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Posts Tagged ‘Labour’

Frank Macskasy: Who I voted for…

18 September 2014 8 comments

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20-september

 

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On the road today, this news story caught my attention;

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Peters backs Davis in Te Tai Tokerau

 

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I couldn’t believe what I was hearing.

This is a deliberate attempt by NZ First and elements within the Labour Party to undermine and destroy the Mana-Internet Alliance.

Which is utterly crazy, and beggars belief.

At current polling, if Hone wins his electorate, he could bring in one or two extra MPs on his “coat-tails”. (The rules as set by this National Government.)

If Labour loses to a National-led coalition by that slim margin – two or three seats – and we face another three years of this damnable regime, because of their unmitigated, self-serving, colossal stupidity,  I will be mightily f****d off.

I will hold the Labour leadership responsible.

And, by the gods, I will give them such grief that Slater and Farrar will be the least of their worries.

This little dirty deal between Labour and NZ First has sealed my Party Vote. I encourage everyone to vote, and I offer my personal endorsement for  the Mana-Internet Alliance.

And Winston  Peters, Kelvin Davis, Stuart Nash, et al,  can go kiss my well-padded, hairy [Anatomical description deleted on good taste grounds - Chief Censor, GCSB]!

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References

Radio NZ: Peters backs Davis in Te Tai Tokerau

Previous related blogpost

The secret of National’s success – revealed.

 

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Harre -Harawira

Above image acknowledgment: Francis Owen/Lurch Left Memes

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National spins BS to undermine Labour’s Capital Gains Tax

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bull shit

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The Nats have been at it again; spinning their misleading bullshit to discredit Labour policy.

This time, Revenue Minister Todd McClay, has been busy issuing media statements that there is no need for Labour’s proposed Capital Gains Tax because, well, evidently, we already have one.

On Sunday 25 May, McClay was quoted as stating,

“Where somebody buys a property or buys shares with an intention of the capital gains being accrued … if their intention is to make a gain from the capital, their normal income tax rules apply, and therefore there is a capital gain.”

Earlier in the month, McClay had made the same assertion,

“When people say New Zealand doesn’t have a capital gains tax on property it’s not true – we do have a capital gains tax, and it applies to speculators.”

Which is strange, because when Labour first released it’s CGT (capital gains tax) policy in  2011,  the following were in favour;

The Dominion Post
NBR
Herald on Sunday
Gisborne Herald
Waikato Times
The Greens
The IMF
The OECD
and columnists and commentators,

Paul Little
Mike Hosking
Gordon Campbell
Anthony Hubbard
Patrick Smellie
Vernon Small
Corin Dann
Andrea Vance
John Hartvell
Matthew Hooten
John Roughan
Duncan Garner
John Armstrong
Bernard Hickey
Gareth Morgan

plus 
Academics,  tax experts, economists, and Treasury.

Those opposed to a CGT were National, ACT, and Landlords.  Unsurprisingly, really, when you think about it. National, ACT, and Landlords represent the capitalists and speculators in our society and they would welcome a tax on capital gains like turkeys look forward to Christmas.

So if we already have a Capital Gains Tax – why were so many in favour of introducing a law specifically for it?

This blogger would  hazard a guess that National and ACT oppose a CGT because it would make up for the seven tax cuts since 1986. These seven tax cuts have seriously reduced government revenue and constrained center-left governments from implementing social policies that would return this country to being a decent social democracy.

Imagine if a CGT in five or ten years would deliver sufficient revenue to fully fund a free tertiary education system in this country. It would drive another nail into the coffin of the neo-liberal policy of user-pays.

Hence why National and ACT absolutely loathe Labour’s policy.

If a CGT was introduced, the catch-cry of right wingers – “but where will the money come from!?!?” – will be muted – if not silenced forever.

But is McClay correct? Do we currently have a Capital Gains Tax?

The answer is, ‘Yes’. And ‘No’.

The current taxation policy on capital gains is haphazard; ill-defined; and open to interpretation. This IRD web-page  illustrates how vague the law is on this issue,

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Residential property Whare nohoanga

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Mistaking property dealing for property investment

Property investor is a collective term for property speculators, dealers and investors. However, they are each treated very differently under tax law.

  • Factors to consider when determining your status
  • What is an investor, a speculator and a dealer?
  • If you are not clear on your intentions for buying a property
  • How long do I need to hold the property to make it a capital gain?
  • How many properties can I sell before it is considered taxable?

Factors to consider when determining your status

Three main factors can determine your status as a property buyer for tax purposes:

  • your intention when you buy a property
  • the patterns of your previous property transactions
  • your association to a builder, property dealer or developer.

The category you fall into isn’t determined by what the property is called or how the activity is described. For example, it may be marketed as a “rental investment” with strong “capital gain” potential, but your firm intention or prior pattern is the factor that determines its tax treatment or if you’re involved in or associated with someone in the business of building, dealing, developing or dealing with land.

If you’re an investor you buy a property to use it to generate ongoing rental income and not with any firm intent of resale. The property is a capital asset and any later profit or loss from selling the property is capital and isn’t taxable (apart from clawing back any depreciation, which is now recoverable).

The rules may be different if you’ve been associated with a person or entity involved in the business of building, dealing, developing or sub-dividing land.  

If you buy a property intending to:

  • resell it, or
  • you intend to sell it after making improvements to it

you’re likely to be a speculator or a dealer. Renting your property temporarily doesn’t change your tax treatment either – you’re still a speculator or a dealer.

What is an investor, a speculator and a dealer?

Investor

If you’re an investor you buy a property to use it to generate ongoing rental income and not with any firm intent of resale. The property is a capital asset and any later profit or loss from selling the property is capital and isn’t taxable (apart from clawing back any depreciation, which is now recoverable).

Property investors sometimes refer to a “buy and hold” strategy. This approach is most likely to mean you are a property investor for tax purposes.

Investors will investigate and analyse future revenue streams, and any gain made on the sale of the property is incidental. Their investment is soundly based on a return from the rental income.

Investors pay income tax on their net rental income but generally not on the eventual sale proceeds of the property.

Note

The rules may be different if you’ve been associated with a person or entity involved in the business of building, dealing, developing or sub-dividing land.

Find out about special tax rules for associated persons.

Speculator

You might think profits from selling property are always capital gains so you don’t have to pay tax on them.  But, this isn’t always true. If one of your reasons for buying a property is to resell it, whether you live in it or rent it out, you’re speculating in property and your profit is likely to be taxable. And, if you sell that property at a loss, the loss may be tax-deductible.

If you’re a speculator you buy a property always intending to sell it. The property is treated like “trading stock” and your profit or loss from selling the property is taxable. Speculating can be a one-off purchase and sale of a property.  Speculators may also receive rental income from the property before they sell it.  

Property dealers or speculators will try to determine and analyse the property’s future price movements because that’s what the deal rests on. Any rental income is secondary.

To be a speculator, you need buy only one property with the firm intent of resale.
Dealers and speculators must pay income tax on any gain they make from reselling their property. If they declare a loss, it may be tax-deductible. They must also pay tax on rental income they may earn from the properties.

Dealer

If you’re a dealer you are similar to a speculator buying properties for resale, but you have established a regular pattern of buying and selling. This includes rental properties.

Some property buyers refer to a “buy and flick” strategy. This approach is most likely to mean you are a property speculator or dealer for tax purposes.

Dealers and speculators must pay income tax on any gain they make from reselling their property. If they declare a loss, it may be tax-deductible. They must also pay tax on rental income they may earn from the properties.

If you are not clear on your intentions for buying a property

Read our guide Buying and selling residential property (IR313)

If you’re buying and selling property other than a private family home, we recommend you get advice from a tax advisor with expertise in this area.

How long do I need to hold the property to make it a capital gain?

There is no time limit. If you buy a property with the firm intention of resale, it doesn’t matter how long you hold it – the gain on resale will be taxable (and any loss may be tax-deductible).

Example

You buy a property with a firm plan to resell it for a profit. The property market falls and you decide to hold onto it instead. You rent it out for 15 years and then sell it when the prices are again rising rapidly. Any gain on that sale 15 years later is likely to be taxable.

How many properties can I sell before it is considered taxable?

There is no set number of properties you can have before they become taxable. In some cases the first property bought and sold may be taxable if you bought it for resale. In other cases there could be a number of factors to take into consideration, such as having a regular pattern of buying and selling property, before a property is taxable.

The factors that may be looked at will vary because each taxpayer’s circumstances are different. For example, buying one property every two years may be considered a regular pattern for one individual and not another.

Find out more about what tax you should be paying

 

Date published: 30 Jul 2010

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Note the difference between Investor, Speculator, and Dealer;

  • Speculators and Dealers  are liable to pay tax on gains made from selling property.
  • But an Investor is not liable to pay tax on realised gains.

The difference is open to interpretation, behaviour, and intent. Though how an IRD official can know the intent of someone purchasing a  property remains a mystery. Telepathy? Time travel? A hot-line to one of our gods?

The issue is not made any clearer on another IRD web page;

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Selling property

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The things you need to consider when selling your investment property, selling your rental property or selling the family home.

What happens when you sell your family home

Selling a family/private home usually has no tax consequence. However there are some circumstances where you may have to pay tax.

What happens when you sell your investment property

Generally, you don’t need to pay tax when you sell your investment property except for any depreciation recovered. However, each time you sell a property it is important to consider if you are still a residential investor or are now a dealer.

What happens when you sell your rental property

Generally, you don’t need to pay tax when you sell your rental property except for any depreciation recovered. However, each time you sell a rental property it is important to consider if you are still a residential rental investor or are now a dealer.

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Obviously, there is no one-law-for-all.  (Something which the ACT Party might like to consider, in it’s “one-law-for-all” policy, as it insists on dumping  Treaty of Waitangi  settlement claims.)

When John Key gave justification to amend statutes governing the GCSB, and extended the spy agency’s powers so it could spy on all New Zealanders and Permanent residents, he claimed that the original  Government Communications Security Bureau Act 2003 was “not fit for purpose“.

When a tax law is so ill-defined that it is open to interpretation of “behaviour” and “intent”, then I submit that the current law on capital gains is “not fit for purpose”.

The National government can squeal all it likes, but the time has come for a capital gains tax and to close the Homer Tunnel-sized loop-holes that bedevil  the current law.

After all, if we already have a Capital Gains Tax as Revenue Minister Todd McClay insists – then he won’t mind terribly much if the law is tightened up. We’d be formalising what McClay says already exists.

Right?

That’s making it “fit for purpose”.

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References

Radio NZ:  Parties at odds over capital gains tax

MSN News: IRD targets `high end’ tax dodgers

Tumeke: John Key’s dagger and his 4 Horsemen of the Capital Gains Tax

IRD: Residential Property – Mistaking property dealing for property investment

IRD: Residential Property – Selling property

National Party: Draft intelligence community legislation released

 

Previous related blogpost

A Capital Gains Tax?  (14 July 2011)

ACT intending a “serious assault”?  (17 July 2011)

 


 

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Skipping voting is not rebellion its surrender

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 26 May 2014.

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Annette King confirmed as Labour’s candidate for Rongotai

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20 September

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NZ, Wellington, 3 May –  The Rongotai Branch of the NZ Labour Party has confirmed current MP, and former minister, Annette King, as Labour’s candidate for the 2014 General Election.

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annette king - labour candidate for rongotai -  wellington - 3 may 2014

Rongotai Labour Party members and invited guests, attending the electorate-selection meeting at Mornington Golf Club.

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In a speech to a packed hall at Mornington Golf Club, in the south Wellington suburb of Berhampore, Ms King was introduced by former Deputy Leader of the Labour Party and MP for Wellington Central, Grant Robertson. His opening comments drew applause and laughter from party members, supporters, and public;

“I get to sit next to Annette in Parliament which is a huge pleasure. One of the things I’ve noticed is that Annette is one of the best multi-taskers in politics. She can simultaneously complete a Soduku and eviscerate Tony Ryall, all at the same time.”

He added,  “the committment that I have seen from Annette that is reflected in the twenty one years as the MP here is without peer, in politics in New Zealand, in my view.” Grant Robertson spoke of her “compassion, true heart, and Labour values”.

Robertson said “she is true to what we believe is a movement that it’s our job to lift the spirits and the prospects of every New Zealander.” Turning to Ms King, he added, “we need you in the  next Labour[-led] government, we need your wisdom, and your experience… and your core values.”

He then seconded her nomination as the Labour candidate for the Rongotai electorate.

With no other nominations, Annette King’s nomination was put to the floor, and was passed unanimously by voice vote.

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Wellington Central MP,  Grant Robertson, discussing issues with Labour Party rank and file members.

Wellington Central MP, Grant Robertson, discussing issues with Labour Party rank and file members.

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A little later, I had a brief one-on-one with Grant Robertson.  I asked him,

“Grant, what is your personal number one for this election?”

He replied,

“The biggest issue for me is jobs. As the Labour Party’s employment spokesperson, I go around the country and I see too many New Zealanders who don’t have work, who want to work, and we have an economy that doesn’t have jobs at the center.

We’re an economy at the moment that’s driven by the bankers and the speculators and what we need is an economy that’s driven by and for people and that will have jobs at the center. So that’s what you’ll hear me talking [about] all through the election.”

I asked Grant Robertson about Labour’s buy-local procurement policy,

“Government procurement is one of the best ways you can stimulate the economy and most of the countries in the world do it and don’t worry about the so-called committments that they’ve got under international agreements… But absolutely, a procurement policy that focuses on encouraging companies that will employ New Zealanders is vital.”

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Annette King, addressing Labour Party members with a good-natured speech.

Annette King, addressing Labour Party members with a good-natured speech.

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Following on, Annette King, addressed Labour Party members with a good-humoured speech, and reaffirmed her determination to promote Labour Party policy and ideals. Ms King said “there was work to be done” and that she “had the passion, the feeling, and the committment” to follow through. She also paid tribute to “new blood” coming through in the Labour Party,

“I do believe that a party needs new talent, we need to bring in the new and rejuvenate. And we’re doing that with members like Grant [Robertson], and Jacinda [Ardern], and David Clark, and Megan Wood, and many of those young people who are coming through showing such talent.”

Ms King also reaffirmed the need for people with institutional memory;  “an experience of knowing what it’s like to be in government. What we want, at this election, is to lead the government again.”

Ms King added,

“The value of fairness to New Zealanders; ensuring that everybody is looked after in this country. Not just the privileged few we see under this government.   There does need to be access to good healthcare; education for our children; and really important, the ability to have a warm, dry, affordable, home. These are some of the  values of our party and so much more.”

In reference to National’s latest scandals, she said,

“We’re going to take the fight to this government, in the next few months. We’ve got twenty weeks to make sure we lead the next government and I believe that we can. What a difference a week makes in politics! Last week a few of us were down at the Newtown market… we were down there and people were walking past us, and looking at us sideways and walking on.

We’d just suffered the fallout of the Shane Jones departure from the party. Today, down at the market, we were surrounded by people. People wanted to talk about policy, to talk about the Labour Party. They wanted to join the Labour Party.  In one week we have seen some really innovative policy coming out of the Labour Party, and people [were] saying ‘Hey, that is the Labour Party we know. A progressive Party that comes up with the real ideas [for] change for New Zealand’.”

There was more than an element of truth when Ms King pointed out,

“All the progressive change in this country came from the Labour Party. This government, and the National governments before, are governments of the status quo. And when you need change, you have a Labour party [government].

And what I could not bear is the thought of three more years of National, and neither could most working people in New Zealand.”

 

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Current MP for Rongotai, Annette King, discussing policy matters with Labour Party stalwarts.

Current MP for Rongotai, Annette King, discussing policy matters with Labour Party stalwarts.

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Annette King is one of the longest-serving MPs in Parliament, having been in office for twentyseven years – twentyone of which have been in the Island Bay/Miramar electorate alone.

In 2000, she was Minister for Health, over-seeing the re-building of the Health portfolio which had been badly under-funded by the previously National-led government. Chronic under-funding in the late 1990s was having a deleterious effect on patients requiring critical life-saving surgery. Many failed to survive the growing waiting lists under Bill English’s watch.

National’s health minister at the time – Southland MP, Bill English – tried to stem the increasing deaths by belatedly injecting extra money for surgery. It failed to address the crisis that had been building over several years of National’s cost-cutting; tax cuts (1996, 1998); and slashing of the public service sector.

One of Ms King’s first moves was a  cash-injection of $1.5 billion into the health sector in December 2001. She said, at the time,

“Unashamedly, the first lot of money will go to those with the greatest need – low income, poor, sick, Maori, and Pacific [people].”

National’s health spokesperson at the time, Roger Sowry, responded with a statement which could only be described as jaw-dropping for it’s sheer hypocrisy.

With National cutting back on funding for services; increasing user-pays; two tax cuts (2009, 2010), and slashing the public service sector, it seems that – unlike the Split Enz song, history does indeed repeat.

Ms King will have her work cut out for her when a new Labour-Green government takes office after 20 September.

Below, Paul Eagle, chatting with Labour Party members;

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    Shrewd strategist and local City Councillor, Paul Eagle (in red shirt), was announced as Annette King's campaign manager.

Shrewd strategist and local City Councillor, Paul Eagle (in red shirt), was announced as Annette King’s campaign manager.

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This blogger took a moment for a brief interview with Annette King, asked her what her priorities would be when a new Labour-Green government took office post 20 September.

I asked Annette King, “what’s really important to you?”

Ms King replied,

“The most important thing for me, and it’s the number one that runs through everything we do, and that is reducing inequalities…”

“Health inequality; housing inequality; education inequality. Inequality in New Zealand is the biggest I’ve experienced in all my years. And I mean, I wasn’t here for the Depression, I’m not that old, but inequality in our society is so great now, that we need a progessive government that’s going to address them. And then you go through the areas. If you take health inequalities; who dies earlier; who dies younger; who has less access.

And you go to low income, Maori, and Pacifica. So that’s my priority.”

Interesting – Annette King’s priorities were remarkably similar to her comments in December 2001 (see above).  Grant Robertson seems to have been correct when he said that her “core values” had not changed.

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(L-R) Paul Eagle, Annette King, and Grant Robertson

(L-R) Paul Eagle, Annette King, and Grant Robertson

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Ms King’s successful nomination was followed by a final ceremony; the awarding of a recognition to long-serving Party members for their contributions to the labour movement.

LEC Chairperson, Peter Franks, presented a gold pin, and life-membership, to Peg Collett and Reatha McInnes (not pictured), for long-term service to the NZ Labour Party;

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LEC Chairperson, Peter Franks, presenting a gold pin,  and life-membership, to Peg Collett and Reatha McInnes (not pictured), for service to the NZ Labour Party.

LEC Chairperson, Peter Franks, presenting a gold pin, and life-membership, to Peg Collett and Reatha McInnes (not pictured), for service to the NZ Labour Party.

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One hopes that people like Ms Collett and Ms McInnes are with us to see the return of this country to the social democratic values for which we were once internationally reknowned for.

We once led the way in women’s rights; anti-atomic bomb testing in the South Pacific; anti-apartheid campaigning; a nuclear-free status; and many other progressive movements for which we can be rightly proud.

The term “punching above our weight” doesn’t even begin to cover the impact that we, as a nation, have had on global affairs.

Today, as the current government would have it, our “reputation” seems fixed on making money from tourism; making money selling logs and dairy powder; and making money with the production of fantasy movies.

“Making money”

Not quite “up there” with engendering the right of women to vote; saving the planet from atomic weapons; and supporting an entire nation to be free from apartheid.

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References

Wikipedia: Annette King

ODT/NZPA: Public Hospital ills blamed on funding

ODT: Acute heart surgery list nearly 400

The Press: Four forced off waiting list die

Sunday Star Times: Anger on heart op delay – English wants answers on cash use

The Dominion: $1.5b injection for Health

NZ Herald:  Prescription fees increase

Fairfax media: 2400 more state sector jobs could go

Metrolyrics: History Never Repeats Lyrics

NZ Herald: NZ inequality at highest level

 

Copyright (c) Notice

All images stamped ‘fmacskasy.wordpress.com’ are freely available to be used, with following provisos,

» Use must be for non-commercial purposes.
» Where purpose of use is commercial, a donation to Child Poverty Action Group is requested.
» At all times, images must be used only in context, and not to denigrate individuals or groups.
» Acknowledgement of source is requested.

 

 


 

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I'm a leftie voting left - join me

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 5 April 2014.

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Letter to the Editor: Labour’s cunning plan (v.2)

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old-paper-with-quill-pen-vector_34-14879

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FROM:   "f.macskasy" 
SUBJECT: Letters to the editor
DATE:    Wed, 30 Apr 2014 21:33:36 +1200
TO:      "The Listener" <> 

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The Editor
THE LISTENER
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David Parker's Reserve Bank-Kiwisaver Variable Savings Rate
is a very clever piece of policy which is so elegantly
simple but so wonderfully clever at the same time. The
question I keep asking is why no one has thought of it
before!

It's intriguing that thus far the only criticism seems to be
based on Labour-bashing rather than any serious analysis.

Although it's interesting to note that Federated Farmers 
and the Northern Employers and Manufacturers' Association 
are open minded about it  - which is  all anyone can ask,
really.

For the Nats - they are panicking. The common spin is that
Labour's policy is "confused". Not exactly a resounding
rebuttal of the Variable Savings Rate - but expect their
Party strategists to get into high gear very shortly.

The funniest thing though, is the number of right wingers
who seem to prefer their cash to be siphoned off to overseas
banks - rather than invested and returned to them. I know
right-wingers are blinkered and see the world in Black &
White terms but this is a whole new  level of dogmatic
dumbness even for them.

If Labour can come up with more initiatives like this -
September 20th will see a new government. 



-Frank Macskasy
[address & phone number supplied]

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References

Radio NZ: Labour makes monetary policy change

Federated Farmers of NZ: Federated Farmers keen on Labour’s monetary policy detail


 

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Skipping voting is not rebellion its surrender

Above image acknowledgment: Francis Owen/Lurch Left Memes

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Letter to the Editor: Labour’s cunning plan

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old-paper-with-quill-pen-vector_34-14879

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FROM:   "f.macskasy" 
SUBJECT: Letters to the editor
DATE:    Wed, 30 Apr 2014 12:13:21 +1200
TO:     "Dominion Post" <letters@dompost.co.nz> 

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The Editor
Dominion Post

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Labour's new policy to replace OCR interest rates with a
variable Kiwisaver rate is ingenuous and common sense. It
beggars belief that it hasn't been thought up before.

Instead of higher interest rates which force mortgage rates
rises, New Zealanders will make higher payments to their
Kiwisaver account.

The difference is obvious - paid to Kiwisaver, we get to
keep our money. Paid to banks, that money disappears off to
Australia  as billion-dollar profits.

Bill English's criticism that Labour's plan would impact
unfairly on the poor and low/fixed income families is
laughable. When has National ever been concerned about the
welfare of the poor?

English forgets that when the OCR rises, so do mortgage
rates. And rents follow. So low/fixed income families cannot
escape the current RBNZ policy of restraining inflation
through interest rates. 

Australia has over A$1.6 trillion saved in their compulsory
savings account. Had we kept own own savings scheme,
implemented by the Kirk-led government in 1973, NZ would
have saved NZ$278 billion by now. We would not be so reliant
on overseas capital.

But Muldoon scrapped it shortly after the 1975 election, and
we have been "captive" to foreign banks ever since.

Let us not make the same mistake twice.





-Frank Macskasy
[address & phone number supplied]

 

 

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References

Radio NZ: Labour makes monetary policy change

Fairfax media:  Bob each way on effects of a lower dollar


 

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Skipping voting is not rebellion its surrender

Above image acknowledgment: Francis Owen/Lurch Left Memes

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Letter to the Editor: The power of the vote

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old-paper-with-quill-pen-vector_34-14879.

FROM: "f.macskasy"
SUBJECT: Letters to the editor
DATE: Sun, 20 Apr 2014 14:38:19 +1200
TO: "Sunday Star Times" <letters@star-times.co.nz> 

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The Editor
SUNDAY STAR TIMES

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This year, if every Labour, Green, Mana, and Internet Party
supporter finds just one person who didn’t vote in 2011,
and supports them to go to the ballot booth on 20 September
– we will have a new government as our Christmas present.

Then we can have a government that focuses on more jobs;
building homes for young New Zealanders; alleviating child
poverty; protecting the environment, and all the other
critical problems confronting our nation.

Those should be our priorities - not endless scandals;
corporate welfare; tax breaks for the rich; dodgy deals
behind closed doors; rising inequality; falling home
ownership whilst speculators profit; farms sold of to
foreign investors; threats to our coastline through
unconstrained deep sea drilling; polluted rivers and lakes;
and not enough jobs for the 168,000 unemployed in this
country whilst National allows cheap foreign labour for the
Christchurch re-build.

To every Labour, Green, Mana, Internet Party supporter; find
one person who did not vote in 2011 and encourage him/her to
vote for change. The power of the Vote is greater than many
realise - which is why so many dictators around the world
fear it.

We can have the country we want. But we're going to have to
work hard to achieve it.

-Frank Macskasy

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(Address & phone number supplied)

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Skipping voting is not rebellion its surrender

Above image acknowledgment: Francis Owen

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A Tale of Two Track Records: Labour vs National #1: New Zealand GDP

12 March 2014 3 comments

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party-logos - which

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As the election campaign for 2014 heats up, citizens can expect a deluge of dis-information, distortions, and  lies from the enemies of the progressive Left. Their constant repetition will be that Labour left the economy is a shocking state in 2008, with the most pernicious  outright lie that the Clark-Cullen government left New Zealand with a “decade of deficits”.

None of it is true. It is part of a meme-construction by the Right, with zealous followers who are willing and able to spread their mis-information on the internet.

Spreading lies is easy.

Discovering the truth is that much harder – you need to know where to look.

This series of reports will hopefully make things easier for those who want a clearer picture of events over the last two or three decades.

Those who cannot remember the past are condemned to repeat it.” – George Santayana

  • Introduction

Most graphed information is taken from Trading Economics, a US-based, on-line, economics-information website.

Trading Economics provides its users with accurate information for 196 countries including historical data for more than 300.000 economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices. Our data is based on official sources, not third party data providers, and our facts are regularly checked for inconsistencies. TradingEconomics.com has received more than 100 million page views from more than 200 countries.

In turn, the site uses information from Statistics New Zealand, the World Bank, NZ Treasury, etc.

The reader can set dates for specific time-parameters  (indicated with red arrows) to search the site’s data-banks by years. It is extremely user-friendly and informative.

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field parameter searches

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Other sources for data will be clearly referenced.

National governance is marked with a blue line.

Labour governance is marked with a red line.

  • New Zealand GDP

“The gross domestic product (GDP) measures of national income and output for a given country’s economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time.”

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New Zealand GDP

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In the 1990s, under National and Ruth Richardson’s (1990-1993) economic stewardship, GDP dropped from $43.9 to $40.3 billion and unemployment skyrocketed to 11.2%. For much of the 1990s, GDP see-sawed up and down, peaking at $67.9 billion in 1997 before falling away again.

Note: National implemented two tax cuts, in 1 July 1996 and 1 July 1998. Neither seemed to help grow GDP, and many public services were cut back in the late 1990s.

For Labour, except for a dip in 2001, GDP rose every year from 2002 to 2008. The rise in percentage terms is outlined below.

From 2009 to 2013, despite the GFC, GDP increased from $117.8 to $169.6 billion, though the rise in percentage terms, outlined below, was not so encouraging. GDP growth, per capita, was also lack-lustre, as demonstrated below.

  • New Zealand GDP per capita

“The GDP per capita is obtained by dividing the country’s gross domestic product, adjusted by inflation, by the total population.”

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New Zealand GDP per capita

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Except for two recessionary periods (early 1990s and 2007/08 Global Financial Crisis and recession), New Zealand’s GDP, per head of capita, has grown every year, until the GFC/recession, when it dropped from$28,168.1 per capita in 2008 to $27,383.8 in 2009.

Curiously,  the 2009 and 2010 tax cuts did not seem to contribute greatly to per capita GDP.

  • New Zealand Real GDP

Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output. GDP is the sum of consumer Spending, Investment made by industry, Excess of Exports over Imports and Government Spending. Due to inflation GDP increases and does not actually reflects the true growth in economy. That is why inflation rate must be subtracted from the GDP to get the real growth percentage called the real GDP.

The raw data for the Reserve Bank  graph (see below) is available in an XLS spreadsheet containing all key figures.

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reserve bank of nz real gross domestic product 1990_2013

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  • Main Stats
  1. Average GDP, 1990 to 1999:     2.4%
  2. Average GDP, 2000 to 2008:   3.5%
  3. Average GDP, 2009 to 2013*:  1.2%

* 2013 figure averaged over three Quarters only.

(Calculations based on RBNZ raw data spread sheet)

  • Impactors on GDP growth
  1. Recession, 1987/91
  2. Ruth Richardson’s “Mother of all Budgets” in 1991, which deepened the recession,
  3. Recession, 1997/98
  4. GFC/recession, from 2007/08 onward.
  • Conclusion
  1. Whilst GDP figures “bounce” around, Labour’s stewardship of the economy between 2000 and late 2008 has been more consistant in GDP growth and with less extremes shown in the 1990s and post-2008.
  2. GDP dipped into negative growth in the early 1990s and post-2008
  3. GDP remained in positive growth between 2000 to 2008
  4. Allegations that the economy did not perform well under Labour are clearly wrong, and the evidence does not sustain those claims.
This blogpost was first published on The Daily Blog on 5 March 2014.

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References

Trading Economics:  About Us

Trading Economics: New Zealand GDP

Trading Economics: New Zealand GDP per capita

Wikipedia: Real Gross Domestic Product (definition)

Reserve Bank of NZ: Real GDP

Reserve Bank of NZ: Real GDP Raw Data spreadsheet

NZ Treasury: New Zealand Economic Growth: An analysis of performance and policy

NZ Treasury: Recent Economic Performance and Outlook

Te Ara: The ‘mother of all budgets’

Ministry of Business, Innovation, & Employment/Dept of Labour:  How bad is the Current Recession? Labour Market Downturns since the 1960s

Colin James: Ruth amid the alien corn

Previous related blogposts

Labour: the Economic Record 2000 – 2008

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The trouble with capitalism is that you run out of money

There, fixed it.

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