OK.. so far we have had the Tax Working Group review and the government rejected it’s key recommendation that there should be a capital gains tax in some form in order to address our growing problem of inequality.
“Not while I am leader” stated the Prime Minister.
More recently The Welfare Expert Advisory Group delivered its report.
42 key recommendations and 112 associated recommendations
My understanding is that the government has selected only 3 of the 112 associated ones to progress on.
Apparently this is what “transformative government ” looks like.
Well, not in my book.
Oh..and please don’t write how this somehow all Winston’s fault.
If Labour was philosophically so unhappy with the economic direction they were headed , good conscience would demand that they go back to the people much earlier than next year to get the mandate they would need to address the terrible inequality in our country.
No, the truth is evident. Neoliberalism is alive and well in the Labour leadership.
As it must also be in the Greens… otherwise why continue to support these socially unjust economic decisions?
Bryan Bruce is one of NZs most respected documentary makers and public intellectuals who has tirelessly exposed NZs neoliberal economic settings as the main cause for social issues.
Because they are part of the propertied class, and that is whose interests they represent… no one else’s.
The entrenched vested interests in NZ will never cough up their fair share of our country’s wealth. A CGT might happen one day but would be piddling and just a token. Neoliberalism and austerity have caused social alienation and unrest to the point of riot in the UK, plus BREXIT because the ordinary people have been screwed by the same policies, and France – the yellow vests. It’s plain to see the ideology our “government” that dog wagged by the tail of the FIRE sector follows is a total disaster with extreme inequality here in what was ” Once God’s own ”
Light relief: 4:05 / 7:38
Bizzare Contact – Here Comes The Revolution https://www.youtube.com/watch?v=QHWISZbdISw
PM said “not while I am PM” ??? Did she. If so, then my estimation of her is well off and she is simply another Nat Rat in Labour clothing – remember Roger Douglas and Richard Prebble … keep up the ‘no change to neolib paradigm’ Labour … what a disappointment. Obviously forgotten already who their constituency is!
During electioneering Labour stupidly responded to NACT’s goading and announced that there would be no increased taxation.
NACT breaks promises continuously but Labour gets so much MSM negative attention that they are wary of giving fuel for more.
That has hamstrung the undoing of the mess left by NACT’s 10 years of deliberate social neglect, climate inaction and destructive management of NZ for corporate profit.
That says it all — keeping to useless “promises” for the sake of appearances instead of taking real leadership. It is cold comfort to the country that Labour is maintaining its illusory higher standard of “honesty”. Are they hoping for transformation by tiny ad hoc increments?
It is not so much the “fiscal responsibility rules” that are t
he problem, but their apparent inability to find a way of changing the tax system that fits in with those “rules”, and which would still be “transformative and progressive”. e.g. They might have introduced a more steeply progressive income tax.
There was much discussion on shifting the tax base from income to capital, mainly to property. There were two problems with this:
1. There was too much focus on CGT, which was really a damn silly idea. And,
2. That any tax on property had to exclude the family home. This affected not only capital gains taxes, but also land taxes and Gareth Morgan’s “risk free rate of return tax”
What seems to be necessary is a cross party agreement that a shift from income to capital is needed, and that the “family home” should not be excluded from such a
shift. We had a crossparty agreement in the fifties and sixties when both parties agreed that the promotion of full employment should be the sine qua non of economic policy, which led to the adoption of Keynesianism.
I could see Labour going along with such an agreement but it is hard to see National, which is why, for one, would never vote for the latter.
“There was too much focus on CGT, which was really a damn silly idea.”
A projected $6 billion annually isn’t that silly an idea.
“That any tax on property had to exclude the family home.”
Taxing the family home merely adds to the cost of home ownership, which we are trying to slow down not add too.
“This affected not only capital gains taxes, but also land taxes and Gareth Morgan’s ‘risk free rate of return tax'”
The problem with Gareth Morgan’s risk free rate of return tax is it taxes unrealised gains, again adding to the cost of home ownership. And without exempting the family home, captures those that are asset rich but income poor.
Additionally, unrealised gains aren’t income until they’ve been realised, thus taxing them (unrealised gains) doesn’t make the tax system any fairer.
Therefore, a CGT would have been the way to go. The timing couldn’t have been better. Jacinda had/has the political capital, a largely accepting public and the capability to have sold it. Yet, without batting an eyelid, she killed it for years to come.
$6 billion is just a sum of money. It is not an “idea”.
A tax on the family home would usually be offset by a reduction in income tax.
A tax on imputed income, i.e. the rent saved by owning one’s own home, could hardly be regarded as “unrealised”.
Realised gain are not necessarily income. The proceeds from the sale of an asset, for example, is actually capital. How can it be otherwise when all one is doing is changing the form in which one’s capital is embedded.
It’s fortunate Jacinda had the good sense to ditch that silly CGT.
“$6 billion is just a sum of money. It is not an ‘idea’.”
It’s the projected revenue stream of an “idea”.
“A tax on the family home would usually be offset by a reduction in income tax.”
That is little relief to those that are income, thus won’t offset the burden.
Rent saved is hardly income when it’s offset by the ever growing cost of rates, insurance and the on-going expense of maintaining that home.
Realised income or losses refer to profits or losses from completed transactions.
It’s not nususl for a government to aquire a cash income when it levies a tax. This is true for most forms of taxation so I don’t really see your point.
Persons who are asset rich and income poor are still rich, so taxing them would help in reducing inequality.
Rates, insurance, etc. are usually more than covered by the rental revenue from a property.
When an asset having a market value of $x is sold for $x there is no income to be taxed. As I said in an earlier comment, all one is doing is converting capital from one form (property, say) to another (cash) and as capital gain is not income, since it is embedded in the asset, there is no income involved.
Incidently, cash is not income, although it is sometimes acquired by earning income. However not in this case.
The point is, a CGT which taxes realised gains is a far fairer form of tax that still provides the Government with a substantial revenue stream.
The only thing keeping many retires heads above water is the fact they own a home. Which they worked hard to obtain and which the income used to purchase the home has already been taxed in the process.
Therefore, why would we want to tax them again via the estimated savings (which may or may not be correct) their wise investment saves them (and taxpayers from having to house them), at the cost of risking generating further widespread hardship?
The same applies to those who have fallen ill, been made redundant, or have become disabled.
Clearly, these aren’t the “rich” people we require to target merely cause they own a modest home.
Forcing people to either sell their homes or (for those who are eligible) get into debt to cover the cost of the tax burden is fiscally irresponsible.
The goal is to get more people out of poverty and owning a home not adding to the cost of home ownership and potentially forcing people out of their homes and into poverty.
The sale of a house is a transaction where there may be a loss or a gain. A gain is a form of income.
Do you think it’s fair to tax “realised” CG when unrealised. CG is not? Really?
It is true that the retiree’s home has been paid for with tax paid income, but it is not the home itself that Gareth Morgan is proposing to tax. Morgan is proposing to tax the at present untaxed rent free accommodation which the retiree enjoys while he owns the house. Morgan also proposes that, if the retiree cannot afford the tax, it can be accumulated in ,an IRD account to be paid for from the proceeds when the house is sold, or deducted from the retiree’s estate when he dies.
Any tax on property would be offset by a reduction in income tax in order that people might niot be disadvantaged.
When a house is sold for its market value there is no profit or loss on the transaction. To understand that requires an understanding of the difference between capital and income. I suspect that you do not.
“Realised income or losses refer to profits and losses from completed transactions.”
This is true if one is selling cans of baked beans: but it is not true when selling assets, where of course there are no profits or losses, only capital gains or capital losses.
I sense a new documentary is coming soon, Bryan?
One of the largest ongoing problems the left face is a lack of decent political representation.
This shortfall (which Labour and the Greens have both displayed well and which Labour has a long history of) is holding back the long overdue progress required.
And without better representation that progress will come far too late for the planet and the growing number being left to flounder and perish being told to wait for progress that may never be delivered.
This failure to deliver is tarring the left in general. Labour talked a big game and the wheels are starting to fall off. When their time is done, the trail of disappointment, fiscal neglect/damage and social harm will scar the left for generations.
The Chairman.
With wheels falling off, who will bphilge NZ’s Trump?
“If Labour was philosophically so unhappy with the economic direction they were headed , good conscience would demand that they go back to the people much earlier than next year to get the mandate they would need to address the terrible inequality in our country.”
The problem we have is that NZ is no longer a caring and compassionate nation. We did have something resembling one prior to 1984 but it was completely decimated by the Bolger/Richardson/Shipley mob in the 1990s and no efforts have ever been made since to fix it. Now we have generational hatred of the poor. Until we fix our culture and values no truly authentic mandate to address inequality in our country can ever be achieved.
“The problem we have is that NZ is no longer a caring and compassionate nation”
Rubbish!
There are plenty of us that care and have compassion. We voted to change the Government for one offering a fairer go.
Therefore, it’s not so much us, but rather the resolve of our so-called left political representation to get the job done. If this Government didn’t continually fall short on it’s stated plans, and put a bit more left wing effort into it (like building more state homes) we would be on a far better path.
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