Economy

Governments find carbon taxes a little taxing

Paris 2018

Everyone thinks the climate needs fixing but no one wants to pay. Thus, the ‘yellow vests’in France prompted a humiliating back-down from the government and the Washington state government lost a vote on Carbon Tax.

The voters in Washington state rejected, 56% to 44%, a proposal to tax carbon dioxide emissions, a clear defeat for environmentalists after years of attempts to curb climate change through economic incentives.

Initiative 1631, which proposed to levy a tax of $15 per metric ton of carbon emissions, would have made Washington the first state in the nation to raise the cost of fossil-fuel intensive activities like driving gas-powered vehicles and heating buildings with natural gas in an effort to encourage clean energy sources like wind and solar power.

Even with such heavyweights as billionaires Michael Bloomberg, Tom Steyer, and Bill Gates supporting a broad coalition of progressive groups, tribes, health advocates, unions in a true blue Democrat state, they still could not get it across the line. And, it was the third attempt!

Meanwhile, across the border to the north, the number of premiers and potential premiers who are saying “no” to Trudeau’s proposal for a carbon tax is growing.

Read more »
Tagged:

The start of the downward slide

Stuff reports: quote.

New Zealand’s economy has slowed sharply in recent months, recording the weakest quarter of growth in almost five years.

Statistics New Zealand said on Thursday that in the three months to September 30, New Zealand’s gross domestic product (GDP) grew by 0.3 per cent, well below the 1 per cent expansion in the June quarter.

Weighed down by a fall in food manufacturing,  and ongoing weakness in the construction sector, it was the weakest three months period since December 2013. end quote.

I had expected poorer GDP figures (not to be confused with the Crown accounts, but at least I know the difference) for the September quarter, primarily because of fuel price increases. To find that these are partly caused by a downturn in the construction sector, therefore, is a bit of a surprise. quote.

Infrastructure investment and gross fixed capital formation – a measure of how much businesses are investing – both fell, but remain positive for the year to September 30.

The primary sector grew strongly, expanding by 2.2 per cent, while the services sector grew but at a slower pace than in recent quarters.

GDP growth per capita – the amount the economy grew per person – was zero in the September quarter.

Economists predicted that the economy would show some sign of slowdown after the unexpectedly strong June figures, however most predicted quarterly growth of around 0.5 per cent.

The weak September quarter means that the economy has expanded by 2.6 per cent since September 30, 2017, the slowest annual expansion since the end of 2013. end quote.

Read more »

See it before it’s gone forever

Caption: Look closely, and you can just spot a budget surplus in there. Picture: Garry Walton.

Young Australians are waking up today to a sight which few of them will ever remember seeing. Their elders talk in hushed whispers of this strange and beautiful sight on the horizon, once thought lost forever. But, even as the children rub their eyes and stare in awe, the beguiling mirage shimmers and threatens to vanish forever.

No, I’m not talking about the perennially doomed winter snow, the Tasmanian thylacine, or even Elvis.

Read more »

Labor a threat to the economy? Now there’s a surprise

A Labor government is a threat to the economy? Tell us something we don’t know, Captain Obvious. Quote:

Banks, property, builders, health insurance and energy giants are all tipped to suffer under a Labor government, Macquarie analysts say.

One winner, however, would be infrastructure developers, Macquarie says in an assessment of the impact of Labor policies should Bill Shorten win next year. End of quote.

In other words, it’ll be a repeat of the same sort of socialist Ponzi schemes that Labor so disastrously oversaw the last time they had their claws on the Treasury. “Building the education revolution” (they just love their Maoist slogans), pink batts, the National Broadband Network: the only people who got rich from Labor’s incompetence were cowboy contractors. Quote:

Read more »

Whaleoil transcription: Mike Hosking and Sir Michael Cullen on a capital gains tax

Mike Hosking.

Newstalk ZB

Starts at 7:53

Mike

It looks like a capital gains tax is coming our way.  The tax working group has reached a consensus, the government have to tick it off, but the group, you have to remember, was set up to achieve such a task.  The chair, Sir Michael Cullen, is back with us.  Good morning to you.

Sir Michael

Good morning Mike.

Mike

In your view, what is the value of a capital gains tax?

Sir Michael

I think there are three areas.

First there’s the long-term sustainability of a tax system as in general terms capital income tends to grow faster than labour income and we’ve seen that shift already over the last 20 years. And we will see more of it as the… as the structure of the population changes so aah… more people in the older age groups with higher capital income, so if we don’t do this then basically those… more of the tax will have to come from labour income in the future.

And secondly, what’s called horizontal equity. Two people with the same income, different sources, (unintelligible) equity, capital income is concentrated amongst the higher, obviously higher wealth, higher income groups aah… and we have a very, very flat tax system apart from that in NZ when you take all factors into account, because GST is a bit regressive, income tax is a bit progressive, umm… you end up with a pretty flat system owing to national standards.

Mike

I know this is a government decision obviously, but what… a capital gains on what?

Read more »

Labour are now investment experts

The current government is showing itself to be a very poor steward of the New Zealand economy. Having trashed lucrative industries for no good reason, and having destroyed business confidence, it still has labour reforms sitting in the wings that will take us back to the heady days of the 1970s. Unfortunately, these guys have not finished yet. Now they want to use their considerable lack of experience to manage the NZ Super Fund. That is $40 billion of assets they are about to play with.

Would you trust David Parker with $40 billion? Personally, I wouldn’t buy a used car from him.

Read more »

Power supply at risk

A newspaper  reports: quote:

Our electricity supply is at risk. The average spot price over a normal year is about 7c/kWh. Since the beginning of October wholesale electricity prices have averaged about 40c/kWh. On November 1 they peaked at about $1 but recent rain in the hydro catchments has dropped the prices somewhat.

Prices have been much higher than they should have been because of shortages of generating plant, water (the hydro lakes were quite low), gas and coal. The generators controlled the prices and seemed to be making hay while the sun shines.

If this was so, they were playing games with the economy and making a nonsense of the market. The high prices should not have happened. They prove that the market is not fit for purpose.

We still face a serious risk that it won’t rain enough in the next few months to refill the lakes and/or we won’t have enough gas and coal to relieve the hydro stations and build up hydro storage. The lakes need to be close to full by mid April to ensure we have sufficient reserve energy for the winter. end quote.

Read more »

Consumer confidence lowest since 2012

Photoshopped image credit: Pixy

As we head into Christmas, A newspaper reports that consumer confidence is at its lowest since 2012… which, you may remember, was the end of the GFC. quote.

Consumer confidence dipped in October as people fret about the future.

The ANZ Roy Morgan consumer confidence index fell to 115.4 in October from 117.6 in September. People’s optimism about their present situation lifted slightly to 122.0 from 120.2 but the future conditions index fell to 111.0 from 115.9, the lowest since late 2015.

“Consumers are feeling good about the here and now, but concerns about the future are clearly growing. Consumers haven’t been this pessimistic about their own and their family’s financial outlook one year ahead since mid-2012,” said ANZ chief economist Sharon Zollner.

Perceptions regarding the next year’s economic outlook fell 5 points to a net 1 per cent expecting conditions to deteriorate versus a net 4 per cent expecting an improvement in the prior survey. The five-year outlook fell 4 points to positive 14 per cent. end quote.

Read more »

Inflation hits 1.9%

Kiwiblog reports that inflation is slowly creeping upwards, with the level reaching 1.9% in September 2018. quote.

The consumers price index (CPI) increased 1.9 percent in the September 2018 year, driven by higher petrol prices, Stats NZ said today.

This follows a 1.5 percent annual  rate for the June 2018 year. For the September 2018 quarter, the  rate was 0.9 percent.

“Petrol prices increased 19 percent in the September 2018 year,” prices senior manager Paul Pascoe said. “This is the highest annual increase since June 2011.” … end quote

Read more »

Letting fees banned on rentals

It was only a matter of time.  The government takes another swipe at nasty landlords.  This from StuffQuote:

Tenants will no longer have to pay letting fees to agents and landlords, after Parliament voted to ban the practice.

Housing and Urban Development Minister Phil Twyford estimated the change could prevent the handover of up to $47 million in a payments he said were “unfair” and had “no economic rationale”.  End of quote.

No economic rationale?  What a stupid statement.  The letting agents provide a service to both tenants and landlords.  That service costs time and therefore money to provide, which is passed on to the person letting the property.  There you go Phil, that’s the ‘economic rationale’.  Quote: Read more »