Politics 🗳️ NZ Politics
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John Nick
Contributor
They have spent it all on air fares to send back the 501s
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So will we soon - the economy has been tanking since the new year.*
It's almost like taking billions out of the economy in one foul swoop would have consequences
*Source: Nicola Fucking Willis
The economy has been tanking for the last two years.So will we soon - the economy has been tanking since the new year.*
It's almost like taking billions out of the economy in one foul swoop would have consequences
*Source: Nicola Fucking Willis
Maybe Willis should just print billions more $ like GR did and RB can drop the OCR TO 2%.
Put another two million road cones out and we are fine again.
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No, read her statement - its has started to deteriorate since the turn of the year.
Facts, not rhetoric - the distinction is important.
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I actually don't understand how National, ACT or the officials from the Newshub article got their numbers. I'm guessing it's all about the assumptions they make as to what interest rates will do and the increase in the number of investment properties purchased in over the next four years.
Revealed: Landlord tax cuts will cost hundreds of millions more than ACT, National campaigned on
That's despite them already scaling back the promised policy.www.newshub.co.nz
Looks like the economists that said nationals numbers didn’t stack up were spot on
If we assume that the officials figures are correct and the first year of the ability for landlords to deduct interest of mortgage will cost the government $360,000,000 when landlords still allowed to claim 50% of the interest for the 2023-24 year, that would mean there would be $720,000,000 total deductions to landlords if they were able to claim all the interest as a deduction.
For the year 2024-25, landlords are able to claim 80% which would mean the government is missing $576,000,000 (if the interest rates stay the same and the number of mortgaged properties doesn't increase), yet the officials are saying, based on the newshub article, that the cost to the government would be $780,000,00.
For the year 2026-27, landlords are able to claim 100% which would mean the government is missing $720,000,000 (if the interest rates stay the same and the number of mortgaged properties doesn't increase), yet the officials are saying, based on the newshub article, that the cost to the government would be $855,000,00.
For the year 2027-28, landlords are again able to claim 100% which would mean the government is missing $720,000,000 (if the interest rates stay the same and the number of mortgaged properties doesn't increase), yet the officials are saying, based on the newshub article, that the cost to the government would be $915,000,00.
Adding the numbers of cost to the government based on $720,000,000 PA and adjusted for the percentage landlords can claim, the total cost to the tax payer is $2.375 billion or an average cost to the taxpayer in lost revenue is $595,000,000 PA. This is closer to National's figures of $650,000,000 PA than the officials figures of $2.915 billion or an average cost to the taxpayer in lost revenue is $730,000,000 PA.
But all of this is based on the numbers put into a computer model and then assumptions of interest rates and the number of properties being brought as investments over the next four years and the assumption of how many of those would require borrowing to purchase.
Even then, the dropping interest rates will impact how much additional revenue won't be going to the government. A 2% drop in interest rates from 7% down to 5% means that the government revenue between the existing scheme (when it reaches 0% deducibility) and the proposed scheme (when it returns to 100% deductibility) reduces the government money by 29.5%.... yet the official figures show it going up... not down even though interest rates are dropping (the ASB have just done a third interest rate drop in two weeks).
We have been seeing the signs for a while now. Last year we were in a technical recession. Facts, not rhetoric as some might say. Even GR had to finally admit that spending was out of control and started to try and reign it in.
It had been indicated for a long time now that we will see a tough 2024 - even before the election and a change of Government.
Hopefully we start to see some relief towards the back end of this year and not in to next year like some are saying.
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I reckon the next GDP update (21 March) will have us firmly in a recession, and the next CPI update (Apr) will continue to track down
Based on those two things my guess is that it will strengthen the market's consensus of the OCR coming down. But the RBNZ will hold it a while longer just to make sure
If I was buying a house, I reckon there is a decent (say 9 month) window between now and the OCR coming down meaningfully where there are plenty of listings and gun shy buyers
I went through Westfield the other day. Plenty of people walking around. Not many carrying shopping bags full of purchases
Prime Minister Christopher Luxon unable to assure promised Budget surplus amid tax cuts
"It's quite obvious to us that we're dealing with a deteriorating economic set of circumstances," the prime minister says.
www.rnz.co.nz
He lacks any gravitas at all.
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John Nick
Contributor
And Kahunas
Prime Minister Christopher Luxon unable to assure promised Budget surplus amid tax cuts
"It's quite obvious to us that we're dealing with a deteriorating economic set of circumstances," the prime minister says.
He lacks any gravitas at all.
And a basic understanding of macroeconomics.
