Politics changed, facts haven’t

March 28, 2019

Sir Michael Cullen is being paid $1000 to sell the capital gains tax.

It’s a task made more difficult by records of his views on a CGT  which the parliamentary library holds from his time as an MP:

Stuff reported that although the chairman of the Tax Working Group once called a capital gains tax “extreme, socially unacceptable and economically unnecessary”, he has since changed his mind.

New documents compiled by the Parliamentary Library for the ACT party reveal just how far he shifted since leaving Government in 2008.

The 84 pages of research included every reference Cullen ever made in the House in reference to a CGT between 1987 and 2008. . . 

They include:

. . . “I think it is extremely hard to make that connection between a capital gains tax and the affordability of housing, insofar as there has never been a theoretical argument put forward about a capital gains tax on housing. It is more in the direction of a level playing field around investment; it is not around the notion that it will make houses cheaper. Indeed, it is very hard to see how it would necessarily make houses cheaper,” Cullen said at the time.

On June 20, 2007, when Bill English asked Cullen about explicitly ruling out a capital gains tax, he responded saying: “One of the problems with a capital gains tax – apart from the fact that if it were done, it should apply to all asset classes—is that countries overseas that have capital gains taxes have significant inflation in house prices on occasion”.

Then on June 21, 2007, he was asked about the possibility of combining ring-fencing with a capital gains tax on all investments except the family home, and more Government investment in low-cost rental housing.

He responded saying: “I think it is fair to say that, if one was looking at a capital gains tax, which I am certainly not, it would apply to all asset classes. I think the arguments in favour of such a tax, which probably 20 years ago were quite strong, become much, much less strong in the intervening period of time, for a whole host of reasons. So I think that that is actually not a very worthwhile avenue to explore, not least because it comes, in effect, at the end of a process, rather than trying to address the over-investment at the start of the process”. . . 

He says he was Finance Minister at the time and following the government line.

When asked why he changed his mind, he quoted John Maynard Keynes: “When the facts change, I change my mind”.

What facts have changed? It wasn’t a good idea then and it still isn’t, for the same reasons.

As Robin Oliver, former deputy head of Inland Revenue, former Treasury advisor, an expert on the tax system, and one of three dissenters on the Tax Working Group said:

There’s a strong argument for taxing capital gains, as you put it, in theory, the problem is the practicality and of making it work. . .

Kathryn Ryan asked him if, all things being equal and as a tax expert would it be good to do it and her replied:

In the actuality of what you have to do to get such a tax in place, no.

Most of the arguments in favour of a CGT are theoretical ones based on a notion of fairness, whatever that is.

Most of the arguments against it are practical based on facts including that it has done nothing to rein in house prices elsewhere and has led to overinvestment in housing, underinvestment in business, and acts as a handbrake on succession.

The politics have changed but the facts haven’t.

A CGT with exceptions as recommended by the TWG would be expensive to administer, contain loopholes which would only provide work for lawyers and accountants, promote over-investment in housing, stifle investment in productive assets, and result in lower tax revenue in tough times when capital gains fall.


Stuff stuffed the headline

March 21, 2019

Federated Farmers was approached by a Stuff reporter asking questions about firearms.

The story was initially headlined Federated Farmers say AK-47 and AR-15 guns are needed to control pests on farms.

There is nothing in the story that says that. The headline was a complete misquote of what Feds spokesman Miles Anderson did say.

Feds were alerted to the headline but an email to members from chief executive Terry Copeland says the story stayed on the website for three hours and that it took intense pressure from the Feds comms team to get it altered.

The story is now headlined Federated Farmers says semi-automatic firearms have a place on farms.

The email says a phone call and an explanation from a Stuff Editor-in-Chief. Stuff has added its ‘regret’ about the misreporting at the bottom of the story.

That the mistake was made in the first place was at best careless, that it took three hours and intense pressure to get it corrected is appalling.

It is particularly disappointing when emotions are heightened in the wake of the mass murders in Christchurch and the need for quiet reason and facts on the issue of gun control are essential.

The email from Feds gives the questions and answers emailed from and to the reporter:

What do most farmers use guns for?

Mainly pest control (rabbits, possums, Canada geese and feral pigs) and humanely euthanizing livestock. Also recreational hunting and target shooting.

On average how many guns would one farmer own? Most farmers own a 0.22 for shooting rabbits and possums, a shotgun for ducks and geese and rabbit control, and a centrefire rifle for deer and pigs, and euthanizing large animals such as cattle.

Generally, what types of guns do farmers use? As above. Farmers use the right firearm for the right job. Quite a lot of the firearms farmers use for pest control are semiautomatic, such as 0.22 rifles and shotguns. These are used to target small fast moving pest species such as rabbits, hares, wallabies and Canada geese. For these species there are often only very limited opportunities to shoot at them and they are commonly found in groups. For Canada geese, for example, hunters may sit in a crop paddock all day for only a few opportunities to shoot at a mob of geese, which may arrive in a mob of up to 100 birds. Four geese eat as much as one sheep and shooting is the only way to control them.

Does the farming community support gun reform? Should the government make it harder for individuals to get gun licences?

Federated Farmers will participate in any process that reviews the law.

What is Fed Farmers’ opinion on military style semi-automatic guns for farming. How common are they? How necessary are they?

Military style semi-automatic rifles are not in common use by farmers. There is no need for general public sales of detachable, high-capacity semi-automatic rifle magazines.

For the record:

My farmer bought an air rifle (for which no licence is needed if you are aged over 18) a couple of years ago when rabbits started invading the lawn and garden. Neither of us owns any other firearm.

Some of our staff own rifles and shotguns which they use for controlling rabbits, possums, ducks, geese, deer and pigs, for recreational hunting and for the mercifully rare occasions when it’s necessary to euthanise cattle.

None own military style arms nor would they have any need to.


Another plank from urban-rural bridge

May 31, 2018

Stuff’ is oging ahead with its plan to close its rural papers and reduce its reporting.

. . . Stuff chief executive Sinead Boucher said farming stories would still appear online on Stuff’s website and app, but the closure of the rural titles will mean the loss of nine journalists and six commercial staff.

Stuff is proposing to retain just three editorial staff to cater for the major newspapers’ farming sections and online content. . . 

That is very sad for the people who are losing their jobs and the three editorial staff covering farming news will be spread very thinly.

However, we have been getting so many free papers – sometimes two or three a day – it’s difficult to keep up with them.

All of them provide different news, views and features but it really was too much of a good thing with too little time to read them all.

If as often happens we don’t have time to read one, the next day’s mail will bring another and the first goes out having had no more than a passing glance.

Country people will still be well served by the rural publications that remain.

The hole will be in urban papers which will no longer have such comprehensive coverage of rural news and views and another plank will go from the urban-rural bridge.


28 papers stuffed

February 21, 2018

Stuff has announced it’s ditching 28 of its papers:

The full list of titles being closed is:

AvenuesWaikato FarmerAdmire MarlboroughNZ Dairy FarmerDiscover MagazineSelwyn and Ashburton OutlookAdmire NelsonHastings MailChristchurch MailNapier MailThe TribuneKaikoura StarInvercargill EyeAuto XtraSouth Canterbury HeraldClutha LeaderWaiheke MarketplaceNewsLinkWairarapa NewsQueenstown MirrorNZ FarmerWaitaki HeraldCanterbury FarmerNorth Waikato NewsCentral District FarmerRotorua ReviewOtago Southland FarmerRuapehu Press.

This is very tough for the people whose jobs are at risk.

There might be opportunities for someone to take over some of the titles but print media is not a growing business and rural media is a very crowded space.

We knew farming was in resurgence when the letterbox started filling up with give-aways.

We now get several free rural papers a week, sometimes three or more in a day.

If we don’t have time to read them when they come they often go out barely read or unread because at least another has come before we get back to them.


Knowing little about Little

November 23, 2014

6/10 in Stuff’s quiz on Labour’s new leader Andrew Little, four of which were guesses.


26/40

December 31, 2013

Only 26/40 in Stuff’s year in 40 questions.


8/10

October 26, 2013

8/10 in Stuff’s Biz Quiz.


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