanged for witchcraft in Salem, Massachusetts.

1759 Seraphim of Sarov, Russian Orthodox Saint, was born (d. 1833).

1832 The British Medical Association was founded as the Provincial Medical and Surgical Association by Sir Charles Hastings at a meeting in the Board Room of the Worcester Infirmary.

1800 Juan José Flores, first President of Ecuador, was born (d. 1864).

1814 Samuel Colt, American firearms inventor, was born (d. 1862).

1827  Mangal Pandey, Indian freedom fighter, was born (d. 1857).

1834 Edgar Degas, French painter (d. 1917)

1843  Brunel’s steamship the SS Great Britain was launched, becoming the first ocean-going craft with an iron hull or screw propeller and also the largest vessel afloat in the world.

1848 The two day Women’s Rights Convention opened in Seneca Falls, New York and the “Bloomers” were introduced.

 Lucretia Mott was described as “the moving spirit of the occasion”.

1863 American Civil War: Morgan’s Raid – General John Hunt Morgan’s raid into the north was mostly thwarted when a large group of his men were captured while trying to escape across the Ohio River.

Map of Morgan’s route

1864 Third Battle of Nanking:the Qing Dynasty  defeated the Taiping Heavenly Kingdom.

1865 Charles Horace Mayo, American surgeon and founder of the Mayo Clinic, was born (d. 1939).

1870 Franco-Prussian War: France declared war on Prussia.

1879 Doc Holliday killed for the first time after a man shot up his New Mexico saloon.

1896 A. J. Cronin, Scottish writer, was born (d. 1981).

1912 A meteorite with an estimated mass of 190 kg exploded over the town of Holbrook, Arizona causing approximately 16,000 pieces of debris to rain down on the town.

1916 Battle of Fromelles: British and Australian troops attacked German trenches in a prelude to the Battle of the Somme.

1919  Following Peace Day celebrations marking the end of World War I, ex-servicemen rioted and burnt down Luton Town Hall.

1937 George Hamilton IV, American country singer, was born.

1940  World War II: Battle of Cape Spada – The Royal Navy and the Regia Marina clashed; the Italian light cruiser Bartolomeo Colleoni sank, with 121 casualties.

1940 World War II: Army order 112 formed the Intelligence Corps of the British Army.

1942  World War II: Battle of the Atlantic – German Grand Admiral Karl Dönitz ordered the last U-boats to withdraw from their United States Atlantic coast positions in response to the effective American convoy system.

1946 Alan Gorrie, Scottish musician (Average White Band), was born.

1947 Brian May, English musician (Queen), was born.

1947 Prime minister of shadow Burma government, Bogyoke Aung San, 6 of his cabinet and 2 non-cabinet members were assassinated by Galon U Saw.

1963  Joe Walker flew a North American X-15 to a record altitude of 106,010 metres (347,800 feet) on X-15 Flight 90. Exceeding an altitude of 100 km, this flight qualifies as a human spaceflight under international convention.

1964 Vietnam War: At a rally in Saigon, South Vietnamese Prime Minister Nguyen Khanh called for expanding the war into North Vietnam.

1971 Urs Bühler, Swiss tenor (Il Divo), was born.

1976  Sagarmatha National Park in Nepal was created.

1979 Sandinista rebels overthrew the government of the Somoza family in Nicaragua.

1982 The Privy Council granted New Zealand citizenship to Western Samoans born after 1924. The government challenged this ruling, leading to accusations of betrayal and racism.

1983 The first three-dimensional reconstruction of a human head in a CT was published.

1985  The Val di Stava Dam collapsed killing 268 people in Val di Stava, Italy.

1989  United Airlines flight 232 crashed in Sioux City, Iowa killing 112 of the 296 passengers.

1992  Anti-Mafia Judge Paolo Borsellino  and  five police officers were killed by a Mafia car bomb in Palermo.

Sourced from NZ History Online & Wikipedia

Word of the day

Vecordious - crazy, insane, lunatic, mad senseless.

Just wondering . . .

. . . why other people’s mess is messier than your own.

CGT will hit super funds & ACC

Labour’s proposed capital gains tax will exempt payouts from superannuation funds but it will apply to property which many of the funds invest in.

For the first time in decades, New Zealanders are acting on the message to save. But if Labour’s policy is enacted, some of the returns from those investments will be eroded by CGT.

The New Zealand Superannuation Fund and ACC have both invested in farmland and other property.

The negative impact Labour’s CGT will have on both of them will be among the boring details the party doesn’t want to trouble us with.

How can they spin this, let me count the ways

How can Labour spin the latest One News Colmar Brunton poll result? Let me count the ways:

1. Only one poll counts.

2. It’s a rogue poll.

3. We can pretend we didn’t leak details of the capital gains tax before polling was done.

4. Polling was done before the tax package was announced and that will be a game changer.

5. The tax policy is irrelevant because people aren’t interested in details.

6. Our supporters don’t have phones.

7. Our supporters are out/too busy when polling companies call.

8. Polling companies are owned by rich pricks.

9. We’ve got more than four months to turn things round.

10. We don’t comment on polls.

There are those who can count . . .

Labour’s tax plans would leave a gaping hole in public finances and add $18.5 billion dollars to net crown debt, Associate Finance Minister Steven Joyce says:

“At a time when an increasing number of large countries are wrestling with severe problems caused by too much debt, Labour’s recipe for New Zealand would be to borrow more each and every year on volatile world financial markets. . . “

Treasury’s models which are used for economic and fiscal projections for Budgets show Labour’s tax increases would raise around $21 billion of extra revenue out to 2024/25  while at the same time they’d forgo about $28.5 billion in revenue.

“That leaves a $7.5 billion revenue hole, on top of another $7.5 billion in extra interest costs Labour would have to pay on their higher debt. In addition, Labour would need to borrow billions more if it doesn’t proceed with the mixed ownership model for SOEs, pushing total net Crown debt $18.5 billion higher by 2024/25.

This would also put pressure on interest rates which would add costs to for households and businesses.

“And that is all on the assumption they could start a capital gains tax in 2013 and raise billions of dollars despite all their complicated exemptions and loopholes.”

The main reason for Labour’s debt and deficit blowouts would be:

-They have underestimated the costs and overestimated the revenue from almost all of their promises.
-They have no basis for adding in $300 million a year from tax avoidance measures – on top of the $800 million a year the Government is already on track to obtain from Budget 2010 measures.
-They have failed to include extra interest costs on their higher borrowing.
-They have not factored in the need to borrow billions of dollars more to maintain the Government’s level of capital investment – in the absence of proceeds from the mixed ownership model for four State-controlled energy companies.

To make matters worse, they have hidden in their numbers an Emissions Trading Scheme based on a $50 per tonne price for carbon across the entire scheme. That would mean Kiwi households would have to fork out four times as much for the ETS as they do currently under the National-led Government’s more balanced scheme.

Labour has made it quite clear they see the ETS as simply another way to raise revenue.

“And, of course, Labour has already admitted it will spend more. It is yet to announce its spending promises, but has railed against every decision this Government has made to contain spending. Any new spending would add even more to Labour’s debt each year,” Mr Joyce says.

Labour criticises every move National makes to rein in spending and has made absoultely no commitment to fiscal restraint should they get hold of the public purse again.

“When you look through all the spin, it’s the same old Phil Goff and Labour: overestimate the revenue, underestimate the costs and borrow the rest.

“In stark contrast, National has a credible plan to balance the books and start repaying debt within three years. We are building on the encouraging economic growth figures released last week with a plan to take New Zealand forwards, not backwards.”

There are those who can count and those who can’t. Then there’s Labour which doesn’t appear to worry about counting at all – and hopes the rest of us either can’t count or aren’t interested.

Their tax and spend policies put New Zealand into recession before the rest of the world and each policy announcement confirms they’ve failed to learn from their own past failures.

The breakdown of the costs of Labour’s package is here.

 

 

July 18 in history

390 BC Roman-Gaulish Wars: Battle of the Allia – a Roman army was defeated by raiding Gauls, leading to the subsequent sacking of Rome.

64 Great fire of Rome: a fire began to burn in the merchant area of Rome.

1290  King Edward I of England issued the Edict of Expulsion, banishing all Jews (numbering about 16,000) from England; this was Tisha B’Av on the Hebrew calendar, a day that commemorates many Jewish calamities.

1334  The bishop of Florence blessed the first foundation stone for the new campanile (bell tower) of the Florence Cathedral, designed by the artist Giotto di Bondone.

1389  Kingdoms of France and England agreed to the Truce of Leulinghem,  inaugurating a 13 year peace; the longest period of sustained peace during the Hundred Years War.

1656  Polish-Lithuanian forces clashed with Sweden and its Brandenburg allies in the start of  the Battle of Warsaw.

1670 Giovanni Bononcini, Italian composer, was born (d. 1747).

1811 William Makepeace Thackeray, English author, was born (d. 1863).

1848   W. G. Grace, English cricketer, was born  (d. 1915).

1855 New Zealand’s first postage stamps were issued. The adhesive, non-perforated stamps for the prepayment of postage were the famous ‘Chalon Head’ design that portrayed a full-face likeness of Queen Victoria in her coronation robes.

1857  Louis Faidherbe, French governor of Senegal, arrived to relieve French forces at Kayes, effectively ending El Hajj Umar Tall’s war against the French.

1862  First ascent of Dent Blanche, one of the highest summits in the Swiss Alps.

1863  American Civil War: Battle of Fort Wagner/Morris Island – the first formal African American military unit, the 54th Massachusetts Volunteer Infantry, failed in their assault on Confederate-held Battery Wagner.

1867 Margaret Brown, American activist, philanthropist, and RMS Titanic passenger, was born (d. 1932).

1870  The First Vatican Council decreed the dogma of papal infallibility.

 The Holy Spirit descending on Pope Gregory I, by Carlo Saraceni, circa 1610, Rome.

1887 Vidkun Quisling, Norwegian soldier, politician and convicted traitor, was born  (d. 1945).

1908 Mildred Lisette Norman, American peace activist, earned the moniker Peace Pilgrim, was born  (d. 1981).

1909  Andrei Gromyko, Soviet diplomat and President, was born (d. 1989).

1909 – Mohammed Daoud Khan, President of Afghanistan, was born (d. 1978).

1914  The U.S. Congress formed the Aviation Section, U.S. Signal Corps, giving definite status to aircraft within the U.S. Army for the first time.

1918 Nelson Mandela, President of South Africa, Nobel Peace Prize laureate, was born.

1923 Jerome H. Lemelson, American inventor, was born (d. 1997).

1925  Adolf Hitler published his personal manifesto Mein Kampf.

1936 In Spanish Morocco, military rebels attempted a coup d’état against the legitimacy of the Spanish government, this led to the Spanish Civil War.

1937 Hunter S. Thompson, American journalist and author, was born (d. 2005).

1942 Bobby Susser, American songwriter and record producer, was born.

1942  World War II: the Germans test flew the Messerschmitt Me-262 using only its jet engines for the first time.

1944  World War II: Hideki Tojo resigned as Prime Minister of Japan due to numerous setbacks in the war effort.

1950 Glenn Hughes, American singer (Village People), was born (d. 2001).

1957 Sir Nick Faldo, English golfer, was born.

1963 Martín Torrijos Espino, former President of Panama, was born.

1965  Russian satellite Zond 3 launched.

1966  Gemini 10 launched.

1968  The Intel Corporation was founded in Santa Clara, California.

1969  After a party on Chappaquiddick Island, Senator Ted Kennedy drove an Oldsmobile off a bridge and his passenger, Mary Jo Kopechne, died.

1971 Sarah McLeod, New Zealand actress, was born.

1976 Nadia Comăneci became the first person in Olympic Games history to score a perfect 10 in gymnastics at the 1976 Summer Olympics.

1982  268 campesinos were slain in the Plan de Sánchez massacre in Ríos Montt’s Guatemala.

1984  McDonald’s massacre James Oliver Huberty opened fire, killing 21 people and injuring 19 others before being shot dead by police.

1984  Beverly Lynn Burns became first female Boeing 747 airline captain.

1986 A tornado was broadcast live on KARE television when the station’s helicopter pilot made a chance encounter.

1992  The ten victims of the La Cantuta massacre disappeared from their university in Lima.

1994 The bombing of the Asociación Mutual Israelita Argentina (Argentinian Jewish Communal Center) in Buenos Aires killed 85 people (mostly Jewish) and injures 300.

1995  The Soufriere Hills volcano erupted. Over the course of several years, it devastates the island, destroying the capital and forcing most of the population to flee.

1996  Storms provoked severe flooding on the Saguenay River.

1996  Battle of Mullaitivu. The Liberation Tigers of Tamil Eelam captured the Sri Lanka Army’s base, killing over 1200 Army soldiers.

2005  Indo-US civilian nuclear agreement, first public joint statement by Indian Prime Minister Manmohan Singh and the then U.S. President George W. Bush.

Sourced from NZ History Online & Wikipedia

Word of the day

Hebetate – to make or become dull or obtuse;  having a blunt or soft point.

4/10

4/10 in the Herald’s entertainment quiz – half of which were lucky guesses.

Rural round-up

Farming couple move south to live dream – Collette Devlin:

Hannes and Lyzanne Du Plessis travelled to New Zealand from South Africa eight years ago with their child, a suitcase and only $20 in a bank account.

Six weeks ago, they moved to Southland with their three children to contract milk on a dairy syndicate managed by MyFarm at Edendale.

“We had no idea our lives would go in this direction,” Mrs Du Plessis said. “We want our story to inspire others. You do not need a lot of money or experience, because the opportunities to live your dream are all here within the New Zealand dairy industry.” . . .

Self-shedding dorper sheep a growing breed - Collette Devlin:

The dorper sheep, a common sight in most parts of the country, was introduced to New Zealand by a Southland breeder, but it remains a rare breed in the region.

There are 45 registered breeders in New Zealand but only four of these are registered in Southland, the New Zealand Sheep Breeders Association reports. Two are in Gore, one in Balclutha and one in South Otago . . .

Problems facing new grain and seed head - Gerald Piddock:

Ian Mackenzie has taken up the chair of Federated Farmers Grain and Seed at a tumultuous time.

He comes into the role after a tough few years for grain farmers with a grain surplus keeping returns low for many of them . . .

June farm sales up year on year but median price per hectare at 7 year low says REINZ – Gareth Vaughan:

A total of 111 farms changed hands last month, 30 more than in June
last year, according to the Real Estate Institute of New Zealand
(REINZ), with nearly half the sales coming in Canterbury, Otago and
Southland. However, REINZ says the median price per hectare is now at
its lowest level since July 2004.

The June sales included 13 dairy farms and 59 grazing properties and
compares with the 81 farms that changed hands in June 2010, 80 in June
2009, 216 in June 2008, 212 in June 2007 and 158 in June 2006. . .

Radicalsim from the far right – Tony Chaston:

Don Nicolsons foray into politics from a Federated Farmers background
is not new, as many well known politicans have started their political
career via this way.

Just how successful he will be only time will tell, but it is
interesting to note that Bruce Wills the new president has already
stated that his style will be less divisive. Is the political following
by farmers changing, and are they moving further to the right and away
from ther traditional National Party roots? . .

Nestle takes slice of Vital Foods:

A subsidiary of global food giant Nestle says it is taking a minority stake in Vital Foods, a New Zealand company that specialises in developing kiwifruit-based “functional foods” solutions for gastrointestinal conditions.

Terms of the deal have not been disclosed, but Nestle Health Science said in a statement that it would take a seat on the board of Vital Foods “to help steer future product development as well as commercial strategy”. . .

It’s time for some friendly persuasion – Jon Morgan:

Bruce Wills has the creased features of an outdoorsman and the dirty fingernails of a farmer who just a few hours before was dagging lambs in the Hawke’s Bay hills. But seated in the Wellington head office of Federated Farmers he looks at home in a suit and tie.

He is a model of the modern farmer – university educated, highly numerate, literate, articulate and computerate, and an agricultural jack-of-all-trades, handy with hammer, fencing pliers, shearer’s handpiece, drenching gun and team of dogs.

Now he wants to add political lobbying to his skillset – the tramping of corridors, handshaking, backslapping, joshing, hard talk, soft persuasion and smiling through clenched teeth . . .

I’ve got farming in my blood -  Eleanor Ainge Roy:

Bruce Wills, the new head of Federated Farmers, talks about a childhood spent taming the wilderness, and the price he paid for returning to the family land.

When the Wills family moved onto Trellinoe Farm in the late 1950s, 45km north of Napier, the only accommodation was a tiny rabbiter’s cottage, stuck on the knob of a hill. There were no gardens, no fences, and no grass. Just acres and acres of blackberry scrub, wild pigs and goats.

After more than 50 years of hard yakka turning the land into an 1100ha sheep and cattle station, Bruce Wills says the family is still in the “breaking in” phase.

Wills, 50, is the new president of Federated Farmers, and spent his first week in the job travelling between Rotorua, Wellington, Trellinoe and Hamilton. It was a hectic mix of attending meetings, talking to the media – and sheep crutching on his farm.

Prime lambs return record sale prices – Sally Rae:

Record prices for prime lambs at southern stock sales are      giving farmers something to smile about after last year’s      shocking season when up to a million lambs died in freezing      conditions.   

A pen of about 20 Dorset Down ram lambs sold for $223.50 each      at a recent Charlton stock sale in Gore. The price was      believed to be a record for the saleyards, PGG Wrightson Gore      livestock manager Mark Cuttance said .  . .

Growth rates beefed up in simple herd home – Sally Rae:

When Mike Elliot could not get the growth rates he    desired through winter to finish beef cattle – despite feeding    as much as they wanted to eat – he looked for an alternative.   

With an 88ha farm in South Otago, although about 11ha of that  was in trees, it was a fairly small property and he needed to   farm intensively.

But he had a “phobia” about making mud and there were also      the increasing costs of planting crops and the amount of time      and effort to feed cattle on those crops . . .   

Support, direction required for rural sector – Dr Marion Johnson:

Sometimes I completely fail to understand New Zealand. As a     nation we trade on a clean green image yet encourage the  desecration of our resources at every turn.   

 We espouse a No 8 wire mentality; yet I wonder how many   citizens even know what No 8 wire is? We no longer support  innovation, unless it is within a prescribed field and then I      would debate the legitimacy of calling such developments innovation . . .   

Bee roads and wildflowers can help save bees in the UK – pasture farmers  are key players  – Pasture to Profit:

Do you know what a “Bee Road” is?
It’s a wild flower planting on farms to attract & protect Bees. I’ve started my own “Bee Road” sowing a wild flower strip of about 40metres x 10m along a roadside on a pasture based dairy farm.  https://www.cotswoldseeds.com/seedmix/wild-flowers-1 

It was sown this spring & is now in glorious techno colour. The bees &
insects love it but there have been some problems like the dry weather &
weed infestation. I am justly proud of my efforts but there are frustrations .  . .

Farmsafe and AgITO launch Quad Bike Farm Licence:

Farmsafe, in association with Agriculture ITO (AgITO), has launched the Quad Bike Farm
Licence.

“On average 35 farmers come off their quad bikes every day,” Grant Hadfield, FarmSafe national manager, says.

“FarmSafe and AgITO are committed to reducing accidents and changing attitudes through training on safe quad bike riding practices.”

The Quad Bike Farm Licence is gained through a practical on job training package that covers safe quad bike riding practices as well as teaching participants to effectively identify, minimise and isolate potential bike riding hazards and make safe riding decisions. . .

9/10

9/10 in Stuff’s Biz Quiz.

CTG death, gift duty by stealth

Labour says its proposed capital gains tax won’t be imposed on the family home or farm homesteads.

But there is a proviso – the area used for business will be liable for the tax.

I don’t know of any farmhouse which isn’t used for business, though just where the line between farm and home is crossed could be debatable.

If a farmer has a bright idea in the bath, or lies awake counting sheep would the bathroom and bedroom be considered part of the business or home?

Farms aren’t the only businesses to be run, at least in part, from home and they too will be hit by the proposed CGT.

Of equal concern is that the tax would effectively reintroduce death duties:

Under proposals unveiled by Phil Goff this week, assets passed on to children would not create an immediate capital gains tax liability. However, Ernst & Young tax partner Jo Doolan said when the assets were eventually sold, the new owner’s liability would be based on the value of assets when it was originally bought, not the value when the asset was inherited.

“Essentially it’s a back-door estate-duty-type tax that’s coming back in” if Labour was elected, Ms Doolan said.

“They’re saying it will only impact on a small percentage of New Zealand, but most New Zealanders, at some stage, will inherit a property or some other assets, and the minute they sell, they are taxed at the original cost.”

Death duties caused lots of work for lawyers and accountants and imposed costs which threatened businesses. Reintroducing them, albeit by stealth as a CGT, would be a backward move.

Wairarapa sheep and beef farmer Anders Crofoot described the tax as “death duty by stealth”.

Mr Crofoot said because of the asset-heavy nature of farming, the industry would be hit harder than other types of small business by capital gains tax, where less capital investment was required.

“If you’re going to whack 15 per cent off that every time it changes hands, it makes that very difficult.”

Mr Crofoot said he believed that in theory capital gains tax could be fair, but once exemptions for different types of assets were introduced, it created a new supporting industry for lawyers and accountants to advise clients on ways to avoid the tax.

CTG in theory isn’t all bad, but Labour’s complicated one is a dogs breakfast which disincentivises business success and directs energy to avoidance.

Every minute of business time wasted on trying to minimise tax liability is a minute not devoted to productive, wealth generating activities.

John Shewan, the chairman of PricewaterhouseCoopers, said the proposals were “manna from heaven” for accountants, predicting a vast body of work for financial planners to advise wealthy clients on how to navigate through the exemptions.

“We’re recruiting, we’re going to triple our staff,” he quipped.

“But in all seriousness, as an overall tax, while there are definitely pros and cons for a capital gains tax, this one is extremely complicated. It’s got some amazing features which I think really bring it down under its own weight.”

A clean capital gains tax with no exemptions, balanced by reductions in other taxes, might have a place.

But Labour’s proposal is for a dirty tax, complicated by exemptions and one which reintroduces death and gift duty by stealth.