Labour faced few real difficulties not of its own making duirng its last nine years in government.
In spite of that the productive sector went into recession under their watch and the economy stayed buoyant only because of consumption fuelled by borrowing.
National has faced an unprecedented series of financial and natural disasters since it won the 2008 election and yet the economy has still grown in the past year.
GDP increased .8% in the March quarter, in spite of the impact of the Christchurch earthquake, and 1.5% in the year to the end of March.
Imagine what might have happened if the government which led us into recession in good times, had been mismanaging the economy in the past three years.
Imagine what will happen if Labour leads the next government – more tax and spend.
Bill English makes clear the contrast between those policies and National’s:
“We’re also confident this recovery will be built on a sound platform of higher savings, exports and productive investment, rather than the excessive borrowing, consumption and government spending of much of the past decade.
“That will remain the focus of the Government’s economic programme,” Mr English says.
Labour hopes its tax policy will be a game-changer. But all it does is reinforce that it plans to continue the tax and spend policies which failed us in its last term.
Homepaddock 
Lots of imagining there Ele, but we need more than a mirage.
Labour’s CGT proposal has reminded New Zealanders what it’s like to have a constructive, realistic plan, instead of ‘dreams and aspirations’. I’m not a Labour supporter, I’m Green-as, but looking around the net, talking to Southlanders of all ‘stripes’ and following other media, I reckon Labour’s CGT has settled well, fits the New Zealand ‘way’ perfectly and has thrown National’s proposals into a poor light. I’m not just having a prod here Ele, I’m giving some genuine impressions for you to assimilate 🙂
LikeLike
Robert, If you are meaning that the New Zealand ‘way’ is breaking generally agreed positions on taxation, and clobbering the hard working business, farming, and professional sectors of the NZ economy then you would be right. Labour and the Greens it seems still want to run the politics of envy and class division in this fair country.
Back in the 1980’s the then Labour administration changed the taxation rules with this promise – we will have a fair consumption tax that applies to everyone, and a flat / low personal tax structure. Fair enough – and it worked for a decade. Helen Clarks Labour administration broke that agreement by introducing the 39c tax. Why do you think everyone went out of their way to minimise or avoid it – it was seen as fundamentally unfair, and reneging on the promises made with the introduction of GST. The proposed CGT is the same. If it was across the board and applied to everyone, and all assets then one could argue it is fair and could be introduced. As it is proposed it targets the nations income producers – farmers, small businesses etc. It is unfair and as such will create a huge amount of unproductive effort as people seek to restructure their affairs to avoid or minimise their exposure to it. That is the last thing that NZ needs at the moment.
I will never trust Labour again on tax. In my opinion they are a bunch of corrupt lying thieving idiots who when in power stuff the country up, and then leave it to others to sort out their messes. Unfair taxes are bad enough – the thought of giving them to complete idiots who just waste the moment is a further insult.
I would prefer the New Zealand ‘way’ to be one that rewards and celebrates hard work and success, and provides inspiration and aspiration for all New Zealand – not the great clobbering machine that Labour and the Greens seem to want to create.
LikeLike
Good post Ele. I think Ross has endorsed your correct summation admirably.
LikeLike
Whatever.
The greedy will wail but most people aren’t greedy and will welcome the CGT as fair.
National’s asset sales on the other hand, are being panned. No one (bar the greedy and the short-sighted) wants to see our valuable assets, no matter how cleverly the sales are packaged in blue-sky, aspirational, cloud-bouncing wrapping paper, hocked off.
LikeLike
John Armstrong says:
“What is indisputable is that in the 10 days or so since it became apparent that a capital gains tax would be an important component of Labour’s election manifesto,
Goff has for the first time – and at the right time – tactically outmanoeuvred John Key and National.
It is hard to envisage how Goff could have handled the very difficult politics that inevitably flow from promoting such a complex and contentious tax any better than he has done.”
I’m reminded of the America’s Cup yacht race.
The blue yacht just lost its mast.
LikeLike
If Hamstrung of the Herald is your bench player Robert, I would have another scout around for someone who has a basic understanding of wealth creation as opposed to wealth consumption. As I suggested recently when you promulgated a list of names and organisations in support of the ENVY TAX before you dish up a cake someone has to bake it.
LikeLike
Robert, What is really offensive about you and your fellow travelers on the left of NZ Politics is the minute any one objects to your proposed thievery out comes the name calling – the ‘greedy will wail’ etc.
I care passionately about this country and its future, and pay a huge wack of tax each year to support it – that gets given to the needy and sick, pays for much needed government services etc (which I am happy about) and also pays for the a fair bit of nonsense which I am less than happy about.
What this country is having is a discussion about the type of future it is going to have. On the right is the idea that hard work, enterprise, creativity and investment should be rewarded, as this leads to economic growth, which in turn pays for the services of government. On the left is the idea, inherited from the worst days of the British Industrial Revolution that the rich oppress the poor, and the poor should take some or all back (Communism being the take it all back expression of this).
Thankfully the last century has shown the absolute bankruptcy of the socialist ideal – it simply doesn’t work, and the economic incentives it provides get exactly the results you would expect given any small understanding of human nature. The number of teenage girls on DPB is a classic example of this.
For New Zealand, we are running out of time to get this right without a massive inter-generational and probably inter-community tussle. The reason for this is that without some serious economic growth and development we start seriously running out money for existing services and programmes about 2030 and definitely by 2050. It is called the baby boom retirement hump, and constitutes a massive demographic and economic shift for the country over the period 2030 to 2050. We simply aren’t ready for it, and we are running out of time to make the adjustments we need to cope with it.
So, we have 19 short years to sort it out. The lefts solution seems to be – we will tax and tax and tax again the very people who invest, create wealth, develop jobs, and already pay the most taxes in this country. The rights solution seems to be – lets encourage wealth creation, enterprise and growth and then allow this to pay for the services we need.
Given it isn’t a zero sum game and there is plenty of wealth and jobs to be created the proposed solution of the right seems to be far more reasonable and common sense.
The lefts myth of the selfish wealthy industrialist in the New Zealand context is just that, a myth. Look at the business make up figures – 95% of businesses in NZ are very small, mostly family owned, going about their business. These hard working people are the ones that the left is proposing the keep taxing and penalising for their hard work, sacrifices, thrift and investment in our country.
Whether they consent to being unfairly taxed while 40% of the population effectively pays no tax is another matter all together. But it seems that most of the left in this country do not have the intellectual capacity to grasp that.
If the left win the argument and persist with the politics of envy, then I would not want to be on a benefit or retired in this country in the mid 2030’s – it would be a very grim time as the country runs out of money, and all government services are cut. People would feel massively betrayed by the government with no capacity to make changes.
If we invest in our future, and reward success instead of penalising it, then there is great hope for this country, and we should be able to afford the services people believe they will be getting.
I do not believe the way the left proposes will get us there at all.
I think there is a better than even possibility that the way the right is proposing will allow us to achieve this.
LikeLike
Ele, Just to confirm the growth message – I work all around NZ and also in Australia. I couple of weeks ago I was in Taupo, and for the first time in 2 years there is land development for housing going on – contractors were putting in some roads and drainage. There are little signs like this all around the country – not in retail yet, it is still really tough, and lots of empty shops around, but showing up in plenty of other places – there are signs of investment underway. I shudder to think what it would have been like if Labour was still in charge as they are completely bereft of ideas on how to run an economy, and essentially lived off the economic good times developed from the 1990’s and wasted / didn’t invest where they needed to in the 7 years of plenty. Worse, they allowed the size of government to run up to well above long term sustainable levels, whilst at the same time choking the productive sector of the economy. National in the past 2 years has made a huge number of minor and subtle changes that have helped business, investment, economic growth. As these changes spread through the economy they will allow for sustained growth. Hopefully enough people will realise this and allow National more time to continue the good work of building a sustainable economy and future for New Zealand.
LikeLike
Ross – you are hilarious!
You wheedle about my using the term greedy, but in the same breath call the CGT proposals ‘proposed thievery’.
Hypocrisy much?
I note that you immediately assume that you fall into the ‘greedy’ category. You’ll need to look again and see if that’s the case.
Perhaps you’ve gone all defensive needlessly.
Do you feel guilty?
LikeLike
Gravy – up to the gunwales and sinking!
LikeLike
RG: I accept it would be a novelty for you, but why not debate the issue? I enjoy and do appreciate Ross’ dignified posts. I am not learned enough to participate other than to raise applause. I surmise you are equally unlearned, but does this stop you indulging in ad-hominem childishness? Sadly not.
Ross/Ele, Thanks on a cold Saturday.
PS I have noted over the years that the Left assume that greed is unique to the better-heeled. The definition of greed is always to be a moving target but I suspect it emerges at many levels of the wealth ladder. If desiring self-betterment is to be labelled “greed” then what hope do we have?
LikeLike
Garner to English on The Nation:
What did you mean when you said that theoretically a CGT is the right thing to do?
mumble mumble dogde and weave
Do you believe that theoretically a CGT is the right thing to do?
whine wheedle prevaricate procrastinate
Magic Bill from Dipton.
Magic!
LikeLike
Robert mate……
Perhaps I have just had an absolute guts full of working my butt off, creating jobs, sacrificing time with my family, and bringing much needed overseas money back to NZ, paying huge amounts of tax to then have the snivelling little men of the left try to tell me I am greedy and aren’t paying my fair share.
Most people who know me express the thought that I am one of the most generous people they know – perhaps because like a lot of people I also quietly get on an give plenty back to the community and to charities as well.
So not feeling guilty at all.
Just sick and tired of the lameness of the left and how much their policies have and would continue to wreck this beautiful country.
LikeLike
Gareth Morgan on the Nation.
“Yeah well I think Labour should be congratulated absolutely for putting CGT on the table …any one who disagrees has no credibility”.
Bit harsh on Bill, on moments earlier.
Garner is trying his best to dump on Labour but it’s blindingly obvious. His aggressive Parker interview, leaning forward, cutting into every statement, compared to the softy softy sweet and sugary English chat was classic!
LikeLike
Morgan ‘Poor old National, just been caught like stunned mullets’.
Quite.
LikeLike
Well Cods, in the absence of learnin’ about the details of the CGT, I’m relying on the comments of those who do know what they’re talking about, hence my quotes from English and Morgan. I’m struggling to find anything at all of value in your comments, other than your most effusive praise for those who represent your ideology.
LikeLike
Ross… I too raise applause for your posts.
Sadly the ad-hominem childishness continues unabated from the snivelling little man of the left.
LikeLike
Robert, I am pleased you admit you don’t understand. I will try to help you with this, gently, as with teaching a child.
If Labour were proposing a CGT on ALL assets, including the family home, with no exceptions (much like current GST on consumption) accompanied by lesser personal taxation and then stuck to it I would have much less of a problem with it. This is what Morgan and other economists conceptually propose.
Instead Labour are proposing to create a sock it to the producers, envy tax that has loopholes from one end of it to the other, and at the same time re-introducing the 39c tax rate, and stuffing up GST by creating exceptions. Typically then Labour have taken an economically sound idea, politicised it, and suggested an implementation that would extremely problematic. So, just another muddling socialist envy inspired mess that will become a re-run of their last time in government where everyone spends time an effort trying to mitigate the effects of unfair taxation instead of investing in productivity growth and jobs.
Further, Labour on taxation over the past 12 years have shown that they simply can’t be trusted. If they ever get back into power they will then continue to tinker and play with all the taxes at their disposal, CGT included. If you think the CGT will remain at 15% and current restrictions then you are a fool. GST was 10% when it started, it is now 15% and in the UK their VAT is higher still.
The reason the left will need to do this is there simply isn’t going to be enough money to pay for all the current services and promises, let alone all the ones Labour are proposing going forward.
If you thought that an accrual based CGT, payable yearly on the valuation of every asset you own, was going to be applied to you and your families assets, then you might change your opinion on whether it is a good idea. IF we get a CGT then that is inevitably where it will end up.
As I outlined in the post above, NZ has some choices – does it invest in success and growth to pay for its future, or does it try to fudge the future until the pack of cards comes tumbling down through a combination of massive debt / interest payments, massive taxation, a productive and professional class (the true taxpayers in this country) that have fled or given up, and unrealistic promises of services that can never be paid for. I choose success and growth, which is what this country has been doing for most of the past 150 years.
As a self confessed greenie Robert, I am surprised that you are not choosing the same, as it is only wealthy well functioning societies can really afford to enhance and protect their environments, as the environmental destruction going on in Africa, Asia and South America attests to on a daily basis.
LikeLike
Ross – that’s not at all convincing but thanks for going to the effort.
I guess I’m not assured that you are able to make dispassionate, balanced comment on the issue. That may be because you describe the proponents of the Capital Gains Tax as ‘ a bunch of corrupt lying thieving idiots’. To me, that kind of statement drops you straight into the ‘one-eyed, ideologically constipated’ category.
As well, your claim that being a good Greenie, I ought to oppose CGT has me wondering if you’ve done any background work on the issue at all! The Greens have been proposing such a change for yonks!
Yonks!
LikeLike
Ross, I agree with Moist. Your comments are probably the most well thought out I have read for a long time.
LikeLike
Robert, I am well aware of the policies that the Green Party advocates here in NZ. The point I was trying to make is that to truly achieve green objectives (irrespective of taxation positions) needs a relatively wealthy society.
Poor or subsistence societies tend to strip and/or damage their environment in the daily grind for survival.
If you accept that wealthy societies are much more likely to protect the environment and be able to afford the remediation of past damage, then it is logical that you would support policies that favour wealth creation and a wealthier overall society.
That was the point – Labour’s proposed CGT will do nothing to help NZ become a wealthier society, in fact it will have quite the opposite effect and suppress wealth creation along with mis-directing effort to tax re-structuring rather than productivity. The accountants and lawyers will love it, but that is hardly helping NZ become an overall wealthier country.
Just to correct the record, I stated that in my opinion Labour are a bunch of corrupt lying thieving idiots, and that included their proposed CGT ideas. I am quite happy with my opinion as it is based on a fair bit of observation and experience.
A CGT fairly and correctly applied across all assets would be quite supportable.
Labour’s proposed CGT is not going to be fairly applied across all assets or asset owners. Their basic message is vote for it because it won’t effect most of you only the productive and highly paid.
What an absolutely pathetic way to create policy and taxes – envy based, rip the money off the productive parts of the economy, and then waste it on the latest fool idea. Sadly, very typical of left wing thought.
It is completely counterproductive, societal divisive, and will get the reaction it deserves.
Just I abhor Don Brash’s wack the Maori’s comments because of the social damage they are doing, not to mention the division and hurt, I also abhor Labour’s approach to the people who add economic value in our society.
As I noted in the earlier – if you and your family had some skin in the CGT debate i.e. your family assets were to be taxed every year on their capital gains – would you be so keen on this new tax?
I suspect you would be much more circumspect, and suspicious of a new tax, and be looking for some sort of trade off against existing taxes – which is the points I have been trying to make.
That would also hopefully encourage you to think about how much tax is reasonable, and what we really want to pay for as a society. At the moment we seem to have this infantile notion from the left that there is a never ending pool of the productive so called ‘rich pricks’ who can pay for everything.
Again in an earlier post, the demographic changes are reducing that pool very rapidly, and by the mid 2030’s we will have run out of time and space.
LikeLike
Ross.. You will have to go even more slowly to try and get through the tofu-addled thought processes of Councilor G.
His lack of comprehension of your last paragraph makes me think his stupidity is deliberate.
As the saying goes..
You can’t reason someone out of a position they didn’t reason themselves into.
LikeLike
“If you accept that wealthy societies are much more likely to protect the environment and be able to afford the remediation of past damage, then it is logical that you would support policies that favour wealth creation and a wealthier overall society. ”
Ah Ross, therein lies the rub. Your definition of a wealthy society, and mine, differ markedly. The society that I envisage as the one that is most likely to protect the environment is, I’m confident to say, NOT the same society you have in mind. I understand your argument, seen it proposed many time, usually glibly by actoids and tories (not highly regarded as environmental champions, curiously enough) but lacking any real depth. There’s an ideological divide right here, at the point where we define that environmentally engaged society. In my opinion, the ‘wealthy’ society the National Party constructs its machinations around, is by its very nature, bound to continue the destruction of the environment we are presently experiencing.
Which, to my mind anyway, leaves your argument in little blue tatters and makes your admirers here (you have a wee swarm) look gullible.
LikeLike
Moist, I know Robert is just trying to create a big wind up for whatever reason.
I also know that there is little point in trying to educate a fool who is happy with his own stupidity.
However, there are other people also reading these posts, and hopefully it will encourage some thought and debate that lifts the discussion just a little around the place
LikeLike
(confident to say is)
LikeLike
Robert, your confidence is extremely misplaced then, because you have no idea of what I would define as a wealthy society, and are just making unsubstantiated assumptions.
If I was to define a what a wealthy New Zealand society was to look like I would start with quadruple bottom line reporting constructs and measure the wealth of the economy, civil society, environmental vitality and cultural richness. The NZ Institute has put out some good thought pieces on this, and even the Green Party has added to the conversation.
The economy and taxation has been the part about the previous discussions, and must be sustainable and healthy to pay for the services we as New Zealand society have agreed we want our governments to provide. If we become poor as a society, the rest falls over pretty quickly. Economically wealthy societies can protect and clean up their environments far more easily than poor ones. The German clean up of the former East Germany after re-unification would be a classic example.
Civil society refers to the voluntary and social sectors of society. Despite 9 years of Labour trying to destroy this sector and see the state take it over, you would have to say it is in pretty good shape based on the evidence of the aftermath of the Christchurch earthquakes, and the outpouring of goodwill, assistance and support. The on-going strength of NZ civil society is one of the things that makes NZ such a great place to live.
Environmental vitality and protection is equally important, as if you stuff your environment as the Chinese are famously doing in their north west then you can’t live there. Ignore or damage your environment at your peril – a good message and one I fully support the Green Party on.
Cultural refers to the blossoming, growth of all NZ cultures – not just Maori. Cultural vitality, respect and growth adds to the whole of society, and generates growth and ideas that transfer from society to society and culture to culture.
When we get all of these in reasonable balance then I might consider we have a wealthy society. Obviously that requires measures over and above just GDP.
Interestingly – when you apply these measures against New Zealand the country is consistently rated in the top 10 in the world as a society and place to live. Which is all good news, and not saying we don’t need to do better in every sphere.
Returning to the economic part of the wealth measures – if we stuff this up, and become a divisive, knock rather than celebrate success society then ultimately the whole of NZ across all wealth measures will be much poorer.
LikeLike
If the shining wit could read, comprehend, reason and debate then the contribution here from Ross would require a little more time for rebuttal than the time he allocated.
It is a pity we didn’t have such analysis as Ross has delivered, in the MSM.
In support of your comments Ross, on creating wealth rather than just kneejerk kick it in the mouth, another completely ignorant Green miss-understanding of how we can enjoy greater wealth while enhancing the environment would be their totally rejecting the use of nuclear energy for production of electricity when the unit costs are compared.
Great debate and the response says it all really, appreciated by me as others have indicated.
Oh and Robert when do we get some wider opinions added to your “list of experts”, you know some, even just one, who actually makes a few crumbs for your lefty mates to spill as they borrow to advance the approaching bankruptcy.
To quote again Dame Margaret Thatcher, “socialism will only last as long as there are other people to fund it”. As Ross points out that day is less than 20 years away at present.
LikeLike
Gravedodger, thanks for the comments – if we had a green movement that hadn’t also embraced left wing socialism / communism I might be a lot more supportive of them. With regard to nuclear energy for electricity – the baseline studies were conducted in the 1970’s by the then Ministry of Works with sites investigated at Manukau Heads and north Whangarei. Given the ample demonstration in the past 12 months of how geologically active New Zealand actually is, I am not convinced we really want nuke plants here – what do we design for is the issue, and the consequences of getting the design and margins of safety wrong get a bit interesting as the Japanese are finding out. There is room on the Clutha, an already highly modified river, for at least 2 and possibly 3 more big hydro stations. In my opinion, these would be a far better option in the interim than nuclear power, with far less long term risk.
LikeLike
What concerns me about the tax and spend philosophy of the left is the lack of understanding of people’s behaviours. the last Labour Government’s 39 cent marginal tax rate created a new national sport, called avoiding paying 39 cents. We no longer followed the All Black’s or the Silver Ferns, we spent out lives plotting to avoid the high marginal tax rate.
The 3 remedies were to,
1) buy rental properties and run up tax losses
2) shelter income in other structures
3) clear off to Australia
It would be hard to describe any of these activities as benefiting New Zealand
The new Labour Party policy of a 39 cent marginal tax rate and a 28 cent company tax rate will only make one class of people wealthy, accountants
As an accountant I would order my Learjet and my Super Yacht now if I thought that the Labour party had a chance of winning
LikeLike
Good grief! If ever there was a graphic illustration of naked elitist silver-spoon-in-the-mouth-ness, Bill English’s declaration today that he sees nothing at all wrong with the super-rich paying no tax at all, it’s this!
In an economic environment when we are all under pressure to make ends meet and pay our fair share toward recovery, English’s arrogant disregard for the sacrifices made by those of us who are not super-rich is astonishingly heartless and shows how incredibly out of touch from the reality of most people’s lives he is. I’ve no doubt Bill is merely saying what his Tory National Party mates say in private, but to see him display that pompous sense of entitlement publicly, is breathtaking.
I hope people note Bill’s careless excuse-making for the very well off in our society and begin to join the dots formed by others in his party, especially his leader John Key who has made similar comments since becoming Prime Minister, and get the picture that accompanies this Government like a very, very expensive painting of the sort that we, the hoi polloi, never get to see.
Shame!
LikeLike
You with English on this one Ross? Pete? Gravy? Codswalloper? Ele?
Looking forward to hearing from any of you!
LikeLike
Robert, so nice of you to come back. I would be interested in your reply / thoughts on what I said about a wealthy society.
Haven’t seen Bill English’s declaration you refer to today, so can’t comment. Where was it? I am happy to have a look.
What I did see on tonights One News was the Goldwater’s of Waiheke Island donating a $4M vineyard to Auckland University for their viniculture course. Reminded me of Owen Glenn donating $8M to Auckland University a few years back (and being completely spat on by Helen Clark at the same time – but that is another story).
Tonights news story warmed my heart – what a lovely couple. Just another couple of so called ‘rich pricks’ doing what comes naturally I guess. I couldn’t help but wonder if they would have been in a position to do that if Labour’s proposed CGT envy tax was is place – possibly not eh.
Many years ago someone asked J.D. Rockefeller’s accountant how much J.D. had left when he died. The accountant very wisely answered ‘all of it son, all of it’. Once you get your head around that then you might be able to understand why there is a very wide range of philanthropy practiced by the well off in New Zealand society. It is just done very quietly and carefully so as not to attract attention – as no one in this country likes show offs and braggarts.
Again, the law of unintended consequences that Labour is completely ignorant of, will come into effect if their proposed CGT is ever put in place – and you can be sure private philanthropy will be one of the things that takes a big hit.
LikeLike
Ross – nice to see you still here. I’ve been in town all afternoon. I didn’t see One News so can’t comment (did watch Country Calendar though – it was on D’Urville Island. I once lived there, worked, farmed, fished and roamed the area featured in tonight’s programme – but that aside…) Bill English declared (on The Nation this morning and shown again on TV# News tonight) that the super-rich should not pay tax. He said he had no trouble with the ethics of the very, very wealthy not paying taxes like the rest of us have to, no problem at all. This was astonishing stuff and quite disgusting. I believe he just caused the Tory Cause immeasurable harm. Ordinary New Zealanders (they vote you know) are not going to look kindly upon an MP or a Government that holds such views.
I suppose you support Bill’s claim.
I’ve posed this question over on Keeping Stock but the head went straight down below sand level and Inv2 has refused to even acknowledge the issue. Nothing new in that I suppose.
LikeLike
Robert – just to start the discussion about the super wealthy paying more or less tax. Lets just start with the NBR Rich List as a definition – these are the people we are talking about. There are currently 150 individuals or families on that list, with the entry threshold being $50M. They are in fact totally irrelevant to the government in terms of total individual taxation.
Maybe we should assume that they pay no personal tax at all at the moment, and being ‘rich pricks’ with $50M at least they should all pay $1M tax per year as a special offering. That would be $150M a year additional tax in this scenario.
The problem is total government tax revenue last year was 50.7 BILLION. http://www.treasury.govt.nz/government/revenue
So if we collected $150M per year in tax from the really rich in our society (they can probably afford it after all as the argument goes) according to our scenario then this would be an additional 0.3% tax revenue for the government. Robert – did you learn this sort of maths at school?
This is an irrelevant number in terms of NZ annual tax revenue.
A much better discussion would what could 150 individuals or families, with proven track records of creating and maintaining wealth do with another $1M each a year. The answer is probably turn it into an additional $5M to $10M if they really put their minds to it. If taxed at 28c company tax then this would translate into $1.4M – $2.8M additional tax revenue for the government, not to mention the additional jobs it would create etc.
This is the point that Labour and fellow travelers on the Left totally miss – if you let wealth creators do their stuff well, they will create more wealth, jobs, tax revenue etc.
Sir Peter Jackson is a classic example of this – he has helped create an entire world class film industry here in NZ, with an associated couple of thousand jobs, tax revenue, tourist promotion and the list goes on. I am really grateful to him, as one of my nephews has a fantastic job at Weta. If we had any brains at all as a country we would be thanking Sir Peter for a job very well done every day, encouraging him to do more and better and reap the continued benefits of jobs and wealth creation that he brings. Not trying, as Labour is proposing with its CGT envy tax, to rip money off Sir Peter and call him names like ‘rich prick’ because of his success. How small minded is that.
LikeLike
i will go and look at the Bill English interview now, and get back to you on that one Robert. Thanks for letting me know where it was.
LikeLike
So you’re of the same mind as English. The super-rich should pay no tax. Thanks Ross, that’s quite clear.
The general public will thrill to your stance and thoroughly understand your reasoning – then, toss you out for the elitist Tory they will doubtless decide you are.
Not saying that I hold that view, just that the ordinary New Zealander wouldn’t put up with that ‘crap’ as they might call it, for a moment.
LikeLike
Robert, I have watched the Bill English interview now. GIven your comments above I will address them before making any comments about what Bill English said.
I continue to be amazed at the way you jump to conclusions about what I say, and then throw some name calling in for good measure.
I very carefully didn’t say what I personally think about the matter – what I did was raise the point and scenario that the personal income tax take on 150 rich people/families is irrelevant in terms of the total NZ tax revenue. That is an indisputable fact. It would apply to any 150 people – because it is just simple maths.
I then raised an alternative scenario – just to try and get you thinking, about where the efforts might be better placed for the wealth creators in our society. If you read carefully you will note that my alternative scenario, quickly sketched, showed that it would be possible to generate $1.4M – $2.8M tax revenue from the activities of the potential $1M first scenario personal/penalty tax.
Surely if the issue is raising tax revenue needed to pay for government services – unemployment relief, sickness benefits, pensions etc and repaying debt, then the my proposed scenario 2 achieves that better than my proposed scenario 1.
If the objective of the exercise is just to clobber the so called rich then scenario 1 works really well – with the one little exception to the happy thinking that the rich might not stay around long to be so clobbered.
The point you seem to struggle to grasp Robert, is that there are many ways of generating tax revenue – not just personal tax or this proposed envy CGT. Allowing the wealth creators in society to generate income, which is then taxed at a fair and internationally sustainable rate is in fact a very efficient and productive way of generating tax revenue. Ripping into the wealth creators of society with punitive and envy taxes is completely counter-productive for two reasons – one there aren’t enough of them to make that much of a difference, and two they then divert their efforts away from generating income to defending themselves against punitive taxation.
LikeLike
Robert,
With regard to this comment you made “The general public will thrill to your stance and thoroughly understand your reasoning – then, toss you out for the elitist Tory they will doubtless decide you are” –
I fail to see where you are coming from or what you are saying – I am not a politician, nor a member of any political party, nor a government employee.
I am a New Zealand born citizen.
So who, how and why am I likely to be tossed out of.
Would you care to explain yourself a little better on this matter
LikeLike
Robert – Bill English interview:
Perhaps you had better go back and re-watch that too.
Bill English is a reasonably good politician in that he ducks and doesn’t answer issues he doesn’t want to.
What I took from what he said was that the property rort loophole (incidentally left open for the whole of the last Labour administration – was that because Helen Clark owns a heap of houses?) has been closed and is generating an additional $800M tax. Fair enough too – and much better revenue than my punitive 150 rich person tax scenario above.
Then I heard him say that National don’t believe they need a CGT now to raise revenue given the tax settings they have put in place. That is a matter of revenue policy, and Labour / Greens / Act / Maori Parties all have their own opinions on that – again fair enough I would have thought.
When challenged on his many year earlier comments regarding CGT he ducked and fudged – but the point was National don’t believe they need the CGT revenue, and the scheme being proposed by Labour has a huge number of problems. Well that is Bill English’s opinion
Finally Bill English said he didn’t believe the plumber who started with one van and worked hard all his life paying tax as he has gone along who ends up with 8 vans should be clobbered for the value he creates in his business. He made the same comment regarding share trading (note that frequent traders classed as such already have to pay tax on their gains) by someone who is not a share trader but has taken a long term buy and hold position – they shouldn’t have to pay capital gains because the current law does not require it. I would agree with Bill English on both those points.
No where did I hear or even catch an inference from Bill English that the super wealth should not pay tax.
So Robert, I think you got the wrong end of the stick again with that one.
LikeLike
Ross – I’m enjoying your contributions to this debate – it’s vastly more substantive than any other commenter on the two blogs I’m asking for engagement on – this one and keeping Stock, blogs that usually give Bill’s ideas and views plenty of column space!
You said:
“Ripping into the wealth creators of society with punitive and envy taxes” which I fine very revealing. I’m expecting that the super-wealthy should pay their fair share of tax, just as I do. Why you assume that I or anyone else would demand that the Government ‘
rips into the wealth creators of society with punitive and envy taxes reveals an unfortunate bias in your outlook.
I expect you’ll find, should this revelation from Bill English get sufficient coverage from the media that ordinary people hear what he said, that their reaction will be like mine and that they will ask, ‘why doesn’t everyone have to pay their fair share?
Precious few will say, as you seem to believe they might,
“Let’s rip into the wealth creators of society with punitive and envy taxes”.
The public would ‘toss you out’ of their stable of trusted and respected people’, were they to hear your opinion about the super-wealthy and their non-payment of tax, in my opinion.
In Bill’s case, they’d toss him out of office, I’m picking, but we will see if this rises to sufficient height.
LikeLike
Meant ‘that you assume’ line 8
LikeLike
Then you missed it entirely Ross. The segment in question was played on TV3 news @6, with the specific lead in by Duncan Garner, who asked the question then asked it again, incredulously.
Guess we can’t debate it then. No matter. Others will have seen it.
I guess tomorrow will reveal the true situation. If it doesn’t exist, I’ll be back here apologising.
LikeLike
Robert, I guess the basis of miss-understanding regarding the wealthy in this country is your base assumption that they pay no tax, and my base assumption that they pay plenty already.
David Farrar has published some tables on Kiwiblog that pretty much demonstrate my position is correct, so I am pretty comfortable with it. It has also been my personal experience.
If you were correct in your assumption that the wealthy in this country pay no tax then your assertions around the proposed Labour CGT would make a lot more sense – that is, the situation is fundamentally unfair, and they should contribute to society, and this might be a way to achieve it.
The sad reality for almost all so called ‘wealthy’ people (defined as income over $150K by Labour) is that they do pay a lot of tax in a variety of different ways – personal income, company tax, tax on dividends, GST, petrol or road user tax, employer kiwisaver contributions, ACC etc – the list goes on.
The case for most is that the proposed Labour CGT is just another additional tax on top of all the others they pay, which is an envy tax, and will stifle the productive investment this country so desperately needs.
Even if there were 1000 taxpayers that you could wring an extra $100,000 tax out of that they were dodging, that is still only $100M. Is is worth bastardising our entire tax system for $100M revenue? – I have already shown that this sort of money is insignificant in terms of total revenue. The trouble is the compliance and opportunity cost of collecting that extra $100M of revenue will be measured in the billions.
You just have to accept that there are always a very small minority at both ends of the spectrum that will pay little or no tax – from those who do cash under the table jobs at one end to those who structure their affairs at the other end. That was what GST was about – capturing some of that from both.
Thankfully the vast majority of New Zealanders are decent and honest and do pay their fair share of tax and contribute to society and that includes those who earn incomes over $150,000 a year.
With regard to Bill English – I watched the Nation interview carefully, and reported what I saw above.
The chances are that Manaless Hone will drop his trousers on the front steps of Parliament tomorrow and no one will remember what Bill English did or didn’t say – such is our media and conversation in NZ. In that case you won’t need to apologise.
LikeLike
OK Robert, I have now watched the TV3 News beat up on Bill English.
My goodness they are a bit pathetic aren’t they. The full Nation interview was a lot more balanced and allowed Bill English to make and debate substantive points fairly – which were around tax and revenue policy. TV3 deserve a wrap of the knuckles over the way they have cut it and turned it into a beat up. I am pleased I have watched both to get the balance.
I basically haven’t watched 3 News since their appallingly biased reporting during the last Lebanon/Israel war. I clearly haven’t been missing anything obviously – that was so pathetic I started wondering if they were part of the ‘News of the World’ stable. I wonder that they even bother putting the word ‘news’ in the title of their show – it should be ‘Stuff TV3 makes up on the cutting room floor and peddles as infotainment to the gullible NZ public’ – not as catchy as 3News I will admit, but much more accurate.
LikeLike
So that’s a yes then Ross? English did say he had no problem with the super-rich paying no tax? That he saw no ethical problem with that sector of New Zealand society being free from that pesky tax-paying thing?
I understand your reasoning quite well – that high-flying, wealth-creators should be nurtured and encouraged in every way because they add so much to our economy, that we don’t want to lose them by being pedantic, that their contribution to the coffers of the country is minor, that what they are doing is within the law etc. but do you grasp my simple claim? That New Zealanders like fairness and this will seem to them (and me) unfair and that it will reflect badly upon Bill English, John Key and the National Government? Perception counts for a lot around election time and this is a bad look.
As to your TV3 comments, not shooting the messenger are you?
The particular clip I saw was staright interview, question and answer from English. No clever edits, it’s just what Bill believed.
LikeLike
I note the comments overnight and thought the Bill English gave the media a loop hole, by way of sound bite, of taking his comments about some people not paying tax out of context. Watching the TV3 news I thought, I can see where this is going. The left will pick it up and I think that it survive Hone’s next stunt.
To be fair the Labour Party in the late Helen Clarke years drafted the new associated party rules (we call the CGT in drag) designed to stop people trading in properties and holding properties for investment purposes in different structures. The National Party enacted these on 06 October 2009. Both parties were trying to dampen the property market down without mentioning CGT.
To add to Ross’s point about GST there are many higher earners paying more tax now. They were not paying the 39cents anyway but now have to pay 15% GST. People must eat wheat bix but they do not have to earn income.
I also love the dropping of GST on certain items. We will need to employ extra staff to monitor it. It will be like the UK with VAT, there is an army of people monitoring it. Accountants will be the winners.
Here is a thought, kill Working For Families and alter the income tax rates to compensate. IRD could then take the rumoured 600 staff off WFF and put them on debt collection, investigating rorts and property deals. I bet that the revenue take will rise
LikeLike
Good morning Peter. I’m pleased you caught the item. I’m being accused of making it up 🙂
English did say that he had no problem with the ethics of the super-rich not paying any tax, didn’t he?
My argument is that ordinary people will not respond well to that statement. They/we value fairness and like things to not only be fair, but be seen to be fair. English’s statement seems arrogant, elitist and un-fair. Commenters over at keeping Stock are revelling and saying that Ross here has ‘handed me my sorry arse’ over this discussion, but my claim was simple. See above. What did you think of what Bill said?
LikeLike
Robert, you need to look at both the Nation clip and the 3News clip again – very carefully this time. The 3News clip was not a straight clip, and was very cleverly edited at the crucial moment to change the emphasis of what Bill English said. You are not making up what you heard if 3News, my point is that it isn’t actually what Bill English said – that is contained in the Nation clips.
Please go have a look before you next leap to a completely unrelated subject
LikeLike
Robert, Thank you for the discussion yesterday. I am off to Australia today to spend the week away from my wife and family doing what ‘rich pricks’ do – working hard, earning revenue that helps the countries balance of payments, and subsequently paying tax to support our society.
I am traveling all day today to get to where I am going, and will be extremely busy for the rest of the week following.
As such this will be my last post on this thread.
If you come back in with more challenges, I will not be responding – not necessarily because I don’t want to, nor because I am ignoring you, but simply because I will not have time to.
Please have a very nice week.
Regards,
Ross
LikeLike
Thanks Ross – btw, ‘rich pricks’ is a phrase I never use (except here in this comment in order to make it clear what I’m referring to). Don’t put yourself down. I’m pleased to hear that you pay your tax to support our society. I reckon the super-rich should do the same and that it’s morally wrong that they don’t, unlike Bill English, who believes the opposite.
LikeLike
I’ve been away from the computer for the past day – thank you for the contributions to this discussion.
I especially appreciated yours, Ross.
Robert I haven’t caught up with the TV3 item to which you refer, but such is my bias it would be difficult for me to accept your view of it rather than Ross’s explanation.
LikeLike