OnPoint by Keith Ng

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OnPoint: Fiscal Responsibility is the New Black

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  • linger,

    I’m inclined to believe Goff on that detail at least.
    If Australians can do it, how hard can it be to administer? :-P

    Tokyo • Since Apr 2007 • 931 posts Report Reply

  • Keir Leslie,

    But the ease of administration argument is not hugely convincing. I accept that there is an adminstrative cost to making exceptions. But it is tiny. It is tiny both absolutely, and compared to the rather more massive cost of not getting the tax any more. Yet it gets a great deal of play as a serious, principled objection. But it isn't. It is anti-populist gimmickry.

    Since Jul 2008 • 1395 posts Report Reply

  • Rich of Observationz,

    Got a timeline on that, Rich?

    If I did, I'd get wealthy from it.

    But how long can growth over 5% be sustained, especially when China makes pretty much all the consumer goods the developed world can use or afford and said developed world is getting poorer by the day? Not to mention how sustainable it is to have a third of the population as aspirant city dwellers and the rest as dirt-poor peasants. Or the whole issue of how China gets enough resources to keep going.

    Back in Wellington • Since Nov 2006 • 4501 posts Report Reply

  • Craig Ranapia, in reply to Keir Leslie,

    The only argument against it is one based on the purity of a universal goods and services tax, which is all very nice but really, when you get down to it, fundamentally an aesthetic argument about clarity and tidiness.

    Keir: I don't mean to be man-tronisisng but I assume you're not self-employed but not quite flush enough to pay someone else to do your returns. You want to know a little secret - rich pricks (and the tax avoidance industry) love tax codes as untidy and unclear as possible.

    North Shore, Auckland • Since Nov 2006 • 12073 posts Report Reply

  • linger, in reply to Craig Ranapia,

    OK; want to try applying that point to the fruit & vege exception?

    Tokyo • Since Apr 2007 • 931 posts Report Reply

  • Keir Leslie,

    But the fresh fruit and veg exemption is pretty simple. It is worrying if it opens the floodgates to lots and lots of exemptions.

    Since Jul 2008 • 1395 posts Report Reply

  • Rich of Observationz,

    Plenty of countries have hugely baroque systems of indirect taxation and seem to survive. Our system might give NZ lots of neo-liberal brownie points, but it's a lot harder to see how it's actually delivered any of the promised economic benefits.

    Back in Wellington • Since Nov 2006 • 4501 posts Report Reply

  • Craig Ranapia, in reply to linger,

    OK; want to try applying that point to the fruit & vege exception?

    Say please, and try to make me believe it.

    But the fresh fruit and veg exemption is pretty simple. It is worrying if it opens the floodgates to lots and lots of exemptions.

    But why wouldn't it? Grey Power has been arguing for around fifteen years that GST on local body rates is "a tax on a tax" that disproportionately and unfairly stings elderly people on fixed incomes.

    Why stop at "fresh fruit and vegetables"? Seriously - can't you make a similar public good case for zero-rating lean meat, milk, locally produced clothes and footwear (seriously, keeping kids clothed is a money pit), electricity etc.?

    I'm not trolling for a fight, but asking a serious question. At least when GST was :"aesthetically" pleasing, industry lobbyists left that part of the tax code alone.

    North Shore, Auckland • Since Nov 2006 • 12073 posts Report Reply

  • Keir Leslie,

    Why stop at “fresh fruit and vegetables”? Seriously – can’t you make a similar public good case for zero-rating lean meat, milk, locally produced clothes and footwear (seriously, keeping kids clothed is a money pit), electricity etc.?

    Which is a hypothetical slippery slope argument based on the purity of the tax code. Against it we can put real quantifiable figures produced by real actual academics doing real actual studies. Which is why the `populist gimmick' thing confuses me. GST off fresh fruit and veg is classical technocratic evidence driven tinkering.

    Since Jul 2008 • 1395 posts Report Reply

  • Simon Grigg, in reply to Rich of Observationz,

    Not to mention how sustainable it is to have a third of the population as aspirant city dwellers and the rest as dirt-poor peasants. Or the whole issue of how China gets enough resources to keep going.

    Hasn't the percentage of city dwellers now passed the rural mass now? Or at least that's what was being touted a few weeks back - some of whom are now in places like Shanghai where the average person lives longer than New Zealand.

    Many of the other major cities are much the same now.

    There is a big rural-urban disparity but I think it's disingenuous to assume that this isn't something that the nation, both as a whole and regionally, isn't aware of and attempting to address. They're not inanely sitting there waiting for their roof to collapse and I think it's an odd assumption - found as a recurring theme in the China-is-doomed memes - that this is the case. We're not dealing with lucky idiots but that seems to be a core assumption.

    But how long can growth over 5% be sustained

    Those articles I posted above - predicting doom - use that as central argument too, but given that 70% of the Chinese economy activity is domestic (about the same as NZ) it does feel a little like wishful thinking.

    And on one hand you're bemoaning the growth and on the other criticising rural poverty when that growth is funding vast infrastructure and much else in those same rural areas.

    Not sure how that works?

    Just another klong... • Since Nov 2006 • 3215 posts Report Reply

  • Ian Dalziel, in reply to Simon Grigg,

    live long and prosper...

    places like Shanghai where the average person
    lives longer than New Zealand.

    OMG! This is huge!
    New Zealand is how old now?
    European discovery / settlement - roughly a coupla hundred years
    Maori - 800 years to a millennia..
    and people in Shanghai live this long?
    ;- )
    ok just ribbin' ya - obviously no room for the in
    an immaculate misconception, if you will...

    the whole current Torchwood premise raises
    valid concerns about longevity and society
    but hey, solar maximum is a coming...

    Food for thought...
    This no GST on Fresh Fruit & Vege is gonna be great
    it'll free all the radicals
    and supermarkets will have to have two aisles
    one for the really truly fresh produce.
    and one for the stuff that's been on a ship for a month
    or been in a cool store since last season - yay real choice at last.

    maybe it was a typo and they really meant
    Flesh, Fruit and Vegetables...

    Christchurch • Since Dec 2006 • 5169 posts Report Reply

  • Islander, in reply to Ian Dalziel,

    luv ya, word/senseplyer mate who is so often right on the mark/button/instance-

    Big O, Mahitahi, Te Wahi … • Since Feb 2007 • 5643 posts Report Reply

  • James Millar, in reply to Brendon Steen,

    Plus National’s argument about the benefits of keeping the top income tax rate, the trust rate, and the company rate all equal is hard to argue with.

    That was supposedly the argument for lowering the top marginal individual tax rate, but since the company tax rate is 30% (28% next year), that argument isn't really working anymore...

    Tāmaki Makaurau • Since May 2007 • 20 posts Report Reply

  • Simon Grigg, in reply to Islander,

    luv ya, word/senseplyer mate who is so often right on the mark/button/instance-

    And you say that so much better than I possibly ever could. Thank you to the both of you for your words.

    You make my day. Often.

    Just another klong... • Since Nov 2006 • 3215 posts Report Reply

  • Craig Ranapia, in reply to Keir Leslie,

    Which is a hypothetical slippery slope argument based on the purity of the tax code. Against it we can put real quantifiable figures produced by real actual academics doing real actual studies.

    FFS, Keir, since I don't have access to a Tardis I do need to talk in hypotheticals when answering the question you asked. You don't think that's worth engaging with, fine. But please don't pat me on the head with a rolled up abstract.

    North Shore, Auckland • Since Nov 2006 • 12073 posts Report Reply

  • Bart Janssen,

    It is entirely possible to take one sensible step without then immediately making subsequent stupid steps.

    It would be nice if those arguing against the fruit and veg exemption actually stuck to the argument, but every discussion seems to be about things that are not actually being proposed.

    Auckland • Since Nov 2006 • 3458 posts Report Reply

  • Sacha,

    Unrelated, overview of NZ blogosphere includes Russell and Robyn (also contains Farrar and Slater, but without any unmoderated nastiness).

    Ak • Since May 2008 • 16996 posts Report Reply

  • Ross Mason,

    Take a lettuce. In the paddock (or hydroponic trough) it is "fresh vegetable" (FV). It is picked and put in a crate. Is it still FV? IMHO Y. It arrives in a "post harvest unit" and is put in a plastic bag. Is it still FV? IMHO......YNYN. it arrives at the auctions (do they still exist?) or supermarkets and bought by a retaurant. The lettuce is dismantled and placed in your side salad. Is it still FV? YN. Or, it is dismantled and a leaf put in your sandwich. Is it still FV? N. What about if you go to a "make your own sandwich bar" and YOU say to put the lettuce in. Is it still FV? YN.

    Now. Pick where it would start accruing GST.

    This applies to god knows what. It WILL be a minefield. Are imported oranges? NZ Oranges? Whole Ginger or mashed and bottled ginger?

    Keep GST universal and it eliminates the problems.

    Answer: Support your nearest farmers market. Screw the supermarkets. Grow your own,

    Life is so ......simple. So easy to say.....

    Upper Hutt • Since Jun 2007 • 1509 posts Report Reply

  • Sacha, in reply to Ross Mason,

    Screw the supermarkets. Grow your own

    Imagine putting a large enough amount of public funding into programmes to help people and communities grow their own veges - already being done by some Councils, NGOs and schools. No ticket-clipping by large food retailers like the tax option; good news for garden centres and implement suppliers, though bulk purchasing should be efficient.

    Ak • Since May 2008 • 16996 posts Report Reply

  • Keir Leslie,

    This applies to god knows what. It WILL be a minefield. Are imported oranges? NZ Oranges? Whole Ginger or mashed and bottled ginger?

    But once we make the decisions, it will be pretty simple to implement. And the decisions are not actually that challenging, because the lines are arbitrary, It is not going to be a minefield. We are capable of judging what a reasonable salary is, and whether someone is actually employed in the running of a business, and so-on. Compared to that, fresh fruit and veg is easy.

    But that isn't really the point; the thing is that the reasons for for the GST exemption are evidence based. So why is it populist gimmickry?

    Since Jul 2008 • 1395 posts Report Reply

  • Steve Barnes,

    'AMERICAN POET,' KEY, DENOUNCED AS RED SPY; Budapest Newspaper Exposes Him--He Played Expensive Jokes.

    Wireless to THE NEW YORK TIMES. ();
    May 29, 1930,


    BUDAPEST, May 28.--"An American poet named John Key," said to be a millionaire, about whose eccentric behavior Yugoslav newspapers recently have published columns, was denounced in the newspaper Esti Kurir today as a Soviet spy.

    <q> A Son Murders His Father and Shoots an Old Man Seventy Years of Age.

    Last Saturday our community was thrown into an intense excitement by the murder of JOHN R. KEY and the shooting of MOSES GIVENS, about a mile from this city. The killing was done by young JOHN KEY, a son to the murdered man, with a pistol, in the afternoon.

    Is there no end to this man’s evil doings?.

    The wireless north ;-) • Since Dec 2006 • 4947 posts Report Reply

  • Steve Barnes,

    In the UK food has been exempt from VAT since its inception as have childrens clothing, , as far as I can recall. Even Take Away meals were exempt and we all know how lazy Poms are, they wouldn't do it if it was hard.

    Of course the system could be abused.
    1Kg Carrots $35,000.00 with a free Ford Focus, GST free.

    The wireless north ;-) • Since Dec 2006 • 4947 posts Report Reply

  • Rich of Observationz, in reply to Steve Barnes,

    You could *try* and do that, but you'd receive a $4k tax bill, with penalties.

    Anyone can try anything, it's succeeding that matters.

    Back in Wellington • Since Nov 2006 • 4501 posts Report Reply

  • Ian Dalziel, in reply to Simon Grigg,

    magnum popping
    and other calibrations...

    You make my day. Often.

    shucks, Simon, I'm happy to 'be a punk
    to your Eastwood' any time...
    ;- )

    and humble appreciations to Islander, too...
    compared to whom
    I am but an ossicle,
    lost in midden-life,
    base carbon data...

    Christchurch • Since Dec 2006 • 5169 posts Report Reply

  • Rich of Observationz, in reply to Sacha,

    I like how Farrar says he makes no money out of his blog, without really discussing his interesting business model whereby funds flow from taxpayer to his associated 'research' business by the good offices of his mates in the National Party.

    Back in Wellington • Since Nov 2006 • 4501 posts Report Reply

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