Hard News by Russell Brown

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Hard News: John Key(nesian)

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  • Don Christie,

    No footy thread today, Mr. Brown? Allow me.

    From the Gruaniad...

    So that is what New Zealand used to play like. It has been too long. This was like being reunited with old friends,

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Paul Williams,

    Cullen has also pointed out that the Nats' version of infrastructure bonds will offer a guaranteed return from the projects they fund, which rather conjures the prospect of digging a very big hole for yourself if things don't work out.

    And they don't, not all of them anyway. Take for instance the Cross City Tunnel and possibly the Lane Cove also. FFS. Use public finance to create private profit and then nationalise the debt when it falls over.

    if you're interested, here's a link to John Quiggan's blog where he notes NZ Treasury's reservations about PPPs which includes this sage advice:

    the advantages of PPPs must be weighed against the contractual complexities and rigidities they entail

    ...and on the issue of rigidities it's worth noting that in the months before it opened, an agreement between Cross City Tunnel owners and State government emerged showing how government had agreed to change, close and re-route a number of roads to funnel traffic into the Tunnel to guarantee it business - it still failed*. Frankly, National's infrastructure policy is starting to resemble the kind of cobbled together crap the Standard worry about.

    * At least economically speaking, perhaps cynically, you might take the view that the State probably picked up cheap infrastructure but I suspect Mcquarie Bank don't see it that way.

    Sydney • Since Nov 2006 • 2273 posts Report Reply

  • Lucy Stewart,

    Just to play devil's advocate: so many of our most educated disappear overseas for want of opportunity or adequate remuneration. If we invest heavily in education, won't we just be funding a brains trust for the taxpayers of other countries (in the same way that we seem to be hoovering up medical graduates from 3rd world countries)?

    Bingo. I'm going overseas for my PhD, and it's not because I can't get it here; it's because we only have two universities with decent programmes in my field of study, and neither has specialists in what I'm really interested in doing my thesis in. We're an agricultural country. That's awesome if your field of study relates to those areas, but we simply do not have the industry to support as many fields as people are interested in. Add that to better pay overseas, and people are always going to go away. The important thing is that, like Key, most of them come back - bringing their experience with them.

    It worked in places like Korea and Vietnam, though, right?

    Which are significantly closer to major markets. NZ's problem isn't just its size; it's the isolation. Ireland is in the EU, Korea and Vietnam border China. It takes a bit of working around.

    Wellington • Since Nov 2006 • 2105 posts Report Reply

  • Rich of Observationz,

    Slarty: so you want NZers to be watching '80s tellys with a green tinge, and Chinese people to be impoverished rice farmers who can't afford cheese?

    And that benefits who?

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Suze Vermeer,

    Our savings record is dismal but heavens forbid anyone suggest that leaving the credit card to gather a little dust would be a good idea.

    Actually, someone did suggest that. Bollard issued warning after warning last year, long before the US sub-prime market went belly-up, to rein in our over-spending and over-use of credit in light of unrealistically high property valuations. The centre couldn't hold, he warned us.

    Wellington • Since Jul 2008 • 29 posts Report Reply

  • George Darroch,

    Re Ireland - if the winds blow favourably, we could position ourselves as an equivalent into China, India and Asia.

    Well, we better invest in educating our kids in Asian languages then, as we're still terribly isolated by our linguistic shortcomings. We could probably turn that around in about 10 years if we worked hard.

    No footy thread today, Mr Brown?

    Yeah, I came here for that and started talking politics. Whoops!

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • dc_red,

    Where do you think a spare billion could be well spent?

    Well, inspired in equal parts by The Simpsons and the Herald's Your Views section, I would be tempted to: "lower taxes, brutalize criminals, and rule you like a king."

    More seriously, I'd be tempted to introduce a selective GST.

    No GST on Insulation.
    No GST on Fruits and Veges.
    No GST on health & education fees.
    No GST on Rates.

    Oil Patch, Alberta • Since Nov 2006 • 706 posts Report Reply

  • Craig Ranapia,

    Just to play devil's advocate: so many of our most educated disappear overseas for want of opportunity or adequate remuneration. If we invest heavily in education, won't we just be funding a brains trust for the taxpayers of other countries (in the same way that we seem to be hoovering up medical graduates from 3rd world countries)?

    Well, I think England (where my GP came from) would take severe exception to being described as a third-world country. :) If you want to stop educated people going overseas, refuse to issue them passports and make the price of a medical degree indentured servitude to whatever DHB is willing to take them on. Seriously.

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Craig Ranapia,

    More seriously, I'd be tempted to introduce a selective GST.

    And is there any international evidence that creates anything other than a mare's nest of exemptions (which seem have more to do with which sector groups have the best lobbyists and PR operations than anything else)?

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Gareth Ward,

    If you want to stop educated people going overseas, refuse to issue them passports and make the price of a medical degree indentured servitude to whatever DHB is willing to take them on. Seriously.

    Unfortunately that will probably just stop educated people, period.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Rich Lock,

    PPPs. The evidence that they're a better way of funding infrastructure is scant, but they're ideologically appealing.

    Two examples from the UK which in a sane world would be enough to deep-six any PPP discussion before it got off the ground:

    1) The NHS. A lot of horror stories floating around about PPP-funded and built hospitals.

    2) The London Underground. Under the contract scheme NuLab oversaw, its usually more profitable for the owners to make sure the trains don't run on time.

    back in the mother countr… • Since Feb 2007 • 2728 posts Report Reply

  • Rich of Observationz,

    Craig: so would you have to take a stupidity test to get a passport?

    Or just produce a copy of a ballot paper with an X for NZ First on it?

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Stephen Judd,

    Bollard issued warning after warning last year, long before the US sub-prime market went belly-up, to rein in our over-spending and over-use of credit in light of unrealistically high property valuations. The centre couldn't hold, he warned us.

    Which reminds me that I would love a retrospective Media7 episode on the media contribution to the housing bubble. ISTR Bollard getting a right castigation in the press for telling the truth, while they were presenting press releases from the REINZ as news and making programmes about doing up and flicking on houses. It would be nice to know what contribution mortgage ads on TV and real estate ads in the paper make to their respective bottom lines...

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • dc_red,

    And is there any international evidence that creates anything other than a mare's nest of exemptions (which seem have more to do with which sector groups have the best lobbyists and PR operations than anything else)?

    Turning the question around, is there any other country or jurisdiction which imposes an almost universal sales tax akin to New Zealand's GST?

    What makes our sales tax "right" - while Canada's, Australia's, Britain's (and many US states), all of which have numerous exemptions built in - are "wrong"?

    The fact is that NZ's GST makes doctor's visits, apples, tertiary education, pears, prescription medicines, broccoli, and home ownership more expensive than they need to be.

    Oil Patch, Alberta • Since Nov 2006 • 706 posts Report Reply

  • slarty,

    so many of our most educated disappear overseas for want of opportunity or adequate remuneration. If we invest heavily in education, won't we just be funding a brains trust for the taxpayers of other countries

    Very fair point: have you noticed how many Oirish accents you hear in other countries? It's a chicken and egg thing...

    FWIW my policy wish list would be:

    - Education
    - Tax credits for anything that increases productivity (i.e. not real estate!)
    - Significant investment in moving away from our monolithic energy infrastructure
    - After a huge amount of consideration, elimination of ACC (I've come to the conclusion that, on balance it tends to reward bad behaviour)
    - Introduction of an additional power to the Reserve Bank: up to 3% of peoples income directed to compulsory saving (as an alternative to raising interest rates). Not taking it away, just saying you can't spend it at the moment.
    - Do the Broadband thing. Now. Stop stuffing around
    - Abolish the MED. Why do governments believe that they can pick winners? You'd have thought we'd have learnt by now.
    - Decriminalise all drugs progressively. Hard drugs sold basically on prescription (along with counselling etc.), the softest using similar rules to alcohol. Dedicate the 50% sales tax on them to harm reduction programmes.
    - Use the money saved by the above (1/3 prisons, 1/3 of police officers etc.) on safety education on the road and in industry
    - With the change, get some more defence staff (especially in the procurement division - I hear they need some help)
    - If a referendum supports it, move from MMP to STV. And get rid of the (sharp intake of breath) Maori seats
    - Introduce a flat tax of 22.5%, with appropriate uplift for the population who would be worse off

    Can't say any of em are ahead on points at the moment :)

    Since Nov 2006 • 290 posts Report Reply

  • slarty,

    Slarty: so you want NZers to be watching '80s tellys with a green tinge, and Chinese people to be impoverished rice farmers who can't afford cheese?

    And that benefits who?

    Struggling with the logic.. help... anyone?

    Since Nov 2006 • 290 posts Report Reply

  • Gareth Ward,

    slarty, I just tore up that ballot, sorry pal...

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • slarty,

    Turning the question around, is there any other country or jurisdiction which imposes an almost universal sales tax akin to New Zealand's GST?

    No. but we are the envy of the world in our simplicity and low compliance costs.

    The evidence is that fiddling with VAT rates makes no difference to the actual price paid. If you zero rate GST on, say, Feminine Hygeine products (seriously - they do in Australia) then the company that sells them cannot claim the input credit. You're much better off just giving a rebate (a tax free allowance on the first $X of income is an easy way.

    the main people who gain from such exemptions are the accountants who fiddle around with descriptors :)

    What makes our sales tax "right" - while Canada's, Australia's, Britain's (and many US states), all of which have numerous exemptions built in - are "wrong"?

    And there is no right or wrong for tax. Just the behaviours that we try to drive with them...

    Since Nov 2006 • 290 posts Report Reply

  • Jim Cathcart,

    Regardless of Labour's fiscal prudence, you can't hide from the fact that private debt in NZ is right up there with the worst in the developed world (largely the result of the property boom). With the prices of those assets to fall for some time (stop kidding yourself if you think it will be over in the next few years) and debt levels reaching a plateau (or increasing at a slower rate), the case for government stimulus is strong.

    Since Nov 2006 • 228 posts Report Reply

  • Paul Williams,

    No. but we are the envy of the world in our simplicity and low compliance costs.

    Sure are, but that might not make it ideal from a consumer point of view.

    That said, I know few people whose buying is heavily influenced by the vagueries of GST in Australia but you do want to check out that grocery till reciept, it can be quite surprising.

    Sydney • Since Nov 2006 • 2273 posts Report Reply

  • Craig Ranapia,

    Craig: so would you have to take a stupidity test to get a passport?

    Or just produce a copy of a ballot paper with an X for NZ First on it?

    Must ask Russell to ask the lads at Cactuslab to come up with a sarcasm tag...

    But since you asked, Rich, NO and NO. Unlike Winston, I'm actually a big fan of open borders and don't think there's any reason to believe people who get tertiary qualifications in New Zealand have some patriotic duty to stay here for the rest of their lives. But I do think, however, there's at least an argument about (say) bonding student teachers, doctors etc. to work in New Zealand for a period with the quid pro quo of (say) an additional lump sum in the form of additional student loan repayments.

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Jeremy Eade,

    But I do think, however, there's at least an argument about (say) bonding student teachers, doctors etc. to work in New Zealand for a period with the quid pro quo of (say) an additional lump sum in the form of additional student loan repayment."

    I agree. It would be the thing to do if you had any time for the notion of sense of community.

    auckland • Since Mar 2008 • 1112 posts Report Reply

  • slarty,

    slarty, I just tore up that ballot, sorry pal...

    Aww shucks - I was just starting to think about baubles.

    But I'm precluded from public office, on account of not being independently wealthy.

    Actually, can you guess which ones I threw in my list fo identity protection purposes? ;-)

    Since Nov 2006 • 290 posts Report Reply

  • Sacha,

    But Craig, we've already mentioned a "sarcasm tag" - (!)

    Ak • Since May 2008 • 19707 posts Report Reply

  • giovanni tiso,

    Yeah, a sarcasm tag, that'd be just great...

    Wellington • Since Jun 2007 • 7473 posts Report Reply

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