Hard News: Press Play > Budget
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Matthew Hooton, in reply to
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.
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Matthew Hooton, in reply to
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.
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DexterX, in reply to
Net debt has gone from about -$5b in 2008 and will reach $71b in 2016,
That is not good.
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BlairMacca, in reply to
And we cut the tax base why?
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Sacha, in reply to
'to encourage growth' #fail
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BlairMacca, in reply to
Thats working out well for us then
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Sacha, in reply to
it does however mean that those people can now afford to buy shares in privatised state assets. #winning
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chris, in reply to
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.
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Kumara Republic, in reply to
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?
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DexterX, in reply to
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.
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Kumara Republic, in reply to
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.
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Gareth Ward, in reply to
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...
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Lucy Telfar Barnard, in reply to
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.
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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.
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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.
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DexterX, in reply to
It is not economists that are needed.
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Jeremy Eade, in reply to
It's a money problem. You look at it from all angles. Our GDP is a good haul.
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DexterX, in reply to
The problems are behavioural and cognitive or a lack of.
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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)
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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
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Fooman, in reply to
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
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Graeme Edgeler, in reply to
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.
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Graeme Edgeler, in reply to
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?
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Graeme Edgeler, in reply to
And we cut the tax base why?
We broadened it. It now includes those earning under $9980.
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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
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