Word of the day

August 1, 2011

Algerining –  prowling around with intent to commit a burglary.


USA does deal

August 1, 2011

USA  leaders have done a deal to raise the debt ceiling.

Congressional leaders of both parties and President Obama said they have agreed to a framework for a fiscal deal that they will present to their caucuses Monday morning, moving Congress closer to taking up a measure that could pass both the House and Senate with bipartisan support and be signed by President Obama, averting a fiscal calamity.

The two Senate leaders, Harry Reid of Nevada and Mitch McConnell of Kentucky, announced the agreement on the Senate floor and President Obama a few moments later. He indicated he would support it, although it was not his preferred approach.

“It will allow us to avoid default,” he said.

The threat of the USA defaulting on its debt was never very real, but even so this is good news for not only the USA but all the other countries whose economies are intertwined with it.


CGT would hamper farm succession

August 1, 2011

Two of the country’s most respected farm advisors, Andy Macfarlane and Pita Alexander,  say a capital gains tax would hamper farm succession and lead to larger land holdings owned by fewer people.

The founder of Macfarlane Rural Business in Ashburton said a CGT would make succession very difficult and there would be fewer families able to pass on land to their children.

“We have seen that in the UK where intergenerational transfer has been extremely difficult. What families tend to do is hold onto the land until they are very old, but they stop farming it and you get big corporates farming land owned by multiple families.” . . .

It would also deter the next generation of farmers striving for farm ownership, Mr MacFarlane said. When retiring farmers sold their farm, the price they received would be the only superannuation they received and the price equivalent was often no better than a good super scheme.

Land values responded up and down to the availability and cost of credit, optimism to the future and investment that increases productivity.Those three things drove land prices and were more important than the tax impact on land as a storer of value, he said.

“The perception that putting a CGT on is suddenly going to make big behaviour changes, I don’t think is necessarily correct.”

A CTG hasn’t kept land prices down in other countries. If anything it has boosted them by making owners more reluctant to sell.

Labour’s policy would slow down farm succession, increase the price of land and encourage both absentee ownership and sale to foreigners who would be better able to pay.

It would help the rich pricks they despise and hurt younger, less wealthy people.

Well-known Canterbury farm accountant Pita Alexander said a CGT had been promoted as being easy to manage but it would not be.

“It will be complicated, slow to produce much real tax income for the Government and will increase incomes for all accountants and solicitors, probably indefinitely.”

New Zealand had three world class industries in dairying, tourism and sheep and beef farming. It was unfortunate that all three of those industries involved substantial land values in terms of a potential CGT, Mr Alexander said.

He doubted, based on worldwide evidence that a CGT would improve the distribution of capital so that it would improve productive investment for New Zealand as a whole.

He also doubted it would fix New Zealand’s farmland and housing shortage.

“Is a CGT going to fix these two key areas? Hard to see with one being a physical shortage and the other going to be exempt.”

The absence of a such a tax had not held down production on New Zealand farms, he said.

“New Zealand farmers’ production output has been affected by climate, prices received and costs. Lower interest costs which a CGT may bring about in time may improve profitability, but the production output is already high and still increasing gradually.”

Real care was required in ascertaining what effect a CGT would have on New Zealand’s land based export sector. Very few of other developed countries with a CGT would have this particular export and economy `mix’, he said.

New Zealand is the only developed country with such a reliance on primary production.

Anything which got in the way of productivity and made it more difficult for people to enter wouldn’t just be bad for the primary sector, it would have a negative impact on the whole economy.

Massey University professor Jacqueline Rowarth  puts it simply: farms need more capital not more tax.

Hat tip: Tony Chaston


A little tinkering leads to a lot more

August 1, 2011

Labour’s chances of being in government after the election are slim but we’re already seeing what will happen if their policy of taking GST of fresh fruit and vegetables is implemented.

Heinz Watties has pointed out that canned and frozen fruit and vegetables can be just as nutritious as fresh produce.

Labour’s argument for applying the tax exemption to fresh produce only is that it’s easy to tell what’s fresh and what’s not. But some fresh fruit and vegetables are luxuries and some processed foods are necessities.

How long will it be before the stupidity of fruits like pomegranate being GST exclusive while tax is still applied to a bag of frozen beans or a can of tomatoes leads to calls for  some exemptions to the exemptions? The next step will be calls for the GST exclusions to be extended to processed food.

They won’t stop at canned and frozen food, the calls for exemptions will extend to other basics like milk, bread and rice.

Every exemption leads to added costs and more anomalies which would lead to more calls for more exemptions which would increase costs . . . because a little tinkering always leads to a lot more.

I am reluctant to call any tax good, but simple taxes are better. They are less expensive to collect and administer and more difficult to avoid.

New Zealand’s GST is very simple and that’s the way it should stay.

National’s Napier MP Chris Tremain point out:

“Treating processed food differently from fresh fruit and vegetables should be seen for what it is – a political gimmick,”  Mr Tremain says. “This is consistent with Labour’s wider promises to meddle with the tax system through a complex set of rules and exemptions that would make it more expensive for businesses to invest. None of this will create jobs – other than tax accountants and bureaucrats. . . “

The problem of people not eating enough fresh fruit and vegetables is complex and price is only one factor. It would be much better to tackle the others, including lack or education and low incomes, than muck about with the tax system.

Hat Tip: Keeping Stock & Whaleoil


Best for business not necessarily for health

August 1, 2011

The headline says: expert urges bigger move into infant formula.

The story is in the business section of the NBR and it’s talking about the business benefits.

Developing products for the fast-growing global infant formula market provides the best opportunity for higher value products from the dairy industry, a leading researcher says.

I can’t argue about that from a business point of view but what’s good for this business isn’t necessarily good for health.

Some women choose not to breast feed, others are unable to and their babies require formula.

But that doesn’t change the fact that breast feeding has health benefits for mother and child and is the best way to feed babies.

There is nothing wrong with increasing the production of formula to meet growing demand.

But there would be a lot wrong with stimulating the demand by advertising in contravention of World Health Organisation guide lines, especially in developing countries where it appears the demand is growing faster.


Compromise more likely than consensus in MMP review

August 1, 2011

Regardless of the outcome of the referendum on our electoral system, we’ve been promised a review of MMP.

However, anyone hoping for significant changes will almost certainly be disappointed.

Electoral finance legislation is a likely guide for what will happen.

The replacement to Labour’s deeply flawed Electoral Finance Act, is an improvement but it’s far from perfect.

It would be unrealistic to expect more from the review of MMP.

Considerable cross-party consultation will be required to get a result that is abiding and that will inevitably result in far more compromise than consensus.

Neither consensus nor compromise will make electorates geographically smaller, reduce the power given to parties or enable us to easily throw out governments we abhor.


August 1 in history

August 1, 2011

30 BC Octavian (later known as Augustus) entered Alexandria bringing it under the control of the Roman Republic.

10BC Claudius, Roman Emperor was born (d. 54).

69 Batavian rebellion: The Batavians in Germania Inferior (Netherlands) revolted under the leadership of Gaius Julius Civilis.

527 Justinian I became the sole ruler of the Byzantine Empire.

607  Ono no Imoko was dispatched as envoy to the Sui court in China.

902 Taormina, the last Byzantine stronghold in Sicily, was captured by the Aghlabid army.

1203  Isaac II Angelus, restored Eastern Roman Emperor, declared his son Alexius IV Angelus co-emperor after pressure from the forces of the Fourth Crusade.

1291  The Swiss Confederation was formed with the signature of the Federal Charter.

1461  Edward IV was crowned king of England.

1498 Christopher Columbus became the first European to visit what is now Venezuela.

1545 Andrew Melville, Scottish theologian and religious reformer (d. 1622) 

1619 First African slaves arrived in Jamestown, Virginia.

1664  The Ottoman Empire was defeated in the Battle of Saint Gotthard by an Austrian army led by Raimondo Montecuccoli, resulting in the Peace of Vasvár.

1774 The element oxygen was discovered for the third (and last) time.

1798 French Revolutionary Wars: Battle of the Nile (Battle of Aboukir Bay) began when a British fleet engaged the French Revolutionary Navy fleet in an unusual night action.

1800  The Act of Union 1800 was passed which merged the Kingdoms of Great Britain and Ireland into the United Kingdom of Great Britain and Ireland.

1828 Bolton and Leigh Railway opened to freight traffic.

1831  A new London Bridge opened.

 

1832  The Black Hawk War ended.

1834  Slavery was abolished in the British Empire as the Slavery Abolition Act 1833 came into force.

1837 Mary Harris “Mother” Jones, American labor organiser, was born(d. 1930).

1838 Non-labourer slaves in most of the British Empire were emancipated.

1840 Labourer slaves in most of the British Empire were emancipated.

1842 Lombard Street Riot erupted.

1855 First ascent of Dufourspitze (Monte Rosa), the second highest summit in the Swiss Alps.

1894 The First Sino-Japanese War began between Japan and China over Korea.

1902 The United States bought the rights to the Panama Canal from France.

1907  Start of First Scout camp on Brownsea Island.

1914 Germany declared war on Russia at the opening of World War I.

1916 Anne Hébert, French Canadian author and poet, was born (d. 2000).

1927 The Nanchang Uprising – the first significant battle in the Chinese Civil War between the Kuomintang and Communist Party of China. This day is commemorated as the anniversary

1936 Yves Saint Laurent, French fashion designer, was born (d. 2008).

1937  Tito read the resolution “Manifesto of constitutional congress of KPH” to the Croatian Communist Party in woods near Samobor.

1941  The first Jeep was produced.

1942 Jerry Garcia, American musician (The Grateful Dead), was born (d. 1995).

1944  Anne Frank made the last entry in her diary.

 

1944  Warsaw Uprising against the Nazi occupation began.

1949 Kurmanbek Bakiyev, President of Kyrgyzstan, was born.

1951 Tommy Bolin, American musician (Deep Purple), was born (d. 1976).

1957  The United States and Canada formed the North American Air Defense Command (NORAD).

1959 –  Joe Elliott, English musician (Def Leppard), was born.

1960Dahomey (later renamed Benin) declares independence from France.

1964  The Belgian Congo was renamed the Republic of the Congo.

1966 Charles Whitman killed 15 people at The University of Texas before being killed by the police.

1966  Purges of intellectuals and imperialists became official Chinese policy at the beginning of the Cultural Revolution.

1967  Israel annexed East Jerusalem.

1968 The coronation of Hassanal Bolkiah, the 29th Sultan of Brunei.

1975  CSCE Final Act created the Conference for Security and Co-operation in Europe.

1980  Buttevant Rail Disaster killed 18 and injured dozens of train passengers.

1981 MTV began broadcasting in the United States and aired its first video, “Video Killed the Radio Star” by the Buggles.

 

1987 Maori became an official language in New Zealand.

Maori becomes official language

1993  The Great Flood of 1993 in the US Mid-West  peaked.

 

1995  The first Victoria’s Secret Fashion Show was held at the Plaza Hotel in New York City.

1996  Michael Johnson broke the 200m world record by 0.30 seconds with a time of 19.32 seconds at the 1996 Summer Olympics in Atlanta, Georgia.

2001 – Alabama Supreme Court Chief Justice Roy Moore had a Ten Commandments monument installed in the judiciary building, leading to a lawsuit to have it removed and his own removal from office.

2004  A supermarket fire killed 396 people and injured 500 in Asunción, Paraguay.

 

2007  The I-35W Mississippi River Bridge collapsed during the evening rush hour.

 2009 gay centre shooting in Tel Aviv.

For more pictures click on the links or go here.

Sourced from NZ History Online & Wikipedia


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