Public finance

More lies of the left exposed

Lindsay Mitchell exposes the lies of the left over unemployment.

In February the Daily Blog screamed the headline,

EXCLUSIVE: Billions of dollars stolen from the unemployed

which claimed a hundred thousand plus people were being denied an unemployment benefit.

The number of those on average receiving a benefit compared to the number of unemployed in the household survey is now about 130,000 fewer than it was in the late 1990s.

The missing 130,000 are the reason why so many social agencies are being inundated for help for food, clothing, shelter despite the so-called recovery in the economy over the last year…
tax cuts for the rich have been paid for by denying entitlements to the poorest and most vulnerable is theft from working people of about a billion dollars a year. It is time to get angry.

The tax cuts for the rich have been paid for by denying entitlements to the poorest and most vulnerable is theft from working people of about a billion dollars a year. It is time to get angry.

Then Labour’s Chief of Staff, Matt McCarten, still writing for the Herald on Sunday, picked up the accusation:  Read more »

Hosking points out the obvious flaws in Labour’s wood policy

Mike Hosking sees right through Labour’s wood policy…another that they will no doubt claim is a “game changer”.

In what the Labour Party will hope is some sort of turning point in their poll run, they’ve started talking wood. They’re pro-wood. They’re getting into and involved in the wood industry.

The potential upside of this is it differentiates them from the Government. It gives them a point of difference. What they’re up to is incentivising the industry – there will be tax breaks for it.

Now the immediate problem I had with the idea is that it originated from their manufacturing inquiry they held a couple of years ago. That was the cross party ‘crisis’ inquiry where Labour, the Greens and NZ First wandered around the country listening to people complain about manufacturing. The big problem being that while they were all in a room together wringing their hands and moaning, manufacturing was going gang busters. Manufacturing has been expanding for the past 18 months in a row and across all sectors. Manufacturing levels are at record highs.

The single best thing Labour could do is declare that the wood industry in crisis and hold an investigation into it.  Read more »

Let’s have a living tax on companies

David Farrar discusses a “living tax” proposal for offshore companies who pay little or no tax in New Zealand…like APN and Fairfax.

This old fashioned concept of paying tax on profit must be disposed of. We should demand a fair tax system. Let’s calling it a living tax – the level of tax a company should pay so that it no longer feels wretched and is helping fund a civilised society.

I think a 15% tax on revenue would be a fair living tax.  Both the Herald and the Dom Post have repeatedly run stories and editorials comparing tax to turnover, not profit. So we should start the living tax campaign with them. Here’s how it would work:  Read more »

A Guest Post – Equality vs Inequality

A reader emailed this today:

Labour and the Greens are making a lot of noise at present about the widening gap between the rich and the poor.  So I have put a few thoughts down on this matter.

1.       Labour and the Green Taliban talk much about the rich getting richer and the poor getting poorer.  What they are in effect doing is driving a wedge  into our society as they harp on about this and are in effect creating a divide in our society.  Those who are poor should hate those who are successful because the implication the left want to spread to their useful idiots is that those who are successful must have done so by taking the resources off the poor and exploiting them.

2.       The left harp on about the fact that those who earn the high salaries are not paying their fair share of tax.  This is utter bulls**t.  Those earning $100,000 are paying significantly more multiples of  tax than the people earning $40,000 or $50,000.  Someone earning $200,000 per annum is probably paying in excess of $60,000 income tax per annum.  It is bulls**t to say that person is not paying his / her fair share.  The reality is that the 12% are paying 75% of the tax.  Effectively to prop up the spending promises of successive Governments, but especially the last Labour Government.

3.       The rich cannot help but get richer.  If I have $1,000,000 in assets and invest those assets at 5% (very modest I know but hold with me) then in 12 months I will have $1,050,000 in assets.  If I have $1,000 invested a 5% then in 12 months I will have $1,050. The rich cannot help but get richer. That is a fact of life.  Of course those with the $1,000,000 use their money to create jobs and capital investment so the whole pie for society can grow bigger.  22 years ago I came back to NZ without a cent to my name.  In that time with very hard work, careful management and setting goals I have managed to accumulate a reasonable asset base. More about that that later.

4.       The good news is that here in NZ we generally have equal opportunity to succeed.  That is what counts.  True some have more opportunity than others and different circumstances.  But I ask this.  Is it possible for a kid from NaeNae or Otara to become a partner in a law firm, a business owner, a policeman, a teacher, an artist, a member of the military, a civil servant, or even the Prime Minister.  The answer is yes. That kid can do whatever he/she wants so long as they have a game plan, some life goals and the intelligence.  All jobs have different pay scales and the outcomes will be different, but it is the opportunity that counts.  While Labour and the Greens seem intent on focusing and splitting the nation with their envy of success, and hatred of the poor,  the National Government is getting on with doing what it reasonably can to ensure all our kids can follow their life dreams.  What the Labour/Green envy and hatred does is tell the kids from Otara and NaeNae that you can’t be successful because you are poor.  The Labour and Greens suppress self-responsibility and ambition and think only the Government can help those at the bottom of the heap.    Read more »

Fairfax columnist recommends Fairfax be shut down

Dave Armstong has written a column that is online at Stuff.co.nz.

He thinks that, though loony, Labour’s Facebook Ban is actually on the right track. apparently the new standard for corporate tax isn’t the law, it is some sort of arbitrary moral code dreamed up by leftists.

Labour’s revenue spokesman, David Clark, a bright young star under David Shearer but a supernova under Mr Cunliffe, decided that if Facebook didn’t pay its fair share of tax (it paid $28,000 tax in 2012 – less than is paid by a demoted backbench Labour MP), a “back pocket” threat would be to shut them down.

Mr Clark’s Facebook facepalm quickly had the libertarians up in arms – avoid all the tax you like but banning internet sites only happens in despotic Third World regimes. New Zealand does far more civilised things like helicopter raids on residents we think may have breached US piracy laws.

Mr Clark was quickly defriended by his colleagues, who doubted Labour would take such draconian action. His relationship status within Labour quickly dropped from “liked” Dunedin MP to “single”.

Mr Key found Mr Clark’s comments “interesting” and Bill English called them “nuts”. However, the finance minister conceded that multinational companies like Facebook should “pay their fair share”.

At present many multinationals don’t. They avoid tax by various legal ways, including creating subsidiaries in low-tax places like the Cayman Islands. It is these subsidiaries that receive most of the company’s revenue, on which they pay negligible tax. The company’s expenses are channelled to relatively high-tax countries like New Zealand, where a loss is made.

Like Fairfax? When did they last pay tax in New Zealand?   Read more »

Who wants to be a millionaire like the Norwegians?

While the green taliban and their luddite enablers oppose exploration for oil and gas off shore in New Zealand have a good hard look at what Norway has achieved as a result of gas exploration.

Norway’s sovereign wealth fund has ballooned so much due to high oil and gas prices that every person in the country became a theoretical millionaire this week.

The Nordic nation is proving to be an exception as others struggle under a mountain of debts.

Set up in 1990, the fund owns around 1 percent of the world’s stocks, as well as bonds and real estate from London to Boston.

The surplus revenue is collected in the Government Pension Fund Global.

A preliminary counter on the website of the central bank, which manages the fund, rose to 5.11 trillion kroner (£503.46 billion/$828.66 billion).

This equates to fractionally more than a million times Norway’s most recent official population estimate of 5,096,300.

It was the first time it reached the equivalent of a million kroner each, central bank spokesman Thomas Sevang said.   Read more »

Bludging filmmaking ratbags still sticking their hands out

Subsidies are evil, no matter who gets them.

I fail to see why the tax breaks and law changes put in for The Hobbit weren’t able to flow through tot he rest of the economy. Surely if they are good for film-making then they are equally good for other industries.

Governments should not be in the business of picking winners…as generally they pick losers…or worse the private owners pocket the corporate welfare when they sell out.

The Herald has a story of cry-baby film-workers.

New Zealand’s high exchange rate going back several years has been a big factor in the pull-out by foreign studios.   Read more »

Good onya Joe, he takes “show me the money” literally

I wonder if we could swap Bill English for Joe Hockey.

In one of his first acts as Treasurer, Mr Hockey will instruct the Australian Tax Office to send taxpayers a personalised and itemised receipt thanking them for their tax dollars and detailing where the money was spent.

The receipts will show, in dollar terms, how much of a person’s tax bill was spent on welfare, health, education and other areas.

The level of gross government debt will also be displayed prominently with a break-down per person.

Treasurer Hockey said the receipts, which will be sent at tax time starting next year, would boost transparency and hold government to account.  Read more »

Dagos power scheme falls flat on its face

The Spanish government has moved to arrest a massive problem in their power industry after maintaining a generous subsidy scheme for the deployment of renewable projects.

Widely seen as one of the most urgent economic challenges facing Madrid, the tariff deficit is the product of the steep gulf between the price of energy paid by consumers and the cost of production. The shortfall has been growing at a rate of about €5bn a year.

The €26bn financial hole reflects not least the generous system of subsidies for the renewables sector that was created by the previous government, and which sparked a boom for solar farms and wind parks across the country. Energy experts warn that at least some of these installations will no longer be able to operate profitably under the new regime.  Read more »

More on TUIA union tax write off

A reader emails about my post on Sunday covering some shonky accounting at TUIA union.

Some comment on the TUIA tax write off.  There are three possible ways TUIA got the write off they received.

  1. Staff incompetence on IRD’s part;
  2. misleading conduct by TUIA; or
  3. A combination of 1 and 2.

I am guessing a combination of 1 and 2 and I will explain why.

The Tax Administration Act sets out IRD’s duties and provides for the circumstances where a write off can occur.

The Inland Revenue Commissioner (and all his staff) has a duty to uphold the integrity of the tax system and a duty to collect the highest net revenue practical.

Its pretty simple when you consider both these duties – if you owe tax and you have the means to pay you need to pay. If you don’t have the means to pay you may get relief.  If you undermine the integrity of the tax system (decide not to pay tax, engage in tax avoidance) you will still have to pay but the mercy may not be there if you can’t pay. In these circumstances rather than provide relief through a write off it may be considered more appropriate to bankrupt or liquidate and also consider some criminal sanctions.   Read more »