J Adern, How will she affect the election, and is she a good leader?

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#1865117 14-Sep-2017 11:07

networkn:

tdgeek:

Wiggum:

tdgeek:

This is Apple Android stuff, it should be serious

I agree it should be, But its irresponsible of Jacinda to propose running a country, without giving people any economic certainty.

Agree. So she has back tracked that, so whatever tax reform they will do, its up for a vote, problem solved. her misjudgement. Or she could be stubborn

You cant say Any Economic Certainty, thats playing with words. Uncertainty over a tax reform that does not include the forms of tax that are the vast contributor of tax revenue, all of the other policies are there, not hidden.

You are awfully forgiving of major mistakes and errors of judgment. It's hard not to feel like you are simply playing devils advocate.

Fair point, but, While I am almost always a National voter, Im also a swing voter. The vast majority of posts here are by hardened Nats or Labs supporters. Hardened. so there is a lot of fight and anger against the other. And exageration, big time, I see a lot of that. That would heighten my lack of "get the daggers out" mentality. I see that. Devils advocate is probably quite true, but not blind, she has potential, and the two articles over the spending and over past Govt spending/debt were enlightening, including the GFC.

IMO the gaps are not nearly as wide as some feel. More about priorities than anything else

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#1865119 14-Sep-2017 11:09

tdgeek:

Too much exageration. I accept the bias but even so. They have policies that feel with help. And there is no housing crisis I'm told anyway

We will have to agree to disagree over exaggeration. You can google for JA stating she didn't want the PM job, it's a video from January if I recall correctly.

Despite what you might feel, I was prepared to give Labour a fair shot under JA, but honestly other than being a bit more upbeat, and having nice aspirations, the actual ability to deliver on promises left me cold, and most policies were similar enough I'd rather the Devil I know.

I don't think JA is right for the PM role right now, but I think she has some potential. I wanted to see her stick with it longer than 5 weeks, I don't think many would consider that unreasonable.

There is a bit about National I don't like right now, I don't want tax cuts, I'd prefer higher social spending. I don't want extra languages when a fair number of our kids can't speak and write the primary language of NZ as it is.

I want to see healthcare and education required to be more efficient so we get better value of the money we already spend, as well as spending more sensibly.

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#1865120 14-Sep-2017 11:13

gulfa:

Once again when will we all grow up and stop name calling (creepy) people Deal with issue Interesting to note that one of the commentators MR has come out and publically stated his position and it wasn't for Labour.

I don't think creepy would be considered an insult if it's an observation about a *behaviour*. I haven't seen said person to refute either way, I am just saying you can use language to describe a behaviour without it being a personal attack.

allio

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#1865124 14-Sep-2017 11:15

Wiggum:

Except that voting started 4 days ago. Sorry for those labour voters who may have already voted and dont like this tax policy. Well done jacinda (releasing policies after voting starts? Thats a first!)

Actually National already announced this morning that they're going to sell off 100 farms owned by Landcorp. Well done Bill for announcing asset sales after voting starts.

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#1865126 14-Sep-2017 11:16

6FIEND:

tdgeek:

6FIEND:

networkn:

How will they fund the miracles they plan on performing to solve the serious issues they see in NZ now?

Is it too soon to enquire about a fiscal hole again?...

Might let the market sort it out :-)

Is the secret, non disclosed tax reform the source of all the funds needed for all their policies?...

No - Labour have already detailed the other sources of funds.

...if you round that up to 2.5bn per year, then that leaves a $14.5bn per year shortfall.

You suggested that this should be treated seriously - It's probably worth doing precisely that.

Labour are spending 12B more and taxing more, thats known, paying debt back at a lower rate, and doing more, so as they have had to back track the tax reform, the policies will need to back track too. Cannot avoid that. Or we can throw stones at each other, thats my point. many here ha e stated good things aboyt the other side, but most of the time its anger rather than serious discusison

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#1865127 14-Sep-2017 11:17

Wiggum:

tdgeek:

Wiggum:

tdgeek:

This is Apple Android stuff, it should be serious

I agree it should be, But its irresponsible of Jacinda to propose running a country, without giving people any economic certainty.

Agree. So she has back tracked that, so whatever tax reform they will do, its up for a vote, problem solved. her misjudgement. Or she could be stubborn

You cant say Any Economic Certainty, thats playing with words. Uncertainty over a tax reform that does not include the forms of tax that are the vast contributor of tax revenue, all of the other policies are there, not hidden.

Except that voting started 4 days ago. Sorry for those labour voters who may have already voted and dont like this tax policy. Well done jacinda (releasing policies after voting starts? Thats a first!)

Actually is shows incompetence, and they think they can manage New Zealand Inc. !!!!

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#1865128 14-Sep-2017 11:18

allio:

The problem is people buying houses for reasons other than to live in them. Every house bought by an investor is a house that an owner-occupier can't buy. Change the tax system so it's not so profitable to buy additional houses, and people will invest in productive enterprises instead. Lower aggregate demand equals lower house prices and more home ownership. More money invested in our local businesses equals more productive and profitable country. Seriously - what's not to like?

Before you keep arguing with me - have you or anybody in your family tried to buy a first home in Auckland in the last 6 or so years?

Firstly - I realise that it wasn't directed at me, but YES - I have purchased my first home in Auckland in the last 6 or so years.

To the main point - while I am in agreement with you that investment in business and industry is preferable to residential housing, it is far from conclusive that a CGT will deliver that, or result in lower house prices. In fact, many other OECD countries with a CGT have experienced the same house-price inflation that NZ has.

What I wanted to share was an opinion piece written by an Auckland Property Lawyer. (With a Masters Degree in Law) It's a very interesting read with some insightful thoughts.

After a bit of a kerfuffle, Jacinda Ardern has strongly stated that her government’s land tax will not include “the family home or the land that a family home sits on”.

Voters might rest assured. Certainly a further tax on mums and dads who own a home to raise their family is difficult to sell. But we have no detail. None whatsoever. And the statement by Ardern about the family home not being taxed seems fine, but there are still problems.

Last week I looked at a leasehold unit title in Auckland for a client. The land was owned by Ngati Whatua, and leased for 150 years to the body corporate. Many of the apartments were Labour’s so-called family homes. They were ideal first homes for those unable to afford soaring Auckland land prices, as the entry level for leasehold units is much less. The very nice apartment I saw was only $325,000. It had two bedrooms, a nice pool and gym complex, tennis court, air conditioning, sauna, spa and security CCTV. It is modern and spacious. It is a great first home option for a young family or a young couple starting out. Indeed, it is exactly the type of first home that those on the left of politics have been championing for a while.

I read the lease. It contains a provision requiring the lessee (the unit owners) to pay the ground rent, but also any “rates, taxes…paid or payable, or otherwise incurred in respect of the Land…”.

If Labour’s land tax was in place, it would be levied against Ngati Whatua as the landowner, but under the lease it is charged to the unit owners. Is Labour going to demand Ngati Whatua not to on-charge the land tax to the unit owners that are family homes? Or will Labour’s desire not to penalise family homeowners not be realised with leasehold units?

Many of these units in this complex are investment properties. Is Labour proposing that only those properties pay the land tax, and not the family units? If so, how does Ngati Whatua recover all its costs under the tax it is charged as it is entitled to do under the lease?

When I started thinking about this more deeply, I then thought of a good friend’s situation.

She has a small retail shop on the North Shore held under a commercial lease. It is her first venture of this type, and it is going really well. I am proud of what my friend has done. But as with all start-ups, the first couple of years are tough. You have to get yourself known. And to maintain a strict budget your costs must be kept to a minimum. It’s very tough in fashion retail, with the internet providing stiff competition. My friend’s lease doesn’t require her to pay the landlord’s land tax, but that’s only because there isn’t currently one. It does require her to pay all rates, which of course she does. Naturally any landlord is going to recover a land tax from the tenant, which will undoubtedly add a cost to my friend’s business. That cost will have to be passed on to her customers – the consumers in our society.

I also act for a very successful retail chain tenant. They have purchasing power and brand recognition. Building owners are pleased to have them as tenants. Because of its name, this client manages to negotiate much more favourable lease terms. On many occasions, it doesn’t pay a lot of the usual outgoings payable under a commercial lease. I am certain this client, and other large retail tenants, will negotiate out of paying any land tax under any lease, but the same almost certainly won’t be available to my friend’s very small business.

In 2009, a tax working group put together by John Key’s government assessed the taxable land base at $460 billion. If the land tax was 1% of this, it would raise $4.6 billion in revenue. That sounds a lot, and it is to a government keen to spend it. But if one excludes Labour’s exemptions, it’s possible that only half of that amount is available. Although a land tax is very efficient, as land cannot be moved, it would also be highly disproportionate because of highly inflated Auckland land values when compared to land values in other parts of the country. It would hit Aucklanders hard. Using my examples in this article, the family that owns the unit on the leasehold Ngati Whatua land will pay about $700 per year in land tax, based on that unit’s share of the land value of $7,000,000.00. Yet, my friend’s small retail shop would face a tax of $4,000.00 per annum, based on an underlying land value of her leased building of $400,000.00. My friend doesn’t yet earn $4,000.00 per annum. She’s also the sort of person who votes Labour.

I started off this article by repeating what Jacinda Ardern said last week. Ardern also said that she wanted the country’s tax system to be “fair”. For my friend’s sake, and for the sake of the young family in the leasehold apartment, I hope she follows through on this promise.

Taxes tend to work well when they are comprehensive and without exception. (G.S.T. is a prime example of this) When you start exempting specific things from a tax policy to introduce complexity and the scope for wealthy people to "structure their affairs" so as to minimise their bill.

FWIW, I would be all in favour of a comprehensive Capital Gains Tax (including the family home) if it was done in conjunction with income tax decreases (so that it was revenue-neutral). ie. a move away from only taxing "income" and beginning to tax "capital" as well.

tdgeek

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#1865133 14-Sep-2017 11:23

networkn:

tdgeek:

Too much exageration. I accept the bias but even so. They have policies that feel with help. And there is no housing crisis I'm told anyway

We will have to agree to disagree over exaggeration. You can google for JA stating she didn't want the PM job, it's a video from January if I recall correctly.

Despite what you might feel, I was prepared to give Labour a fair shot under JA, but honestly other than being a bit more upbeat, and having nice aspirations, the actual ability to deliver on promises left me cold, and most policies were similar enough I'd rather the Devil I know.

I don't think JA is right for the PM role right now, but I think she has some potential. I wanted to see her stick with it longer than 5 weeks, I don't think many would consider that unreasonable.

There is a bit about National I don't like right now, I don't want tax cuts, I'd prefer higher social spending. I don't want extra languages when a fair number of our kids can't speak and write the primary language of NZ as it is.

I want to see healthcare and education required to be more efficient so we get better value of the money we already spend, as well as spending more sensibly.

You did say miracles and so on! :-)

Yes, 5 weeks, if it was 5 months whole new ball game for the campaign. As to PM, I feel she would have done well, but yes, a 3 year apprenticeship is ideal

Your policies are like mine. I dont want anything or need anything so I can take a "lets get some things fixed and improved" And I see National failing on many issues, thats my bias. But, this campaign has given them a kick up the jacksy, they do need to be more socially focussed, thats not a red, commy thing as it has been in the deep past, this is 2017 not 1967.

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#1865136 14-Sep-2017 11:24

Pumpedd:

Actually is shows incompetence, and they think they can manage New Zealand Inc. !!!!

Not so much incompetence, as inexperience, and a lack of proper planning brought about by terrible polling 5 weeks ago, followed by a change of leader who in my opinion is trying to do too much. If this had happened 6 months ago, things would be quite different.

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#1865137 14-Sep-2017 11:29

networkn:

allio:

Well my call of half an hour ago was exactly wrong - Labour have now categorically ruled out any (not already announced) new taxes in the first term.

Wow, way to stick to your "beliefs" Labour.

So they believe these taxation policies are critical to NZ, but since they won't get elected with them in place, they have compromised their values to take power. How will they fund the miracles they plan on performing to solve the serious issues they see in NZ now?

Oh come on now. Most of your posts at least make sense, even if they are wrong. Are you now seriously going to maintain that National (or any other political party) does not 'compromise their values' to take power? I have never known any party in any country that did not make compromises once it got elected. You are just reaching for things to bash Labour with. This is a BS non-argument.

Plesse igmore amd axxept applogies in adbance fir anu typos

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#1865139 14-Sep-2017 11:31

tdgeek:

You did say miracles and so on! :-)

Yes, 5 weeks, if it was 5 months whole new ball game for the campaign. As to PM, I feel she would have done well, but yes, a 3 year apprenticeship is ideal

Your policies are like mine. I dont want anything or need anything so I can take a "lets get some things fixed and improved" And I see National failing on many issues, thats my bias. But, this campaign has given them a kick up the jacksy, they do need to be more socially focussed, thats not a red, commy thing as it has been in the deep past, this is 2017 not 1967.

Well, it's a matter of perspective. I don't believe Labours policies would significantly change the housing crisis, it would in my opinion take a miracle. I am not saying they have used the worlds miracle. Is that clearer?

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#1865141 14-Sep-2017 11:32

6FIEND:

Labour are forecasting taking an additional $16,964m per year in tax revenue by the end of their first term. (Yes, that's almost 17 Billion dollars extra tax that we will need to pay every year under Labour (once they have completed their programme)

Surely they aren't predicting an economic upturn of that magnitude? The commentary I have seen is predicting a slight downturn.

Labour will indirectly impose extra costs on business via various policies. Increased costs mean reduced profits which means reduced revenue from company tax. They have also announced they will explore new taxes that will effect companies.

My question is what will be the net change in govt tax revenue will be. A couple of examples: -

(1) A royalty on water: Reduces profits (mineral royalties are deductible costs). This reduces company tax liability and company tax revenue for govt. What will be the net change in govt tax revenue?

A lot of work is required to answer that question for the various types of business in and it requires an understanding of the relationship between extraction and revenue. This will be more consistent in water bottling than in irrigation.

(2) Increases in wage costs from new bargaining provisions: A $1 increase an wages cost is a $1 decrease in profit and a $0.28 decrease in company tax. That will be offset by increased PAYE taxable income. At the lower levels of income (where most unions operate), that is a net tax loss for the govt.

Other stuff ...

Labour has budgeted on zero budget increases across most many departments. I don't think that's realistic (especially with lots of new policy to roll out) so I would guess the $17B extra tax revenue required is an underestimate.

Labour will implement a large and rapid construction program in AKL (light rail and houses). This will require the presence of a large workforce in Auckland for several years. Will there be an increase in construction costs and and overall increase in demand (price) for housing?

I think Labour are headed for a "mother of all budgets" moment. When they realise upon taking office and talking to the grown ups, that they cannot deliver what they have promised and will have to go back on number of key policies and publicly made assurances.

Mike

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#1865142 14-Sep-2017 11:32

tdgeek:
6FIEND:

tdgeek:

6FIEND:

networkn:

How will they fund the miracles they plan on performing to solve the serious issues they see in NZ now?

Is it too soon to enquire about a fiscal hole again?...

Might let the market sort it out :-)

Is the secret, non disclosed tax reform the source of all the funds needed for all their policies?...

No - Labour have already detailed the other sources of funds.

...if you round that up to 2.5bn per year, then that leaves a $14.5bn per year shortfall.

You suggested that this should be treated seriously - It's probably worth doing precisely that.

Labour are spending 12B more and taxing more, thats known, paying debt back at a lower rate, and doing more, so as they have had to back track the tax reform, the policies will need to back track too. Cannot avoid that. Or we can throw stones at each other, thats my point. many here ha e stated good things aboyt the other side, but most of the time its anger rather than serious discusison

Actually, I'm a big fan of how 6FIEND generally responds with facts and sources to make an argument rather than stone throwing or name calling.

If they are spending 12B more and taxing 2.5B more, then they won't just be repaying debt at a lower rate, they'll be increasing debt by almost 10B per year. (Until they cancel some spending promises)

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#1865144 14-Sep-2017 11:35

networkn:

I agree compromise is a good thing, but they should have thought things out better in the first place. JA came out like a bull in a china shop. I believe it's an inexperience and age thing. I am a very similar age to JA and I don't believe I know anyone in my age group I'd feel comfortable leading the Government. There isn't a lot of downside to Labour under JA being in opposition for 3 years longer.

C'mon, seriously? You don't think you are qualified to run the country but you feel qualified to post endless opinions here about how it should be done. And you accuse Jacinda Ardern of inconsistency!

Plesse igmore amd axxept applogies in adbance fir anu typos

allio

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#1865145 14-Sep-2017 11:36

6FIEND:

To the main point - while I am in agreement with you that investment in business and industry is preferable to residential housing, it is far from conclusive that a CGT will deliver that, or result in lower house prices. In fact, many other OECD countries with a CGT have experienced the same house-price inflation that NZ has.

Thanks for your post, which is very reasonable and thoughtful and I can't disagree with a lot of it. But this line that "Australia has a CGT too and their prices are even worse than ours" is really misleading. Our house price inflation in the last few years is really, really bad. Way worse than any other comparable countries, all of whom have CGTs.

If we'd followed the same track as Australia we'd actually have a lot of those mythically affordable $600k houses right now. We don't, which is why an entry level house is $800k.

Anyway - even if a CGT doesn't slow house price inflation one bit, that means it's basically free tax revenue for the government, right? Why isn't that a good thing?

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