Hard News by Russell Brown

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Hard News: Press Play > Budget

184 Responses

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  • Matthew Hooton, in reply to HenryB,

    Its because its not a zero budget. That's just a slogan. Go to page 20 of http://www.treasury.govt.nz/budget/2012/estimates/est12sumtab.pdf Government spending goes up from an estimated $79.5 billion this year to $81.7 billion next year, etc. This doesn't have anything to do with the SOE share sales.

    Auckland • Since Aug 2007 • 56 posts Report Reply

  • Matthew Hooton, in reply to Johnny Red,

    Whatever "austerity" means, it doesn't apply to NZ. Net debt has gone from about -$5b in 2008 and will reach $71b in 2016, a $76b stimulus over 8 years. And NZ hasn't been in recession since 2008/9. I think people just use the word "austerity" because it got a lot of play in France during the presidential election, so its kind of fashionable, and it aligns with their preconceptions about what a National budget looks like.

    Auckland • Since Aug 2007 • 56 posts Report Reply

  • DexterX, in reply to Matthew Hooton,

    Net debt has gone from about -$5b in 2008 and will reach $71b in 2016,

    That is not good.

    Auckland • Since Nov 2006 • 1201 posts Report Reply

  • BlairMacca, in reply to Matthew Hooton,

    And we cut the tax base why?

    Wellington • Since Apr 2007 • 201 posts Report Reply

  • Sacha, in reply to BlairMacca,

    'to encourage growth' #fail

    Ak • Since May 2008 • 16794 posts Report Reply

  • BlairMacca, in reply to Sacha,

    Thats working out well for us then

    Wellington • Since Apr 2007 • 201 posts Report Reply

  • Sacha, in reply to BlairMacca,

    it does however mean that those people can now afford to buy shares in privatised state assets. #winning

    Ak • Since May 2008 • 16794 posts Report Reply

  • chris, in reply to Matthew Poole,

    I’m not sure the work will dry up

    Nothing to do with employment.

    Oh. I was toying with the idea of someone like my grandmother who employs an old family friend to help out around he house (mon-fri) suddenly feeling whimsically inclined to do the work herself rather than allow the Government's talons a scratch of this newly nonrefundable. As it is, the likelihood of that being declared now slips down to not at all.

    中国 • Since Jan 2010 • 900 posts Report Reply

  • DeepRed, in reply to Sacha,

    it does however mean that those people can now afford to buy shares in privatised state assets. #winning

    Probably the same people who speculate on the property money-go-round.

    What would be greater poetic justice than unleashing an anti-trust rottweiler on these privatised state assets, waiting for the share prices to plummet, then buying them back for a fraction of what they sold for?

    The southernmost capital … • Since Nov 2006 • 4365 posts Report Reply

  • DexterX, in reply to DeepRed,

    Probably the same people who speculate on the property money-go-roundt

    I don't think so - the assumption is wrong along the similar line of a CGT moving investment from ppty to "export/growth ventures".

    I have more faith in benevolent Aliens landing in Wellington and providing us with futuristic technology that will save us all.

    Auckland • Since Nov 2006 • 1201 posts Report Reply

  • DeepRed, in reply to Matthew Hooton,

    Whatever "austerity" means, it doesn't apply to NZ.

    It's because the "austerity" is selective. Case in point: Bill English justifying the Roads of National Significance escaping Treasury scrutiny.

    The southernmost capital … • Since Nov 2006 • 4365 posts Report Reply

  • Gareth Ward, in reply to Luke Williamson,

    Agreed. If personal rate goes up, then everyone becomes a company, and if company rate goes up, then the company moves offshore. Not easy.

    The Scandinavian dual taxation systems make this work - capital income/corporate tax rates are set dramatically lower than labour income tax rates. Yes there are the incentives for reclassifying labour income but they don't mean a flat tax is the ultimate answer...

    Auckland, NZ • Since Mar 2007 • 1721 posts Report Reply

  • Lucy Telfar Barnard, in reply to Andrew C,

    don't quite understand what you mean here. If you sell an asset that makes a profit you pay a % in tax. You can still buy a better/bigger home with the remaining profit cant you? Just because you chose to spend it on a bigger home doesn't mean the profit is unrealized, it just means you spent the profit.

    Except that you don't get to spend the profit on a bigger home, you have to spend it buying one that is the same as the one you just sold.

    If I buy a house for $200K, and don't do anything to it other than basic maintenance, and then sell it 10 years later for $300K, then in theory I've made a capital gain of $100K, which is taxed. So let's say the tax is 15% (as proposed by Labour, though not on the family home), and we'll pretend I've managed a private sale so as to avoid the additional cost of agents' fees; the CGT would be $15K. So I've sold my $300K house and I'm left with $285K. However, if I want to buy a house that is basically the same in every way to the one I've just sold - not bigger, not more opulent, not a better area, just the same - it will cost $300K - that's what I got for my house, so that's what they're worth. If I want to move, I'm going to have to either down-grade the size, quality or location of my home, or increase my mortgage.

    In practice a version of this already happens in the form of agent fees, which on a sale of $300K would amount to about $12K, it's just that it goes to real estate agents and not the government. I haven't noticed REA fees doing anything to make home-buying more affordable, probably the opposite, so I think the ONLY way a CGT would help towards that goal would be if it applied only to investment properties and not to the family home. As owner-occupier properties (presumably?) still make up the bulk of the market, they would set the market price, thus making rental property less attractive as an investment, and quick do-ups less attractive as a business.

    Wellington • Since Nov 2006 • 375 posts Report Reply

  • DexterX,

    The emphasis on increasing rates of taxation or introducing new taxes is flawed and is not a solution - the tax take needs to increase as a result of an expanding economy.

    Auckland • Since Nov 2006 • 1201 posts Report Reply

  • Jeremy Eade,

    I'm sure many Homes won't approve.The budget is not the genuis economic plan that we want .There are some incredibly talented economists emerging. Because they are the people ironically in demand. We were first with one way of economic thinking yet we have no boldness in respecting our own studies.

    auckland • Since Mar 2008 • 1112 posts Report Reply

  • DexterX, in reply to Jeremy Eade,

    It is not economists that are needed.

    Auckland • Since Nov 2006 • 1201 posts Report Reply

  • Jeremy Eade, in reply to DexterX,

    It's a money problem. You look at it from all angles. Our GDP is a good haul.

    auckland • Since Mar 2008 • 1112 posts Report Reply

  • DexterX, in reply to Jeremy Eade,

    The problems are behavioural and cognitive or a lack of.

    Auckland • Since Nov 2006 • 1201 posts Report Reply

  • Paul Campbell,

    Any one know - the 10% bonus for paying off a student loan early is going away - anyone know when - I want to pay off some of the kids loans if I can

    (10% ROI - better than anything else on the market)

    Dunedin • Since Nov 2006 • 2179 posts Report Reply

  • Paul Campbell,

    BTW if I were a student and owed $20k in student loans and could borrow more interest free - right now I could borrow another $20k, use it to pay off the original $20k, claim the 10% early pay off bonus, and end up owing $18k (rinse wash repeat)

    I'm always been amazed that people haven't been shrinking their loans this way - it always seemed very rort-worthy

    Dunedin • Since Nov 2006 • 2179 posts Report Reply

  • Fooman, in reply to Paul Campbell,

    I’m always been amazed that people haven’t been shrinking their loans this way – it always seemed very rort-worthy

    Well, the drip feed nature of student loan draw downs makes this unlikely. The most you get ever get in one shot was ~$1k for course related costs (text books, maybe laptops these days). The rest came in at a max of $150 per week, and for most students on a loan, was needed to pay for inconsquentials like rent, power and food.

    FM

    Lower Hutt • Since Dec 2009 • 87 posts Report Reply

  • Graeme Edgeler, in reply to Paul Campbell,

    Any one know – the 10% bonus for paying off a student loan early is going away – anyone know when – I want to pay off some of the kids loans if I can

    (10% ROI – better than anything else on the market)

    Legislation was being passed under urgency yesterday. I presume they'll either have gotten it done, or will get it done today.

    Also, I think you'll find the ROI isn't as good as you make out. You'll probably save/make more if you just leave the outstanding balance of your loan to be eroded by inflation.

    Wellington, New Zealand • Since Nov 2006 • 3009 posts Report Reply

  • Graeme Edgeler, in reply to Jeremy Eade,

    The budget is not the genuis economic plan that we want .

    When was the last budget any country had which was or included a genius economic plan?

    Wellington, New Zealand • Since Nov 2006 • 3009 posts Report Reply

  • Graeme Edgeler, in reply to BlairMacca,

    And we cut the tax base why?

    We broadened it. It now includes those earning under $9980.

    Wellington, New Zealand • Since Nov 2006 • 3009 posts Report Reply

  • Paul Campbell,

    OK thanks - rats, should have done it last week when it was rumoured - this is money we've set aside to partially pay off our kid's loans so they don't start life completely burdened - I'm not planning in giving it to them to enjoy while they let their loans deflate

    Dunedin • Since Nov 2006 • 2179 posts Report Reply

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