Hard News by Russell Brown

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Hard News: Things To Do

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  • Sue,

    while there is a wealth issue when it comes to GST

    the issue when picking and choosing what is or is not cover
    Why only food, what about other necessities
    like electricity?
    or toilet paper?


    and what about the cost to companies working out the difference, they will only raise their prices to get back their cost, most probably wiping out the benefit from no GST.

    Wellington • Since Nov 2006 • 527 posts Report Reply

  • Craig Ranapia,

    Not to mention they've just played their censorship card too:

    Scoop: Violent Video Game Should Be Banned

    *sigh* Could McCoskrie please explain how I've managed to watch this movie around a dozen times, without going on a roaring rampage of human sacrifice, self-mutilation, gang rape (then mutilating my victim so the little skank won't nark), wholesale slaughter of most of my family and cannibalism?

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

  • Rich of Observationz,

    I agree with Russell. And Craig.

    And Sue.

    GST isn't a luxury tax, it's a broad based consumption tax. It has the advantage of simplicity and of catching both those who live mainly off assets and those who leverage their lifestyle on credit cards and second mortgages.

    However, I do think the RAM have chosen good political ground in appealing to people who don't care about economics and do feel they're being ripped off by "the system". I'd probably prefer they vote for the Socialist Workers (which RAM are, BTW) than for NZ First.

    Though it wouldn't be good if they take votes from the Greens and wind up both getting 4.5%.

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

  • Shep Cheyenne,

    To buy into the "tax off food" takes you into the anti-tax lobby.

    Our tax system works and we get a lot of great services for it.

    As GST works as a % of the costs of goods, wouldn't it be logical for that rises in payment and taxation to be passed on to those on benfits as it happens?

    If you're getting govt assistance, are you middle class?

    Since Oct 2007 • 927 posts Report Reply

  • Yamis,

    And as Craig has pointed out, the less well off without families have been continually told, in effect, to go and screw thems...ummm, someone.

    If they reckon they are finacially stretched now then I do not suggest having children.

    If people can't afford to adequately feed, clothe, house their children then I suppose to an extent they have to accept some of the 'blame'. But I would have thought that since we all live in a society that we actually quite like people and so somebody better be having them.

    If a couple where at least one of them is working a fulltime job can't afford to have two or three kids then I'm sorry but that's when the state needs to step in and help when necessary. And bear in mind that it is essentially the children that are being looked out for here, not the parents. The 60 dollars we get a week does not go on grog and dvds, it goes someway to covering the nappies, increased heating bills and other necessities naughty buggar needs.

    But if people want to have a stack of kids knowing full well that they are already heavily reliant on the government then they need a damn good slapping.

    My wife and I were financially comfortable for a wee while there on my income and with no kids. Now despite my wage going up around 20% in two and a bit years AND getting working for families we are struggling more now that we have a tiny tot running amok. Without the WFF we would be FLICKED. So ease up, lest we have child rearing becoming a sport solely for the aristocracy.

    ;)

    Since Nov 2006 • 903 posts Report Reply

  • Danyl Mclauchlan,

    Scoop: Violent Video Game Should Be Banned

    GTA4 looks so freaking awesome.

    Wellington • Since Nov 2006 • 927 posts Report Reply

  • Danyl Mclauchlan,

    And more Grand Theft Auto 4 teasers

    Er . . . possibly not safe for work.

    Wellington • Since Nov 2006 • 927 posts Report Reply

  • Yamis,

    I'm going in to Work and Income to see if they will pay for a copy of Grand Theft Auto 4 for me as an emergency need.

    Since Nov 2006 • 903 posts Report Reply

  • Paul Campbell,

    Well we all need kids whether they're ours or someone elses - we have a health insurance system where we on average pay in when we're young and healthy and collect when we're older - we're all depending on there being a new generation out there keeping the economy ticking over and paying taxes for that to work

    Income splitting is another tax issue that's being discussed a lot at the moment - at its simplest it works by moving the tax steps out so they kick in at twice the values they do now and then letting a couple claim their joint income at that rate - it particularly helps people with very different incomes - like stay at home mums (or in my case a spouse who's gone back to Uni) - it doesn't help the working poor if they're both working - and in fact to keep the total tax take neutral you have to raise the taxes on everyone else (or more likely you move the steps which has the same effect).

    One argument is that the self employed already have this benefit because they can prorate income through a corporate shell - it's true - and my accountant periodically tries to encourage me to set up something so my wife can do this and I keep lecturing her about how the whole point of my corporation is to pay tax (in NZ rather than the US, where I consult - I think you should pay where you live), not avoid it.

    But Craig isn't going to like this one either - as I said it benefits the married at the expense of the single - in the US, where it's called "filing jointly", there's a (quite small) singles movement against it claiming discrimination

    Dunedin • Since Nov 2006 • 2623 posts Report Reply

  • Christopher Worthington,

    The idea that GST is regressive is actually a bit of a canard. Yes, at a given point in time, the rich save a higher proportion of their income. But over their lifetime high earners still tend to spend what they earn, so they pay the same rate in the end (more actually, because they pay tax on the returns from saving as well). Those that die with massive savings have actually done the rest of us a huge favour by, in effect, working for free all those years.

    Of course, as a flat tax GST is more regressive than the progressive income tax.

    Removing GST from food would be slightly progressive: food is 19% of expenditure for decile 2 households versus 15.2% for decile 10.

    However it is still a terrible idea. Leaving aside the well covered complexity aspects, there are still two big problems. Firstly, there's no reason to favour reducing the price of food over raising incomes (at the same fiscal cost). Secondly, a huge proportion of the fiscal cost still goes to people not in poverty.

    The latter reason is basically why tax changes are not a good solution to addressing poverty issues - they're never targeted enough. The same criticism applies to a tax-free threshold, and to a certain extent to minimum wage increases (which have plenty of other problems to boot).

    The fact that Labour has done little (but not nothing) to increase direct targeted benefits probably has less to do with the "entrenched new right establishment" lurking under their beds in Wellington and more to do with the fact that beneficiaries aren't swing voters and increasing benefits isn't a popular policy with the middle class. It certainly doesn't resonate in election-year the way "interest-free student loans" does.

    Since Jan 2008 • 25 posts Report Reply

  • Idiot Savant,

    I'd probably prefer they vote for the Socialist Workers (which RAM are, BTW)

    Interestingly, I had email last week from a RAM member who was quite upset at that being said in public, and claiming that it's a "broad left" movement. Of course, the very fact they use that terminology kindof gives it away...

    Palmerston North • Since Nov 2006 • 1717 posts Report Reply

  • Yamis,

    increasing benefits isn't a popular policy with the middle class.

    These days I wonder what the middle class is given the number of them that are in fact getting a government handout of some sort.

    I think that a three person household (two parents and child) can be earning up to around 70,000 before WFF dries up completely. If they have a second child then the threshold goes up higher.

    So it really depends on what 'benefits' the government is proposing on increasing, decreasing, changing and WFF effects a MASSIVE number of NZ families, including pretty much the entire middle class. Well, what I would consider the middle class anyway.

    I'm sure others know more stats, facts than me though to beat me down.

    Since Nov 2006 • 903 posts Report Reply

  • A S,

    The fact that Labour has done little (but not nothing) to increase direct targeted benefits probably has less to do with the "entrenched new right establishment" lurking under their beds in Wellington and more to do with the fact that beneficiaries aren't swing voters and increasing benefits isn't a popular policy with the middle class. It certainly doesn't resonate in election-year the way "interest-free student loans" does.

    I suspect that both Labour and National's focus groups are telling them quite loudly that after almost 10 years of doing the right thing and paying for those less well off via their taxes, the middle classes are beginning to ask what is in it for them. The recent nasty price spikes and mortgage grimness will be focusing an awful lot of potentially swinging voters very much on what is in it for them.

    I can't blame them either. After ten years, the middle classes and the rest of the "rich pricks" in the top tax brackets are quite entitled to ask when they get treated as something other than a group to be exploited.

    Wellington • Since Nov 2007 • 269 posts Report Reply

  • Jane Treadwell,

    GST works, is fair and doesn't have a building full of civil servants to worry about the exceptions (look at the UK and Australia).

    One of the issues I have is would the 'saved' GST get spent on 'better quality' food as appears to be the argument for exempting it - I think not. Not when milk costs more than Coke; cheese costs more than pies. Fruit and veg are climbing in price - regardless of the GST component.

    Biggest issue for me on this one is the conversation Innes Ashe had with Sean on Morning Report this morning about the Working for Families programme not working for the 180,000 kids living in poverty. If your parents aren't working you don't get access to these extra funds. She cited the example of a working man with a wife at home looking after their 3 year old and getting $60 extra a week via the WFF initiative. When he was struck down with cancer and the wife remained home to nurse him and look after the child, they lost that money. Doesn't make sense to me.

    Singapore • Since Nov 2007 • 9 posts Report Reply

  • Sue,

    <quote.>If your parents aren't working you don't get access to these extra funds.... Doesn't make sense to me.</quote>

    that's becuase i suspect they were now under the 'all so supportive' arm of the government and on some sort of benefit. Then again somone at


    Which let's not forget gets taxed.
    If you want to help the less well off people in NZ why not stop income tax on government benefits?

    How about no income tax for people earing under X K a year, that is far more manageable than GST changes. It's just another tax rate.

    Wellington • Since Nov 2006 • 527 posts Report Reply

  • A S,

    Biggest issue for me on this one is the conversation Innes Ashe had with Sean on Morning Report this morning about the Working for Families programme not working for the 180,000 kids living in poverty. If your parents aren't working you don't get access to these extra funds.

    My understanding of WFF is the reason people on benefits can't get WFF is because WFF is targeted at those in work. WFF is supposed to act as an incentive for people to re-enter the workforce.

    The child poverty lobbists are being a little bit unfair with their critique of WFF, it was never designed to work for those on benefits, that is why there is a benefit system.

    At the end of the day, CPAG & co are upset that those they see as being most disavantaged are not getting enough. But it is important to remember that this is not what WFF was designed to do.

    Wellington • Since Nov 2007 • 269 posts Report Reply

  • Yamis,

    Out of interest according to the ird.govt.nz site...

    a household earning $70,000 and one child aged 0-12 will get $3 a week, a household earning $85,000 with two children aged 0-12 gets $2 a week and a household earning $100,000 with three children aged 0-12 gets $2 a week.

    Those are basically the top ends of the scales before the money gets shut off. if you take off $5,000 from each amount ie. $65,000, $80,000 and $95,000 then each household would receive about $25 dollars a week ($1,300 a year in the hand).

    Good to see that a family of five on 95 grand a year are considered beneficiaries in modern day NZ. I wonder what sort of response that would have got 20 years ago. ;)

    Since Nov 2006 • 903 posts Report Reply

  • Yamis,

    At the end of the day, CPAG & co are upset that those they see as being most disavantaged are not getting enough. But it is important to remember that this is not what WFF was designed to do.

    Exactly A S. Though my memory is shot I'm pretty sure that was the main focus when it came in and it seems to have been reasonably successful if the number of real beneficiaries (ie. sickness and unemployed and professional rugby players) is anything to go by.

    Since Nov 2006 • 903 posts Report Reply

  • Raymond A Francis,

    Ok comming in a bit late on this
    Don't complicate GST with exemptions just drop it back down to 10% where it started
    And I really like the Greens Policy( I must be really tired and confused I can't believe I typed that but working in a winery does that to you) of those on low incomes being non taxed, I don't know but say up to 10 grand or may be 15
    Seems to me that helps those on the bottom and it should be easy to administer

    45' South • Since Nov 2006 • 578 posts Report Reply

  • George Darroch,

    The best way to ensure the poor can afford decent food is to make sure they have the money to pay for it. And of course, there are a number of ways to do so, some better than others, removal of GST being only one. The removal of tax on the first $5000 that the Greens have suggested for years is also worth considering.

    According to a recent UNICEF report, best places to raise children in the OECD are those that directly target their needs, namely the Netherlands and Scandinavia. Perhaps we're moving slowly in this direction. But as CPAG have been saying for a long time, we're leaving a significant number of children behind.

    The fact that Labour has done little (but not nothing) to increase direct targeted benefits probably has less to do with the "entrenched new right establishment" lurking under their beds in Wellington and more to do with the fact that beneficiaries aren't swing voters and increasing benefits isn't a popular policy with the middle class

    Of course, the fact that ordinary middle-class people see themselves as apart from 'people who use benefits', rather than potential beneficiaries of these social services can be construed as evidence that the key messages of the 1990s were fairly successful.

    If there was a bit more imagination in the political scene, and room to establish consensus, we might adopt the Danish model, which combines high levels of flexibility in the labour market (one in three Danes changed job in the last year) with high unemployment benefits, and subsidies which boost low wage jobs. Importantly, the middle-class are well accommodated. Somewhat like a WFF for welfare.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Tom Semmens,

    Reading this is an eye opener as how far to the right even the chardonnay socialists of P.A. are.

    Sevilla, Espana • Since Nov 2006 • 2217 posts Report Reply

  • Terence W,

    How about no income tax for people earing under X K a year, that is far more manageable than GST changes. It's just another tax rate.

    Hi Sue,

    That is, in my opinion, a good idea (and what I was referring to when I wrote 'tax free threshold'). All the more so if benefits are currently taxed.

    Christopher,

    Thanks for an interesting comment.

    The idea that GST is regressive is actually a bit of a canard. Yes, at a given point in time, the rich save a higher proportion of their income. But over their lifetime high earners still tend to spend what they earn, so they pay the same rate in the end (more actually, because they pay tax on the returns from saving as well). Those that die with massive savings have actually done the rest of us a huge favour by, in effect, working for free all those years.

    But the wealthy could save more, if they so chose to; GST disproportionately denies the poor this ability - hence regressive.

    The latter reason is basically why tax changes are not a good solution to addressing poverty issues - they're never targeted enough. The same criticism applies to a tax-free threshold, and to a certain extent to minimum wage increases (which have plenty of other problems to boot).

    Not if you balance a tax free threshold with commensurate increases in your top marginal tax rate. Do this and you can ensure that the wealthy are no better off. Also, while I don't want to get into a debate about the broader merits or not of raising the minimum wage I struggle to see how it isn't in some way targeted to the most poor (at least among workers). Isn't that kind of inherent.

    The fact that Labour has done little (but not nothing) to increase direct targeted benefits probably has less to do with the "entrenched new right establishment" lurking under their beds in Wellington and more to do with the fact that beneficiaries aren't swing voters and increasing benefits isn't a popular policy with the middle class. It certainly doesn't resonate in election-year the way "interest-free student loans" does.

    Maybe, but adherents to the ideology in question certainly tried their best to paint beneficiaries as unworthy (remember those awful 80s 'documentaries'). And this still resonates, I think. Which makes the issue less likely to ever gain political traction.

    George D,

    Nice comment.

    YesWeCanberra • Since Mar 2008 • 41 posts Report Reply

  • Mikaere Curtis,

    Reading this is an eye opener as how far to the right even the chardonnay socialists of P.A. are.

    Depends what you are referencing. If it's the "Don't pollute GST with exceptions" meme then I'd say it's born more of bureaucratic pragmatism than some kind of latent right wing tendency.

    My reading is that there is a general leaning towards alternative approaches to configuring the tax/benefit regime to it delivers the most benefit to those who have the least capacity to endure the coming hard times.

    If you mean the meme that beneficiaries are already catered for and don't need assistance a la WFF, then I would have to agree that this has rightish connotations.

    The CPAG have been campaigning for years about the need to do something meaningful about child poverty at all levels. The (depending on your source/definition) 130K to 180K children in poverty is a significant problem for our country, with real world ramifications in terms of future spends relevant to the criminal justice and health votes.

    The fact that Labour have had nearly nine years during which they have presided over so many excellent economic conditions/indicators, and that they don't even have a target for eliminating child poverty, speaks volumes to me about political expediency vs the needs of the most disadvantaged groups.

    Tamaki Makaurau • Since Nov 2006 • 528 posts Report Reply

  • Geoff Lealand,

    Taking a slight tangent, have people seen the story about the petition calling for a referendum on the 'anti-smacking' legislation being given the heave-ho. There is a rather curious formula being applied: 285,027 (or 10% of registered voters) signatures were required; 324,511 were submitted but a check of a sub-sample resulted in an estimate of 267,000 'valid' signatures--after duplicate signatures, illegible signatures and names not on the Electoral Roll were deleted.

    It is a victory of sorts, but rather a hollow one. I would suspect that 10-20% of signatures on all petitions would be screwy. I have been known to sign 'Adolf Hitler' or 'Benito Mussolini" on petitions that offend me (yes, I know it is adolescent! ) I once also put one of Richard Prebble's books through a shredder, and returned it as requested, after it had been left in our letter-box during an election campaign.

    Amyway, our Japan visit was fan-bloody-tastic. I will be putting up a piece about on kiwiboomers.com in a week or two.

    Screen & Media Studies, U… • Since Oct 2007 • 2562 posts Report Reply

  • Belt,

    "Critically, such a policy would benefit relatively well-off people who spend more money on food -- that'll be me -- far more than the poor people RAM claims to represent."

    <sigh>

    Statements such as that disappoint me and drag you down Russ.

    Well off people don't CARE they get more, percentage wise. They have disposable income to burn - relatively speaking-.

    But it DOES actually help people who are wondering where there next 10 bucks will come from.

    I think the petition is a farce, and completely misguided.

    But for once, someone, stop thinking how any percentage measure would benefit rich people "more". It is such a tired argument. It's an argument made by people incapable of allowing the poor advancing at the "expense" of rich advancing more in dollar for dollar -or percentage- terms.

    Who cares, including the rich people, that you have $10 or $20 a week more to spend?

    Those who don't have any money left at the end of the week. They care.

    FFS....

    Envy even gets in the way of helping those who need relief.

    Trust me, by the time my mortgage, rates, petrol and food bill hits me, I'll know it. But, like you I suspect, I'll be OK. Cost and price increases over time are inevitable.

    But do no longer fall in the trap of calculating how ANY measure might benefit the "rich" MORE. Focus on those who need it, and see how it benefits THEM.

    The "rich" pay 80%(ish) of all taxes as it is, so if they have a little more, they'll be well rewarded for keeping the 20% from abject poverty altogether.

    (PS: The RAM initiative is misguided if not well intended. But I think you know where I am coming from, even if you can not allow yourself to agree :)

    Nelson • Since Nov 2006 • 49 posts Report Reply

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