Politics 🗳️ NZ Politics

[wizard of Tauranga]

An economic discussion group I’m in has looked at the 1% tax on every transaction policy of one of the minor crackpot parties - NZ loyal. This is not a plug for the party but a look at that one policy.

If you take the politics and party out of it, it’s an interesting idea used by several successful countries over a long period of time.

Eg Singapore has a 7% transaction tax and they are one of the richest per capita. Dubai has a 1% rate (complimented by oil!)

It’s different to GST in that it’s every transaction - you sell your house you pay it. You withdraw cash at an ATM you pay it. You buy shares you pay it. Rent and mortgage goes up by 1%, etc

Might be a little radical for NZ but it has its benefits (and risks) and could be used by the left or right as a viable alternative or to compliment the current tax system.

 

[Bay39er]

An economic discussion group I’m in has looked at the 1% tax on every transaction policy of one of the minor crackpot parties - NZ loyal. This is not a plug for the party but a look at that one policy.

If you take the politics and party out of it, it’s an interesting idea used by several successful countries over a long period of time.

Eg Singapore has a 7% transaction tax and they are one of the richest per capita. Dubai has a 1% rate (complimented by oil!)

It’s different to GST in that it’s every transaction - you sell your house you pay it. You withdraw cash at an ATM you pay it. You buy shares you pay it. Rent and mortgage goes up by 1%, etc

Might be a little radical for NZ but it has its benefits (and risks) and could be used by the left or right as a viable alternative or to compliment the current tax system.

wizard of Tauranga
Are you able to give me a link to the 7% transaction tax in Singapore as I was in Singapore recently and withdrew funds ex an ATM and did not have to pay any transaction tax

 

[John Nick]

wizard of Tauranga
Are you able to give me a link to the 7% transaction tax in Singapore as I was in Singapore recently and withdrew funds ex an ATM and did not have to pay any transaction tax

My wife is in Manila now but had a stopover in Singapore a few days ago and her cards don't appear to have any tax..

 

[Rick O’Shay]

wizard of Tauranga
Are you able to give me a link to the 7% transaction tax in Singapore as I was in Singapore recently and withdrew funds ex an ATM and did not have to pay any transaction tax

Could be wrong here but isn't the transaction tax like GST? You wouldn't pay it on ATM transactions other than any bank fees which are usury. And I think it's going up next year.

 

[snake77]

I read it like GST as well.

I haven't read much into it besides a few headlines or captions but Liz Gunn had issues getting her candidates ready. That lack of attention to detail wouldn't give me any confidence in her tax plans.

 

[wizard of Tauranga]

Read more about it here:

Financial transaction tax - Wikipedia

en.wikipedia.org

My Singapore example was actually a GST. Lots of countries use it as one of a range of taxes at a small rate and on different things.

I think Vision NZ is proposing it as the only govt income and I can’t see how it would raise enough income.

 

[Bay39er]

Read more about it here:

Financial transaction tax - Wikipedia

en.wikipedia.org

My Singapore example was actually a GST. Lots of countries use it as one of a range of taxes at a small rate and on different things.

I think Vision NZ is proposing it as the only govt income and I can’t see how it would raise enough income.

So your saying Vision NZ is proposing a GST of 1% on everything and not just goods and services?

 

[wizard of Tauranga]

So your saying Vision NZ is proposing a GST of 1% on everything and not just goods and services?

I haven’t read their actual policy I was on a forum discussing financial transaction taxes in general after Vision NZ raised it

 

[Noitall]

Hundreds of landlords to become tax-cut millionaires under National's plan - analysis

"There is no benefit to giving millions of dollars to already wealthy landlords."

www.newshub.co.nz

Polls will be interesting tomorrow.

 

[wizard of Tauranga]

Hundreds of landlords to become tax-cut millionaires under National's plan - analysis

"There is no benefit to giving millions of dollars to already wealthy landlords."

www.newshub.co.nz

Polls will be interesting tomorrow.

Wow… a Council of trade unions analysis

Interest deductibility is a ligitimate business expense that everyone including treasury said was stupid to remove and would push up rents. A said a lot about the consequences at the time and it’s all proved correct.

No other country has these daft accounting rules.

 

[Noitall]

Wow… a Council of trade unions analysis

Interest deductibility is a ligitimate business expense that everyone including treasury said was stupid to remove and would push up rents. A said a lot about the consequences at the time and it’s all proved correct.

No other country has these daft accounting rules.

Don’t shoot the messenger

 

[wizard of Tauranga]

Don’t shoot the messenger

I was shooting the article

And particularly the biased CTU that knows nothing about the housing market or benefits.

Linking the two is simply emotive blackmail and divisive when each is an independent decision.

 

[miket12]

The figures from the CTU don‘t match the current figures available. In 2021, Valocity released the latest available figures showing private landlords with over 50 houses owned 10,254 houses between them. That means a minimum of 205 landlords owning only 50 houses each or 51 landlords owning over 200 houses each….. not over 340 mega landlords owning over 200 houses each…. that would require there to be nearly 70,000 houses owned by mega landlords, not the 10,254 from the best available figures.

The only way that it would close to over 70,000 properties owned by over 340 mega landlords is if the CTU figures not only included private landlords but also included charities. This throws his figures of what he says is the average saving a mega landlord would receive of $1.3 million times the 346 mega landlords to get a combined tax saving of nearly $450 million per year into doubt. Why? Because charities don’t pay tax and therefore don’t get the benefit of the reduction in removing interest deductions that private landlords do.

He has also made a number of assumptions to reach his conclusions as well. He’s assumed how many properties owned by mega landlords are mortgaged and what the values of those mortgages are…. information not publicly available. He’s also assumed that most of the houses owned by mega landlords are over five years old so would still be able to claim interest deductibility anyway.

But the media and those looking for “holes” within tax policies will eat this up because why bother fact checking information from the CTU….. the biggest single donor to Labour’s campaign.

 

[wizard of Tauranga]

The figures from the CTU don‘t match the current figures available. In 2021, Valocity released the latest available figures showing private landlords with over 50 houses owned 10,254 houses between them. That means a minimum of 205 landlords owning only 50 houses each or 51 landlords owning over 200 houses each….. not over 340 mega landlords owning over 200 houses each…. that would require there to be nearly 70,000 houses owned by mega landlords, not the 10,254 from the best available figures.

The only way that it would close to over 70,000 properties owned by over 340 mega landlords is if the CTU figures not only included private landlords but also included charities. This throws his figures of what he says is the average saving a mega landlord would receive of $1.3 million times the 346 mega landlords to get a combined tax saving of nearly $450 million per year into doubt. Why? Because charities don’t pay tax and therefore don’t get the benefit of the reduction in removing interest deductions that private landlords do.

He has also made a number of assumptions to reach his conclusions as well. He’s assumed how many properties owned by mega landlords are mortgaged and what the values of those mortgages are…. information for publicly available. He’s also assumed that most of the houses owned by mega landlords are over five years old so would still be able to claim interest deductibility anyway.

But the media and those looking for “holes” within tax policies will eat this up because why bother fact checking information from the CTU….. the biggest single donor to Labour’s campaign.

So you’re also saying the CTU doesn’t have a clue about property? You would think they are an employment advocacy group or something…

Anyway - if all landlords with mortgages are currently losing money and the policy change to STANDARD ACCOUNTING PRACTICE meaning they now break even again then the whole article should be chucked in the bin as more Labour smear articles.

The Labour changes (which are only half introduced so far) will mean instead of rents ramping up hugely over the next 2 years with increasing homelessness and poverty, they will stabilise and possibly go down. There is a significant different in rent projections under the two parties policies which the biased CTU conveniently ignores…

 

[juju]

Wow… a Council of trade unions analysis

Interest deductibility is a ligitimate business expense that everyone including treasury said was stupid to remove and would push up rents. A said a lot about the consequences at the time and it’s all proved correct.

No other country has these daft accounting rules.

He's the literally an economist and the CTU director of policy.

Maybe the country should stop the addiction to hoarding residential property as a business?

miket12 you're point about the CTU donation to labour - it'd be really interesting to track the property investors and mega landlords donating to National...

The very very simple point is National are giving tax relief to landlords will making beneficiaries lives worse... in a cost of living crisis...

 

[Up the guttz]

Strange how national have a lot more campaign funds than labour but I only ever hear and see adds from labour. Every 15mins on the radio, every time I’m on a website, non-stop labour adds. Not one of them talks about labour and their policies, they are all just anti Chris Luxon. They have gone after the individual rather than the party in this campaign.

Haven’t herd much national adds at all and the ones I do hear arnt just bagging labour.

 

[wizard of Tauranga]

The very very simple point is National are giving tax relief to landlords will making beneficiaries lives worse... in a cost of living crisis...

Why does linking beneficiaries pay to inflation make them worse off? All govt spending should be linked to inflation and only bad economic managers throw money around above inflation…

He's the literally an economist and the CTU director of policy.

Conflict of interests. Ask Wood for an explanation. The unions elect the Labour leadership.

 

[miket12]

He's the literally an economist and the CTU director of policy.

Maybe the country should stop the addiction to hoarding residential property as a business?

miket12 you're point about the CTU donation to labour - it'd be really interesting to track the property investors and mega landlords donating to National...

The very very simple point is National are giving tax relief to landlords will making beneficiaries lives worse... in a cost of living crisis...

The problem with BOTH National and Labour's policy on benefits if that, given the wrong circumstances, BOTH policies mean beneficiaries would be worse off depending on whether the CPI or Wage index is higher or lower than the other.

When wage increases are higher than the CPI, beneficiaries are better off under Labour BUT when the CPI is higher than wage increases (which happens more often than the other way), beneficiaries would be better off under National.

TBH, I wish both of them would forget their political biase and actually do what is best for the country instead of what they think their voter base wants.

I would categorise each form of benefit into three categories: long term benefits (for the disabled, etc.), medium term (for solo parents, etc.) and short term (the unemployed).

Then calculate benefit increases on the amount both the CPI and wages have increased. The long term beneficiaries get their benefits adjusted annually by the larger of the two of CPI or wage increases. The medium term beneficiaries get their benefits adjusted by the average of the two (i.e. if the CPI went up 4% and wage by 3%, they would get a 3.5% adjustment) while short term benefits are adjusted by the smaller of the two.

This way, we're looking after those who are on a benefit "for life" outside of their own doing while encouraging those who could be working off the "unemployment" benefit.... something which increases the countries productivity thus increasing everyone's standard of living.

 

[Noitall]

'Can you answer the question?': Luxon grilled by AM's Bridge on benefits

Disability advocates say under National's plan, a single person on the supported living benefit would be $6 worse off in the first year, rising to $19 a week by 2026.

www.newshub.co.nz

Spin of the highest order. Good to hear he’s committed money to Maori health health though, he’ll certainly be held to it after this exchange.

 

[miket12]

'Can you answer the question?': Luxon grilled by AM's Bridge on benefits

Disability advocates say under National's plan, a single person on the supported living benefit would be $6 worse off in the first year, rising to $19 a week by 2026.

www.newshub.co.nz

Spin of the highest order. Good to hear he’s committed money to Maori health health though, he’ll certainly be held to it after this exchange.

It was quite a train wreck.... all he had to say was that beneficiaries would be better off under Nationals plan when the CPI was higher than wage increases. Instead, he kept pulling out National policy and avoiding answering the question. His advisors aren't coaching him that well with dealing with the media.