Elites strike new Government with fear of recession, Liam Dann’s prozac and the PSA is grumpy with new Tax Group

1. Sorry wrong man. Cullen was finance minister for 9 years, he HE could have looked at the tax system and proposed some changes during all those years, he chose not to. He will be far to blinkered because he is a neo lib himself.

   • Yes, Cullen was very much part of the problem (and still is), and therefore cannot be part of any solution. In an exchange I personally had with him around 12 year ago he clearly demonstrated he didn’t know what he was talking about.

     However, in the insane system we have imposed on us, not knowing what one is talking about seems to be a prime qualification for appointment to a position of power.

     Anyone who believes that money-printing by central banks leads to prosperity is nuts.

     Anyone who thinks in trashing the environment through over-consumption and economic growth is nuts.

   • Cullen is a neoliberal. Remains to be seen if he can work out what’s happened in the 9 years since he’s been out of government because Neoliberalism is starting to show it’s effects in NZ and on our exports of profits rather than good or services.

     Much less effects when Clark was in government because it takes a while to show where it’s all going and the multinational are getting greedier and after the Panama papers it’s all coming out that many can legally avoid being taxed through convenient loopholes. One of the biggest users of these tax havens are politicians and Hollywood apparently so no wonder no action!

     Agree with LOIS GRIFFITHS about having a Robin Hood tax.

     Since NZ has effectively given away it’s citizenship and residency to anybody and they don’t even have to spend any time in NZ (Peter Thiel a few days) but can access full benefits here, a Robin Hood tax is the only way to tax them and the criminal moneylaunderer’s when they flit in and out of NZ by taking a tiny bit of tax when they bring money in or out.

2. The Forbes article said it took NZ decades to get in this shit shape.
   NZ Treasury said last year servicing the over 100 billion debt hole John Key got us in was going to cut us all deep.
   Watch for cuts especially in Health and education.
   Steven Joyce is still going on about his 12 billion fiscal hole that he knows is there because he dug it.

   • It’s semantics. Car Keys choose to borrow offshore at upwards of 5% interest. #rediculous

     The government can borrow at 0% interest from the Reserve Bank

   • the really problem is the level of private debt thanks to national pumping the housing bubble new zealanders have borrowed and borrowed and borrowed way beyond there incomes well over half a trillion dollars all that debt will needs to be serviced i hate think how many house holds are stressed at the current record low interest rates let alone as interest rates rise ,house hold melt down has only just began nz gfc is almost here

     the question is who will be bailed out the people or the elites who caused it with there greed

   • 100% ME,

     Every word ‘ME’says is correct.

     SS Joyce was a bag spender expecially on the Holiday’ roads no nowhere.

     Joyce is our disaster we will inherit.

   • “Steven Joyce is still going on about his 12 billion fiscal hole that he knows is there because he dug it.”

     Wonder what other little nasty surprises are in store for the Labour-led government?

     • Well you know every one wants a tax cut. It’s one of those things eh. But nobody asks well what services will have to be cut and are the cooperates still going to get there’s.

       It’s like my kids. They don’t ask if I can afford the money they just take it.

3. And what would you want the Govt to do Martyn, that WONT cause a recession/higher mortgage rates? Give us a list of what you would do if you had the leadership of the country’s cheque book. Im sure whatever #1 on your list would be would be enough but go for it! And then you can explain why a recession/interest rate rises is not your policy outcomes but National and USA/China to blame….cough cough.

   • You’re strangely gloomy there, Imright? Which is strange because Labour left the country’s economy in a fairly good state – something even acknowledged by Key in some of his more lucid moments.

     Whereas it was the Nats who say massive borrowings; two unaffordable tax cuts; corporate welfare on the rise; and credit ratings cut by ratings agencies. On top of which, wages have stagnated whilst housing has become more unaffordable than ever, with families forced to live in cars or garages.

     It’s not Labour you should be worried about, it seems.

   • 1. End capitalism
     2. Tax unproductive assets & land not workers
     3. Install Positive Money policies
     4. Massive redistribution of wealth so that ALL Kiwis share in our rock star prosperity not just the 1%

     • Everyone knows that Capitalism has failed. The litmus test for that is all wealth gets uplifted and placed in the hands of fewer and fewer owners.

       For Instance: our previous low IQ Government allowed in massive numbers of immigrants and allowed massive numbers of foreigners buy off our assets, Banks, Land, Energy, Forests, Housing, Health EVERYTHING.

       So the many of NZ have been denuded. NZ wealth has gone to foreigners overseas.

       SO FIX IT
       As Ropata succinctly puts it :

       1. End capitalism
       2. Tax unproductive assets & land not workers
       3. Install Positive Money policies
       4. Massive redistribution of wealth so that ALL Kiwis share in our rock star prosperity not just the 1%

       In my words, end the stupidity of Capitalism now. Replace it with Shareism. To not Share will be illegal. To waste will be illegal. To harm another in any way will be illegal. To not work will be illegal. To Harm the environment in any way will be illegal. Immigration and Emigration should be severely restricted.

4. Great article Martyn,

   Yes you hit the spot 100% when you said;

   “There is a terrible collapse coming, and no one seems to be even faintly aware of what that will bring.Winston knows, that’s why he said…

   “Far too many New Zealanders have come to view today’s capitalism, not as their friend, but as their foe.

   “And they are not all wrong.

   “That is why we believe that capitalism must regain its responsible – its human face. That perception has influenced our negotiations.”

   Yes Martyn we are seeing the beginning of the slump now, as the retail figures are slumping even though the ‘Media paint the rosy picture’ so your next statement cicles this point that it is the media that are trying to talk up the economy but of course National has lost the ‘treasury benches’ and cant ‘manufacture ‘ any more spikes in building roads and earhquake zones now.

   http://www.nzherald.co.nz/hawkes-bay-today/news/article.cfm?c_id=1503462&objectid=11946863

   http://gisborneherald.co.nz/localnews/3103942-135/region-urged-to-apply-for-funding

   Sorry national as it was you that always pushed the “fiscal responsibility” upon us all didn’t you???

   So labour must start “the new deal” again as the ressission bites, and restore our regional rail and housing firstly then build factories to manufacture world class cheap products from our wool, timber, and other natural resources we still have before they are gone.

   We hope the media get into labour/NZF regional policies as they will save us all.

   
   “The NZ Herald is owned by NZME who in turn are almost 90% owned by large banks, so the economic narrative that always emanates from the Herald champions the free market with the zealotry of suicide bombers on tour.”

5. I don’t bother with Forbes’s propoganda.

   Nor with NZ’s NBR which, I note, is appropriately wrapped in plastic on the newstands, like pornography.

6. I don’t think interest rates are likely to rise in the foreseeable future. Not materially. The whole world is indebted to the eyeballs , and material increase in interest rates will cause a cascade of defaults triggering the collapse you andWinston refer to.
   D J S

7. Yes I agree with Winston. . I have long agreed with the predictions of a downturn in the global economy. The federal reserve, the European central bank , the central bank of Japan and the Chinese central bank have all been engaged in “unconventional” policies,printing money, buying shares, all in an effort to stave off an inevitable recession. It has worked so far but at some point the shit will hit the fan.
   https://www.peakprosperity.com/blog/107796/when-all-blows,

   It wont be Labour’s fault, I don’t blame the previous National Government either. The responsibility lies with the countries mentioned above. China at least has a plan to create economic growth with its “One belt one road” project. The others appear to be relying on war and chaos to hide their pillaging and mismanagement of the global economy.
   NZ would do well to embrace the positive and reject the negative., something they cannot do if their decisions are based on historical alliances instead of a considered moral approach to global issues as they arise.
   For example: NZ abstains on the recent UN resolution condemning the glorification of Nazism. https://www.strategic-culture.org/news/2017/08/23/nations-that-accept-nazism-today.html
   WTF. This issue is clear cut but abstaining avoids contradicting the dizzy NeoCon, Nicky Haley
   The Labour Government has stood up and made a strong attempt to get the Australians to see sense regarding the human rights of the people on Manus Island, but standing up to Uncle Sam may be more difficult. Blindly clinging to the alliance with USA will surely lead us to more geopolitical discord and economic problems. The NZ Government must act independently. I wish them all the best

8. Why is there never any mention of a Tobin Tax ( aka Financial Transaction Tax or Robin Hood Tax) ?

   • Speculation in the property market is far greater than those in the theoretical finance markets.

     • @ Sam No way!

       So many scams operating in the financial markets.

       If Labour are addicted to globalism as they seem to be, the only way to control all the money flows going in and out of NZ is to do some sort of Robin Hood tax. The biggest export of profits out of NZ is the banks.

       When you have people gambling over $500 million at Sky City but nobody seems to care, and China’s most wanted gets 4 months detention in his penthouse – somethings wrong!

       Dick Smith somehow being worth 400 million more in 1 year and then suddenly bankrupt. All the workers, IRD and customers out of pocket but someone gets millions from the scam.

       Mondelez and the Cadbury scams. Again, sucking the business with bogus bank loans and IP, then selling off the factory, making the workers redundant etc etc.

       Seriously someone needs to get a slice of all these “intellectual property” charges that are not taxed by all these multinationals.

       Capital gains taxes are easy to avoid for offshore and trust moneys that somehow turn over millions but never make a taxable profit.

       If NZ wants to actually get some taxes out of the immigration, tourism and asset sale fuck up then tax money flows not profits.

       Somehow the richest don’t seem to make profit anymore. sarc.

       Will be more popular with voters that capital gains that most people know the rich and offshore will avoid. It’s the unfairness that makes people angry.

       Tax those that pay little to nothing here on their turnovers of millions and billions.

       That needs to be the new capitalism that will tax all these global predators like Mondelez who don’t make any profit through accountancy loopholes . Now that would be sweet!

       MSM would crap their pants if a Robin Hood taxes is introduced.

       • (Think you deserve a reply SAVENZ)

         Through what exactly?

         The repeal of Glass-Steagall shows little difference with regards to the financial crisis, which was really more on the millions of Americans who tied their mortgages and pension plans to unstable stock bubbles. See the problem? Well it’s similar in NZ. Tying retirement plans to property. Then you’ve got real estate agents convincing old people with very little trading and investing experience to trade and invest and stuffing up because they don’t fully understand the technical detail and an industry that just wants to make the sale.

         I know one of Bernie Sanders’ proposals was a financial transaction tax to directly tax securities and equities and other stock/trader transactions. It should be noted that Sweden tried to do the same in the 80’s and had the FTT revoked after seven years due to diminishing revenue.

         https://www.businessinsider.com.au/sweden-explains-why-a-european-financial-transaction-tax-wont-work-2011-9?r=US&IR=T

         On another note before Donald Trump came in and started telling companies if you move you factories off shore he’ll tax the hell out of those products, that the stock markets were in a death spiral and would have spelt doom for millions of workers globally.

         USA $62k, NZ $42, Euro $32k, UK $33k, Asia all over the place but about $20k. These are all average salaries. What they mean is people are living week to week and month to month and they’re all looking for ways out to retire comfortably.

         And because small business and farmers are expected to understand the matters of a national financial apparatus. I swear I heard this bullshit out of small national government mentality at one point. And I dunno, making it so when they gamble with our cash, they don’t just get nice bailouts? Eh. But putting non-experts on the firing line is probably not the way to go about it.

         But core inflation is around 2% right now. Unemploymen is around 5%. We are growing. You’d think this is the time to raise rates. Yes. You raise it slowly and carefully. But the government is communicating well as honestly as they can, with the way the market is responding, I’d point at them the economy tilts into deep recession.

         And the bankers who “engineered” this actually should be able to lose shit tons of money on it(although I put the blame squarely on parliament). When your not acting in the best interests or the people your ostensibly payed to represent then you lost the mandate to govern.

         • Raising wages and taxes is a waste of time if the rich don’t pay wages or taxes. Many corporations don’t even pay taxes in this country. They make losses!

           I’d like to see micro taxes on every financial transactions. 1 cent on every 100 dollars circulating. Buy a house, gamble money, earn wages, buy a car, anything electronic – you pay a percentage through the transaction in real time and the banks collect it.

           So those buying luxury cars and houses and gambling can be taxed even though they may ‘earn’ zero profit. Might lower consumption – who knows?

           Then lower other taxes that are only hitting the locals who the new poor and middle class like GST and wages.

           In 21st century there needs to be another more sustainable way to tax when there is globalism, tax havens and climate change. The NZ government can’t change the world, but it can evolve to solve 21 century issues and problems not seen before.

           The old capitalism has to change. The planet can’t survive if everything is geared to new consumption.

           That would be a compromise. Not the destruction of 20th century capitalism and globalism but a way to modify it into a compromise. Otherwise you get all or nothing and neither seem good.

           • I don’t want to look like a dick in three years but Labour intends to raise the minimum wage to $20.20 in 3 years. So long as the gap between the living wage and the average wage is sufficient then there should be room for promotion and all that. But moving to full employment means workers can bargain more, and its probably like 5% unemployment, then 4.5% the next year and 4% the the year after.

             The only thing is the whole getting 1% into work thing. Shouldn’t be to hard really what with NZFirst billion tree thing. I mean where looking at employing 2k or 10k unemployed here for a $5 boost to the minimum wage. Any old cunt could do that (I assume). And that will pay the bills bills. Literally.

             I mean this shit shouldn’t need saying. Finance has got y’all by the balls. It’s time to take our country back.

           • I forgot to say the biggest wealth transfer blockage is from employer to employee. That’s something every one can handle. Finance, idk.

             • Yes but if there is no planet then where is the wealth in that between employer to employee?

               Employee’s are also reducing and there is an increase in self employed and contract workers. Old fashioned taxation is not really set up for the modern world. Secondary taxes, really? It’s the often the poor that are working multiple jobs being hit by that sort of not fit for purpose taxation crap.

               Taxes are taken and then given back in subsidies so it’s just a bueaurcratic nightmare.

               There needs to be a way to try to reduce consumption while keeping people at the same or higher levels of wealth and lifestyle and reducing consumption.

               Rising inequality and pollution means that’s not happening.

               I also think there should be measures to try to reduce population growth around the world. Not China’s one child policy but people are living longer and longer and modifying the natural world unsustainably from Palm oil plantations to water pollution and climate change.

               Economic wealth is geared towards more people, more consumption and more money but that has it’s own downfalls for future generations because it is coming at an environmental and social cost.

             • The main argument is that the existing tax code is orders of magnitude too complex, and as a result, is easily abuseable. It depends on the particulars of how the new brackets are formed, and there’s no hard details here so it’s hard to say for sure. But the way I picture it given the rhetoric around it, is that the existing income tax brackets will have the people who qualify for the brackets greater than them, but less than the new values will be folded into them.

               Or to clarify, currently, we have eight brackets in 2 primary and secondary brackets for income and flat tax rates : 10.5%, 17.5%, 30%, 33%, and same again for flat rates. I expect we’re gonna see three brackets that contain all the same people, like this:

               Bracket 1 [10.5%])
               Bracket 2 [17.5%])
               Bracket 3 [30%])
               Bracket 4 [33%])

               So basically, your taxes will remain unchanged if you curently pay 10.5%, 17.5%, or 30% income tax, but if you paid 33% income tax, your taxes will go to service slightly less government debt repayment schedule signalled during the elections, because people in this bracket have a lot more leeway in paying the tax than the lower brackets that come straight out of the pay slip.

               The biggest impact of this should be felt by those at the 33% mark that can afford it, which is, for a single person, those who earn over $70,000 per year. And people on a flat rate will see no change.

               The poorest working New Zealanders though, who make under $14,000 per year, Over $14,000 and up to $48,000, Over $48,000 and up to $70,000, will see no change, which is most of the zero Tax changes signalled during the elections, so I expect this will blow over there heads.

               Though again, this is purely supposition. They might very well redraw the brackets. It wouldn’t surprise me unduly to see the brackets end up something like 10% being under $15,000ish 17% being Over $14,000 and up to $50,000ish and 30% being Over $48,000 and up to $80,000ish. And $80,000 and over. There by creating a bit of a tax threshold at the bottom.

               The biggest problem I can think of Just making sure current corporation tax laws are actually enforced.

               In the case of Mc Jobs, if you did away with the need for staff to cook, serve, take money and clean the floors you could run each store with one or two people to maintain the machines.

               The money saved on staffing costs would savagely increase profit margins, and therefore the taxes they are liable for.

               And if people have never developed any skills beyond flipping burgers by the time they reach proper adulthood they should probably end up starting and angry enough to take to the streets. And this is partly the article by Nick Hanauer “The Pitchforks Are Coming.” 5 seconds looking at where the distribution of wealth has gone over the course over the last 4 decades should answer focus every one.

               I haven’t gone into capital gains tax on property because that’s a foreign investor thing. And the government receives $70-$80 billionish and they don’t seem to want to spend to far over $82 billion. And if you can’t regenerate government services on these numbers then there’s something really really wrong.

               But nobody seems to be to thrilled with all this. They just want to know they’ll get there money’s worth or won’t won’t to pay for a parliament filling up with duds.

9. In my view the shit was going to hit the fan anyway, given the Nats built economic growth mainly on immigration, on overseas students studying here, on tourism, on rebuilding Christchurch and on a short lived dairy boom. The rest was high property values giving many middle class home owners much equity, to use as security for more lending from banks, to consume and extend their property portfolios.

   A slow down or recession was due anyway, even if the Nats had formed the new government, as housing price inflation has slowed, yes is in some places leading to price drops.

   The Nats achieved this with their bright-line test, with loan to value ratios for the banks, and so forth. Labour signaled and acted on stopping foreign buying, so that has slowed demand a bit.

   The home building in Auckland is hardly enough to keep up with demand though, while Christchurch and Canterbury have less construction going on now.

   The dairy industry is flattening out also, as there is only so much milk you can squeeze out of so many cows’ udders, without further polluting waterways.

   Forestry and wood processing are at their limits, due to a coming shortage of logs, as most has been chopped off and exported already. Planting a billion trees will take time on land not yet available, and trees will need at least fifteen, rather twenty five to thirty years to grow.

   There are capacity constraints all over the show, not enough teachers, certainly in Auckland, not enough doctors, most GPs being over fifty years old, and due to retire soon, there are not enough nurses, dentists and so forth.

   There are certainly not enough building workers and skilled tradesmen to build the infrastructure and housing in places like Auckland, it takes time to train them, and some may need to be allowed in from overseas.

   That is why I had advised Labour to let the Nats run a fourth term, and screw up totally, which would then convince enough voters to throw them out for years to come, so NZ could be rebuilt over three terms of a Labour led government.

   But as Labour, NZ First and Greens were desperate to get into government, they have now inherited the serious mess the Nats have left us with. As voters tend to have short memories, especially in NZ, given the often useless media and information shortage within voters’ brains, I fear they will soon blame Labour for not doing better than is possible.

   That is of course what the Nats and also the business sectors and their leaders hope for, hence all this stuff we get presented now.

   They are holding Labour to ransom, kind of, the business elite, which leads to back downs from some policy announced prior to the election. There will be serious limitations to what Jacinda and her team can do, it will sadly show sooner or later.

   As for the expert Michael Cullen, he is certainly well qualified for the tax advisory group he is meant to lead, but he is also one who cherished the jobs for the old boys, same as Bolger and others did:

   https://www.nbr.co.nz/article/which-soe-will-cullen-chair-100128
   https://nz.linkedin.com/in/michael-cullen-74284867
   https://www.nzpost.co.nz/about-us/media-centre/media-release/change-of-leadership-at-nz-post

   In my view, Michael Cullen has become part of the elite. The PSA is right about some criticism on the goals set for that group, as ruling out changes to income tax, that alone is highly questionable.

   My advice is, do not expect too much, so not to be disappointed too much, dear friends.

10. Lois. Re Financial Transaction tax. Probably because it could work against the folk responsible for the position we are now in.

    • I remember Satoshi’s paper on the 4chan before it got taken down. And the toeing and throwing about the incomplete paper. So I looked into it and read as much as I could and discovered that it had a 21 million Bitcoin limit and though OK!!! I need to get some of this stuff. The fact that it was technological did have something to do with why I was interested but the much more interesting thing to me is that there was a limit and it was informed by software and thought that’s a brilliant economic system. It wasn’t until a year latter before you could buy a Bitcoin through this complicated process, you had to deposit money into Dwolla then transfer it to Mt Gox and do it all in reverse if you wanted to cash out until the exchanges started coming online. I still remember telling my whole family about it that night and especially the girls saying “I don’t know about all this, it sounds like a scam.” And I’m like I only want to put a few hundred dollars in and every ones like “I don’t know.”

      So I ended up not telling any one about it because it was way to annoying. And then the next summer when it hit $30 dollars they were all like “Sam have you something to tell us.” And I’m like NO!!! Iv nothing to say because for me the economic aspect of Bitcoin was more interesting in away than the price or technology. The technology is an enabler of the economic reality. But the economics was the drawing point for me. There’s a medium of exchange component that was interesting, so you could send money to New Zealand with out all the hassle of Western Union but the driver for me that Bitcoin is sound money. Straight away I realised you can’t make more of it. That was the big eureka moment for me.

      So I read some of Hayek which was kind of an introduction to libertarian thought and taking restrictions away from people from doing certain things. I’m pro legalise marijuana and thought what would happen if you take that restriction away. ‘But what would happen from an economic standpoint made more sense to me.’

      So if you stop making it illegal then the price goes down because there’s this enormous price premium placed on the fact that it’s illegal and things like this make more intuitive sense to me from an economic stand point and kind of aligns better with what policy makers were telling me.

      Bitcoin to me is sound money. I don’t know how else to put it. We haven’t reached the 21 million lint yet but I recognised straight away that if you gave every one a Bitcoin it would only be fractions of a Bitcoin and I was like I better get in first.

      But the value of Bitcoin isn’t the price. The value of Bitcoin is all the developers making it work. When ever Bitcoin is attacked every one can see what’s going on through the price action. So every time there’s trouble in the world the price moves up. And when there’s a bit of calm Bitcoin stabilises or falls, or its under attack then developers just change the block size or code it a bit diffent then bam, Bitcoin at all time highs.

      But Bitcoin is sound money.

11. Probably because it could work against the folk responsible for the position we are now in.

12. alot people missed this interview with professor Steve keen on rnz
    http://www.radionz.co.nz/national/programmes/sunday/audio/201845436/steve-keen-the-coming-crash

    its worth listening to his advice was to get personnel debt down as low as possible if possible but we cant avoid it even if your debt free you will still be effected

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