Public Address | Cafe | OnPoint: It's real

Paul Campbell

Sat, 16 Jul 2011 21:50:41 +1200

Thinking more about Farrar's table I think it's disingenuous because it shows a snapshot in people's life – real people don't stay in the same earnings bracket for all their lives – people's lives follow a natural arc – my son's at Uni, he earns very little and gets lots…

DexterX

Sat, 16 Jul 2011 21:01:48 +1200

I don't think that Robert Reich actually agrees or disagrees with Ben's view – though what he says is relevant generally to the fallacious "management of the economy".

A lift in wages and better equality in employment relations are some of the things that really need to happen in NZ…

Rob Stowell

Sat, 16 Jul 2011 20:55:42 +1200

'Middle class' in the US doesn't translate at all cleanly to 'bourgeoisie' or exclude the 'Working class'.
But yeah. There is a huge 'underclass' in the US that Reich doesn't mention.
I don't think that's deliberate callousness. He's an economist, and his particular schtick at the moment is that great…

DexterX

Sat, 16 Jul 2011 20:38:12 +1200

All this talk of a bubble or contribution to 50% of a bubble, is basically nonsense??

I wouldn’t put much reliance on any analysis or regurgitated press release placed in print and penned by Tapu Misa.

The Saving Working Group – which a treasury based think-tank thang released a report…

Hilary Stace

Sat, 16 Jul 2011 20:36:06 +1200

I agree with you, but he is speaking to an US audience, on economic oppression and not social justice. And the visuals are good. For an NZ audience how about this little chat from the the Spirit Level people?

giovanni tiso

Sat, 16 Jul 2011 20:28:37 +1200

Yes, the explanation part is good. It’s the final sentence that is abhorrent.

Sacha

Sat, 16 Jul 2011 19:48:54 +1200

It explains concisely something about economics and politics to an audience broader than marxist academics. I'd love to see more of that (especially from lefties).

giovanni tiso

Sat, 16 Jul 2011 18:56:18 +1200

Great clip

Is it now? To me, it shows all the embarrassing limitations of the idea of equality for Social Democrats, which is nicely matched by Labour’s current rhetoric. What Counts Is The Middle Class. Of course if you spoke to a leftie in 1980 you might find they had…

Sacha

Sat, 16 Jul 2011 17:24:56 +1200

Robert Reich agrees

Great clip

Sacha

Sat, 16 Jul 2011 17:24:33 +1200

Someone said that 50% of our most recent NZ residential bubble would have been removed by a CGT. Can't remember where, but recent.

I first heard that via Bernard Hickey I think, but the recent mention was a Tapu Misa column on Monday:

And the Government's own Savings Working Group has…

Kumara Republic

Sat, 16 Jul 2011 15:48:50 +1200

It’s always been my view that a pervasive middle class is about the closest capitalism can ever get to socialism. It offers the best chance for people to work in, and live lives that aren’t all about the money.

Robert Reich agrees.

http://www.youtube.com/watch?v=JTzMqm2TwgE

Robert Urquhart

Sat, 16 Jul 2011 10:46:25 +1200

+1 In much the same position myself

BenWilson

Sat, 16 Jul 2011 10:43:56 +1200

And to that end, I think that economic stagnation is a fairly inevitable consequence of socialist policy. I just don't think that's so bad. It's a curious leveling process, which is actually making the world a better place, that it means once nations get a basic level of economic stability,…

BenWilson

Sat, 16 Jul 2011 10:34:50 +1200

That is in part my point faced with a choice "you" prefer the house over creating the brave new frontier.

I hope you can see that that is not the case. I choose to own property because it has been one of the soundest investment classes for decades in NZ,…

DexterX

Fri, 15 Jul 2011 22:55:35 +1200

Someone said that 50% of our most recent NZ residential bubble would have been removed by a CGT. Can't remember where, but recent.

Can you point to me where you get this from.

Having regard to REINZ figures from 2008 through to early 2011 – the movement has been "mostly"…

DexterX

Fri, 15 Jul 2011 22:45:29 +1200

That is in part my point faced with a choice "you" prefer the house over creating the brave new frontier.

Jeremy Andrew

Fri, 15 Jul 2011 22:02:40 +1200

Also by having metric fuckloads of juicy, juicy oil and gas.

plus cod liver oil... Perhaps not such a plus that.

Islander

Fri, 15 Jul 2011 20:24:09 +1200

O fuck yes!
Now, let's see – my batter recipe? The dried version? The complex & varied soused et al platter?
I'm sure I could find/make up political analogies/metaphors.

Thing is, Norway -smallish, has done so much better than we have – and it's done it
-partially- by having a very…

Ian Dalziel

Fri, 15 Jul 2011 20:15:09 +1200

The Norwegians, on the other hand…
Won't anyone think of the cods?

BenWilson

Fri, 15 Jul 2011 20:13:36 +1200

What “technology” did the people at the Labour Party conference and those blogging in Public Address forums in support of CGT want “developed” and what risks were they going to take on to do “it” – whatever “it” was that they considered needed doing?

Ooo, ooo, I can answer that,…

Russell Brown

Fri, 15 Jul 2011 20:07:45 +1200

You didn’t agree with Ganesh Nana and think David Farrar is a partisan hack who’s never seen a stat he can’t bad touch into gibberish? And sorry for being harsh here, Russell, but how exactly does a low-quality post on Farrar’s blog balance out, mitigate or give a pass to…

Sacha

Fri, 15 Jul 2011 18:54:18 +1200

The NZ downturn and the extent of the subprime-lending crisis in the USA although related to a degree are not the same. I note that the USA having a CGT didn't stop the GFC – they are not related.

Someone said that 50% of our most recent NZ residential bubble…

Sacha

Fri, 15 Jul 2011 18:51:39 +1200

Does Ganesh Nana regularly do work for Labour and is he used by them to seed their comms?

Islander

Fri, 15 Jul 2011 18:51:17 +1200

No comment on Muldoon & the stifling of the Labour-initiated National Superannuation eh Craig?
THAT is where the rot began in our economy, best as I/amateur can see-

Craig Ranapia

Fri, 15 Jul 2011 18:18:16 +1200

I’d be more inclined to agree if …

DexterX

Fri, 15 Jul 2011 17:58:37 +1200

How does the Fred the plumber scenario you have laid out provide for growth in the productive base of the economy – Fred is still doing what he was doing before he borrowed the $20,000 – but he has a better work wagon which he can depreciate and perhaps a…

DexterX

Fri, 15 Jul 2011 17:46:58 +1200

The statment easier than you think doesn't cut it – Can you tell me how it is going to happen?

Kumara Republic

Fri, 15 Jul 2011 17:45:52 +1200

There many things that cause me to damn the Muldoon government, but the destruction of the super fund still looms largest. Even bigger than the ridiculous 'Thing Big' wastage...
trust rightwingers? Never in a million years.

Nigel Lawson did the same with Britain's North Sea wealth. The Norwegians, on the…

Andre

Fri, 15 Jul 2011 17:39:47 +1200

Thanks for pointing out that the whole lending ratio between business and property is currently developed on purely commercial lending terms associated with risk.
Imagine if banks were made to follow the US doctrine whereby mortagees unable to continue servicing their debt are able to walk away leaving the banks…

Keith Ng

Fri, 15 Jul 2011 17:38:30 +1200

I/S: no, government is not all about redistribution. It's main function is to provide public goods that otherwise wouldn't be provided, to look after the interests of the community in a scale and in a timeframe in which individuals can't.

Redistribution is a part of that, but certainly not all…

Ian Dalziel

Fri, 15 Jul 2011 16:43:56 +1200

Money for nothing...
Now that Hone is drawing a salary while not under oath, perhaps we should look at a Capital Games Tax for our big Parliamentary earners...

Islander

Fri, 15 Jul 2011 16:43:50 +1200

Stephen Judd

Fri, 15 Jul 2011 16:39:25 +1200

Rik, one could see the Cullen fund and Kiwisaver as laying the groundwork for a transition to a more Australian-type regime. That is, compulsory contribution out of earnings, and means-tested social security for those who haven't saved enough.

However, I imagine that if Labour were to join those particular dots,…

Paul Williams

Fri, 15 Jul 2011 16:32:47 +1200

Rik, currently Australians pay 9 percent compulsory superannuation on salary and wages.

Rik

Fri, 15 Jul 2011 16:28:44 +1200

For one thing, the biggest benefit going is national super

Right – let's do away with it then!

Do Australia have an equivalent to national super? Or do they just have a compulsory retirement savings scheme?

Paul Williams

Fri, 15 Jul 2011 16:14:44 +1200

Goff gave a very good interview this morning, can't see it posted in this thread, so it's here.

Gio, I'm with Sacha on this, I don't think David's stupid, I do think he's spinning (I also think Labour's wedged the government nicely on this).

giovanni tiso

Fri, 15 Jul 2011 16:00:44 +1200

Yes, see, I think a lot of people reckon that he argues dishonestly. I don't. I think he just doesn't grasp concepts of moderate difficulty and above.

Sacha

Fri, 15 Jul 2011 15:58:28 +1200

The thing that I find most depressing about Farrar is not that he's everywhere – it's that he's as dumb as a freaking post.

If he were genuinely stupid, he'd be less evil. Much like some of his fellow travellers.

Rich of Observationz

Fri, 15 Jul 2011 15:47:58 +1200

Well, IANACBE (work it out) but it seems to me that the risk ratio is designed to reflect actual risk, not an opinion on the desirability of certain lending.

However, if the likely inflation of house prices is limited through taxation, then that will make residential mortgages more risky, and…

Stephen Judd

Fri, 15 Jul 2011 15:47:47 +1200

Are there enough incentives for those on benefits to get off them?

For one thing, the biggest benefit going is national super (citation). Currently we don’t incentivise old people to die, but I don’t think we should change that.

For another, numbers on other benefits change more or less in…

giovanni tiso

Fri, 15 Jul 2011 15:43:19 +1200

Hey, yeah – and when you add all those up, that’s like 66% tax … isn’t it? Fark.

The thing that I find most depressing about Farrar is not that he's everywhere – it's that he's as dumb as a freaking post.

Dave Howell

Fri, 15 Jul 2011 15:32:15 +1200

How about if the trading banks were forced by legislation to offer a higher ratio of business lending?

I beliebe there's already a mechanism by which something of the sort can be done. Banks' Capital Adequacy requirements (i.e. how much liquid funds they need to have available to back their…

Rik

Fri, 15 Jul 2011 15:30:17 +1200

So....that graph by DPF...aside from all the interesting conclusions being reached by commentators on both sides of the fence, the household vs individual angle, and the fact that it doesn't allow for the shared benefits all NZ'ers benefit from (health, corrections, education, etc)...could we not use it as the basis…

Rich of Observationz

Fri, 15 Jul 2011 14:31:12 +1200

How about if the trading banks were forced by legislation to offer a higher ratio of business lending?

My understanding is that no bank will lend more than chump change without taking a security, normally a mortgage on real estate.

I'm unconvinced that we should encourage them to do otherwise.…

Sacha

Fri, 15 Jul 2011 13:59:27 +1200

How about if the trading banks were forced by legislation to offer a higher ratio of business lending?

I wonder if their aversion might change anyway under a CGT?

Sacha

Fri, 15 Jul 2011 13:57:53 +1200

NZ companies, listed ones at least, pay relatively high dividends and have relatively low share price growth.

Would a CGT affect that tendency over time? (serious question)

Russell Brown

Fri, 15 Jul 2011 13:53:28 +1200

More Farrar apple-and-orange action:

Labour also announced a new top tax rate of 39%, for those earning $150,000 or more a year. They obviously feel those people are not paying enough tax through 33% income tax, 15% GST and now also a 15% CGT.

Hey, yeah — and when you…

Russell Brown

Fri, 15 Jul 2011 13:45:48 +1200

For the mystified, Danyl fisked DPF’s graph.

Amazingly, he’s trotting out the exact same misdirection in his Herald column today.

Households who earn $150,000 or more currently contribute 71% of the net income tax (tax less transfers) of all households. So 10% of the households pay 71% of the next tax.…

Martin Lindberg

Fri, 15 Jul 2011 13:41:00 +1200

Keith, you're pwned! They're bad numbers, don't you know.

3410

Fri, 15 Jul 2011 13:38:16 +1200

I'd be more inclined to agree if pretty much everything David Farrar has said on the issue since yesterday afternoon hadn't been such obvious, disingenuous, unmitigated party spin.

True dat. I'm getting a bit sick of these "new" ways of reporting tax figures.

Russell Brown

Fri, 15 Jul 2011 13:35:00 +1200

I think I can be atypically terse on this: No.

If Curia is writing the costings of National policies (prominently displayed on their website) and David Farrar is on a panel discussion of those policies without a very full disclosure at the top of the interview, I’ll be calling bullshit…

3410

Fri, 15 Jul 2011 13:29:36 +1200

Am I supposed to be happy that RNZ couldn't get a basic COI disclosure right from the start? No, I'm not.

Merely noting your emergency feedback serve.
:)

Rik

Fri, 15 Jul 2011 13:29:13 +1200

How will the 90% of all families in NZ paying no income tax when you take into account WFF become investors in productive businesses?

Possibly easier than you might think – a friend of a friend is a policeman who doesn't earn all that much but seems to do OK…

Andre

Fri, 15 Jul 2011 13:19:03 +1200

I reckon that Labour had to launch a CGT to stem the flow of their supporters to the Greens. "Russel Norman and Bernard Hickey save Labour" should be the headline if they beat National.
We need more investment in small businesses and the share market can't help the problem. How…

Dave Howell

Fri, 15 Jul 2011 13:16:59 +1200

Bear in mind the greater part of the productive base of he economy is not listed on the stock market.

Who said anything about the stockmarket? Exactly the same argument applies if you do a deal with Fred the plumber to give him 20 grand towards buying a new van,…

Craig Ranapia

Fri, 15 Jul 2011 13:13:23 +1200

Happy now, Craig?

Am I supposed to be happy that RNZ couldn't get a basic COI disclosure right from the start? No, I'm not. Anyway, I've got something a little more useful to do.

linger

Fri, 15 Jul 2011 13:06:45 +1200

the Higgs bosun
is somebody you can only find on a ship that has a warp drive.

Steve Withers

Fri, 15 Jul 2011 12:51:39 +1200

I turned Mora / Farrar off. I already know the dogma.

Rich of Observationz

Fri, 15 Jul 2011 12:40:06 +1200

Why is [the slow start] a problem?

Why isn’t it? (serious question)

If the purpose of CGT is to raise revenue, then not getting any revenue might be an issue to a government that wants to cut GST and reduce borrowing.

For the purpose of incentivising behaviour, then it isn’t…

Idiot Savant

Fri, 15 Jul 2011 12:30:22 +1200

How is owning shares or a stake in financial or stock markets promoting growth in the productive base of the economy – that bit that actually creates and does things?

Well, supposedly the stick market is about providing investment to help firms grow. In reality, of course, its about speculation,…

Idiot Savant

Fri, 15 Jul 2011 12:28:42 +1200

For more money in your pocket?

Ah, but whose pocket? Labour gives to some pockets, National to others, according to their ethical theories about just distribution and the desirability of substantive (rather than formal, equal right to starve under bridges) equality. You can deride it as a bribe, but at…

DexterX

Fri, 15 Jul 2011 12:00:12 +1200

I could say something about nerf herding and nerfherders, however, that response doesn't answer the question.

How is owning shares or a stake in financial or stock markets promoting growth in the productive base of the economy – that bit that actually creates and does things?

Bear in mind the…

Keith Ng

Fri, 15 Jul 2011 11:44:44 +1200

Because Labour is a left-wing party and wants to roll back some of National's upwards redistribution. You can't just live off sterile economic management; it needs to be for something.

For more money in your pocket?

3410

Fri, 15 Jul 2011 11:39:57 +1200

I expect a little more from RNZ’s flagship news/current affairs shows than the lame magazine fluff after lunch. I'm not talking about the media ethics equivalent of the Higgs bosun here, just disclosure 101.

Happy now, Craig?

Idiot Savant

Fri, 15 Jul 2011 11:36:38 +1200

I also am going 'why' a bit with the changes in income tax. Given, as you're pointing out, it doesn't actually seem to do much to the government's books all up, why is it there?

Because Labour is a left-wing party and wants to roll back some of National's upwards…

Keith Ng

Fri, 15 Jul 2011 11:36:31 +1200

My suggestion to avoid a slow start is this:

BUT THE SLOW START IS NOT A PROBLEM.

Why is it a problem?

Keith Ng

Fri, 15 Jul 2011 11:33:09 +1200

My (non-trolly) concern is that with all due respect to BERL, the income modeling is also based on very long-term projections. I think we’ve all learned to take anything coming out of Treasury with a pound of salt, shouldn’t we do the same with a private company that I assume…

Dave Howell

Fri, 15 Jul 2011 11:28:04 +1200

Can someone please explain how CGT will suddenly encourage people to move out of property investments and invest in more “productive” areas of the economy?

Combination of tax treatment and effects of leverage.

Shares return taxable dividends and non-taxable capital gains. Houses return taxable rents and non-taxable capital gains.

However…

Keith Ng

Fri, 15 Jul 2011 11:23:50 +1200

Can someone please explain how CGT will suddenly encourage people to move out of property investments and invest in more “productive” areas of the economy?

(I withdraw my answer in deference to Dave's below.)

Kumara Republic

Fri, 15 Jul 2011 11:22:07 +1200

Most peope who invest in property do so as it is generally (and correctly, IMO) perceived as being lower-risk than shares or bonds. CGT potentially makes property less attractive as an investment, but if it applies equally to equity and debt investments also, then this won't affect their investment decisions.…

DexterX

Fri, 15 Jul 2011 11:17:42 +1200

Blind faith in the mechanism of the stock and financial markets, I don’t share it.

One should only invest in financial markets what you can afford to lose.

The over cooked and bent nature of these markets don't make it an overly productive investment option in my view – Finance…

Craig Ranapia

Fri, 15 Jul 2011 09:59:32 +1200

And one more thing, Stephen, I expect a little more from RNZ’s flagship news/current affairs shows than the lame magazine fluff after lunch. I'm not talking about the media ethics equivalent of the Higgs bosun here, just disclosure 101.

Craig Ranapia

Fri, 15 Jul 2011 09:52:33 +1200

After the way Jim Mora let Farrar go unchecked yesterday afternoon, I feel the Left is entitled to a pass on that one.

I think I can be atypically terse on this: No.

If Curia is writing the costings of National policies (prominently displayed on their website) and David Farrar…

Rich of Observationz

Fri, 15 Jul 2011 09:50:35 +1200

My suggestion to avoid a slow start is this: the tax gets charged on an annual basis using the GV of the property and the general property inflator. (For the taxpayer, this would simply mean listing their assets at the start and end of the year – LINZ and IRD…

Stephen Judd

Fri, 15 Jul 2011 09:41:15 +1200

After the way Jim Mora let Farrar go unchecked yesterday afternoon, I feel the Left is entitled to a pass on that one.

Craig Ranapia

Fri, 15 Jul 2011 09:32:56 +1200

Currently listening to Ganesh Nana on Nine to Noon. Did I miss the disclosure of BERL's blatant conflict of interest in any discussion of this policy?

BenWilson

Fri, 15 Jul 2011 08:50:45 +1200

Well, to be fair, nobody in this town does.

I do. Labour did it with Muldoon.

Can someone please explain how CGT will suddenly encourage people to move out of property investments and invest in more "productive" areas of the economy?

I think this question is fair. My own preference…

George Darroch

Fri, 15 Jul 2011 08:35:35 +1200

Banks don't make lending decisions based on whether their secured asset is appreciating in value, they lend on the basis of whether they think their loans will be repaid.

Yes, but they base at least part of that assessment on the assumption that if the loan-holder is no longer able…

Andy Milne

Fri, 15 Jul 2011 08:26:28 +1200

To continue my train of thought: If govt really wanted to disincentivise property investment, wouldn't it be more effective to no longer allow investment property losses to be offset against PAYE income? That tax advantage seems to be at least as big a driver of investment property investment as capital…

Andy Milne

Fri, 15 Jul 2011 08:05:38 +1200

The banks have chosen to lend to housing over businesses, on the basis that housing inflation is better for their returns than a business trying to run a profit.

Im not sure I see what you're trying to say here George. Banks don't make lending decisions based on whether their…

Craig Ranapia

Fri, 15 Jul 2011 08:02:39 +1200

I also am going 'why' a bit with the changes in income tax. Given, as you're pointing out, it doesn't actually seem to do much to the government's books all up, why is it there?

My (non-trolly) concern is that with all due respect to BERL, the income modeling is…

George Darroch

Fri, 15 Jul 2011 07:17:41 +1200

Can someone please explain how CGT will suddenly encourage people to move out of property investments and invest in more “productive” areas of the economy?

I can see where you're going there. While this is true – that dollar for dollar a speculative asset is the same whether it's a…

Andy Milne

Fri, 15 Jul 2011 07:07:32 +1200

Can someone please explain how CGT will suddenly encourage people to move out of property investments and invest in more "productive" areas of the economy? If CGT is applied as a blanket tax across virtually all asset classes barring the family home, I don't see how it incentivises a change…

Christopher Dempsey

Fri, 15 Jul 2011 07:00:38 +1200

Me, envious? Not at all.

DexterX

Fri, 15 Jul 2011 05:56:16 +1200

It is all such a good idea and if you are working self employed and over 55 you can avoid it, you can avoid it if you are savvy.

As you said above

we'd been foolish to psych ourselves up for endless tax cuts and WFF handouts.

Like I said…

Lucy Telfar Barnard

Fri, 15 Jul 2011 03:13:07 +1200

I'm just so seriously relieved to see a party – any party – releasing some actual pre-election policy statements, so that there's a faint chance the election might actually be fought on policy rather than (or at least as much as, I'm not that hopeful) personality. Perhaps Labour finally figured…

Scott A

Fri, 15 Jul 2011 02:11:28 +1200

I also am going 'why' a bit with the changes in income tax. Given, as you're pointing out, it doesn't actually seem to do much to the government's books all up, why is it there?

The 'envy tax' narrative – the punishment of aspiration and betterment criticism of higher levels…

Public Address

Fri, 15 Jul 2011 02:11:28 +1200

Discussion from blog post.