OnPoint: Easy as 1, 2, 22.8 billion
208 Responses
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On Twitter, Farrar cited these same numbers as “numbers from Treasury”. Let’s hope he doesn’t say the same thing in his columns or his blog, because that would be greatly misrepresenting these numbers and besmirching Treasury’s reputation as neutral, competent public servants.
On Farrar's recent form, I'm not sure that prospect would deter him.
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So, basically, Joyce over-egged the pudding when there was more more than enough fluff and fudge to pin Labour on?
Tsk.
Let’s hope he doesn’t say the same thing in his columns or his blog, because that would be greatly misrepresenting these numbers and besmirching Treasury’s reputation as neutral, competent public servants.
Oh, Keith… you jest. When don’t Treasury have their competence and neutrality “besmirched” by someone who isn’t being told what they want to hear? My point, before the Craig-bot bullshit starts us, is not that I'm saying Farrar is right but just that 1) I suspect you need a rather thick skin if you work at Treasury and 2) you don't need to look too hard to find occasions where Treasury numbers should be taken with an unhealthy amount of salt.
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Strange that this was spun together by Joyce's little elves, not the Finance Ministers'.
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Joyce's little elves
I always assumed Joyce would have trolls or imps
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the amount of additional money you can get from tax dodgers is $0. Forever.
he’s probably not far from wrong. IR is currently looking at means to increase compliance, but they’ve been doing that for years.
it would be better to focus on growing the economy, IMHO.
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Che Tibby, in reply to
or the minister of inland revenue.
is joyce taking on brownlee's roll while he's preoccupied not fixing chch?
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Russell Brown, in reply to
you don’t need to look too hard to find occasions where Treasury numbers should be taken with an unhealthy amount of salt.
Keith's point is these are not Treasury numbers.
That would imply that they have been provided by Treasury staff with the degree of professional integrity we would expect from public servants. They have not. They have been created by political staffers with a publicly available spreadsheet tool. Calling them "Treasury numbers" does besmirch the professional integrity of the public servants at Treasury.
And I'm quite sure David Farrar knows that.
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besmirching Treasury’s reputation as neutral, competent public servants
That would be kinda hard..
IR is currently looking at means to increase compliance, but they’ve been doing that for years
Depends on the means. If they are just looking at more effective means to chase people down, then sure, that suffers from diminishing returns. If we talked about restructuring the tax system so that businesses that obviously make money (or why would they exist) pay their fair share in tax, then there's a long way to go.
[Cue a big whinge that businesses with no hope of ever making a bean are the backbone of the weightless economy, and NZ needs to cherish and subsidise them, or we'll be forced back to the horrors of the 20th century.]
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Ian Dalziel, in reply to
he's pulling our lego...
a close up of Mr Farrar's calculator?
Now known in the trade as a farrago... -
So if I understand your numbers you are saying that about $15b of Joyce's numbers are bollocks.
That means Labour are about 7.5b off the mark and unlikely to be able to pay off any debt from these tax changes.
It is disturbing how variable such important financial predictions are, almost like folks are mostly guessing.
But it does seem as though Labour's proposal means we wouldn't need to sell our electricity companies. Given the unmitigated disaster seen in the US as a result of allowing private companies to own electricity supply that has to be worthwhile.
And who knows, all the commentators could be right, the CGT numbers could actually be conservative and we might see more tax revenue from them than estimated. That would leave money to pay off some of the debt National has left us with after a mere 3 years.
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merc,
Monopoly 101, never sell the utilities. Also with smart metering the whole electricity game changes.
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3410,
Great post, Keith.
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More needs to be made of scaling back Prostetnic Vogon Joyce's pet projects and the vested interests that lobbied and profit from them. And not just the Holiday Highway either.
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BenWilson, in reply to
Monopoly 101, never sell the utilities.
? I never sold anything unless I was already screwed, but I would often trade a utility with a big cash difference for any other kind of property, or neglect to buy a utility, given the chance, when I was low on cash. The utilities were lame assets in Monopoly. The average payout from landing on them if someone owned both was $70. Compare that with $700 for landing on one of just the weak blue properties with a hotel on it. Or $2000 for landing on Mayfair with a hotel - game over, most times. The railways were pretty good earners too, the best thing being the constant drip feed of cash since they're evenly distributed.
Pretty silly game, really. You can't force anyone to stay at a Mayfair hotel, but if you own the electricity and water, you can pretty much force them to pay you every month. You could quite easily make Mayfair an undesirable suburb by cutting the power and water.
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Keith, quick question: Given that National have already pre-borrowed a lot of money at current (cheaper) rates, wouldn't this further off-set Joyce's interest figures in Labour's favour? Eg: if Labour miraculously win the election, there is funding already available and already earning interest (and accounted for in Treasury's books) that they can re-task for whatever?
Hope that made sense, and if anyone has a clear answer I would be very interested in hearing it.
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Russell Brown, in reply to
Hope that made sense, and if anyone has a clear answer I would be very interested in hearing it.
It was, may I say, an excellent question.
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merc, in reply to
Play Monopoly with children, see what happens. Mayfair costs a whack to get into game killing shape, utilities just keep on trucking, like the railway stations.
The interesting thing round this whole debate, is the debate itself I reckon. -
Keith Ng, in reply to
1) I suspect you need a rather thick skin if you work at Treasury and 2) you don't need to look too hard to find occasions where Treasury numbers should be taken with an unhealthy amount of salt.
What Russell said.
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BenWilson, in reply to
Play Monopoly with children, see what happens.
Usually, I thrash them, and prefer not to play them except to teach it. But yes, I seldom bother developing Mayfair unless for some reason the game has got to an advanced state and everyone has a lot of money. That's uncommon - if you've got enough money to develop Mayfair, you've usually already won. Doing so would be only to hurry the game to the end.
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Keith Ng, in reply to
That means Labour are about 7.5b off the mark and unlikely to be able to pay off any debt from these tax changes.
There's about $4-5b which are legitimately challenged, where Labour has a case to answer. And yeah, that'll have a massive impact on their ability to pay off debt.
It is disturbing how variable such important financial predictions are, almost like folks are mostly guessing.
They are. They're (usually) not awful guesses, and they are substantially better than nothing, but that's why looking at what the assumptions and parameters are is so important - so we can sort out the stupid guesses from the educated ones.
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I'm sure this has been pointed out elsewhere, but selling SOEs and repaying government borrowing isn't "paying off debt" in any meaningful sense.
The net debt stays unchanged, and the return on capital is lost. Only if the SOE makes a lower ROI than the interest on government stock will spending on debt interest be reduced (and bear in mind that if the shares are sold to <strike> mum and dad kiweees</strike> stags out to flip them to foreign pension funds the day after the float, they'll go for less than they'd otherwise be worth).
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I don't understand why we need to sell assets or create new taxes so we can afford to top up the income of wealthy or working over-65s. That generation has most of the wealth and a capital gains tax is just going to be another way to tax younger generations to support an unsustainable superannuation policy.
Superannuation spend is going to 9.5 billion in 2012, and it will continue to grow. If you could shave off a fifth of that by raising the retirement age to 67, means-testing over-67s, and suspending payments to over-67s who are still working you could save more than 15b in 5 years.
It's an accepted truth that changing the retirement age quickly would be too much of a shock: but people in the transition phase of 65-67 could receive a special unemployment benefit that didn't force them to look for work if they were unable to or didn't want to. The unemployment benefit isn't that much less than the pension, particularly if you're married.
I think most people would choose to stay in work. Right now it makes sense to stay in work over 65 if you can: you get two incomes, one of which the under-65s pay for with their income tax and potentially a CGT. That doesn't seem fair to me.
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Che Tibby, in reply to
Superannuation spend is going to 9.5 billion in 2012, and it will continue to grow.
oh THAT elephant in the room.
national super is the untouchable spend. old people vote en masse.
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mattgeeknz, in reply to
What does anyone over 67 have to lose (at least those without assets or income)? It’s a narrow band of people that will be affected.
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Compulsory super contributions is the solution to our super problem. It won't harm anyone on super, but it can reign in the cost of national super really, really fast.
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