Posts by DexterX
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Hard News: A Capital Idea?, in reply to giovanni tiso,
That has been the thrust of what the economists and bankers reported in the press have been banging on about of late.
Guppy’s up against the glass after Goff taps the walls of the fish tank - in my view.
With the RWC I think that we could get a delegation of economists and bankers set their feet in concrete and link them together with chains and use them for parking barricades that can provide directions and offer free advice.
With the tax system IMHO – removing the depreciation claim and the LAQC thing in residential property investment was all that needed to be done – they did it.
Removing LAQC against all other activities and small business was a wrong move and will lead to the banks and the IRD taking more bankrupt petitions against small business owners than would otherwise have been necessary.
Not being able to offset a business loss against what you have drawn out will send some people to the wall.
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Hard News: A Capital Idea?, in reply to Sacha,
Yes - I covered that sort of stuff in the threads "Election 2011 Go" and "Everything has changed until 2014".
Some of it is as follows:
The economy will recover and it will be based on better and more sensible infrastructure and Tourism, Agriculture, Fisheries and Forestry – these are the areas where the investment in technological innovation needs to be developed and it needs to extend to all aspects of the chain that gets those products to markets
if you get a concern that is exporting you encourage it by providing it with a tax break as regards the amount of reinvestment and development and what you get is more growth - that concern by virtue of the reinvestment able to increase their activity, the people they employee and the export receipts they bring back into the country.
The rate of growth in a concern is directly related to the level of reinvestment.
Providing a tax incentive is not a handout - the concern still has to go out and earn the money it reinvests in its operation it isn't getting a grant.
There is also the ability to target bonds issues at inovation investment and make Kiwi Saver fund available for this.
The expectation that a CGT will encourage investment innovation in the export sector is ill founded - it really is BS..
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Hard News: A Capital Idea?, in reply to Sacha,
Agriculture in NZ is the largest portion of the export economy, contributing about two-thirds of exported goods.
You might be referring to dairy products as only being 25%.
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oops perhaps
Westpac chief economist Dominick Stephens: “New Zealanders are incentivised to borrow money to buy land rather than invest in productive assets. If we introduced a capital gains tax that incentive would be diminished and there would be a greater incentive for people to save via bank deposits or productive business ownership”t
Um, Farms are land and productive business assets - that is the base of the economy.
What are these other productive assets to which he refers, and prodcutive business owernship is? ( working for yourself)
The best way to save is to borrow and retire debt early or to go to Oz or Overseas and earn a real wage and then come back to NZ when it suits you.
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The thing for me is that "we do not in my view need another tax" - it will come in as one thing and morph into something entirely different. The effect will be ultimately to make it harder for the lower paid and vulnerable.
It will be able to be avoided and passed down.
It is interesting that some of he countries promoted as having CGT in many cases also have a poll taxes, federal taxes, death duty and stamp duty.
Removing LAQC's and the depreciation claim was enough.
The problem with removing LAQCs across the broad spectrum is that it will now be harder for "small business" to start up and to endure the recession we are passing through or any other similar downturn event.
I feel it is a diversion of no real moment at present and a disguise for failing to deal with a raft of real issues responsibly by both the present and past govt.
I am more concerned about the growth of “Text a Loan” and other dodgy things like “Pay Day Loans” really taking off with no specific legal framework, the govt cutting back on allowances to budgetary service providers, and a whole range of other things.
The govt has been borrowing more than it needs, the economy is forecast to expand - which I think is likely and with that expansion the tax take will increase.
Where a CGT is answer – what again was the question?
The answer is growth and not more types of tax.
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Hard News: A Capital Idea?, in reply to BenWilson,
Cognitive misers I presume?
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Hard News: A Capital Idea?, in reply to Rich Lock,
People just want the silky greasy salesman to tell them it will be all right and not have to deal with the reality of making things right when they go wrong.
I find it in often in my work - you run into a scenario where there are professional people who own a substantial home, which leaks from a range of issues.
These people can afford to have the problem solved but often don't even want to understand or acknowledge the problem or a solution - this exists even when they are shown the problem, provided with a web gallery, and drawings of both the problem and the solution.
Often you can spend days, weeks, months counselling someone on the nature of the problem and how to fix it and at times it finally gets to a stage where they repeatedly suggest their preference for shortcuts or "squirting silicon" on it.
On occassion I have suggested they save their money and go along to the $2.00 shop and purchase a magic wand.
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Hard News: A Capital Idea?, in reply to BenWilson,
I was disagreeing with Islander and agreeing with you - lack of punctuation.
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Hard News: A Capital Idea?, in reply to Islander,
I disagree "NZers are weirdly stingy" and gravitate to chosing the lesser rather than the optimal or correct solution.
This approach underlay the deregulation to the building industry and the problems it created.
It doesn't even come down to being able to afford quality - people you can afford quality don't want to pay for it.
If anyone watched the leaky home documentary one of the recurring themes was the use of a cheap fix approach over a permanent solution - cheap being the strategic smearing of silicon (which I call pooh) everywhere as opposed to the installation of the correct flashing.
Silicon, which breaks down in sunlight, and is meant to be used as a binding agent to between two surfaces of flashing which are to be bound together with rivets – is often just smeared over the top of an unsealed flashing lap that may become the source of a leak.
You might have a job that you have a range of quotes that go from $9,500 with all flashing joints bound and sealed correctly to say $8,500 which will be done with the laps just put in place. The first job will likely last 17 to 25 years and the other job will last for 3 to 7 years.
The person doing the lesser job will be really busy.
The weird stingy thang comes from people being cognitive misers and not wanting to have to think through in any detail the critical element of any decision they are looking to make.
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Hard News: A Capital Idea?, in reply to Rich Lock,
Sub par housing is what people want - There is a real lack of wanting quality - people want cheap crap - that is the primary driver.