Silly idea number 8 – what do you think?
Posted by Pete Hodgson on August 24th, 2010
Tax changes: Part 2:
A year later the Government announces a “tax switch”. GST goes up to 15%. Income tax comes down.
A closer look reveals the obvious. The rich are net winners, the poor are net losers. The rich-poor gap widens, still further.
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The only thing that I can see that is silly about it is that you are wasting your time doing silly polls about it.
May I ask when you last did something constructive for your country?
Really interesting to see that the Nacts are getting so upset about these little reminders that they are questioning whether we should post. Keep it up Pete.
With the NATs constantly making ill-considered and obvious moves to advantage the rich and pressure the poor, Pete will be writing about Bill and John’s Silly Idea No. 50 before you know it.
I certainly agree with PDM that these polls are silly. Obviously the polls that count that show the Nats strong over 50% are causing you concern. Since the top 105 “rich are already paying 75% of the tax then there is a significant risk that they will go where they are appreciated. Sadly for your lot, evenyone is better off – even the poor are going to have more in their had – better than the $3.50 (or less) per week that they will get back when Labour cut GST on fruit and vege if they ever get back the goverment benches.
Actually I am not so much a NACT supporter as I am a supporter of Don’t Vote Labour.
pdm, did you vote for a GST increase in Nov 2008?
pdm dont get to upset, while Labour are operating in an intellectual vacuum National are busy running the country
I love these post. It shows the depth of knowledge, and pettiness of labour. Keep it up. Its laughable.
Why pdm every month pete is out there in the trenches fighting the tories on NZ’s behalf
GST hike sucks and on top of the booze price minimum, they are killjoys
@ Spud – labour supported a 50% increase in alcohol excise tax – so you should thank your stars that they arnt in – else nobody could afford to drink anymore.
I love that in voting i get to choose “sillier than that”. It may be my favourite option of all time.
Monty, still waiting for you to front up with the proof that the GST rise was flagged by National before the 2008 election, as you have alleged. A simple reference is enough.
Proof read your latest above, BTW, and then tell me about silly.
Running the country? Where? Into the ground? You’re just nervous that Pete has his sights properly zeroed in.
Go where? Australia? Where they have higher tax rates than NZ and employers have to contribute 9% to employees’ super?
Maybe you think the NZ rich will pack up and go to Switzerland, Monaco or Belize, yeah thats a real risk
Try again.
@Monty. The 3.50 will be swallowed up by the cost of childcare which in some places is raising by 25-40 a week, so people on a lower income will not be better off.
It would be far better to cut out the wasteful Government spending that we saw balloon under a Labour Government. If National did this then the GST increase to fund tax cuts would be unnecessary.
If Labour hadn’t squandered so much taxpayer funds for so little return, we wouldn’t be in this situation now.
“better than the $3.50 (or less) per week that they will get back when Labour cut GST on fruit and vege” according to Household Economic survey to achieve this type of refund you would have to earn over $100k, for the average family they spend less than $18.50/week on F&V. This proposed change gives those who spend more a greater tax cut, and as per the surveys conducted the rich spend more on this form of food. So it is a tax change thaty benfits the rich few than the Kiwi family. I s this not what Lab opposed in rhetoric but how about in practice?
http://wdmzpub01.stats.govt.nz/wds/TableViewer/tableView.aspx
Also do not tourists spend and incur GST so by changing the tax mix do we not benfit as a country, I am not aware of many toruists incurring PAYE taxes. So in 2007 tourists spent $8.8b so NZ will take approx $200m in additional taxes.
http://www.tourismresearch.govt.nz/News–Media/News-Archive/2008/Tourism-Spend-Over-20-billion-for-the-First-Time/
$3.50c ? Wow you must feel rich
I think these polls are testing for the content of next years election “reminder and pledge” cards… Coming soon to a mailbox near you…
My opinion on this is the same as the last (very similar silly idea post) I think introducing a tax free threshold which would have reduced everyone’s taxes equally and taken pressure of the lowest earners was the best idea… Or no tax cuts since we’re losing hundreds of millions a week…
Yes A Mother it’s a bit of a bungle alright.
Now my local childcare center has changed hands the 20 hours free ECE for 3 & 4 year olds now costs $1 hour (if using less than 35 hours), and they have also made the minimum daily rate of 7 hours, while using those hours.
There is now allocated hours in place. e.g.. morning session 7.30-12.00 or parts of $30.00.
There is also a booking fee of $25.
2 year old daily rates is sitting at $50.00, which is $250 a week, if you work full time!!.
You are allowed 4 weeks holiday leave, with 2 weeks notice, or you have to pay for all the full costs other than this.
Full fees also apply when the chid is sick.
They have currently laid of qualified teachers.
Before this childcare centre changed hands they had more flexibility and less cost, and basically you only paid for what childcare the child actually received.
It was a real godsend when you are working hours out of the norm on a single income.
According to OECD studies NZers are paying 28% of the net income on childcare. The fourth highest out of 32 countries. The OECD average is 13%.
This is a real bungle, at a time when they are urging single mums back into work.
Heres the link
http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=10668470
They can’t do that because there wasn’t any. National even took down their website that was supposed to detail all this wasteful spending. If there was any wasteful spending by the last government then I’m sure that website would still be up and have all the nasty details.
The reality is that if Labour had done what NACT wanted (cut taxes) we’d be a hell of a lot worse off. Even Bill English said that when NACT first got into power.
@Spud. GST to rise by 2.5% benefits to rise by 2%.
I feel sorry for you!
!
Yet no-one saying this is a good idea and saying that we would be better off has come and argued about how the ‘tax break’ will make people on min wage better off in the long run.
My, this one seems to have generated a little more unpleasantry than most. Let’s see how the land lies in about two months when the price increases are all to hand and the debate on who is or isn’t a winner is settled- pay packet by pay packet.
Spud I will be fine. We don’t get a tax break but life goes on.
Pete, it is I agree but with childcare going up no one seems to take this into consideration for people on min wage.
Yes Marie. Its not fair and eaten up by any tax break that people may get.
Goodluck to you A Mother
@ a Mother. “@Spud. GST to rise by 2.5% benefits to rise by 2%.”
That kind of comparison is useless – unless the beneficiary is spending 100% of their income on Goods and Services. Rent etc do not incur GST.
Do these silly ideas come in any other flavours or is sour grapes the only choice?
A mother, as of October 1st the tax rate will also change to compensate for the GST rise. Someone on $30k gross (I just picked a number) will pay 2.8% less tax, equivalent to $16.15 per week in the hand. http://www.ird.govt.nz/changes/income-tax/individuals/personal/
The benefit increase (I think 1.96%) is an adjustment linked to cost of living indices, not designed as an offset for the GST rise.
Hope that brightens your day, come 1st October you should actually be a little better off
“@ a Mother. “@Spud. GST to rise by 2.5% benefits to rise by 2%.”
Just a note GST increases by 2.2%. The 2.5% increase is on the GST exclusive amount. Not 2.5% on the ticketed value in the store. It is not much of a difference but there is a difference in the facts, also for many this increase will not apply to 100% of peoples spending, as the likes of rent, mortgages and bank fees do not incur GST charges, and for those naughty few, fines and other late penality payments are GST exclusive.
@chris I thought I saw something about rates being affected by GST – if that’s true then rents could go up. I dare say that many bennies spend 100% of their income
I’m not really too fussed about the increase or non increase I would get. I’m more worried about the cost of childcare next year while I’m on teachers placement for 6 weeks. Especially the first 3 week placement when my youngest will still be under 3. This will eat into any increase I may get don’t you think? And Chris with the cost of rent, and childcare for one day a week to allow me to study (I also study nights)power, phone, internet (I study from home to keep down costs, cheaper than the travel and I don’t have a car) I do spend 100% of what I get. Especially when I have to take a child to after hours due to ear infection etc. can’t just leave to monday and no matter what the age or situation you still have to pay.
The people working full time on min wage this would really eat into any increase they may get.
@Chris
yes I don’t spend 100% on goods and services. You take out rent out your right. Unless what Spud says happens.
A mother – I appreciate the increased childcare costs will have an impact (same for me with daughter just turning 2, another year before we get some relief).
Has Pete posted the changes to ECE as a silly idea post yet? If not I guess it’s on the roster.
Best of luck by the way.
all these silly idea, and not a single good one from you pete? how about a poll on what you think a good idea could be?
@chris I thought I saw something about rates being affected by GST – if that’s true then rents could go up.
Hi Spud. Rates and other expenses don’t affect rents in that way – which is half the problem with the housing market. Lots (I’d even say most) of landlords don’t charge enough rent to cover expenses and leave a proper profit – their investment is in a capital gain. That’s why rental investment is so highly geared and why house prices seem all out of kilter with the rental income able to be achieved from them.
House prices are all out of kilter with rents because everyone is overpaying for them, the yeilds should dictate the price yet owners and investors are/were massively overpaying for them, that lead to the bubble that has caused a 12% reduction in the market over the last 24 months and given that yeilds are still very low there is a long way to go yet…
Thanks Bea