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Simon Bridges: “No ifs, no buts, no caveats, I will repeal this CGT”

13 March 2019 1 comment

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A recent bold statement from current National Party leader, Simon Bridges, declared his intentions should a capital gains tax (CGT) be enacted;

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…No ifs, no buts, no caveats, I will repeal this CGT as Prime Minister of New Zealand ” – a statement so categorical that it made John Key’s 2008 commitment never to raise GST, look timid;

“National is not going to be raising GST.

National wants to cut taxes not raise taxes.”

Except, he did.  In October 2010, Key’s National government increased GST from 12.5% to 15%.

Nine years later, Simon Bridges has made a similar, solemn, hand-on-heart, promise: “No ifs, no buts, no caveats, I will repeal this CGT as Prime Minister of New Zealand“.

Except, he can’t.

On at least several levels, his commitment to repeal a capital gains tax will fail.

Labour’s  Grant Robertson, made it crystal clear that any proposed CGT will not be implemented until after the 2020 general election;

“We know it is important to get this right, so we will balance the need for certainty and urgency by ensuring that any potential changes will not come into effect until the 2021 tax year. This gives multiple opportunities for public input, and a general election before any new tax would come into effect.”

The process would be straight-forward: whatever the Coalition government decides would be put into legislation that would not ‘activate’ until after the next election. It would take a repeal of that legislation to stop CGT from ‘kicking in’.

The difficulty with this is two-fold.

Firstly, Simon Bridges and the National Party would have to achieve a simple little thing: win the next election.

The chances of that happening – with current polling – is marginal, to say the least.

For starters, National has been trailing Labour in the last two political polls.

Secondly, National has no ‘mates’. ACT is consistently in the zero-to-1% band and the faux-Bluegreen Party is nowhere to be seen.

That leaves two parties: the Greens and NZ First.

The Green Party membership would rather machine gun the last remaining Hector’s Dolphins than entertain a “teal” coalition with the Nats. Bridges’ promise to reinstate offshore exploratory drilling for oil and gas would make any potential National-Green coalition toxic and as likely as a flying saucer landing on the White House lawn.

Which leaves NZ First. It is unclear as to what benefit – if any – a coalition deal with the Nats would offer to NZ First. As well as having been the “kiss of death” to other small parties, National has tried to destroy Winston Peters in the past. Peters is unlikely to have forgotten the leaking of his superannuation over-payment and the strong probability that it was engineered by a senior National government minister who shall remain nameless.

Moreover, if this current Coalition Government passes legislation for a capital gains tax to take effect in 2021, that would mean all three parties – Labour, Greens, and NZ First – voting to pass said necessary legislation.

For a National-NZ First Coalition to repeal that legislation would mean NZ First voting against a law that they themselves helped enact.

The fallout with the public would be massive, echoing NZ First’s disastrous decision to form a coalition with National back in 1996. Public support for NZ First would rapidly evaporate.

There would be simply no possible political gain for NZ First to travel down that road.

So unless Simon Bridges can find a new political party to ally with; or, unless National can win 50% outright of the Party Vote in 2020 – both unlikely scenarios – his promise to “repeal this CGT as Prime Minister of New Zealand” cannot be taken seriously.

Indeed, the comments following Bridges’ ‘tweet’ on 6 March reflected the disbelief of such an unlikely event happening.

And more than one social media commentor asked some pertinent questions;

“Does that include the Brightline Test your government introduced?”

And;

“Will you get rid of tax on wages and if not, why not?”

Considering that National introduced a limited capital gains tax – the  two year ‘brightline’ test – in 2015, Bridges would have to make some hard decisions and explanations to the public.

Would the ‘Brightline’ test remain in place if he had an opportunity the scrap the Coalition’s more comprehensive CGT?

Would he return the ‘Brightline’ test to two years or keep it  at five?

How would he justify retaining a ‘Brightline’ test – whether at two or five years – when scrapping a more comprehensive, and justifiably fairer, capital gains tax? Why is one form of CGT acceptable to National, but not the other?

And as more than one person demanded to know, why is National promising to get rid of one tax (Capital gains) which would benefit property speculators – but not income tax, which would benefit every wage and salary earner in the country  (and put a permanent smile on David Seymour’s face that would never be erased)?

Bridges would be facing these questions and more in 2020 if he decided to make capital gains taxation an election issue next year.

All of which is unsurprising: at around 5% in the polls, Bridges faced the ignominy of approaching the margin of error – depressing symbolism to be viewed as an ‘error’ – and over-taken by one of his National MPs, Judith Collins. This has made him that most desperate of beasts; a politician at risk of becoming irrelevant.

No party can hope to win the governing benches with a Leader who is seen as uninspiring and lacking support from even National Party voters.

If Bridges cannot succeed in campaigning to defeat capital gains, his tenure as National’s leader will come to an abrupt end. To be followed in rapid succession by his political career.

A further point has probably not escaped the attention of the National Party: if the Coalition government wins the next election and remains intact, that would signify not just the implementation of the capital gains tax – but it’s bedding-in for three years. That would make it much harder to repeal.

Especially if all the fear-mongering, gloomy predictions failed to materialise and the world (or at least the bit at the bottom where New Zealand sat) failed to end in Mayan Calendar 2012-style. Like GST, National would have to ‘bite the bullet’ and accept the new tax. They simply could not find any justification to repeal it without perpetuating their ‘other’ reputation as being a party of, and for, “rich pricks”.

If Labour, the Greens, and NZ First hold their nerve and don’t blink in the face of right-wing hysteria and bluster, the political gain from implementing CGT could be greater than they anticipate.

In fact, everything to gain, and National to lose.

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Postscript

Response to National MP, Scott Simpson, engaging in fear-mongering over CGT:

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References

Twitter: Simon Bridges – no ifs no buts no caveats – 6 March 2019

Otago Daily Times: Key ruled out GST increase in 2008

NZ Herald: GST rise – The hole in your pocket

Interest.co.nz: Labour releases document setting out tax plan, says no Working Group taxes would come into effect until after 2020 election

Mediaworks/Newshub: National plunges to worst result in over a decade – Newshub poll

NZ Herald: National will reverse Govt’s offshore oil exploration ban if in power in 2020 – Bridges

Radio NZ: Peters’ legal action against National party continuing – lawyer

Beehive: Bright-line test targets gains on property sales

Interest.co.nz: The Bill that will see the bright line test extended from two-years to five has passed its third reading and now awaits the Royal Assent to become law

Mediaworks/Newshub: NZ prefers Judith Collins to Simon Bridges as Prime Minister – Newshub poll

Twitter: Frank Macskasy – Scott Simpson – capital gains tax

Other Blogs

The Standard: Why New Zealand needs a capital gains tax

Previous related blogposts

A Capital Gains Tax?  (14 July 2011)

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

National spins BS to undermine Labour’s Capital Gains Tax (31 May 2014)

A Claytons Capital Gains Tax? (13 September 2014)

Simon Bridges – out of touch with Kiwi Battlers (2 March 2019)

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This blogpost was first published on The Daily Blog on 8 March 2019.

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Simon Bridges – out of touch with Kiwi Battlers

2 March 2019 2 comments

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As property investors/speculators; assorted financiers; and their  political-wing, the National Party,  ramp up their opposition to a capital gains tax to a stridency approaching hysteria, current party leader, Simon Bridges, has used the mainstream media to push his highly propagandised (and highly emotive and misleading) messages;

“What the Kiwi way of life is is a recognition that New Zealanders aspire, they understand that people who work hard, who save, who invest, who take risks deserve the fruits of their labour and there is nothing fair about a capital gains tax that fundamentally gets in the way of that.”

He makes it sound as if property investment in New Zealand is akin to carving out and building a railway through the Himalayas.

On social media, Mr Bridges has used blitzed Twitter and Facebook with isolated examples of supposedly “contradictory cases” where CGT might or might not apply and has even taken to mis-representing aspects of how such a tax might apply (though he was quickly called out by other social media users).

Anyone would think that the Four Harleyriders Of The Apocalypse are bearing down upon us.

But Bridges miscalculated badly when one particular message posted on Twitter caught the eye of several users;

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New Zealanders aspire & want to get ahead for themselves & their families. How is it right that an $8m home in Auckland won’t face a CGT but a couple scrimping and saving for a bach or crib for their family will get slammed with the top tax rate? That’s not the Kiwi way.

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The kiwi way“?!

Homeless people living in garages and vans; families crammed into over-crowded houses; and even the home-seeking kids of the middle-class who cannot afford their own first homes would hardly be “The Kiwi Way“.

They would hardly be sympathetic to property owners lamenting having to “scrimp and save for a bach or crib“. Not many tears would be shed over “a bach or crib“.

Especially when many, if not most, if these “baches” and “cribs” are now substantial constructions and no longer the rustic cottages we once knew as kids.

As several Twitter-users pointed out;

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“Because a primary home is a necessity; a beach house is a luxuary.”

Babes if you don’t understand how CGT works maybe don’t get into it. And your mate’s kids might be “scrimping and saving” for a Bach but most of nz are just struggling to get a house deposit together thanks to the mess which is the property market xox

If you are scrimping perhaps a holiday home should not be a priority?

I don’t know anyone scrimping and saving for a batch. Just to get by each week yes. You are so out of touch bro.”

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There were other criticisms made, with many pointing out to Mr Bridges that a capital gains tax would apply only to any profit made at the end of selling a bach/crib – not saving for it;

“It’s not profit unless you realise it by selling the asset, you mean”

But it speaks loudly that Mr Bridges is openly appealing to the propertied middle class – those who already hold assets.

He does not appear to be even remotely concerned at the homeless nor frustrated young home-seekers who have been forced out of the property market, and destined to forever rent. National could not even admit that a home ownership problem existed.

To do so would have been a tacit admission of failure.

The term “Generation Renters” exists for good reason, as economist Shamubeel Eaqub explained in 2015 (when National was strenuously  rejecting any suggestion of a housing crisis);

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Economist Shamubeel Eaqub calls the Auckland housing story “madness” – and his upcoming book Generation Rent captures the rising sense of hopelessness among young New Zealanders locked out of the home ownership dream.

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The number of households who own or part own their home has decreased by 75,000 since 2007, despite the total number of households increasing by 155,000 in the same period. The number of households renting has increased by 117,000 during that time.

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The facts, however, speak more clearly and truthfully than any rhetoric from the current leader of the National Party, desperate to shore up his waning support and struggling to remain relevent.  If Mr Bridges loses the CGT debate it will be another nail in his political coffin.

The data, however, is hard to dismiss:

In 1991 Home ownership had reached a peak of 73.8%.

By 2013, home ownership had fallen to 64.8%.

Last year’s census results are not yet available according to Statistics NZ, but they are hardly likely to show any improvement.

The numbers show the dire state of our plummetting home ownership rates. If Mr Bridges was truly concerned for the “ordinary Kiwi battler”, he would be focused on those locked out of owning their own home instead of those already owning property and ‘aspiring’ to buy holiday homes on top of their bricks-and-mortar assets.

Instead, Mr Bridges’ comments about “a couple scrimping and saving for a bach or crib” indicates how utterly divorced he and his National Party fellow MPs are from mainstream, non-propertied New Zealand. The fact that most of them own investment properties should not be lost on us. They epitomise privilege.

National was certainly not reluctant to raise GST, prescription charges, family court fees, and a whole raft of other charges in 2010. Where was Mr Bridges then, championing those who “scrimp and save”, only to be hit by increased GST, medicine costs, and government charges?!

Mr Bridges and his privileged colleagues appear clearly wedded to protecting the interests of those for whom property investments has created mostly tax-free wealth. If ever there was a party for entrenched privilege, it is National.

It is also clear that those wanting to “get onto the first rung of the property ladder” need look elsewhere than the National Party. “Aspirational” for  the homeless and first home-owners means something completely different to National.

When a party leader unashamedly declares that he backs existing owners of property; wanting more property; without paying their fair share of tax on unearned gain on property – then those without property should look elsewhere.

The real question is not whether Mr Bridges and National are on the side of the property-owners or home-seekers. That question has well and truly been answered by Mr Bridges’ revealing ‘tweet’ above.

No, the real question now is, which side does NZ First want to be on?

What will be Winston Peters’ legacy? Aspirational home seekers or paper-wealthy property owners looking to increase their assets?

I know which one I’d want to be remembered for.

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Note: This blog author is currently away from his main computer, so reference-links may not be as comprehensive as they normally are.

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References

Radio NZ: Capital gains proposal – ‘What we’ve got here is a tax on a tax’ – Simon Bridges

Twitter: Simon Bridges – oriental bay, ohariu, gorse – 25.2.2019

Twitter: Simon Bridges – auckland home, auckland home office, exempt – 25.2.2019

Twitter: Simon Bridges – couples, scrimping, saving, baches, CGT – 22.2.2019

Radio NZ: Housing ‘challenge’ still not a ‘crisis’

Fairfax/Stuff media: House price rises creating a generation of renters

Statistics NZ: Owner-Occupied Households

Statistics NZ: 2013 Census QuickStats about national highlight

Other Blogs

The Daily Blog: ’The laughable myth of the ‘Kiwi way of life’

The Standard: Spare a thought for our poor impoverished landlords

Previous related blogposts

A Capital Gains Tax?  (14 July 2011)

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

National spins BS to undermine Labour’s Capital Gains Tax (31 May 2014)

A Claytons Capital Gains Tax? (13 September 2014)

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Capital gains tax labour NZ Politics Daily - Bryce Edwards Otago University liberation blog - www.liberation.org.nz

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This blogpost was first published on The Daily Blog on 25 February 2019.

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What I want for Christmas…

29 December 2017 Leave a comment

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Now is the time of the year when we send in  requests to that mysterious red-garbed being at the north pole for ‘goodies’ of one sort or another.

This is my belated wish-list of gifts. But not gifts for myself. These are gifts for the whole of New Zealand…

Housing for all

As the Coalition’s Associate Finance Minister, David Parker recently stated;

“I have a pretty simple view of this. I don’t think that it should be an international market for houses. I think local homes are to live in.

They shouldn’t be commodities that we trade internationally. I think just about everyone who’s a foreign person buying into New Zealand – they’re a very, very wealthy one-percenter if you like. And I think that’s one of the excesses of global capital when you allow those sorts of interests to influence your local housing market.”

The majority of New Zealanders would agree with him.

Even our former pony-tail-pulling Dear Leader, John Key, was moved to lament seven years ago;

“Now, that’s a challenging issue given the state of the current law and quite clearly it’s evidentially possible and has been achieved that individual farms can be sold. Looking four, five, ten years into the future I’d hate to see New Zealanders as tenants in their own country and that is a risk I think if we sell out our entire productive base, so that’s something the Government will have to consider.”

Granted that he was referring to selling farms to foreign investors, but the same holds equally true for residential property. We literally could become “tenants in our own country” if housing is allowed to be a commodity traded by investor-speculators. Especially without hindrances such as Stamp Duty or Capital Gains Tax. In effect, our housing becomes the plaything of the wealthy, with our children becoming increasingly locked out of ever owning their own home.

Even domestic investor-speculators are having a deleterious effect on home ownership. As recently as March this year (2017) the Property Investors Club revealed that “Auckland investors account for a 43% share of all sales [and] first home buyers have dropped back to a low of 19%“.

When I open up the Christmas gift labelled “Housing”, I find;

  • A capital gains tax, excluding the family home, set at the corporate tax rate of 28%. Rentals are a business; we should tax them as such.
  • An increase of State Housing of at least ten thousand units.
  • Labour’s “Kiwibuild” policy taking off  like a rocket and providing affordable homes for all first-home buyers.
  • Entrenching Housing NZ  in legislation as a public service rather than an SOE; banning dividends or any other transfers from HNZ to central government; reinvest any gst paid by HNZ back into HNZ; banning sales of existing housing; guaranteeing tenancy for all families where children and/or young adults under 21 reside in the home.

Free education for all

One of the greatest scams sold to New Zealanders is that education is a “private benefit” and therefore should be paid for (at least in part) by young people.

This was never the case for Tories such as John Key, Steven Joyce, Paula Bennett, Judith Collins, Bill English, et al. Their university tuition was mostly free, courtesy of the State.

An educated population presented solely as a “private benefit” ignores the counter-factual; an un-educated population would be severely handicapped economically, socially, technologically and marked with deprivation on every level.

As a mind-experiment, imagine if every doctor, nurse,  and dentist remained in New Zealand after graduation, and in doing so, their debt was wiped. Who would benefit? Answer:

(a) doctors, nurses, and dentists,who would have no massive debts hanging over them

(b) the public, who would  enjoy their services

(c) central government, which would receive  doctors, nurses, and dentists’ taxation.

Now imagine if those same doctors, nurses, and dentists, all emigrated. Imagine if we were left with not one doctor, nurse,  and dentist in the country. Who would benefit? Who would lose out? Answer:

(a)  Losing out: the public, which would be deprived of their services

(b)  Losing out: central government, deprived of their taxation

(c)  Losing out: the entire country, as the economy, life-expectancies, child mortality, etc, all took a giant leap backwards

(d) Doctors, nurses, and dentists, who would still have massive debts hanging over them.

It’s abundantly clear that an educated population is not primarily a private benefit. It is a collective benefit that allows an entire society and nation to progress.

We used to have (near-)free tertiary education for those who wanted it – with a student allowance thrown in.

Then we had Rogernomics; seven tax cuts; and ended up with over $15 billion in student debt. High student debt has forced many graduates to go overseas. The previous National regime even implemented a policy arresting so-called “loan defaulters” at the border;

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This is the craziness  we have arrived at: making criminals of young people for not paying for a service that John Key, Steven Joyce, Paula Bennett, Judith Collins, Bill English, et al, enjoyed for free.

And like a frog in a steadily heating pan of water, this craziness has grown incrementally until New Zealanders have have accepted this state of craziness as “the norm”.

It is not normal. It is as far removed from normal as one can get without permanent residency in the local psych unit.

I open the second Christmas gift. This one is labelled “Education”. In it, I find;

  • Fully funded Early Childhood Education; Primary Schools, and Secondary Schools. All school “donations” are dropped.
  • Increases to Vote Education funding is tagged to inflation/cost-of-living increases.
  • The mandate for  salary increases for teachers is handed to the Remuneration Authority, and is automatically double that of MP salary increases.
  • All university and polytech education is free-to-user.
  • All current student debt is wiped.
  • All criminal convictions for loan defaulters are wiped and their legal fees reimbursed.
  • All student debt amounts paid by graduates become a tax credit. Eg; a graduate having paid $30,000  in debt (including interest) will have a tax credit of the same amount. (An exception being those graduates who voted National and/or ACT. Their debt will be doubled. After all, they support user-pays. Let’s not disappoint them.)

Free breakfasts and lunches in schools

Europe does it. Sweden, Finland, Estonia, UK, Scotland,  and even India does it. They provide varying levels of free meals  for children at school.

The benefits are obvious; healthy meals are provide to all children regardless of social status or class origins. There is no stigmatisation as “coming from a poor family” when everyone is provided with the same service.

Child Poverty Action Group (CPAG) wrote in their 2011 report, “Hunger for Learning“;

Yet despite the ubiquity of food insecurity among students at Auckland’s decile 1 and 2 schools, children’s hunger is often portrayed as one of individual moral failure and stigmatised accordingly. (p17)

In all cases breakfasts were provided on a universal basis to all children who wanted one. Principals were very conscious of the stigma attached to targeted provision of meals, even in younger children. For schools working to build trust between themselves and the community principals felt that universal provision sent a message that children and parents would not be judged. (p24)

Anscombe (2009) notes that in the New Zealand context some schools  do not want to be seen as needing to feed children because of the stigma attached to low-decile schools. (p28)

The key argument against free provision is that it takes away parents’ responsibility to provide basics for children. Yet, as this report makes clear,  many families cannot afford to provide adequate nutrition for their children, and also, targeting risks stigmatisation, and it is clear from the interviews conducted for this report that this becomes evident in children well before they leave primary school. Stigmatisation risks missing children that need help (Sheridan, 2001). (p29)

In its estimate of the cost of food in schools in Scotland, the Scottish parliament made a number of observations pertinent to New Zealand. Among them were that a deregulated system led to poorer quality food, something the Scottish legislation sought to address; a universal system removes the stigma attached to targeted provision, improves take up and is cheaper to administer; universal provision helps build a healthy nation, and this was viewed as contributing to the economic, social and healthy wellbeing of Scotland as a whole; and nutritious school meals were recognised as lowering Scotland’s high rates of coronary heart disease, some cancers, and diabetes, and were seen as being of key importance for development and growth in childhood and adolescence (Sheridan, 2001, pp. 2-3). Other, more direct, savings included teacher time (teachers spend time teaching rather than trying to deal with disruptive behaviour) and savings associated with improved attendance. (p36)

One fact we are all fully cognisant of is that the moralising Right are only too willing and quick to jump on a soapbox and judge poor families for not feeding their children. The constantly parroted rhetoric is “can’t afford to feed them, don’t have them” – a subtle code  advocating class eugenics, and attempting to deflect from the real social problems we face.

Make school meals – like superannuation and hospitals – universally free, and that stigma vanishes because everyone’s children is treated equally.

After all, if it was good enough for former Social Welfare Minister, Paula Bennett,  to refuse to  measure poverty

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…then it should be good enough not to measure which children should or should not qualify for free breakfasts and lunches in our Primary and Secondary schools.

I open my third gift, and it contains;

  • Free healthy, nutritious breakfast and lunch for every child in New Zealand.

Orphan medicines for all who need them

In the last few years I have reported on a small number of New Zealanders who have been denied life-saving medication because PHARMAC has insifficient funding to pay for these expensive drugs. Medication for diseases such as Acid Maltase deficiency, or Pompe Disease, are not funded and sufferers either have to pay huge sums – or slowly perish.

NZORD, the New Zealand Organisation for Rare Disorders, has repeatedly called for PHARMAC to fully-funded orphan drugs for rare conditions.

In August 2013, this blogger reported;

At a seminar in Wellington, Labour’s Health spokesperson, Annette King, announced her Party’s new policy to create a new fund for purchasing so-called “orphan drugs” – medicines – for rare diseases.

Labour’s new policy marks a turning point in the critical problem of “orphan drugs” which are not funded by PHARMAC, but which are a matter of life and death for people suffering rare diseases.

Ms King announced Labour Party policy on the issue of orphan drugs and the problem of lack of funding;

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Annette King orphan drugs NZORD seminar

Health Spokesperson, Annette King, Wellington, 1 August 2013 – NZORD seminar

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“So one of the things that would need to happen soon after an election would be the establishment of on implementation working group, which could be made up of clinicians; of patients; of community representations, and others,  to put in place the details and work on the criteria for access. I do believe that in separating the funding and operation of the orphan drugs policy from PHARMAC. It will let them get on with doing what they do really well, and I think in some ways it will free them to get the best they can for the most of us who don’t need special medicines. But it will mean that for those who have rare disorders, that there will be a fund around that.”

Ms King was advocating a separately-funded body that would over-see orphan drugs for rare diseases.

However, it has become apparent that budgetary constraints and fiscal time-bombs left by the previous, incompetant National government have put Labour’s policy in doubt.

Instead, the new Coalition government is faced with unfunded budget-blow-outs such as new frigates for the NZ Navy;

The cost of upgrading two of the navy’s frigates has blown out again – this time by $148 million. The project – originally estimated to cost $374-million – will now cost $639 million.

This, on top of an eye-watering, jaw-dropping $20 billion “investment plan”  for New Zealand’s military. The Fairfax article appeared to parrot the previous government’s spin with these opening paragraphs;

The Government for the first time has confirmed New Zealand is capable of launching its own cyber attacks as a deterrent to cyber terrorism.

It’s unveiled a $20 billion investment plan in defence force capability, which will see the military establish a new cyber support capability, bolster intelligence units and digitise the army on the battlefield, giving it network enabled navigation and communications systems.

Only further down the story was it revealed that the $20 billion would be spent on new warships, aircraft, and other military paraphernalia.

Meanwhile, health budgets are stretched with PHARMAC unable to afford life-saving medicines.

The next gift to be opened;

  • “orphan drugs” funded for all who desperately need them

There are many other gifts to be opened, but one particular one caught my eye. This one had no cost to it. It was totally, utterly free-of-charge…

Kiwi fairness

Wrapped up in plain brown paper,  and put away in a dusty attic somewhere for the past thirty years, is a little box. It appears unassuming and unremarkable.

Except…

It contains the most precious gift of all; our notion of Kiwi fairness; our identity of caring for others. We had it once, in abundance. We even used to march for it in our streets, for fairness, justice, and peace in far away countries.

In South Africa;

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In South East Asia;

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Even in our own backyard;

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Wouldn’t it be refreshing if those 1,152,075 New Zealanders who voted for National in September this year, thought more of homelessness; child poverty; polluted rivers and lakes; under-funded hospitals, medicines, and mental health services; mounting student debt on our children, etc  – than for their bloated property values?

Wouldn’t it be better for us as a society if our distorted sense of hyper-Individualism – that bratty spoiled ‘child’ of  neo-liberalism and globalisation,  was pared back, and the needs of our communities put first and foremost?

The last gift I open;

  • The Kiwi identity of a fair go for all.

Without it, nothing else can be achieved. Perhaps that one is the most important of all.

A very Merry Christmas, festive season, happy new year, and family time for all,

irrespective of how you may choose to celebrate it.

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References

NBR: Foreign Buyer Ban – it’s the enforcement, stupid

NZ Herald:  PM warns against Kiwis becoming ‘tenants’

Property Investors Club:  First buyers still missing out in Auckland’s most affordable properties

Labour Party:  Our plan to start fixing the housing crisis

NZ Herald:  Student loan debt – 728,000 people owe nearly $15 billion

Fairfax media:  Kiwi lawyer comes home from UK to find $16,000 student loan grown to $85,000

NZ Herald:  Woman arrested at airport over student loan debt

NZ Herald:  Third person arrested at the border over student loan debt, as Govt ramps up crackdown on borrowers

NZ Herald:  Student loan debtor arrested at border, more warrants sought

Radio NZ: Two dozen prosecuted for defaulting on student loans

Child Poverty Action Group: Hunger for Learning

NZ Herald:  Bennett slammed over child poverty claim

National Party:  29 fiscal time-bombs waiting to blow

Radio NZ:  Navy budget blowout – ‘Our sailors aren’t safe’ – Ron Mark (audio)

Fairfax media:  Defence White Paper – Government unveils $20b defence plan for new planes, boats and cyber security

Electoral Commission:  2017 General Election – Official Result

Additional

Bay of Plenty Times:  Inside Story – The student loan effect

Previous related blogposts

Terminal disease sufferer appeals to John Key (12 Nov 2012)

Terminal disease sufferer appeals to John Key – Update & more questions (28 Nov 2012)

Health Minister circumvents law to fulfill 2008 election bribe? (18 Dec 2012)

Johnny’s Report Card – National Standards Assessment – Compassion (9 Jan 2013)

“There’s always an issue of money but we can find money for the right projects” – John Key (20 Jan 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part tahi (4 March 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part rua (4 March 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part toru (4 March 2013)

Opposition parties work together on “orphan drugs” (part wha) (10 Aug 2013)

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homeless families living in a car cartoon

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This blogpost was first published on The Daily Blog on 24 December 2017.

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Observations on the 2017 Election campaign thus far… (ono)

20 September 2017 11 comments

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You show me yours, I’ll show you mine…

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Perhaps the most ill-considered public statement from NZ First leader, Winston Peters, was his recent (11 September) demand that Labour disclose it’s full tax plan as a pre-condition for coalition;

“You are not asking the questions. You can’t possibly mean to go into an election saying, ‘My tax policy will be decided by a committee, and I am very sincere about that’. One needs to know what we are talking about … that should be fatal to a party’s chances. And we need to know.”

The jaw-dropping, gob-smacking, forehead-slapping gall of Winston Peters! For him to demand clarity and full disclosure from others – when he himself has made a fetish of not disclosing to voters who he will coalesce with, post-election  – takes the Hypocrisy-of-the-Year Award from National and plants it firmly on his own Italian suited jacket-lapel.

On top of which, none of Peters multi-billion dollar policies have yet to be costed.

So here’s the deal, Winston. You want to see Labour’s tax plans? We want to see your coalition intentions.

We’ll show you ours if you show us yours.  After all, “One needs to know what we are talking about“.

As Jacinda said, “Let’s do this“.

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Richard Prebble should keep vewy, vewy quiet

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On the matter of Labour referring taxation reform to a Working Group post-election, former-ACT Party leader Richard Prebble was scathing in his condemnation that Jacinda Ardern would not disclose her intentions toward implementation of a possible Capital Gains Tax.

In his regular NZ Herald propaganda slot, he wrote on 7 September;

“…Jacinda thinks the answer to every problem is a new tax. Asking for a mandate for capital gains taxes without giving any details is outrageous. All new taxes start small and then grow. GST was never going to be more than 10 per cent.

Who believes it is fair that the Dotcom mansion will be an exempt “family home” but a family’s holiday caravan plot will be taxed? The details are important…”

A week later, he followed up with;

“In a “captain’s call” Jacinda changed the tax policy to say that a Labour victory was a mandate for Labour to introduce any new tax and at any rate that a nameless committee of “tax experts” recommended, just the family home is off limits.

Any tax? What about land tax? Yes. Tax on the family bach and boat? Yes. Water? Petrol? Nothing is off the table. Will the capital gains tax be 33 per cent? Maybe. The petrol tax 10 cents a litre? Probably. Water tax. Guess a figure. “Trust us” says Jacinda.

No party has ever asked for so much power.

This, from the man who was a former Minister in the Lange Government which – in 1986 – introduced various neo-liberal “reforms” that the Labour Government had never campaigned on; had not included in their manifesto; and introduced the regressive  Goods and Services Tax in 1986. The Goods and Services Tax was never disclosed to the public in 1984.

Prebble and his cronies deceived  the New Zealand public in the 1984 election campaign. They withheld their true agenda. They lied to us.

For Prebble to now rear up on his hind legs, braying in indignation, pointing a  stained finger at Jacinda Ardern, is hypocrisy beyond words.

As former producer of TV’s The Nation, Tim Watkin, wrote on Prebble’s sanctimonious clap-trap;

“To read and hear a member of the fourth Labour government like Richard Prebble howling about transparency is like an Australian cricketer railing against under-arm bowling. Labour’s manifesto in 1984 was as artful a collection of vagaries as has ever been put to the public and after winning a second term in 1987, Prebble and his fellow Rogernomes embarked on a series of reforms – arguably the most radical tax reform ever considered by a New Zealand government, including a flat tax – without campaigning on them.”

Richard Prebble should think carefully before raising his voice on this issue – lest his own track record is held up for New Zealanders to scrutinise.

Does he really want that particular scab picked?

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Latest Colmar Brunton Poll…

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The latest TV1/Colmar Brunton Poll (14 September) has Labour and the Greens climbing – a direct antithesis to the TV3/Reid Research Poll which had Labour and the Greens sliding (12 September).

12 September:  Reid Research-TV3

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14 September: Colmar Brunton-TV1

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Which raises two questions;

  1. Are polling polling companies operating in the same country?  Or Parallel Universes?
  2. Is it about time that all public polling was banned once early voting begins?

The chasm in poll-results for National, Labour, and the Greens confirms critics of polls who dismiss results as wildly unpredictable. “Bugger the pollsters“, said Jim Bolger in 1993 – and with considerable justification.

Though Winston Peters and his supporters may be nervous at the fact that both polls have NZ First at 6% – perilously close to the 5% threshold. Any lower and Peters’ Northland electorate becomes a crucial deciding factor whether NZ First returns to Parliament.

Several commentators – notably from the Right – have been making mischief with the poll results, suggesting that a vote for the Green Party would be a wasted vote. Without the parachute of an electorate base, if the Greens fall below 5% in the Party Vote, their  votes are discounted and Parliamentary seats re-allocated to Labour and National.

John Armstrong and Matthew Hooton are two such commentators making this fallacious point. Fallacious because even at Reid Research’s disastrous 4.9%, the polling ignores the Expat Factor. Expats – predominantly overseas young voters –  are not polled, but still cast their Special Votes, and often for the Green Party.

In 2014, the Green vote went from 210,764 on election night to 257,359 once Special Votes were counted and factored in. The extra 47,000 votes was sufficient to send a fourteenth Green Party List candidate to Parliament;

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It seems contradictory that there is a total black-out of polls on Election Day itself – when voting stations are open. But polling is allowed to proceed two weeks out from Election Day when voting stations are also open.

It may be time for this country to consider banning all polling whilst voting stations are open. If poll results are so open to wild fluctuations, and certain commentators make mischief from questionable data, then the possible risk of undue influence on voters cannot be discounted.

Once voting begins, polling should cease.

The only poll that should count after voting begins is Election Day.

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Losing the plot, Winston-style

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On Radio NZ’s Morning Report (14 September), NZ First Leader, Winston Peters lost the plot. His haranguing of Guyon Espiner did him no credit.

More incredible  was Peters’ assertion that he has not made any “bottom lines” this election;

“I have never gone out talking about bottom lines.”

Peters’ blatant Trumpian-style  lie flew in the face of  his bottom-lines during this election campaign.

On a referendum on the Maori seats;

“My strategy is to tell everybody out there that you won’t be talking to NZ First unless you want a referendum on both those issues at the mid-term mark of this election.”

On re-entering Pike River mine;

“I’m making no bones about it, we’ll give these people a fair-go, and yes this is a bottom line, and it shouldn’t have to be.”

On a rail link to Northport;

“I can say for the people of Northland and Whangarei, this is going to happen. We’ve got the corridor; it’s been designated. The only thing it lacks is the commitment from central government and we are going to give this promise, as I did in the Northland by-election – we are 69 days away from winning Whangarei as well – and that’s one of the first things we’re going to be doing straight after the election.”

Peters has issued  several other bottom lines, including changing the Reserve Bank Act, banning foreign purchase of land, setting up a foreign ownership register, reducing net migration to 10,000 per year, and not raising the age of eligibility for New Zealand Superannuation (from 65).

Peters also attacked Espiner for personally supporting the neo-liberal “revolution” in the 1980s. As  Espiner pointed out, when Roger Douglas tore New Zealand’s social fabric apart, he was 13 years old at the time.

Plot lost.

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Labour’s tax & spend – what ails the Nats?

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National has launched a full-scale attack on Labour’s taxation policies and plans to set up a Tax Working Group to investigate the possibility of a Capital Gains Tax.

The Crosby-Textor line is childishly simple: the Right have identified a ‘chink’ in Jacinda Ardern’s teflon armour – kindly on loan from previous Dear Leader;

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But there’s more to it than simply attacking Labour through a perceived weakness in their taxation policy.

Labour is attempting to shift New Zealand away from a low-taxation/minimalist government, and return the country to the fully-funded social services we all once enjoyed.

Remember free prescriptions? Yes indeed. Prior to 1986, prescribed medicine was free.

National’s growing concern is not that Labour will introduce new (or higher) taxes.

Their worry is that New Zealanders will like what their taxes can buy; free tertiary education. Lower medical costs. Cheaper housing. New, re-vitalised social services such as nurses in schools.

Up until now, the Cult of Individualism had it’s allure. But it also has it’s nastier down-side.

If New Zealanders get a taste for a Scandinavian-style of taxation and social services, that would be the death-knell for neo-liberalism. When Jacinda Ardern recently agreed with Jim Bolger that neo-liberalism had failed – the Right noticed.

And when she said this;

“New Zealand has been served well by interventionist governments. That actually it’s about making sure that your market serves your people – it’s a poor master but a good servant.

Any expectation that we just simply allow that the market to dictate our outcomes for people is where I would want to make sure that we were more interventionist.”

For me the neoliberal agenda is what does it mean for people? What did it mean for people’s outcomes around employment, around poverty, around their ability to get a house? And on that front I stand by all our commitments to say that none of that should exist in a wealthy society. And there are mechanisms we can use that are beyond just our economic instruments and acts, to turn that around.”

– the Right became alarmed.

This election is not simply between the National-led block vs the Labour-led bloc – this is the battle for the future of our country; the soul of our people.

This moment is New Zealand’s cross-road.

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WINZ and Metiria Turei – A story of Two Withheld Entitlements

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Recent revelations that WINZ has withheld $200 million of lawful entitlements to some of the poorest, most desperate individuals and families in this neo-liberal Utopia (note sarc), has shocked some;

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$200 million withheld from welfare recipients who could have used that cash to pay for doctor’s visits. Shoes for children. Even lunch meals – which so many National/ACT supporters continually berate the poor for not providing for their kids – as Donna Miles reported on 13 September;

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Did the country rise up in a clamour of righteous anger? Was there a vocal outcry on social media? Were the Letters-to-the-editor columns filled were disgust and demands for a fair go for beneficiaries?

Like hell there was. If New Zealanders noticed, they showed little interest.

Yet, even the Minister for Social Welfare, Anne Tolley, had to concede that WINZ had fallen woefully short in helping those who need it most in our country;

“I agree at times it’s too bureaucratic and we’re doing our very best.”

$200 million in lawful entitlements withheld – and there is barely a whimper.

Contrast that with former Green Party co-leader, Metiria Turei, who did some “withholding” of her own;

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A young solo-mum withholds information from social welfare in the mid-1990s, after then-Finance Minister Ruth Richard has cut welfare payments – and every conservative moralist; middle-class National/ACT supporter; media elite; and right-wing fruitcake, has a collective hysterical spasm of judgementalism that would put a Christian Fundamentalist to shame.

Perhaps if social welfare had not been cut in 1991…

Perhaps if WINZ had not withheld $200 million in rightful welfare entitlements…

Perhaps then Metiria Turei would not have had to withhold information, merely to survive…

Perhaps if half this country were not so drenched in…

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Perhaps then, our sheep and pigs might finally learn to fly.

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References

NZ Herald:  Winston Peters to Labour – Front up on your tax plans

Fairfax media:  Gareth Morgan positions himself as alternative to Winston Peters

NZ Herald:  Richard Prebble – The Jacinda tidal wave can be stopped

NZ Herald:  Richard Prebble – The Jacinda tidal wave has gone out

Radio NZ:  Time to come clean on coalition compromises

TVNZ:  Colmar Brunton poll – Labour maintains four point lead over National, could govern with Greens

Mediaworks:  National could govern alone in latest Newshub poll

Colin James: Of polls, statistics and a Labour deficit

NZ Herald:  John Armstrong – This election is a two-party dogfight now

NZ Herald:  Remaining Green Party voters ‘mainly hippies and drug addicts’ – Matthew Hooton

Parliament:   The 2014 New Zealand General Election – Final Results and Voting Statistics

Radio NZ: Morning Report –  The Leader Interview – Winston Peters

Fairfax media:  Winston Peters delivers bottom-line binding referendum on abolishing Maori seats

Fairfax media:  Winston Peters says Pike River re-entry is bottom line to election deals

NBR: TV3 – The Nation – Peters promises rail to Northport

Newsroom:  What a National-NZ First Govt might actually do

Fairfax media:  Jacinda Ardern says neoliberalism has failed

Radio NZ:  WINZ staff accused of withholding entitlements

Fairfax media:  Turei rallies Palmerston North troops in fight against poverty

Other blogposts

Donna Miles: Child Poverty – Facebook Post Shows The Nats Don’t Care

Previous related blogposts

Election ’17 Countdown: The Promise of Nirvana to come

Observations on the 2017 Election campaign thus far… (tahi)

Observations on the 2017 Election campaign thus far… (rua)

Observations on the 2017 Election campaign thus far… (toru)

Observations on the 2017 Election campaign thus far… (wha)

Observations on the 2017 Election campaign thus far… (rima)

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jacinda will tax you (b)

 

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This blogpost was first published on The Daily Blog on 15 September 2017.

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National Tinkers while Auckland Property Prices Burn

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snail politics - national government tinkers

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When it comes to tax cuts for the rich;  state asset sales; slashing public services; and corporate welfare – National can move at relativistic velocities that Einstein concluded were beyond the realms of physical  laws in our Universe.

When it comes to social problems like child poverty; increasing greenhouse emissions from agriculture; and a housing crisis in Auckland (denied again, recently, by our esteemed Prime Minister)  – the National government can tinker and prevaricate in ways that would do a two year old, at an early childhood centre, proud.

It has opposed, resisted, condemned, criticised, and generally done everything within it’s power not to implement any form of capital gains tax in this country. Suggesting to National that a CGT could be one tool (of many) to quell housing speculation in Auckland has been like inviting a Vegan to a spit-roast barbecue.

Belatedly, as is usual for this  government, after considerable pressure from multiple political, community, business, and state sectors, Key has decided to move – albeit at a glacial pace, and with a tentative single step – to introduce a limited Capital Gains Tax.

The limited CGT will apply;

Introducing a new bright line test to tax gains from residential property sold within two years of purchase, unless it’s the sellers main home, inherited or transferred in a relationship property settlement.

As Key explained;

“It’s not unreasonable to expect that if you buy an investment property and sell it for a gain within two years, then you should be taxed on that gain.”

Fair enough to. It is not unreasonable, especially when the rest of us have no choice but to pay tax on all our other earnings, whether it be as a wage-slave; self-employed; retailer; contractor, etc, etc, etc, etc, etc…

Even property investors admit it is fair, as NZ Property Investors’ Federation CEO, Andrew King, pointed out;

“As we have been saying for years, people trading property have always had to pay tax on their profits and this move will help to clarify this. This should finally put to rest all the unfounded comments from people who say that property has a tax advantage.”

But – two years is the “bright line”?!

So, property speculators/investors who sell their assets in, oh, say, two years and one day are safe?

I’m sure this has escaped the attention of every property speculator/investor in the country. Plus their accountants. Plus tax specialists. Plus the chap who mows the lawns.

Shhhh! Be vewy, vewy quiet! Don’t tell anyone.

As long as no one knows of the two year “bright line”,  the law is “perfectly workable”…

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flying money pig

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Tinkering – best left to a National government. They are expert at it.

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References

Fairfax media:  No housing crisis in Auckland – John Key

NZCity: Capital gains tax on property announced

NZCity: Capital gains tax – what’s been said

Other blogs

Bowalley Road: The Least They Could Do

Gordon Campbell on the government’s belated moves on property speculation

No Right Turn: Winning the argument on taxing capital gains

Polity: At the end of the day what most New Zealanders ackshully accept is… (Housing edition)

Polity: More-tax-on-capital-gains-but-not-at-all-a-capital-gains-tax

The Dim Post:  Progress

The Standard: CGT – the focus groups made Key do it

The Standard: Capital gains tax to be introduced

The Standard: Herald praises Cunliffe for CGT policy

Previous related blogposts

A Capital Gains Tax?

Our growing housing problem

National spins BS to undermine Labour’s Capital Gains Tax

Why should tradies be prosecuted for doing “cashies” and not paying tax?

Letter to the Editor – A Claytons Capital Gains Tax?

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capital-gains-tax-first-world-problem

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This blogpost was first published on The Daily Blog on 21 May 2015.

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Why should tradies be prosecuted for doing “cashies” and not paying tax?

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“My name is Mr Smith. I am from Inland Revenue and Bill English sent me to help.”

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Before we go any further, just to remove all doubt from certain quarters, as the IRD points out with crystal clarity;

“New Zealand does not have a capital gains tax.”

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IRD - capital gains tax - investor - speculator

Source

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IRD - new zealand does not have a capital gains tax

Source

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Meanwhile, the IRD today (5 May) announced a crack-down on ‘tradies’ and other businesses who  do “cashie” (cash) jobs whilst not declaring that income with Inland Revenue and subsequently not paying their full measure of tax.

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IRD - crackdown on cashies jobs

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First of all, let me state that  everyone should pay their taxes. Without a comprehensive taxation system, our infra-structure would never have been built and our social services would be non-existent.

We need taxes for our education system; our public healthcare; judiciary; housing; police; DoC; border controls; public transportation, et al. As Inland Revenue’s marketing and communications group manager, Andrew Stott, stated in a NZ Herald report;

“Tax in New Zealand pays for many of the things that we enjoy about this country and so it’s important to encourage everyone to do that.”

But it’s a bit “rich” (excuse the pun) for the IRD to be clamping down on an underground “cash” economy  when we have – in broad view of the entire nation – a massive tax loop-hole costing society billions in lost tax-revenue.

I refer to a lack of Capital Gains Tax (CGT).

A tradesman is expected to pay tax on thousands or tens of thousands of dollars received for sub-contracting jobs.

An investor/speculator can pocket hundreds of thousands (perhaps millions)  of dollars in Auckland’s over-heated property market – and not pay one dollar in tax on profit;

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People making more on their homes than they earn at work - nz herald - auckland property market - daily blog - capital gains tax

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In effect, the current taxation system rewards doing very little work. For “Jonathan”, a property investor/speculator, he will just sit back in his Italian-leather recliner-rocker; and watch property inflation increase values. Then cash-up and make a tax-free windfall.

Meanwhile, “Gazza”, a tradesman living across town  to the property investor/speculator, gets up at 6am; goes to work in cold or shine; rain or fine; puts up with the risk of workplace injuries (or worse); goes home; and repeats the next day. For his efforts, he is taxed. And if he dares pocket a dollar without paying a percentage to the Taxman – he can be fined 150% plus interest; taken to Court; perhaps even bankrupted.

The latter is called “a mug’s game”.

Let me demonstrate this  with a highly complex, detailed,  financial diagramme;

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Taxpayer and Speculator

(L-R) “Gazza; works six days a week; earns $150,000 p.a.; pays income tax on earnings plus GST on any new home he builds – “Jonathan”; works in his garden tending to his geraniums; made $1 million selling three houses in Auckland he bought a few years ago; paid nil tax.

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“Gazza” then gets a letter from IRD saying he’s being audited because he  may have done a few “cashies” sometime in the last few years when things were a bit lean after the GFC. Seems he forgot to pay tax on a few thousand dollars.

Meanwhile, “Jonathan” thinks he and his wife will enjoy a round-the-world cruise with their tax-free gain.

“Gazza”, who built the houses, paid tax on every cent he earned (except for the “cashies” he  may or may not have done elsewhere).

“Jonathan”, who has lifted a hammer only to put a picture up on the wall, who built nothing, and simply bought and sold existing houses – paid nothing in tax.

Only in New Zealand do we have a law going after the battlers like “Gazza” – who actually get up each morning to build new houses. National and ACT think this is a perfectly sane state of affairs.

“Mr Smith” from the IRD is knocking on “Gazza’s” door.

“Gazza” wonders why he bothers getting up in the mornings.

“Jonathan’s” geraniums are  doing very well.

Addendum

Stuart Duncan sold his 1982 fibre-cement home at 116 Oaktree Ave in Browns Bay in November 2013 for $751,000.

Now the new owners have on-sold for $1,205,000 – despite doing little work on the property – giving them a 16-month profit of $454,000 – about $940 a day.

“I’m still in shock,” Mr Duncan said after learning how much his old property fetched. “It’s just disbelief.

“It was an 80s house, three-bedroom do-up. Where is the market going? God help New Zealand.”

NZ Herald

I doubt if we’ll be receiving much assistance from an invisible supernatural deity. Not when New Zealanders seem unwilling to help themselves sort out this crazy mess. And not when we, as a nation, keep re-electing a government hell-bent on doing nothing about a crisis that has spiralled out of control.

We have only ourselves to blame.


 

References

IRD: International

IRD: Residential Property

Fairfax media: Cash jobs crackdown by IRD

TV3 News: IRD launches campaign to crack down on cash jobs

NZ Herald: IRD chases down tradies’ cashies

NZ Herald: People making more on their homes than they earn at work

This blogpost was first published on The Daily Blog on 6 May 2015.

 

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Letter to the Editor – A Claytons Capital Gains Tax?

13 September 2014 3 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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letter to the editor, Rob Fagan, Dominion Post

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Sat, Sep 13, 2014
subject: Letter to the editor 

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The Editor
Dominion Post
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In referring to a capital gains tax, Rob Fagan claims “that we already have one” (letters, 11 Sept).

This would be news to the IRD which states, in fairly plain english that, “New Zealand does not have a capital gains tax” on it’s page ” Moving to New Zealand permanently – Holding or disposing of shares”.

Mr Fagan might advise if there are any other taxes Inland Revenue isn’t aware of.

-Frank Macskasy

[address and phone number supplied]

 

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References

Dominion Post: Editorial –  Capital gains tax still a smart idea

IRD:  Moving to New Zealand permanently – Holding or disposing of shares


 

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Skipping voting is not rebellion its surrender

Above image acknowledgment: Francis Owen/Lurch Left Memes

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