Christopher Luxon, New Zealand Prime Minister 2023

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#3250618 18-Jun-2024 20:36

Eitsop: This is why I think we should simplify, and have Universal Basic Income (UBI).. instead of WFFTC and any other WINZ Sick/unemployment payment.. all paid from a higher rate of tax, eg flat rate of 30%

If every child (parent until they are 16) and person was paid say $300pw tax free.. then they can go out and earn more money

eg if a Single Parent with 2 kids would get $900pw.. and if they earnt more money, they don't lose any of the 900pw

That's a great idea. I don't think you could find a single National Party MP in favour of it.

Eitsop

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#3250621 18-Jun-2024 20:42

In regards to being able to claim on rental interest is a normal business expense.. it was ugly when Labour put the policy to not allow it as a claim (I am left leaning).
It was however a wolf in sheeps clothes.. it was in lieu of capital gains - which has negative connotations

Its not as if National didn't put teh Brightline tax (which was a capital gains with different name)

The way forward

allow all new zealanders to claim mortgage interest.. if its good for rental property owners, good for owners or;
put in capital gains tax (on all rental & commercial properties) that must be realised every year, not just when a property is sold

I doubt the first option would be considered, as it would only make more speculation in property market.
The second option woul work, even if a propertie is rented for part of the year, they would need to declare value at start/end of rental period

mudguard

2113 posts

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#3250694 19-Jun-2024 07:11

Eitsop:

This is why I think we should simplify, and have Universal Basic Income (UBI).. instead of WFFTC and any other WINZ Sick/unemployment payment.. all paid from a higher rate of tax, eg flat rate of 30%

If every child (parent until they are 16) and person was paid say $300pw tax free.. then they can go out and earn more money

eg if a Single Parent with 2 kids would get $900pw.. and if they earnt more money, they don't lose any of the 900pw

Sounds like what Gareth Morgan was suggesting when he was in TOP. The issue is funding it. From memory (I have his book) it would have been funded by charging a property tax to encourage people to downsize, IE single older occupant in a large five bedroom villa etc. I don't think our current tax system could pay for it.

GV27

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#3250737 19-Jun-2024 10:05

mudguard:

Sounds like what Gareth Morgan was suggesting when he was in TOP. The issue is funding it. From memory (I have his book) it would have been funded by charging a property tax to encourage people to downsize, IE single older occupant in a large five bedroom villa etc. I don't think our current tax system could pay for it.

The issue is funding it equitably. A duplex on a postage stamp-sized section in Auckland would be underwriting a sprawling quarter-acre section in the middle of nowhere. If the idea is that it encourages land to be used more efficiently then it fails at the first hurdle.

sir1963

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#3250773 19-Jun-2024 11:37

GV27:

The issue is funding it equitably. A duplex on a postage stamp-sized section in Auckland would be underwriting a sprawling quarter-acre section in the middle of nowhere. If the idea is that it encourages land to be used more efficiently then it fails at the first hurdle.

One example uses 2 x water, sewerage, stormwater, etc etc etc, the other would be self-reliant
Densification also means that all service need massive upgrades to cope with the increased demand.

mudguard

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#3250777 19-Jun-2024 12:00

sir1963:
GV27:

The issue is funding it equitably. A duplex on a postage stamp-sized section in Auckland would be underwriting a sprawling quarter-acre section in the middle of nowhere. If the idea is that it encourages land to be used more efficiently then it fails at the first hurdle.

One example uses 2 x water, sewerage, stormwater, etc etc etc, the other would be self-reliant
Densification also means that all service need massive upgrades to cope with the increased demand.

Surely the issue with that is that ten people renting a four bedroom house in Mangere are going to pay way more than an elderly single retired person living in their mortgage free villa in Devonport. Yet the relative wealth of the eleven people is vastly different.

GV27

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#3250778 19-Jun-2024 12:01

sir1963:

One example uses 2 x water, sewerage, stormwater, etc etc etc, the other would be self-reliant
Densification also means that all service need massive upgrades to cope with the increased demand.

Yes, and they generally cover that through development contributions that would be far higher as a portion of overall value than a legacy house in the sticks.

Plus, that densification happening in Auckland means it isn't happening in other places, which in turn keeps those houses more affordable and puts upwards pressure on houses in Auckland.

Explain to me why people in Auckland should have the ticket clipped again on an ongoing basis because no one wants to live in rural backwaters, who incidentally moan every single time Auckland gets a funding for projects to help it cope with massive population increases.

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sir1963

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#3250784 19-Jun-2024 12:08

mudguard:

Surely the issue with that is that ten people renting a four bedroom house in Mangere are going to pay way more than an elderly single retired person living in their mortgage free villa in Devonport. Yet the relative wealth of the eleven people is vastly different.

You mean a house that uses more than 10 times the services of one old person ? Now look at the house hold incomes in those two situations.

sir1963

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#3250786 19-Jun-2024 12:12

GV27:

sir1963:

One example uses 2 x water, sewerage, stormwater, etc etc etc, the other would be self-reliant
Densification also means that all service need massive upgrades to cope with the increased demand.

Yes, and they generally cover that through development contributions that would be far higher as a portion of overall value than a legacy house in the sticks.

Plus, that densification happening in Auckland means it isn't happening in other places, which in turn keeps those houses more affordable and puts upwards pressure on houses in Auckland.

Explain to me why people in Auckland should have the ticket clipped again on an ongoing basis because no one wants to live in rural backwaters, who incidentally moan every single time Auckland gets a funding for projects to help it cope with massive population increases.

Not even close to covering the costs.

And its the people in the "rural backwaters" that are supplying the food for Aucklanders , and wages also tend to be higher in Auckland.

mudguard

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#3250820 19-Jun-2024 14:14

sir1963:

You mean a house that uses more than 10 times the services of one old person ? Now look at the house hold incomes in those two situations.

That's why it was based on wealth rather than income. I'm trying to remember the exact example from the book but the gist was, two retired people. Both had similar incomes and bought similar houses fifty years ago. One in Devonport and one in Invercargill. Both get paid the exact same amount of super, but are vastly different in terms of wealth.

So that is where the Universal Income was to come from, tax the homeowner 1% or something each year once mortgage free. Ultimately the idea was to free up housing stock (IE big houses) for those that needed it. My parent's are a good example. They live in a big villa and use about a quarter of it. Surrounded by schools, ten minute walk from town etc.

Our current tax regime can't afford a UBI at this stage, hence the proposal to look at taxing property. Obviously it was never going to go through.

sir1963

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#3250846 19-Jun-2024 15:09

mudguard:

sir1963:

You mean a house that uses more than 10 times the services of one old person ? Now look at the house hold incomes in those two situations.

That's why it was based on wealth rather than income. I'm trying to remember the exact example from the book but the gist was, two retired people. Both had similar incomes and bought similar houses fifty years ago. One in Devonport and one in Invercargill. Both get paid the exact same amount of super, but are vastly different in terms of wealth.

So that is where the Universal Income was to come from, tax the homeowner 1% or something each year once mortgage free. Ultimately the idea was to free up housing stock (IE big houses) for those that needed it. My parent's are a good example. They live in a big villa and use about a quarter of it. Surrounded by schools, ten minute walk from town etc.

Our current tax regime can't afford a UBI at this stage, hence the proposal to look at taxing property. Obviously it was never going to go through.

So you are saying a pensioner with an average Auckland $1M home should have to pay $10,000 a year out of their pension just because they made a good decision 40+ years ago ?

I know a lot of pensioners who are avid gardeners, you want to tell them that everything they worked for their entire lives for should not be theirs and you are going financially bully them out of it.

But someone with a much higher income can blow it on booze, drugs, hookers, gambling and do nothing to save for their retirement will in effect be their equal when they retire.

Why invest in anything at that point ?

Or seriously look at cashing up assets and have them invested through Barbados or some other tax shelter, or just say screw it and burn the house/business/etc down. If someone wants it they can earn it themselves and build it up from scratch themselves too, and look on the bright side, no one will get any inheritance then too.

What's next, forcing people out of jobs when someone with a bigger family needs that Job more ?.... look at that another way of forcing people out of homes, bankrupt them.

Once you destroy the value of assets....where does your money come from to fund your utopia ? Particularly when people who can succeed are allowed to do so in other countries, do you propose denying doctors, nurses, police, armed forces , entrepreneurs , etc etc the right to travel ?

Weirdly enough, countries with high poverty also lack these people and you think its a goal we should aim for ?

How about letting Auckland become so expensive both businesses and people look at the regions and we end up with a better distribution of jobs, people, income, opportunity.

mudguard

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#3250850 19-Jun-2024 15:18

sir1963:

So you are saying a pensioner with an average Auckland $1M home should have to pay $10,000 a year out of their pension just because they made a good decision 40+ years ago ?

I'm not saying anything. This was Gareth Morgan's proposal on how to fund a UBI. I'm not saying I agree with it or not. I want to say it's been about a decade since I read it, so I can't remember exactly what was said.

But it does raise an interesting point about Super and no means testing. On the one hand the simplicity of our system is brilliant, minimal red tape and therefore reduces costs. And that would be the logic behind a UBI, NZ citizen, tick, here's your UBI.

But on the other hand we pay the same (Super) to someone who might be considerably wealthier on paper than another person. Whether that's fair or not is another debate.

mudguard

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#3250852 19-Jun-2024 15:20

sir1963:

But someone with a much higher income can blow it on booze, drugs, hookers, gambling and do nothing to save for their retirement will in effect be their equal when they retire.

I guess this is the thing I look at. Does anyone genuinely believe NZ Super will look the same in a generation or two? Perhaps I'm pessimistic but I suspect my Kiwisaver balance will be critical when I retire.

sir1963

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#3250853 19-Jun-2024 15:34

mudguard:

I'm not saying anything. This was Gareth Morgan's proposal on how to fund a UBI. I'm not saying I agree with it or not. I want to say it's been about a decade since I read it, so I can't remember exactly what was said.

But it does raise an interesting point about Super and no means testing. On the one hand the simplicity of our system is brilliant, minimal red tape and therefore reduces costs. And that would be the logic behind a UBI, NZ citizen, tick, here's your UBI.

But on the other hand we pay the same (Super) to someone who might be considerably wealthier on paper than another person. Whether that's fair or not is another debate.

My grandfather did not collect the pension, he was financially independent and refused to sigh up for it.

If you are working, you are not retired and we treat it the same as any other benefit, you can make $100 then its $ for $.

I fully intend to retire when I am able so someone else younger can have my job. A large number of pensioners in work (who can not be forced to retire) are actually consuming that job rather than someone younger. Taxing people on their "wealth" will simply mean MORE retired people will keep working to make ends meet, doubling the value of fixed assets does not pay for groceries or the power bill, especially if you are going to tax it.

As for the "wealth" how much did they also make for other people though jobs, how much did these people do for the community, how much more than average did they pay in tax

sir1963

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#3250854 19-Jun-2024 15:38

mudguard:

sir1963:

But someone with a much higher income can blow it on booze, drugs, hookers, gambling and do nothing to save for their retirement will in effect be their equal when they retire.

I guess this is the thing I look at. Does anyone genuinely believe NZ Super will look the same in a generation or two? Perhaps I'm pessimistic but I suspect my Kiwisaver balance will be critical when I retire.

It's not the same as it was for my grandparents. Then again they also did not have an employer matching contributions $ for $ , getting tax breaks for saving etc etc etc.

I wonder if there will be a generation who will view YOUR KiwiSaver as "greed" when theirs is so much smaller and think they are entitled to a share of it ?

Same attitude some have today, just applied to a different asset class....

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