Kia-ora
An often repeated argument against increases in welfare, including UBI, minimum wages or payments to alleviate poverty, is that it will fuel inflation and most will end up no better off. (More market advocates don't seem to have the same faith in "the market" to hold prices down for the poor, as they do for the rich).
We never see that argument made against the 17 to 20% increases at the top end, which are already fuelling inflation, in food and housing, making prices too high for poorer people.
The answer is, to make the rich less wealthy.
The Laffer curve theory, the idea that Government share of the economy displaces private share, is often cited as a reason for not expanding the size of Government spending.
The theory is generally given as an argument against higher taxes along with the idea that higher taxes will simply be avoided.
The evidence shows, however, up to a certain point, Government spending on infrastructure, education, health, services, welfare and social policy helps the private sector as well.
The worlds most successful economies generally have a Government share of the economy greater than ours. We have a lot of room to move in this direction.
However, a UBI is a change in distribution of incomes, not an increase in the size of Government.
WINZ will shrink, for a start. So will tax compliance costs for small business.
Higher progressive taxes are inevitable. As Obama said "it is math". We cannot have a viable economy/society while reducing Government services below a minimum and continuing to borrow, so a few wealthy people can pay less tax.
We cannot afford the compounding interest, on the billions required over time, for National's unaffordable tax cuts.
Middle to upper middle income PAYE earners claim, with some justification, they are paying a disproportionate share of taxes.
They are in the middle, between the better off, who can use tax dodges, and the poor, who do not have enough to pay tax.
A more even distribution of taxes, maybe, with capital gains taxes, financial transaction taxes, wealth taxes, which share costs more fairly around all sources of income/wealth, will allow us to reduce PAYE income taxes share..
Broader definitions of income, for tax, makes the system fairer.
The psychological effect of universality. "I am getting something back for my taxes, even if I am paying more tax than I am getting back" should not be underestimated.
If New Zealand super was not universal, it would have been steeply reduced, or gone, 2 decades ago.
The highest marginal tax rates are paid by those on the lowest incomes. Then there are regressive taxes such as GST. At the bottom end high marginal rates really are a disincentive to work. Abatement rates, plus work and transport costs means a welfare recipient that does some work is often worse off. At the other end I do not know of anyone who will turn down an extra million dollars in income becuase they may have to pay 600 thousand in tax.
Certainly didn't stop me from trying to work harder to raise my income, when marginal tax rates were 60%, in the early 80's..
I have no sympathy at all with those on high incomes who complain they use the same services as those on low incomes, but are paying a greater dollar amount of tax.
They are benefiting the most from the society NZ taxpayers and workers have built, and from Government services. That is how they became wealthier! It is only fair that they pay the most. Chances are, if they had been born in a country without our education, infrastructure, social and health systems, they would be the one in the cardboard box on the street.
Progressive taxation is the price of living in a well resourced, pleasant, and cohesive society.
If you don't like it, move, to a tax free paradise, like Somalia!
But first, Please be consistent with your principles, and give back to New Zealanders all the proportion of your wealth that you earned because of our efforts and support.
Showing posts with label Solutions.. Show all posts
Showing posts with label Solutions.. Show all posts
Wednesday, January 22, 2014
UBI (2) Why should we push for a UBI? (Universal basic income).
Why a UBI?
Firstly. To overturn some paradigms:
That a great many people should lead poor and constricted lives, so a very few can be rich.
That ordinary people are disposable economic production units.
The economy, and I use the word in its broadest sense, exists for people, not the other way around.
New Zealanders, apart from a few extremists, generally accept that some of the income/resources available to those in paid work is transferred to those who are too young, old, ill or incapable to undertake paid work and those who undertake work, such as childcare, which is essential to our society.
The debate is about the amount, and how to fund and distribute it.
So. Why should we use a UBI?
A UBI empowers everyone, especially those who are currently marginalised, with the principle, everyone should have enough of societies resources as of right, for, at least, the necessities of life. I would go further, and say that everyone deserves enough, to be a inclusive part of the community.
A UBI acknowledges, and enables a living, for the many people, such as those bringing up children, (Mostly women) who carry out essential, but currently poorly paid or unpaid, services for our society.
A UBI looks after those whose work is displaced by the necessary shift to a more energy efficient and environmentally sustainable economy.
We cannot expect the involved workers, for example, coal miners, to bear the whole costs of the shift.
A redistribution of income to those at the lower end, who have to spend all their income, will be “good for business”, especially local small and medium enterprises (SME’s).
A UBI and initial flat tax rates removes the high marginal rates on low income earners. Encouraging workforce participation, entrepreneurship and progress away from “welfare dependency”..
The simpler tax system possible with a UBI makes compliance easier, especially for SME’s, and avoidance harder.
Redistributing income to those who spend it locally, instead of on Maseratis, Hawaii holidays and imported electronic junk is good for our balance of payments.
It reverses the, economically and socially disastrous, re-distribution of income upwards of the last 3 decades.
Increases the money available for savings and investment locally.
Libertarians, the principled ones, can see a lot to like in giving people choices in how they spend income, rather than giving it to the Government to spend. Less Government involvement in income redistribution and allocation may well “shrink” some parts of Government. We see from the “mincome” experiment http://en.wikipedia.org/wiki/Mincome , that spending on welfare, health care, crime and other effects, of poverty and social dysfunction, will reduce over time.
A UBI allows time out; to study, get well, bring up children, carry out voluntary community work, teach, start a business, avoid burnout, add to community services/wealth.
We already have a UBI, for older people. NZ super.
It has been totally successful in removing poverty amongst the elderly, (less than 3% in poverty).
We can, at least, extend it to children.
Time we “made poverty, history!”
Also published in The Standard
Firstly. To overturn some paradigms:
That a great many people should lead poor and constricted lives, so a very few can be rich.
That ordinary people are disposable economic production units.
The economy, and I use the word in its broadest sense, exists for people, not the other way around.
New Zealanders, apart from a few extremists, generally accept that some of the income/resources available to those in paid work is transferred to those who are too young, old, ill or incapable to undertake paid work and those who undertake work, such as childcare, which is essential to our society.
The debate is about the amount, and how to fund and distribute it.
So. Why should we use a UBI?
A UBI empowers everyone, especially those who are currently marginalised, with the principle, everyone should have enough of societies resources as of right, for, at least, the necessities of life. I would go further, and say that everyone deserves enough, to be a inclusive part of the community.
A UBI acknowledges, and enables a living, for the many people, such as those bringing up children, (Mostly women) who carry out essential, but currently poorly paid or unpaid, services for our society.
A UBI looks after those whose work is displaced by the necessary shift to a more energy efficient and environmentally sustainable economy.
We cannot expect the involved workers, for example, coal miners, to bear the whole costs of the shift.
A redistribution of income to those at the lower end, who have to spend all their income, will be “good for business”, especially local small and medium enterprises (SME’s).
A UBI and initial flat tax rates removes the high marginal rates on low income earners. Encouraging workforce participation, entrepreneurship and progress away from “welfare dependency”..
The simpler tax system possible with a UBI makes compliance easier, especially for SME’s, and avoidance harder.
Redistributing income to those who spend it locally, instead of on Maseratis, Hawaii holidays and imported electronic junk is good for our balance of payments.
It reverses the, economically and socially disastrous, re-distribution of income upwards of the last 3 decades.
Increases the money available for savings and investment locally.
Libertarians, the principled ones, can see a lot to like in giving people choices in how they spend income, rather than giving it to the Government to spend. Less Government involvement in income redistribution and allocation may well “shrink” some parts of Government. We see from the “mincome” experiment http://en.wikipedia.org/wiki/Mincome , that spending on welfare, health care, crime and other effects, of poverty and social dysfunction, will reduce over time.
A UBI allows time out; to study, get well, bring up children, carry out voluntary community work, teach, start a business, avoid burnout, add to community services/wealth.
We already have a UBI, for older people. NZ super.
It has been totally successful in removing poverty amongst the elderly, (less than 3% in poverty).
We can, at least, extend it to children.
Time we “made poverty, history!”
Also published in The Standard
Thursday, September 5, 2013
Universal Basic Income. UBI.
Kia-ora
The concept of UBI has a long history in New Zealand.
Of course, we already have a UBI for those over 65. Which has been extremely successful at eliminating poverty amongst the elderly, at a very moderate cost by international standards.
“In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally”. http://kjt-kt.blogspot.co.nz/2011/06/on-retirement-pensions-and-age-of.html
It has been a policy plank of various minor political parties, such as Social Credit. http://en.wikipedia.org/wiki/New_Zealand_Democratic_Party_for_Social_Credit
Currently, the Greens have discussed a UBI as part of welfare and economic policy development.
Many organisations, and individuals both left and right wing, have discussed the idea. Including the darling of the extreme right, Roger Douglas.
Recently Gareth Morgan has been an advocate. He puts the case rather well. http://www.bigkahuna.org.nz/universal-basic-income.aspx
“Paying universal transfers acknowledges that every individual has the same unconditional right – to a basic income sufficient for them to live in dignity. The Unconditional Basic Income (UBI) provides this.
With this basic protection in place people are then free to add to that income through paid work if they choose. Equally, they can live on the UBI and pursue other activities – doing the unpaid work of caring for children or others in their community for example, or studying full time, or pursuing new business ventures. The UBI offers the prospect of ensuring everyone has the means to live while giving them the freedom to live their lives as they choose.”
However David Preston from the MSD exemplifies what seems to be the main concern and almost the only real objection to a UBI. People may chose to go surfing instead of working. Horrors! http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj10/universal-basic-income-cure-or-disease.html
The vision, of 80 year old pensioners surfing, this engenders, caused me a great deal of mirth.
In fact the only real experiment with a universal basic income. http://en.wikipedia.org/wiki/Mincome ,showed that the overwhelming majority, even with guaranteed income, chose to do something constructive. Work, study or raising children. In the 70′s in New Zealand, with a much more generous unemployment benefit than we have now, almost everyone still chose to work.
The biggest advantage of a UBI, of course, is the almost total elimination of poverty, with all the savings in the accompanying economic and social costs. There is also the not inconsiderable savings in administration of welfare, simplified tax systems and the hit or miss nature of targeted welfare. Because it is universal, there is less incentive for the wealthy to try and destroy it, to cut taxes.
The main objection, apart from the horror of some people that recipients may simply go surfing, A horror they do not seem to extend to the inheritors of unearned extreme wealth, is cost!
It is not, however, a given, that the overall cost of a UBI would be more than that of a fair targeted welfare system.
Of course those same people throw up their hands object to the cost of current welfare. They cannot understand why the poor are not made to live in cardboard boxes and starve quietly as they do in their ideal economies, just so those on high incomes can pay a few dollars less taxes.
Universal superannuation in New Zealand has been considerably cheaper and more effective than targeted schemes elsewhere.
Don’t see why a UBI should not pay for itself in the savings in administration, the decreased costs of poverty and the extra tax take from extra income within the economy. Flat taxes over the UBI rate, are possible, which should cheer up the right wing.
The removal of abatement rates for working and the removal of the penalty of extreme poverty for business failure, for those not already millionaires, can only help more people into work, study and entrepreneurship. For others, it frees them up for socially useful unpaid work, such as sport coaching, teaching and the myriads of other unpaid and unrecognized work which makes for a functional society.
Lastly. In an era where resources are running out, being able to survive without having to find ever more creative ways of using up resources, and ripping off your fellow citizens, is an essential step towards a steady state sustainable society.
Also published in The Standard
The concept of UBI has a long history in New Zealand.
Of course, we already have a UBI for those over 65. Which has been extremely successful at eliminating poverty amongst the elderly, at a very moderate cost by international standards.
“In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally”. http://kjt-kt.blogspot.co.nz/2011/06/on-retirement-pensions-and-age-of.html
It has been a policy plank of various minor political parties, such as Social Credit. http://en.wikipedia.org/wiki/New_Zealand_Democratic_Party_for_Social_Credit
Currently, the Greens have discussed a UBI as part of welfare and economic policy development.
Many organisations, and individuals both left and right wing, have discussed the idea. Including the darling of the extreme right, Roger Douglas.
Recently Gareth Morgan has been an advocate. He puts the case rather well. http://www.bigkahuna.org.nz/universal-basic-income.aspx
“Paying universal transfers acknowledges that every individual has the same unconditional right – to a basic income sufficient for them to live in dignity. The Unconditional Basic Income (UBI) provides this.
With this basic protection in place people are then free to add to that income through paid work if they choose. Equally, they can live on the UBI and pursue other activities – doing the unpaid work of caring for children or others in their community for example, or studying full time, or pursuing new business ventures. The UBI offers the prospect of ensuring everyone has the means to live while giving them the freedom to live their lives as they choose.”
However David Preston from the MSD exemplifies what seems to be the main concern and almost the only real objection to a UBI. People may chose to go surfing instead of working. Horrors! http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj10/universal-basic-income-cure-or-disease.html
The vision, of 80 year old pensioners surfing, this engenders, caused me a great deal of mirth.
In fact the only real experiment with a universal basic income. http://en.wikipedia.org/wiki/Mincome ,showed that the overwhelming majority, even with guaranteed income, chose to do something constructive. Work, study or raising children. In the 70′s in New Zealand, with a much more generous unemployment benefit than we have now, almost everyone still chose to work.
The biggest advantage of a UBI, of course, is the almost total elimination of poverty, with all the savings in the accompanying economic and social costs. There is also the not inconsiderable savings in administration of welfare, simplified tax systems and the hit or miss nature of targeted welfare. Because it is universal, there is less incentive for the wealthy to try and destroy it, to cut taxes.
The main objection, apart from the horror of some people that recipients may simply go surfing, A horror they do not seem to extend to the inheritors of unearned extreme wealth, is cost!
It is not, however, a given, that the overall cost of a UBI would be more than that of a fair targeted welfare system.
Of course those same people throw up their hands object to the cost of current welfare. They cannot understand why the poor are not made to live in cardboard boxes and starve quietly as they do in their ideal economies, just so those on high incomes can pay a few dollars less taxes.
Universal superannuation in New Zealand has been considerably cheaper and more effective than targeted schemes elsewhere.
Don’t see why a UBI should not pay for itself in the savings in administration, the decreased costs of poverty and the extra tax take from extra income within the economy. Flat taxes over the UBI rate, are possible, which should cheer up the right wing.
The removal of abatement rates for working and the removal of the penalty of extreme poverty for business failure, for those not already millionaires, can only help more people into work, study and entrepreneurship. For others, it frees them up for socially useful unpaid work, such as sport coaching, teaching and the myriads of other unpaid and unrecognized work which makes for a functional society.
Lastly. In an era where resources are running out, being able to survive without having to find ever more creative ways of using up resources, and ripping off your fellow citizens, is an essential step towards a steady state sustainable society.
Also published in The Standard
Sunday, May 19, 2013
An Alternative Budget.
Kia-ora
An alternative Budget, From Matt McCarten.
Matt has posed this as a "left wing" budget.
However many of the ideas would have been considered centrist economic thinking not long ago.
Just shows how much right wing extremists have dominated economic thinking.
"1. Abolish 15 per cent GST. Replace with 1 per cent financial transaction tax as recommended by the New Zealand Bankers Association. Same money."
An idea which is being looked at seriously all around the world. It does need adoption by many countries at once to prevent banks dodging it.
"2. Abolish PAYE on wages and salaries. Replace it with a wealth tax and a capital gains tax when shares, businesses, land and property are sold. People are taxed when they're cashing up, not when they are making it."
Actually an idea of that noted arch socialist, economic thinker, Adam Smith. "Tax the owners of capital and land, not labour and entrepreneurs, because they produce the wealth".
"3. 90 per cent Death Tax. You can't take it with you. Grown-up kids should earn their own money anyway."
True, but I think their should be a threshold, say, a million dollars. No reason why one family should be allowed to accumulate ever increasing wealth over generations., and many sound economic and social justice reasons why they shouldn't. However parents should be able to pass on some to their kids.
"4. Rent-to-buy homes underwritten by the state. Limiting homes to two a family and having a capital gains tax will keep prices affordable."
Exemptions for family homes or restrictions on the number of homes a family has may not work. How do you define family? Better to again have a threshold. Maybe set at the current median price.
"5. State-created work schemes for all long-term jobless."
Not bad, but I think a Guaranteed income is better, bearing in mind that in a steady state sustainable economy we do not need all those working hours.
"6. A living wage set at $20 an hour minimum. It would be a stimulus package."
Contrary to often expressed opinions from the rabid right, minimum wages increase demand and increase jobs and business profits. A better form of stimulus than gifting money to the banks, who lost it in the first place.
"7. No tax on profits kept in a business."
An incentive to invest in business growth, entrepreneurship and employment, not speculation.
"8. Free public transport in major cities. That would get people out of their cars."
Likely to save on roading, energy, and other costs long term.
"9. Victims get 100 per cent state compensation for loss or injury. Offenders work it off if necessary.
I hope that is extended to those who knowingly sell harmful products and politicians who work against their constituents best interests.
"10. Make KiwiSaver a state-owned fund and buy all the Government's non-core commercial assets."
Still doesn't give the investment in sustainable productivity we need for the future, but better than putting it in the financial lottery that is overseas financial markets. The same ones that lost all the US pension funds.
All in all a much more progressive and sound budget than National's recent mean spirited and dysfunctional, joke.
An alternative Budget, From Matt McCarten.
Matt has posed this as a "left wing" budget.
However many of the ideas would have been considered centrist economic thinking not long ago.
Just shows how much right wing extremists have dominated economic thinking.
"1. Abolish 15 per cent GST. Replace with 1 per cent financial transaction tax as recommended by the New Zealand Bankers Association. Same money."
An idea which is being looked at seriously all around the world. It does need adoption by many countries at once to prevent banks dodging it.
"2. Abolish PAYE on wages and salaries. Replace it with a wealth tax and a capital gains tax when shares, businesses, land and property are sold. People are taxed when they're cashing up, not when they are making it."
Actually an idea of that noted arch socialist, economic thinker, Adam Smith. "Tax the owners of capital and land, not labour and entrepreneurs, because they produce the wealth".
"3. 90 per cent Death Tax. You can't take it with you. Grown-up kids should earn their own money anyway."
True, but I think their should be a threshold, say, a million dollars. No reason why one family should be allowed to accumulate ever increasing wealth over generations., and many sound economic and social justice reasons why they shouldn't. However parents should be able to pass on some to their kids.
"4. Rent-to-buy homes underwritten by the state. Limiting homes to two a family and having a capital gains tax will keep prices affordable."
Exemptions for family homes or restrictions on the number of homes a family has may not work. How do you define family? Better to again have a threshold. Maybe set at the current median price.
"5. State-created work schemes for all long-term jobless."
Not bad, but I think a Guaranteed income is better, bearing in mind that in a steady state sustainable economy we do not need all those working hours.
"6. A living wage set at $20 an hour minimum. It would be a stimulus package."
Contrary to often expressed opinions from the rabid right, minimum wages increase demand and increase jobs and business profits. A better form of stimulus than gifting money to the banks, who lost it in the first place.
"7. No tax on profits kept in a business."
An incentive to invest in business growth, entrepreneurship and employment, not speculation.
"8. Free public transport in major cities. That would get people out of their cars."
Likely to save on roading, energy, and other costs long term.
"9. Victims get 100 per cent state compensation for loss or injury. Offenders work it off if necessary.
I hope that is extended to those who knowingly sell harmful products and politicians who work against their constituents best interests.
"10. Make KiwiSaver a state-owned fund and buy all the Government's non-core commercial assets."
Still doesn't give the investment in sustainable productivity we need for the future, but better than putting it in the financial lottery that is overseas financial markets. The same ones that lost all the US pension funds.
All in all a much more progressive and sound budget than National's recent mean spirited and dysfunctional, joke.
Saturday, May 18, 2013
The magical world of New Zealand's, Neo-Liberal, right wing.
Kia-ora
The magical world of New Zealand's, Neo-Liberal right wing.
It has been obvious that some people live in a different world than the rest of us.
One where Chicago school economics, work!
One where you save the village by blowing it up!
One where global warming can be stopped, Canute like, by legislation.
One where dropping wages and giving everything to bloated financiers, makes us better off!
One where removing money from an economy makes it work better.
One where every country is going to get rich by out exporting every other country.
One where enabling greater inequality than the dark ages, works!
The one with the trickle down fairy. "Give us the money and we will p-- on you".
The market fairy. "Leave it to the market and we will cut your wages,impoverish your children, and tell you it is a brighter future".
The Austerity fairy. "We will become better off by becoming poorer".
The catching up with Australia fairy. "We will catch up with Australia by doing almost the opposite of everything they have done".
The Democracy fairy. "We will let you vote, to change the names in Government, or on a few social issues which do not affect our making money off you, but not to make any meaningful changes to the way the country is run".
The privatisation fairy. "We will ensure that the NZ current account is forever in deficit, by selling all the income earning assets"
The debt fairy. "We will cut debt by borrowing $300mill a week, to pay for unaffordable tax cuts, to pay for our Hawaii holidays".
The Job fairy. " We will increase the number of jobs by putting thousands out of work, and cutting the unemployment benefit".
The "We support business" fairy. While ensuring New Zealanders have no money to buy from local businesses, and increasing small businesses costs.
The better future fairy. "We will give you a better future by paying you less, charging you more and cutting services".
It is pretty obvious which side of the political spectrum is on another planet. Planet Key!
(New Zealand's, financial industry shill, Prime Minister).
The magical world of New Zealand's, Neo-Liberal right wing.
It has been obvious that some people live in a different world than the rest of us.
One where Chicago school economics, work!
One where you save the village by blowing it up!
One where global warming can be stopped, Canute like, by legislation.
One where dropping wages and giving everything to bloated financiers, makes us better off!
One where removing money from an economy makes it work better.
One where every country is going to get rich by out exporting every other country.
One where enabling greater inequality than the dark ages, works!
The one with the trickle down fairy. "Give us the money and we will p-- on you".
The market fairy. "Leave it to the market and we will cut your wages,impoverish your children, and tell you it is a brighter future".
The Austerity fairy. "We will become better off by becoming poorer".
The catching up with Australia fairy. "We will catch up with Australia by doing almost the opposite of everything they have done".
The Democracy fairy. "We will let you vote, to change the names in Government, or on a few social issues which do not affect our making money off you, but not to make any meaningful changes to the way the country is run".
The privatisation fairy. "We will ensure that the NZ current account is forever in deficit, by selling all the income earning assets"
The debt fairy. "We will cut debt by borrowing $300mill a week, to pay for unaffordable tax cuts, to pay for our Hawaii holidays".
The Job fairy. " We will increase the number of jobs by putting thousands out of work, and cutting the unemployment benefit".
The "We support business" fairy. While ensuring New Zealanders have no money to buy from local businesses, and increasing small businesses costs.
The better future fairy. "We will give you a better future by paying you less, charging you more and cutting services".
It is pretty obvious which side of the political spectrum is on another planet. Planet Key!
(New Zealand's, financial industry shill, Prime Minister).
Tuesday, May 14, 2013
The Reserve Bank, Debt and the Property Market
Kia-ora
In New Zealand we have the "Reserve Bank Act".
Which basically requires the reserve bank to kill the rest of the economy, whenever Auckland house prices, or wages, rise.
Originally enacted, as a circuit breaker, to cap excessive inflation in the 80's, politicians have kept it, long past its use by date, because in their limited view, what works once, briefly, will work perpetually.
It could be argued that it was somewhat successful in curbing very high inflation, on that limited occasion, though others would note that the end of very high inflation ended with the slowing of the rise in oil prices.
Now, every time the New Zealand productive economy struggles off its knees, the reserve bank delivers another knockout.
Howdaft. Puts it so much better than I can. I have republished his article here.
I have highlighted some in bold.
In New Zealand we have the "Reserve Bank Act".
Which basically requires the reserve bank to kill the rest of the economy, whenever Auckland house prices, or wages, rise.
Originally enacted, as a circuit breaker, to cap excessive inflation in the 80's, politicians have kept it, long past its use by date, because in their limited view, what works once, briefly, will work perpetually.
It could be argued that it was somewhat successful in curbing very high inflation, on that limited occasion, though others would note that the end of very high inflation ended with the slowing of the rise in oil prices.
Now, every time the New Zealand productive economy struggles off its knees, the reserve bank delivers another knockout.
Howdaft. Puts it so much better than I can. I have republished his article here.
I have highlighted some in bold.
"The issues of house price rises in
Auckland and Christchurch is prompting comment that it may be time for
the Governor of the Reserve Bank to raise interest rates. It
is noted in the media that an increase in interest rates will result in
foreign money seeking higher returns to enter the domestic market and
this will also increase the value of the already overvalued dollar.
What hasn’t been commented on is
that an increase in interest rates will also penalise every business and
household in the country including everyone resident in Auckland and
Christchurch who already have a mortgage and have no intention of buying
or selling a home. There will
be no beneficial behaviour change within that wide group who are not
seeking to get further into debt but it will impose hardship and
constrain the rest of the economy. The
interest rate rise would be imposed simply as an attempt to limit price
rises in response to artificial shortages of housing in two localised
parts of the property market.
The more sensible action would be to
address the cause of these shortages rather than attempt to alter the
market response by raising interest rates.
The Reserve Bank Act is not only
completely ineffectual at slowing property prices it is the root cause
of property price inflation. Because
the Reserve Bank Act obliges debtors to pay over the market price for
debt, it also guarantees lenders greater than normal market returns on
investments. The result is that foreign cash looking for high and secure returns has flooded into the New Zealand property market. The
banks are incentivised to actively inflate the property market because
of the high returns it provides (thanks to the Reserve Bank Act) and
because of the flood of money that they have to invest. As
a result the more the Reserve Bank increases interests rates above the
natural rate for the marketplace the more money that flows into the
property market, the less risk averse lenders need to be because they
receive higher margins on loans and this results in banks adopting laxer
lending practices, this then leads to property price inflation which
results in the rate of increase in capital value of the property (in the
overheated parts of the market) to exceed the cost of debt - for a
while at least – the negative real rate of interest in this small part
of the property market consequently further incentivises borrowing.
The end result is that we are as a
nation carrying far more debt than is necessary for the economy to
function effectively, we have a ruinously over valued property market,
we have a grossly overvalued exchange rate, we are bleeding our scarce
foreign earnings on interest payments on all the debt and meanwhile our
productive sector is crippled by both the cost of borrowing and by the
over-valued and highly unstable exchange rate, Instead of suppressing
inflation, the Reserve Bank act causes inflation.
The Reserve Bank Act is singularly the most stupid element of the reforms of the 1980’s. It is utterly illogical in that it defies the simplest of precepts of economics. The answer to the problem of inflation is simple. If
a government wishes to increase the cost to the consumer of any element
of the economy without increasing the supply of that element it imposes
a tax not a compulsory price increase – alcohol and tobacco are
excellent examples of this concept in action. The government also targets only those activities it wants to constrain. So when it taxes alcohol it does that based on alcohol content – it doesn’t tax all liquids.
A tax also allows for redistribution
and targeting by the government to occur so if the tax imposes on lower
income households this can be resolved through social payments with the
tax on debt as a source of funds. Similarly the tax can be linked to the asset class or region causing the problem so there may be a lower tax on business debt. This
is not difficult; the banks already set interest rates by the manner in
which the debt is secured, the tax could be similarly targeted. This
is only one possible mechanism as there are is a range of possible
taxation responses to this problem which these need to be linked into a
wider strategic review of the role of taxation in the economy.
At a more fundamental level any market failure or physical circumstances causing the price pressure also needs to be addressed. Auckland
prices are being driven by a range of other policy actions by
government that put inflationary pressure into the market. These
include allowing uncontrolled foreign ownership of residential real
estate, immigration – from both within New Zealand and from off-shore -
and from a failure to fully price the true cost to the national economy
of growth of the major cities and the cost of internal migration of
business and residents. Property
in the larger cities but particularly in Auckland is being subsidised
in a number of ways while the rest of the national market is in one form
or another languishing with surplus housing and infrastructure. In
addition to fostering policy that actively inflates the cost of housing
nationally and causes our international debt to be excessive and our
currency to be over-valued we are not as a nation using our existing
investment in infrastructure wisely.
We need to be asking ourselves
collectively why we, who as a nation have the highest natural capital
per capita and arguably the best system of society in the world, are one
of its debt basket cases. We are only being prevented from being another Greece or Cyprus by the dairy industry. We
also need to ask why we are not so much better off as a nation when
countries like China and Singapore are doing so much with so
comparatively little. The
answer is quite simple and that comes down to the vision and courage of
their political leadership, could I commend you to read George Monbiot’s
recent post
http://www.monbiot.com/2013/04/22/the-self-hating-state/
as it very accurately describes the malaise that we have inflicted upon
ourselves with our reforms and our reliance on “The Market” to provide."
Wednesday, April 3, 2013
The Standard on Pay Rates.
Kia-ora
The New Zealand left wing newsletter/blog, "The Standard" has some interesting discussions on wage levels.
It appears only the already rich work harder when they are paid more. The poor have to work for love.
The idea that we are not competitive unless wages are low wears a bit thin when those at the very top can pay themselves 17 to 20% more each year.
Zetetic in The Standard on pay rates.
The New Zealand left wing newsletter/blog, "The Standard" has some interesting discussions on wage levels.
It appears only the already rich work harder when they are paid more. The poor have to work for love.
The idea that we are not competitive unless wages are low wears a bit thin when those at the very top can pay themselves 17 to 20% more each year.
Zetetic in The Standard on pay rates.
"As you know, the Right says more money incentivises harder work. John
Key felt he wasn’t working very hard when he first became PM on a net
$250,000 a year, so he gave himself tax cuts and pay rises worth $100 a
day. Just look at the results!
But I’m confused: why’s he cutting our pay with youth wages, higher Kiwisaver, and higher student loan repayments? Is it that rich people work harder when they get more money and poor people work harder when they get less?
I guess the elite really do see us as a different species – mules, I suppose. And I see them as a different species but for different reasons and as a different species – leeches.
But I’m confused: why’s he cutting our pay with youth wages, higher Kiwisaver, and higher student loan repayments? Is it that rich people work harder when they get more money and poor people work harder when they get less?
I guess the elite really do see us as a different species – mules, I suppose. And I see them as a different species but for different reasons and as a different species – leeches.
Sunday, August 19, 2012
A Challenge.
Kia-ora
A challenge
“And, out of interest, does anyone know of any research into privatization that shows it to be generally effective at improving a service, increasing efficiency and leaving its lowest level workers with a living wage? All I read currently is that the investors get richer, the management can pay itself what it likes, the customers pay more and more for worse service and the lowest level workers are told they need to find a second job just to survive because they are a valueless kind of replaceable resource.”
I have not found a single case where this can be answered in favour of privatisation. Can You?
A challenge
“And, out of interest, does anyone know of any research into privatization that shows it to be generally effective at improving a service, increasing efficiency and leaving its lowest level workers with a living wage? All I read currently is that the investors get richer, the management can pay itself what it likes, the customers pay more and more for worse service and the lowest level workers are told they need to find a second job just to survive because they are a valueless kind of replaceable resource.”
I have not found a single case where this can be answered in favour of privatisation. Can You?
Monday, June 18, 2012
On New Zealand's Retirement Income. Pension.
Kia-ora
The finance industry have been creaming their pants, for a return to the halcyon days, before the tax rebates were removed from superannuation savings. When they got to play with our money for free, and the negative returns and high charges were ignored, because of tax payer subsidies.
Egged on by the neo-liberals who prefer the elderly, the unemployed and the sick to starve in the streets, as an incentive to scare working people into accepting starvation wages, while they continue to get 17% increases in wealth, the finance industry is dreaming of getting more of their sticky hands on our wealth, with private super funds.
Since the 70's they have been constant in the meme that we cannot afford super. A meme that has been driven entirely by the self interest of those, who are too wealthy to need super and too mean to pay taxes, and a greedy finance industry.
Unfortunately, it is true, that if you repeat bullshit often enough, even those who should know better come to believe it.
We cannot afford super is code for, "we should leave our elderly to beg on the streets". So that wealthy people can pay less tax and the finance industry can again lose our savings for us.
In fact the idea that State super is unaffordable is crap from the same people that cry TINA and reckon that all social insurance is unaffordable.
If they win with super, they will just start on other social wages.
In reality it is much more affordable than the finance company bailouts, which would be necessary with private super.
.
"So, in 2050, we're projected to be paying only 1% of GDP more in superannuation than we were paying in 1990. Quelle horreur! This is not a difference to be terrified of, and it is easily manageable with a modest increase in taxation, either now or in the future (though that perhaps is exactly what those pushing for change are frightened of: higher taxes)".
Intergenerational theft is another piece of oft repeated stupidity.
"Do we really want to return to the days when most elderly people were totally impoverished when their working lives ended".
Super has always been paid for by current production. However you finingle it financially, whether through current taxation or savings, it still comes from the production of the current generation.
If we want to keep super affordable we should tax the current generation to invest in a sustainable future. Invest in energy, housing, education and other infrastructure so that we can keep all our people. Not in financial ponzi schemes which will fall over in the next GFC.
""Because our kids can’t afford to buy houses, we bought houses for them to live in using the equity from our house, and now all our money is tied up in mortgages. At the same time, we’re supporting our parents in their old age.
That’s how life is and always has been, for most of us. Our parents worked to give us a decent start in life, and we worked hard so our kids could have a fair go. We’re looking after our parents in their old age. We hope we’ll be looked after in our old age.
What about this is “intergenerational theft”?""
But. We can avoid the whole concept of retirement, intergenerational fairness and all the other sticking points by accepting that everyone in our society is entitled to a liveable share in the society they and their ancestors have built up.
Whether you call it a Universal income, Guaranteed minimum income (GMI) or a personal shareholder payment it is the same thing.
Replace all welfare, social insurance and pensions with a GMI.
We also get to solve many other problems such as child poverty, the unfairness of a present welfare system, and making our society more sustainable, at the same time.
http://www.sott.net/articles/show/235840-A-Town-Without-Poverty-Canada-s-Guaranteed-Income-Experiment
""Initially, the Mincome program was conceived as a labour market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work.
It turns out they did.
Only two segments of Dauphin's labour force worked less as a result of Mincome - new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren't under as much pressure to support their families.
The end result was that they spent more time at school and more teenagers graduated. Those who continued to work were given more opportunities to choose what type of work they did"".
http://thestandard.org.nz/key-on-the-nation/comment-page-1/#comment-483385 The best way to deal with any problem is to eliminate it at root. The best way to deal with ‘retirement’ as a problem is to eliminate the entire concept. No I’m not being extreme.
The simple answer is a Universal Income""
""In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally"".
Monday, October 24, 2011
Occupy Wall Street.
Kia-ora
The response from the Neo-Liberal establishment to OWS, shows they know how effective bottom up changes can be.
Why we should protest.
Management 101. Effective change management.
1. Establish a consensus that there is a need for change.
2. Figure out what needs to be changed. Again by consensus.
3. Invite ideas and positive changes from the shop floor.
4. Managers should act as facilitators and supporters of change agents.
Lasting and effective changes, need to have the active support of the majority of the workforce, at all levels.
Authoritarian managers are rarely effective at making lasting changes. People always find a way to derail changes they do not support.
Despite some of the best research on Management and Leadership coming from the USA. Places like the USA, NZ and UK ignore it. Leaving effective implementation to Germany, Japan and Scandinavia.
It is strange that despite all the research that says they are less effective, the cult of the Authoritarian Manager/National Leader still remains. Maybe the answer lies in the research about Authoritarian followers. Those who like certainty, even if it is leading them into a country like Somalia.
OWS is at stage 1 at present.
The first stage.
What is frightening politicians, who dream of absolute power, is they know OWS will grow.
We will soon see the solution is democracy. Very scary for those who have been ripping us of while accepting a Parliamentary salary from us.
Why should we leave our future up to a power hungry, greedy minority.
We are the 99%.
In the meantime. We can do our part in supporting stage one. Worldwide.
Occupy Wall Street.
The response from the Neo-Liberal establishment to OWS, shows they know how effective bottom up changes can be.
Why we should protest.
Management 101. Effective change management.
1. Establish a consensus that there is a need for change.
2. Figure out what needs to be changed. Again by consensus.
3. Invite ideas and positive changes from the shop floor.
4. Managers should act as facilitators and supporters of change agents.
Lasting and effective changes, need to have the active support of the majority of the workforce, at all levels.
Authoritarian managers are rarely effective at making lasting changes. People always find a way to derail changes they do not support.
Despite some of the best research on Management and Leadership coming from the USA. Places like the USA, NZ and UK ignore it. Leaving effective implementation to Germany, Japan and Scandinavia.
It is strange that despite all the research that says they are less effective, the cult of the Authoritarian Manager/National Leader still remains. Maybe the answer lies in the research about Authoritarian followers. Those who like certainty, even if it is leading them into a country like Somalia.
OWS is at stage 1 at present.
The first stage.
What is frightening politicians, who dream of absolute power, is they know OWS will grow.
We will soon see the solution is democracy. Very scary for those who have been ripping us of while accepting a Parliamentary salary from us.
Why should we leave our future up to a power hungry, greedy minority.
We are the 99%.
In the meantime. We can do our part in supporting stage one. Worldwide.
Occupy Wall Street.
Saturday, October 8, 2011
Kia-ora
A reminder of why we have to change our economic paradigm.
Our present one is not sustainable, even short term.
“Memo To The #Occupied Movement (A Post-Growth Economy)
By Richard Heinberg
06 October, 2011
Post Carbon Institute
Here’s a fact that’s hard for most Americans to swallow: economic growth is over. Given the finite nature of our planet and its resources, the recent trend of global economic expansion was destined to end. No stimulus package or slashing of social programs is going to flip the economy back to an expansionary trajectory. We’ve hit the proverbial wall, and this will be the defining reality of our lives from now on.
The growth-seeking political-economic system has failed us. Today that system is dominated by Wall Street. “Goldman Sachs rules the world,” trader Alessio Rastani told us in a now-viral BBC interview. I met people like Rastani in researching my book, The End of Growth.
At one lavish conference, 800 global investors packed a hotel ballroom to consider climate change. There was no talk of how to avert or mitigate floods and droughts. Instead, the discussion focused on profiting from warming with — no joke — weather derivatives. These folks were just doing their job, despite any private feelings of concern, remorse, or dread. And each was getting paid enough to single-handedly fund a midsize school district.
Both Wall Street and Washington are trying to do something impossible: grow human consumption forever in a world of limited energy, minerals, water, topsoil, and biodiversity, all while protecting and expanding the riches of the top one percent. If economic growth is over, that means we can no longer count on a rising tide to lift all boats. Under these conditions, extreme income inequality is not just unfair, it is socially unsustainable.
It’s strategic to bring protest to Wall Street rather than Washington. We must go directly to the crime scene — not with a request for reforms, but with an arrest warrant from the people.
You courageous people in the #occupy movement are absolutely right in saying the system is broken, greedy, and unfair. But when our discussion turns to replacing the current system, we’ve got to embrace a bigger view of reality than the one held by stock traders and politicians. It’s not just our wealth they want to control, it’s our vision for what is both possible and necessary. We need a post-growth economy that works both for people (all of them) and for the rest of nature: a localized economy based on renewable resources harvested at nature’s rates of replenishment, not a fossil-fueled global economy driven by the imperative of ever-higher returns on investment."""
A reminder of why we have to change our economic paradigm.
Our present one is not sustainable, even short term.
“Memo To The #Occupied Movement (A Post-Growth Economy)
By Richard Heinberg
06 October, 2011
Post Carbon Institute
Here’s a fact that’s hard for most Americans to swallow: economic growth is over. Given the finite nature of our planet and its resources, the recent trend of global economic expansion was destined to end. No stimulus package or slashing of social programs is going to flip the economy back to an expansionary trajectory. We’ve hit the proverbial wall, and this will be the defining reality of our lives from now on.
The growth-seeking political-economic system has failed us. Today that system is dominated by Wall Street. “Goldman Sachs rules the world,” trader Alessio Rastani told us in a now-viral BBC interview. I met people like Rastani in researching my book, The End of Growth.
At one lavish conference, 800 global investors packed a hotel ballroom to consider climate change. There was no talk of how to avert or mitigate floods and droughts. Instead, the discussion focused on profiting from warming with — no joke — weather derivatives. These folks were just doing their job, despite any private feelings of concern, remorse, or dread. And each was getting paid enough to single-handedly fund a midsize school district.
Both Wall Street and Washington are trying to do something impossible: grow human consumption forever in a world of limited energy, minerals, water, topsoil, and biodiversity, all while protecting and expanding the riches of the top one percent. If economic growth is over, that means we can no longer count on a rising tide to lift all boats. Under these conditions, extreme income inequality is not just unfair, it is socially unsustainable.
It’s strategic to bring protest to Wall Street rather than Washington. We must go directly to the crime scene — not with a request for reforms, but with an arrest warrant from the people.
You courageous people in the #occupy movement are absolutely right in saying the system is broken, greedy, and unfair. But when our discussion turns to replacing the current system, we’ve got to embrace a bigger view of reality than the one held by stock traders and politicians. It’s not just our wealth they want to control, it’s our vision for what is both possible and necessary. We need a post-growth economy that works both for people (all of them) and for the rest of nature: a localized economy based on renewable resources harvested at nature’s rates of replenishment, not a fossil-fueled global economy driven by the imperative of ever-higher returns on investment."""
Wednesday, September 28, 2011
Monday, August 22, 2011
Climate Change Is Here. Now!
Kia-ora
Kassie Siegel: Climate Change Is Here Now
"Climate change is happening now, we are causing it, and the costs of inaction -- to us, to plants and animals, to the physical world that we depend on -- are too steep to ignore and pass to the coming generations".
Friday, August 12, 2011
In search of a justification.
Kia-ora
Many laughable statements come from the Neo-Liberal right, but the ones that seek a moral or economic justification for greed and meanness are the most comical. (If the effects were not so serious).
Like the one from a bailed out US bank manager. "God thinks I should have a bonus". :-)
The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
– John Kenneth Galbraith
The Standard.
Debunks the idea that taxing the rich more cuts total tax take. In fact the opposite has happened. As taxes to the rich have been cut in Western countries, Government revenues have decreased in most cases.
As I have said before. In the time of its greatest prosperity the US top tax rate was 90%.
Recent top rate tax cuts in New Zealand have resulted in decreased revenue each time.
Decreasing taxes on business and high incomes means more capital is free for more investment.
Did not work. Capital investment by private investors in NZ, the UK and the USA has decreased while they hid the money offshore, to dodge even more of the tax they should pay, or spend it on holidays in Hawaii. AND financial gambling. (Where we will have to bail them out next time they lose).
What's worse.
Cutting tax rates, and therefore revenues, cuts Government investment in the local economy in favour of those who take the money offshore. Never to be seen again.
In New Zealand the Government is borrowing offshore to pay for tax cuts to the rich. A double blow to the national deficit.
Similarly. Cutting wages is supposed to be an incentive for business to invest.
Trouble is cutting the wages of the businesses customers is even more of a disincentive. Low wage workers do not buy much.
Since the 1984 attacks on Unions and steadily dropping wages in New Zealand, direct investment in New Zealand production has dropped to 1/3 of what it was in the 70's.
Make the rich richer and they will give people jobs.
Jobs are not something the rich gives. Jobs are workers supplying their labour.
The rich are awash in money at present. 20% increase in the wealth of the richest in New Zealand. In the USA the rich are sitting on trillions. Where are the jobs??
In recent history job growth has come from State initiatives. It was not the private sector that pulled the USA out of the 30's depression, it was massive State spending, on the new deal, then WW2.
Lastly. The idea that the rich earn their money and we have no right to take it from them.
Who earns millions?
Most have millions because their family had millions. They contribute nothing and consume much more than poorer people.
Some entrepreneurs have started new business, produced services and ideas of great benefit to many people. It can be said that they earned their money.
It is notable that most of these people are philanthropists.
The rich benefit so much from our society it is only fair that they give back.
Better to take some if this money back and reinvest in infrastructure and the necessary green technology to ensure humanities future survival.
Many laughable statements come from the Neo-Liberal right, but the ones that seek a moral or economic justification for greed and meanness are the most comical. (If the effects were not so serious).
Like the one from a bailed out US bank manager. "God thinks I should have a bonus". :-)
The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
– John Kenneth Galbraith
The Standard.
Debunks the idea that taxing the rich more cuts total tax take. In fact the opposite has happened. As taxes to the rich have been cut in Western countries, Government revenues have decreased in most cases.
As I have said before. In the time of its greatest prosperity the US top tax rate was 90%.
Recent top rate tax cuts in New Zealand have resulted in decreased revenue each time.
Decreasing taxes on business and high incomes means more capital is free for more investment.
Did not work. Capital investment by private investors in NZ, the UK and the USA has decreased while they hid the money offshore, to dodge even more of the tax they should pay, or spend it on holidays in Hawaii. AND financial gambling. (Where we will have to bail them out next time they lose).
What's worse.
Cutting tax rates, and therefore revenues, cuts Government investment in the local economy in favour of those who take the money offshore. Never to be seen again.
In New Zealand the Government is borrowing offshore to pay for tax cuts to the rich. A double blow to the national deficit.
Similarly. Cutting wages is supposed to be an incentive for business to invest.
Trouble is cutting the wages of the businesses customers is even more of a disincentive. Low wage workers do not buy much.
Since the 1984 attacks on Unions and steadily dropping wages in New Zealand, direct investment in New Zealand production has dropped to 1/3 of what it was in the 70's.
Make the rich richer and they will give people jobs.
Jobs are not something the rich gives. Jobs are workers supplying their labour.
The rich are awash in money at present. 20% increase in the wealth of the richest in New Zealand. In the USA the rich are sitting on trillions. Where are the jobs??
In recent history job growth has come from State initiatives. It was not the private sector that pulled the USA out of the 30's depression, it was massive State spending, on the new deal, then WW2.
Lastly. The idea that the rich earn their money and we have no right to take it from them.
Who earns millions?
Most have millions because their family had millions. They contribute nothing and consume much more than poorer people.
Some entrepreneurs have started new business, produced services and ideas of great benefit to many people. It can be said that they earned their money.
It is notable that most of these people are philanthropists.
The rich benefit so much from our society it is only fair that they give back.
Better to take some if this money back and reinvest in infrastructure and the necessary green technology to ensure humanities future survival.
Thursday, July 7, 2011
Some glimmerings of hope.
Kia-ora
At last Labour (NZ's, until now, slightly left Neo-Liberal party) are showing some signs of offering real visionary alternatives.
Comment from Labour.
Good on them.
Some thoughts.
The reaction shows that sensible people have been waiting for alternatives from the present voodoo economics.
CGT should be universal on any appreciating asset.
Without a CGT PAYE payers are subsidising speculators .
It expands the tax base in a way that also discourages unproductive speculation and borrowing.
Capital gains income should be treated the same as any other personal income for tax purposes.
Why should you pay up to 33% on your work income and a speculator or someone who does up a house for sale pay only 15%.
It has to be retrospective to have any real affect.
The family home will probably have to be exempt to make the policy politically palatable, but I see no real reason to complicate CGT by doing so.
Like GST, I believe tax systems are much harder to rort if they are kept simple.
I can see a lot of single children of wealthy people suddenly acquiring a family home.
If it is, there are several ways to make it less distortionate (Suggestions only. There are more).
1 The family home could be exempt up to say, twice the mean price.
2 First homes only could be exempt from CGT.
3 More State housing both to rent or buy keeps prices within reach of ordinary people and puts a further downward pressure on house prices.
4 Only charge CGT on the gap between selling a house and buying the next one.
5 Allow for inflation and normal maintenance.
Now we need to look at the bonanza for banks and speculators and nightmare for manufacturers and workers. The reserve bank act.
We wait with anticipation, the official announcement.
At last Labour (NZ's, until now, slightly left Neo-Liberal party) are showing some signs of offering real visionary alternatives.
Comment from Labour.
Good on them.
Some thoughts.
The reaction shows that sensible people have been waiting for alternatives from the present voodoo economics.
CGT should be universal on any appreciating asset.
Without a CGT PAYE payers are subsidising speculators .
It expands the tax base in a way that also discourages unproductive speculation and borrowing.
Capital gains income should be treated the same as any other personal income for tax purposes.
Why should you pay up to 33% on your work income and a speculator or someone who does up a house for sale pay only 15%.
It has to be retrospective to have any real affect.
The family home will probably have to be exempt to make the policy politically palatable, but I see no real reason to complicate CGT by doing so.
Like GST, I believe tax systems are much harder to rort if they are kept simple.
I can see a lot of single children of wealthy people suddenly acquiring a family home.
If it is, there are several ways to make it less distortionate (Suggestions only. There are more).
1 The family home could be exempt up to say, twice the mean price.
2 First homes only could be exempt from CGT.
3 More State housing both to rent or buy keeps prices within reach of ordinary people and puts a further downward pressure on house prices.
4 Only charge CGT on the gap between selling a house and buying the next one.
5 Allow for inflation and normal maintenance.
Now we need to look at the bonanza for banks and speculators and nightmare for manufacturers and workers. The reserve bank act.
We wait with anticipation, the official announcement.
Tuesday, June 28, 2011
Democracy Recap.
Kia-ora
I find myself on the Standard again defending the principle of Democracy against the same old arguments.
My answers in italics.
Arguing for democracy.
“On top of that is the very real threat of Tyranny of the Majority.”
That is a joke! At the moment we have a tyranny of a very small, wealthy minority.
What is worse is Government by minority in the USA, UK and NZ keeps voting for less taxes for the wealthy putting the economy in deficit and shutting our society down.
Looking at two BCIR decisions in California is cherry picking unless you look at how it has worked fine elsewhere.
“Transfer that scenario to NZ and I wonder if the Homosexual Law Reform Bill (1986) would have been passed had it gone to referenda?”
Judging by the polling at the time the majority in NZ supported the bill. It was parliament who held it up. I suspect a majority are also happy about gay marriage.
It is a minority of religious people, supported by Government who are too scared of them to revisit the issue, who are holding up a sensible abortion reform law.
“Or the Prostitution Law Reform Bill of 2003?”
Maybe, maybe not. I suspect the majority could have been persuaded by sensible argument. But it is not a consideration against democracy that some people do not like the decisions. Many more do not like most of the decisions of our present Government.
“Heck, women didn’t get the vote in Switzerland until 1971!! Until then, numerous referenda on the issue had been voted down.”
Again in NZ it was Parliament that held this up. Indications were that the majority view was women should have equal rights. The decision in Switzerland reflected their society not their political system. The same thing would have happened no matter what form of Government they had.
“I have a very real fear of lawmaking-by-referenda – especially law that is complex. For example, who can forget Norm Withers’ referendum held in 1999, which asked, “Should there be a reform of our Justice system placing greater emphasis on the needs of victims, providing restitution and compensation for them and imposing minimum sentences and hard labour for all serious violent offences?”?”
The Government censored the senior judge who argued against more severe sentencing.
Again this needed a more informed level of public discussion, instead of point scoring politicians.
You mean the majority may not agree with you! If you think you have a better way it is up to you to prove it will work.
Who are you to say you can understand complex issues but the public cannot.
The majority did oppose section 59. Not I suspect because they wanted to go out and beat their kids, but as I did, because the police already have more powers than the level of maturity and skills of the average police-person can handle.
Given more discussion and less of the disgusting name calling and BS from both extremes we may have got a better law.
Similarly with the FS and SB law a lot more discussion and time was required to make a durable solution which was OK for the majority of both ethnicity.
“Lawmaking by referenda, to me, is a lazy way to make law. It involves little thinking; very little participation by the public; and only superficual knowledge of issues – usually by media. Complex issues devolved to a simple “Yes” or “No” tick.”
Doesn’t work that way in Switzerland. Politicians have to work hard at getting views across, making legislation work or it will be voted out.
Research shows that on the whole BCIR makes better decisions than politicians.
New Zealanders have shown over time that, contrary to your belief, the majority believe in fairness and equality for minorities. How many really oppose fair treaty settlements for example.
“It would be like handing over the justice system to internet messageboards/Fora, for a verdict. It would be the ultimate ‘McDonaldisation’ of our political system.”
And handing it over to the prettiest politician on TV is not!
““Would you like fries with that “No” vote to adequately fund criminal rehabilitation programmes?””
I suspect given the evidence of increased crime figures, if they are abandoned, the public would quickly vote them back.
When people know that they will actually make a difference they will take more interest and demand they are properly informed.
Why would anyone fully consider how they vote in a referendum when they know it will ignored.
Like most people your objections are really. “We cannot have democracy because the decisions may not reflect the ones I would make”.
Well. I am happy to test my ideas against the collective intelligence of the public. Are you?
I find myself on the Standard again defending the principle of Democracy against the same old arguments.
My answers in italics.
Arguing for democracy.
“On top of that is the very real threat of Tyranny of the Majority.”
That is a joke! At the moment we have a tyranny of a very small, wealthy minority.
What is worse is Government by minority in the USA, UK and NZ keeps voting for less taxes for the wealthy putting the economy in deficit and shutting our society down.
Looking at two BCIR decisions in California is cherry picking unless you look at how it has worked fine elsewhere.
“Transfer that scenario to NZ and I wonder if the Homosexual Law Reform Bill (1986) would have been passed had it gone to referenda?”
Judging by the polling at the time the majority in NZ supported the bill. It was parliament who held it up. I suspect a majority are also happy about gay marriage.
It is a minority of religious people, supported by Government who are too scared of them to revisit the issue, who are holding up a sensible abortion reform law.
“Or the Prostitution Law Reform Bill of 2003?”
Maybe, maybe not. I suspect the majority could have been persuaded by sensible argument. But it is not a consideration against democracy that some people do not like the decisions. Many more do not like most of the decisions of our present Government.
“Heck, women didn’t get the vote in Switzerland until 1971!! Until then, numerous referenda on the issue had been voted down.”
Again in NZ it was Parliament that held this up. Indications were that the majority view was women should have equal rights. The decision in Switzerland reflected their society not their political system. The same thing would have happened no matter what form of Government they had.
“I have a very real fear of lawmaking-by-referenda – especially law that is complex. For example, who can forget Norm Withers’ referendum held in 1999, which asked, “Should there be a reform of our Justice system placing greater emphasis on the needs of victims, providing restitution and compensation for them and imposing minimum sentences and hard labour for all serious violent offences?”?”
The Government censored the senior judge who argued against more severe sentencing.
Again this needed a more informed level of public discussion, instead of point scoring politicians.
You mean the majority may not agree with you! If you think you have a better way it is up to you to prove it will work.
Who are you to say you can understand complex issues but the public cannot.
The majority did oppose section 59. Not I suspect because they wanted to go out and beat their kids, but as I did, because the police already have more powers than the level of maturity and skills of the average police-person can handle.
Given more discussion and less of the disgusting name calling and BS from both extremes we may have got a better law.
Similarly with the FS and SB law a lot more discussion and time was required to make a durable solution which was OK for the majority of both ethnicity.
“Lawmaking by referenda, to me, is a lazy way to make law. It involves little thinking; very little participation by the public; and only superficual knowledge of issues – usually by media. Complex issues devolved to a simple “Yes” or “No” tick.”
Doesn’t work that way in Switzerland. Politicians have to work hard at getting views across, making legislation work or it will be voted out.
Research shows that on the whole BCIR makes better decisions than politicians.
New Zealanders have shown over time that, contrary to your belief, the majority believe in fairness and equality for minorities. How many really oppose fair treaty settlements for example.
“It would be like handing over the justice system to internet messageboards/Fora, for a verdict. It would be the ultimate ‘McDonaldisation’ of our political system.”
And handing it over to the prettiest politician on TV is not!
““Would you like fries with that “No” vote to adequately fund criminal rehabilitation programmes?””
I suspect given the evidence of increased crime figures, if they are abandoned, the public would quickly vote them back.
When people know that they will actually make a difference they will take more interest and demand they are properly informed.
Why would anyone fully consider how they vote in a referendum when they know it will ignored.
Like most people your objections are really. “We cannot have democracy because the decisions may not reflect the ones I would make”.
Well. I am happy to test my ideas against the collective intelligence of the public. Are you?
Saturday, June 25, 2011
The Politics of Envy.
Kia-ora
Thanks to Art Uncut for this one.
""If an individual realises that those in the socio-economic group they were born into die a decade younger on average, or that their children's life chances are significantly less than the children of those who can afford private education, or that the wages of those in 'higher' socio-economic groups have risen many, many times faster in the last thirty years than the wages of those in their own, and as a result of this realisation gets a bit angry, I think that we should call this 'legitimate grievance' rather than 'petty jealousy'. The phrase 'politics of envy' is very ugly indeed. I hope in the future this phrase is deemed unacceptable in the way that racist or homophobic terms are now deemed unacceptable"".
Thanks to Art Uncut for this one.
""If an individual realises that those in the socio-economic group they were born into die a decade younger on average, or that their children's life chances are significantly less than the children of those who can afford private education, or that the wages of those in 'higher' socio-economic groups have risen many, many times faster in the last thirty years than the wages of those in their own, and as a result of this realisation gets a bit angry, I think that we should call this 'legitimate grievance' rather than 'petty jealousy'. The phrase 'politics of envy' is very ugly indeed. I hope in the future this phrase is deemed unacceptable in the way that racist or homophobic terms are now deemed unacceptable"".
Wednesday, June 22, 2011
Financial Transaction Tax.
Kia-ora
I promised ideas for solutions. Here is another step to making the economy work for people.
A Financial Transaction tax (FTT) imposed unilaterally by a single country would probably fail as speculators can shift to another jurisdiction.
If most countries impose one at the same rate it cannot be dodged.
The advantages are, that it captures and slows speculation in currency flows, which has been so damaging to most people. Including us. At the moment we pay for the failures of money traders with bailouts and Government spending cuts.
Don't forget that New Zealand's credit rating reflects the expectation that the Government would bail out private banking.
Join the campaign. Financial-transaction-tax
I promised ideas for solutions. Here is another step to making the economy work for people.
A Financial Transaction tax (FTT) imposed unilaterally by a single country would probably fail as speculators can shift to another jurisdiction.
If most countries impose one at the same rate it cannot be dodged.
The advantages are, that it captures and slows speculation in currency flows, which has been so damaging to most people. Including us. At the moment we pay for the failures of money traders with bailouts and Government spending cuts.
Don't forget that New Zealand's credit rating reflects the expectation that the Government would bail out private banking.
Join the campaign. Financial-transaction-tax
Thursday, June 2, 2011
Anthropogenic, Global Warming. (AGW) Is it too late?
Kia-ora
Is it already to late.
“Last year, a record 30.6 gigatonnes of carbon dioxide poured into the atmosphere, mainly from burning fossil fuel – a rise of 1.6Gt on 2009, according to estimates from the IEA regarded as the gold standard for emissions data.”
While the politicians around the world "are fiddling", The chances of keeping Global warming within tolerable limits are decreasing year by year.
James Lovelock may yet be proved right. The human race is unable to co-operate to prevent the collapse of the environments ability to support humanity.
Keeping warming within 2 degrees this century is unlikely, unless we stop almost all fossil fuel use within the next 20 years.
The US Governments answer is to legislate, to say AGW does not exist, as if politicians opinions could "stop the tide".
Without the efforts of the worlds biggest per capita polluter, the chances of real efforts to reduce warming in the next 20 years are not good.
The IPCC predictions have, so far, been shown to understate AGW.
ANY ONE WHO ARE CONCERNED ABOUT OUR CHILDREN'S FUTURE SHOULD BE PRESSURING GOVERNMENTS AND BUSINESS TO REDUCE GREEN HOUSE GAS EMISSIONS. Not to mention reducing our own.
Joining organisations such as Green parties NZ Greens, lobbying groups 350.org , community groups NZ Transition towns and business sustainability NZ business council for sustainable business. groups are other ways to help make a difference.
Government agencies can assist with reducing your dwelling or businesses carbon footprint. Energy Efficiency and Conservation Authority.
Is it already to late.
“Last year, a record 30.6 gigatonnes of carbon dioxide poured into the atmosphere, mainly from burning fossil fuel – a rise of 1.6Gt on 2009, according to estimates from the IEA regarded as the gold standard for emissions data.”
While the politicians around the world "are fiddling", The chances of keeping Global warming within tolerable limits are decreasing year by year.
James Lovelock may yet be proved right. The human race is unable to co-operate to prevent the collapse of the environments ability to support humanity.
Keeping warming within 2 degrees this century is unlikely, unless we stop almost all fossil fuel use within the next 20 years.
The US Governments answer is to legislate, to say AGW does not exist, as if politicians opinions could "stop the tide".
Without the efforts of the worlds biggest per capita polluter, the chances of real efforts to reduce warming in the next 20 years are not good.
The IPCC predictions have, so far, been shown to understate AGW.
ANY ONE WHO ARE CONCERNED ABOUT OUR CHILDREN'S FUTURE SHOULD BE PRESSURING GOVERNMENTS AND BUSINESS TO REDUCE GREEN HOUSE GAS EMISSIONS. Not to mention reducing our own.
Joining organisations such as Green parties NZ Greens, lobbying groups 350.org , community groups NZ Transition towns and business sustainability NZ business council for sustainable business. groups are other ways to help make a difference.
Government agencies can assist with reducing your dwelling or businesses carbon footprint. Energy Efficiency and Conservation Authority.
Tuesday, May 17, 2011
The Green Alternative.
Kia-ora
The New Zealand Greens show there are credible alternatives to National's Neo-Liberal slash and burn.
Some Alternatives for a Green budget.
In fact they have been advocating socially and environmentally responsible alternatives for some time.
The Green new Deal.
Media prefer to ignore sensible discussion of policy to concentrate on sound bites and irrelevance about celebrities.
The Labour party is "missing in action". I suspect they feel that New Zealand is so unrecoverable, after 30 years of Neo-Liberal "stuffing" that they do not want to be in power
The New Zealand Greens show there are credible alternatives to National's Neo-Liberal slash and burn.
Some Alternatives for a Green budget.
In fact they have been advocating socially and environmentally responsible alternatives for some time.
The Green new Deal.
Media prefer to ignore sensible discussion of policy to concentrate on sound bites and irrelevance about celebrities.
The Labour party is "missing in action". I suspect they feel that New Zealand is so unrecoverable, after 30 years of Neo-Liberal "stuffing" that they do not want to be in power
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