Posts by Matthew Poole
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OnPoint: Election 2011: GO!, in reply to DexterX,
I consider a CGT will have two major effects:
Yes, we know you do. But you cannot produce evidence to support your position, whereas Elliffe's piece examined real-world implementations of CGTs and determined that there would be long-term benefits to NZ to also implementing a CGT. He is also not a raving leftie.
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OnPoint: Election 2011: GO!, in reply to Lucy Stewart,
The trick is in making sure that “a bunch” is not “everyone”, that we can attract other countries’ best and brightest in return, and in ensuring that a significant portion of them do come back.
This is the big hook. As you say, we'll never keep all of our highly-educated young people, and a majority will travel at some point. I'm being pushed to do a stint with one of my employer's overseas offices to get exposure to projects of a scale that'll never come to NZ. If I do so, it'll ultimately be to NZ's gain because the skills that I'll bring back couldn't be honed in the same way here.
However, when people are coming from overseas and saying "It's so expensive to buy a house" and "It's so expensive to buy food" and "Your wages are so low", that's not encouraging high-quality long-term immigration. Quality of life only makes up for so much when you're going from EUR or GBP250k to NZD90k and losing work variety to boot.
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OnPoint: Election 2011: GO!, in reply to BenWilson,
Which might tip the scales away from the near singlemindedness with which NZers get into property in the first place. It might channel the funds into more productive activity than buying an existing house and charging people to live in it.
If it does that, then it might lead to the economic growth that Dexter's been rabbiting on about:
The only thing that will improve things is a a susutaioned lift in GDP and an increase in wages.
If Kiwis started putting money into things other than houses, hell even if they put money into banks, we might see changes in the economy. We're a relatively smart country, but there are some incredibly stupid aspects to the economy, not least of which is the absolute stranglehold that housing has on the investment market. Banks are obsessed with the stuff, as are "mum and dad investors", which is to the long-term detriment of our economy. Like the poor guy up in Whangaparoa who lives in the same street as the 50-something-house landlady and had to go overseas to get $2m in capital investment for a software project. She can leverage about $10m in lending out of banks, but he can't find a fifth of that for something that will create high-value jobs.
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OnPoint: Election 2011: GO!, in reply to DexterX,
I suggest it will be funded from rents.
Yes, probably, but that spike in rent increases will be a one-off and will long-term be offset by reduced rates of rent increases due to property values not climbing as rapidly as they do when one can engage in speculative behaviour with only minimal disincentive. You haven't responded as to why you think that's an incorrect assumption, either, and you're determinedly looking at the near-term impact without considering whether there might be any longer-term offset that ends up with renters being better-off.
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OnPoint: Election 2011: GO!, in reply to Paul Williams,
From 2012, all undergraduate places in public universities will be funded by the Commonwealth at a set rate that is part of the cost and the balance will be payable by the student
A conversation I had several years ago, with someone from Australia, implied strongly that a number of places in Australian universities are fully-funded and the availability of partial funding to other places is limited by the particular course. So high-social-utility degrees such as medicine would have relatively more funded places available than degrees such as commerce, or arts, or what have you.
That may've been a mistaken interpretation on my part, but the cap on the number of places with access to even partial funding was explained clearly and is at odds with what you state here. So maybe things have changed? -
OnPoint: Election 2011: GO!, in reply to DexterX,
Who's talking about a CGT on unrealised gain, though? All the serious suggestions I've seen are based on taxation of gains realised at time of sale. So try addressing that one, please.
Oh, and you haven't explained why we should consider your opinion to be more worthy of contemplation than the opinion of taxation practitioners who've looked at the impacts of CGT schemes introduced overseas.
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OnPoint: Election 2011: GO!, in reply to Paul Williams,
I’m not convinced the interest free arrangements are justified. Perhaps CPI would be better
If students had some reasonable hope of getting their education funded other than through a student loan. maybe. But for pretty much everyone there is no option except a loan. Scholarships are few, applicants are many, and many of them don't offer enough to cover even a year of tuition never mind anything else.
Contrast this with Australia, where there are many fully-funded positions available on top of scholarships.
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OnPoint: Election 2011: GO!, in reply to Paul Williams,
Matthew, I actually think it’s reasonable to assess the total value of public funding for tertiary by including student support. The VCs are arguing that student support is too generous.
Including student allowances, absolutely. But student loans are loans. They're at least technically an asset, not an operating expense, and should not be included in a truthful evaluation of money spent on providing tertiary education. That'd be like a bank saying it spends $x on providing mortgages where $x includes the value of the mortgages themselves.
As for too generous, a student allowance barely covers rent in Auckland. It's far from generous, and the changes to living costs for student loans makes it worse - you now can't get the accommodation supplement if you're getting living costs, as I understand it.
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OnPoint: Election 2011: GO!, in reply to giovanni tiso,
People say you throw your money away if you give it to a landlord – what, as opposed to a bank?
Well, when you give it to the bank you are buying back a little more of an asset that will, very likely, appreciate in value. If you give it to a landlord, you’re helping them buy back a little more of an asset that will, very likely, appreciate in value.
That said, if renting keeps your outgoings lower than they would be with owning, and you’re smart with how you use the difference, you can end up with a large cash surplus that gives you significant flexibility in your accommodation arrangements in later life.That’s the thing that people don’t quite see. If you rent for less than a mortgage but you consume the difference, then you’re worse-off because you have nothing to show for it. But if you invest the difference wisely you still end up with an asset, albeit with less capital in-flow to the value of the difference between your total mortgage repayment and your rent payment.
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OnPoint: Election 2011: GO!, in reply to giovanni tiso,
I’ll happily trade a class of traders and speculators who own ten-plus houses at a time with one of serial renovators who flick a single one off every couple of years.
I'm not willing to give even that much. Property ownership is still a dream for me, even with a top-bracket job, and my position is very definitely "Fuck y'all!"