So, how about that budget?

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Ultimate Geek

#1309500 21-May-2015 19:30

A quick update for those in this thread who thought investing in Kiwisaver for kids was a dumb idea.

My 5yo currently has $1,578.91
My 3yo currently has $1,433.24

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#1309529 21-May-2015 20:00

I guess I should have shopped around with servicing fees. The one I asked had pretty stinging fees.

pinkydot

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#1309530 21-May-2015 20:01

the travel levy is just similar to the departure tax years ago before leave the country & have to pay the $25 dollar.
so now it's just pretty much they bring it back but just 3 dollar cheaper.

Geektastic

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#1309586 21-May-2015 22:25

dejadeadnz: The axing of the Kiwisaver headstart is a terrible, terrible idea. We need to create a savings culture and also to support the capital markets and to encourage people to save using investment vehicles like managed funds instead of just throwing every $$ at the property markets. This isn't going to help.

That one surprised me too. As does the lack of tax free pension saving.

MikeB4

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#1309587 21-May-2015 22:37

Irrespective of the $1000 startup going people should still start retirement saving at the earliest time. Using the startup going as an excuse not to is a huge mistake.

networkn

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#1309594 21-May-2015 23:09

hashbrown: A quick update for those in this thread who thought investing in Kiwisaver for kids was a dumb idea.

My 5yo currently has $1,578.91
My 3yo currently has $1,433.24

Same except the other way around. The numbers are REMARKABLY Similar.

mattwnz

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#1309597 21-May-2015 23:19

MikeB4:
sidefx: Is it just me, or is the plan to address current housing issues laughable? $52 million set asside, so I guess that'll help, what, 60 people with current house prices in Auckland? :p

And wow, they can axe the $1000 instantly, just like that? I'm somewhat surprised by that one.

unfortunately there is not a bottomless pit so to pay for much needed measures to help the poor and child poverty sacrifices need to be made else where. As for the Auckland housing issues the government has already
announced measures along with Reserve Bank measures.

It wasn't an election policy to scrap it. It appears it was done to push the surplus next year, as without axing it, there would hardly be one.

The problem is that now there are very few incentives to join kiwisaver. The tax credits will likely to end too, as they have already been halved. So I suspect we will end up with a compulsory system before too long, due to the kickstart incentive being removed. If it was compulsory, then they wouldn't be paying it anyway. It's funny how 2 decades ago NZ voted against compulsory super, and it is likely we will end up with it in the end.

The housing measures won't do very much, just will push rents up. The problem in Auckland is supply, and too many people needing to live there. Really they should be looking at distributing the population around the country more. Would help if they put fibre into all the small towns.

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mattwnz

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#1309600 21-May-2015 23:23

pinkydot: the travel levy is just similar to the departure tax years ago before leave the country & have to pay the $25 dollar.
so now it's just pretty much they bring it back but just 3 dollar cheaper.

Levy = new tax. Local councils are also trying to use the word levy for extra charges, as a way to not push up rates. When infact it is just a tax by another name.

6FIEND

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#1309707 22-May-2015 10:03

sen8or: Ofcourse no budget addresses the causes, merely the symptoms, why is child poverty so bad in NZ? Is it spread throughout all NZ or concentrated in a few areas, if spread out, then its a wider issue than if concentrated in only a small amount of communities. If it is concentrated in a small amount of communities, what do they have in common, why are they different, what can be done to stop repeating the cycle?

I am 100% certain that not everyone will agree with me on this, but I'll share my opinion anyway. (Have at it guys!)

With a very small number of exceptions, there is no such thing as child poverty. Instead, we have a relatively large number of individuals who have children that they can't afford to care for. In many cases, they cannot afford to care for themselves yet continue to have additional children despite this worsening their ability to support their family. In other cases, the situation may have arisen through unforeseen circumstances (separation, accident, death of a parent, etc.) but the upshot is the same - the child is not responsible for providing for itself - the parent/guardian is, and it is the parent/guardian who's resources (and priorities) determine whether or not the child is well cared for or neglected.

Why is it so bad in NZ? The relative "badness" of the problem compared to where else and by what measure is a very open-ended question...

Is it spread out or concentrated in a small number of communities? I believe that this is mostly a cultural issue. Half of all Maori at the last census were under the age of 24. That is an enormous burden of care for an ethnicity that has a comparatively limited income. (only 18% of Maori earn more than $50k p.a.) To provide contrast for this overrepresentation of "children", the national median age is over 38yrs old. This phenomenon is even worse in Pacifica communities, with half of that population being under the age of 21, and also having a much lower income rate. (though I can't place my finger on the correct reference for this)

What can be done to stop repeating the cycle? Nothing palatable. The key outcome required is to stop people having children that they cannot afford to care for themselves. This could be achieved in two possible ways (that I can think of)
1) By making changes to our Welfare policy to provide a flat rate benefit that gives no consideration to the number of children that you support. (With enormous social cost and with a great deal of child suffering)
2) By somehow preventing individuals from procreating unless they can prove that they are able to provide for their offspring. (removal of self determination, Government regulated wombs, etc.)

Instead we accept the more humane and civilised alternative - compulsorily taking money from those that can provide for themselves (and their families) and distributing it amongst those who cannot. If the assessed outcome of this is that it's not sufficient then our only option is to take even more money from those that are living within their means. (of course, the effect of doing this, you move some borderline families from independence onto welfare)

Probably the best long-term approach is not "stopping" the cycle so much as "weaning people off it".
This is achieved through education.

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#1309725 22-May-2015 10:38

6FIEND:
With a very small number of exceptions, there is no such thing as child poverty. Instead, we have a relatively large number of individuals who have children that they can't afford to care for.

So what you're saying is that we don't have child poverty, what we have is lots of children who live in circumstances where they don't get enough of the necessities of life to flourish, due largely to a lack of money?

Potayto, potahto.

Geektastic

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#1309728 22-May-2015 10:41

6FIEND:
sen8or: Ofcourse no budget addresses the causes, merely the symptoms, why is child poverty so bad in NZ? Is it spread throughout all NZ or concentrated in a few areas, if spread out, then its a wider issue than if concentrated in only a small amount of communities. If it is concentrated in a small amount of communities, what do they have in common, why are they different, what can be done to stop repeating the cycle?

I am 100% certain that not everyone will agree with me on this, but I'll share my opinion anyway. (Have at it guys!)

With a very small number of exceptions, there is no such thing as child poverty. Instead, we have a relatively large number of individuals who have children that they can't afford to care for. In many cases, they cannot afford to care for themselves yet continue to have additional children despite this worsening their ability to support their family. In other cases, the situation may have arisen through unforeseen circumstances (separation, accident, death of a parent, etc.) but the upshot is the same - the child is not responsible for providing for itself - the parent/guardian is, and it is the parent/guardian who's resources (and priorities) determine whether or not the child is well cared for or neglected.

Why is it so bad in NZ? The relative "badness" of the problem compared to where else and by what measure is a very open-ended question...

Is it spread out or concentrated in a small number of communities? I believe that this is mostly a cultural issue. Half of all Maori at the last census were under the age of 24. That is an enormous burden of care for an ethnicity that has a comparatively limited income. (only 18% of Maori earn more than $50k p.a.) To provide contrast for this overrepresentation of "children", the national median age is over 38yrs old. This phenomenon is even worse in Pacifica communities, with half of that population being under the age of 21, and also having a much lower income rate. (though I can't place my finger on the correct reference for this)

What can be done to stop repeating the cycle? Nothing palatable. The key outcome required is to stop people having children that they cannot afford to care for themselves. This could be achieved in two possible ways (that I can think of)
1) By making changes to our Welfare policy to provide a flat rate benefit that gives no consideration to the number of children that you support. (With enormous social cost and with a great deal of child suffering)
2) By somehow preventing individuals from procreating unless they can prove that they are able to provide for their offspring. (removal of self determination, Government regulated wombs, etc.)

Instead we accept the more humane and civilised alternative - compulsorily taking money from those that can provide for themselves (and their families) and distributing it amongst those who cannot. If the assessed outcome of this is that it's not sufficient then our only option is to take even more money from those that are living within their means. (of course, the effect of doing this, you move some borderline families from independence onto welfare)

Probably the best long-term approach is not "stopping" the cycle so much as "weaning people off it".
This is achieved through education.

Yes. I agree.

The problem is that everyone thinks it is fine to earn $50k (or even less) and there seems to be very little aspiration to ensure that the next generation does better. As the saying goes, if you keep on doing the same thing do not expect different results.

The corollary of this is that 2% of taxpayers are paying almost 25% of the total tax take. Now, that is not fair by any measure and nor is it wise. That 2% is likely to be the best educated and most mobile (it includes my wife and I who have the legal right to live and work in at least 30 countries with no further visas or paperwork, for example). So, it is theoretically possible (and likely if taxes etc became less attractive) that the 2% (or a significant enough proportion thereof) that is paying the almost 25% could get up and leave. Even a quarter of that 2% leaving would have a significant effect on the NZ economy in terms of tax take.

A solid strategy for increasing the earnings of New Zealanders is required, which must be multi-pronged. Education is part - we need a literate and skilled workforce in disciplines that international employers require. We need to look at attracting more firms to be based here instead of Australia or wherever and one way of doing that is to look at how we tax them and ensure that if they come here and employ our citizens, they get rewarded for doing so instead of penalised and demonised.

The whole area of raising income so that the weight of paying taxes can be more evenly spread seems to be largely ignored.

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#1309730 22-May-2015 10:47

Geektastic:
Yes. I agree.

The problem is that everyone thinks it is fine to earn $50k (or even less) and there seems to be very little aspiration to ensure that the next generation does better. As the saying goes, if you keep on doing the same thing do not expect different results.

The corollary of this is that 2% of taxpayers are paying almost 25% of the total tax take. Now, that is not fair by any measure and nor is it wise. That 2% is likely to be the best educated and most mobile (it includes my wife and I who have the legal right to live and work in at least 30 countries with no further visas or paperwork, for example). So, it is theoretically possible (and likely if taxes etc became less attractive) that the 2% (or a significant enough proportion thereof) that is paying the almost 25% could get up and leave. Even a quarter of that 2% leaving would have a significant effect on the NZ economy in terms of tax take.

A solid strategy for increasing the earnings of New Zealanders is required, which must be multi-pronged. Education is part - we need a literate and skilled workforce in disciplines that international employers require. We need to look at attracting more firms to be based here instead of Australia or wherever and one way of doing that is to look at how we tax them and ensure that if they come here and employ our citizens, they get rewarded for doing so instead of penalised and demonised.

The whole area of raising income so that the weight of paying taxes can be more evenly spread seems to be largely ignored.

However the big down side of this is the more your domestic incomes grow the less competitive your products become for export and then starts a downward spiral. Then of course we cannot attract overseas Corporations to set up here and we start a migration of local companies offshore seeking greater competitiveness. There are many examples of this in history.

Geektastic

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#1309779 22-May-2015 11:27

MikeB4:
Geektastic:
Yes. I agree.

The problem is that everyone thinks it is fine to earn $50k (or even less) and there seems to be very little aspiration to ensure that the next generation does better. As the saying goes, if you keep on doing the same thing do not expect different results.

The corollary of this is that 2% of taxpayers are paying almost 25% of the total tax take. Now, that is not fair by any measure and nor is it wise. That 2% is likely to be the best educated and most mobile (it includes my wife and I who have the legal right to live and work in at least 30 countries with no further visas or paperwork, for example). So, it is theoretically possible (and likely if taxes etc became less attractive) that the 2% (or a significant enough proportion thereof) that is paying the almost 25% could get up and leave. Even a quarter of that 2% leaving would have a significant effect on the NZ economy in terms of tax take.

A solid strategy for increasing the earnings of New Zealanders is required, which must be multi-pronged. Education is part - we need a literate and skilled workforce in disciplines that international employers require. We need to look at attracting more firms to be based here instead of Australia or wherever and one way of doing that is to look at how we tax them and ensure that if they come here and employ our citizens, they get rewarded for doing so instead of penalised and demonised.

The whole area of raising income so that the weight of paying taxes can be more evenly spread seems to be largely ignored.

However the big down side of this is the more your domestic incomes grow the less competitive your products become for export and then starts a downward spiral. Then of course we cannot attract overseas Corporations to set up here and we start a migration of local companies offshore seeking greater competitiveness. There are many examples of this in history.

OTOH Singapore and Hong Kong, both tiny islands, seem to have managed to do quite well by basing their economies on international trade.

I agree it is a balance but we need to do something to increase incomes rather than just keep patching holes by bunging taxpayer's money at them and hoping this time will be different...

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#1309785 22-May-2015 11:34

Geektastic: OTOH Singapore and Hong Kong, both tiny islands, seem to have managed to do quite well by basing their economies on international trade.

I vote that we move NZ to a suitable location to be a gateway to China.

MikeB4

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#1309787 22-May-2015 11:38

Geektastic:
MikeB4:
Geektastic:
Yes. I agree.

The problem is that everyone thinks it is fine to earn $50k (or even less) and there seems to be very little aspiration to ensure that the next generation does better. As the saying goes, if you keep on doing the same thing do not expect different results.

The corollary of this is that 2% of taxpayers are paying almost 25% of the total tax take. Now, that is not fair by any measure and nor is it wise. That 2% is likely to be the best educated and most mobile (it includes my wife and I who have the legal right to live and work in at least 30 countries with no further visas or paperwork, for example). So, it is theoretically possible (and likely if taxes etc became less attractive) that the 2% (or a significant enough proportion thereof) that is paying the almost 25% could get up and leave. Even a quarter of that 2% leaving would have a significant effect on the NZ economy in terms of tax take.

A solid strategy for increasing the earnings of New Zealanders is required, which must be multi-pronged. Education is part - we need a literate and skilled workforce in disciplines that international employers require. We need to look at attracting more firms to be based here instead of Australia or wherever and one way of doing that is to look at how we tax them and ensure that if they come here and employ our citizens, they get rewarded for doing so instead of penalised and demonised.

The whole area of raising income so that the weight of paying taxes can be more evenly spread seems to be largely ignored.

However the big down side of this is the more your domestic incomes grow the less competitive your products become for export and then starts a downward spiral. Then of course we cannot attract overseas Corporations to set up here and we start a migration of local companies offshore seeking greater competitiveness. There are many examples of this in history.

OTOH Singapore and Hong Kong, both tiny islands, seem to have managed to do quite well by basing their economies on international trade.

I agree it is a balance but we need to do something to increase incomes rather than just keep patching holes by bunging taxpayer's money at them and hoping this time will be different...

But with more population in one street than we have total :P

My wife is in Hong Kong now on her way back from a conference in Beijing she says Hong Kong is a place with distinct two halves and does not like it.

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