NZ vs Australia tax rates

May 10th, 2007 at 7:03 am by David Farrar

The latest changes to the Australian tax rates now means that all Australians earning less than $250,000 pay less in tax than we do in NZ. And that’s before we even look at higher wages, and less indirect taxes.

taxrates.JPG

The table above shows how much tax Australians and NZers will be paying at each income level. Also what the effective average tax rate will be.

If you have an entry level job at $20K, Dr Cullen takes 18.2% off you, while Mr Costello will take only 6.8% giving you an extra $2,300 to spend.

At the average wage of $40K, Dr Cullen takes 20.2% and Mr Costello only 14.6%.

At $80K, Dr Cullen takes 28.1% to 22.3% for Costello. That’s an extra $4,000+.

Now let us look at what a Finance Minister who does not hate tax cuts can do over time.

taxcuts2.JPG

Now remember in looking at the above table, that Australia has had far smaller surpluses as a % of GDP than NZ, yet have managed to cut taxes consistently.

Low income Aussies have had a 40% reduction in the tax they pay. Those on our average wage of $40,000 have had a massive 28% reduction in tax.

In fact everyone earning under $150,000 had has a 20% or greater reduction in tax.

NZ has had a golden opportunity to lower taxes over the last few years – at times when it would not have been inflationary and we had the second best best fiscal position in the world.

Thanks to Dr Cullen we have lost the opportunity to stay competitive with Australia, and to give hard working Kiwis some of their own money back.

No tag for this post.

147 Responses to “NZ vs Australia tax rates”

  1. PaulL () says:

    I think your second table is backwards. The percentages correct tho.

    Before people start mumbling about state taxes, consider local rates in NZ (out of control), and the considerable tax break given to superannuation in Australia (and which isn’t represented in your table).

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  2. SPC () says:

    I don’t agree.

    We have a very high BOP deficit which would have been even higher if we had reduced taxes.

    We should not cut taxes until we find a way to resolve this strucutral problem. IMO, if we do this the wrong way around, we will find ourselves in a long term economic decline

    Otherwise, it’s obvious the lower tax rates occur on Oz because of their higher wages.

    We could have lower taxes too, if employers paid higher wages.

    Also one should note Australians however have to pay a compulsory share of their wages into super schemes for their retirement, whereas here we have tax funded super and some of the surplus we have (and need to have for this reason) is invested to ensure the viability of this tax funded super.

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  3. David Farrar () says:

    SPC – total nonsense. Many countries run a BOP current account deficit and it is no excuse to not reduce tax.

    Also nonsense to say having higher wages means one can afford tax cuts more. Rubbish. The operating surplus determines the level of tax cuts you can afford.

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  4. David Farrar () says:

    Paul – tablw now fixed.

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  5. SPC () says:

    How much do you think the interest rates would rise, if we cut taxes while the BOP deficit was 10% of GDP? And how many countries have cut taxes while their BOP deficit was at this level? It would after all be a very irresponsible thing to do.

    As to tax rates and wage rates, it is simply a fact that the higher the peoples wages, the lower the rate of tax on their incomes that would be required to fund their public services.

    This is the sad fact that we have to take into account when comparing our situation with theirs. We either pay more of our dollars in taxy or have less public services than they do, because we have lower wage incomes.

    As to surpluses, not all surpluses are equal. It depends on how much deferred infrastructure investment is in the works and also whether a country has tax funded super. Those with tax funded super need to store surpluses now to afford future super costs.

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  6. burt () says:

    SPC

    How much do you think the interest rates would rise, if we increased welfare while the BOP deficit was 10% of GDP? And how many countries have increased welfare while their BOP deficit was at this level? It would after all be a very irresponsible thing to do.

    The effect is the same, different ideology different end result. I don’t think dependency and tax churning is a good replacement for real economic growth.

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  7. Sinner () says:

    First and most importantly: even RadioSocialism is now calling the next Aussie election for Howard — more than 10 point labour lead smashed overnight. That’s government for you!

    How much do you think the interest rates would rise,

    A buck is a buck is a buck – whether the socialists spend it or humans spend it. Because personal spending is more efficient that socialist spending, provided you reduce govt spending more than the tax cuts the net impact on the economy is always positive.

    Fact is: Kiwis voted for Tax cuts at the last election and the Moneymander and Maorimander stole them from us.

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  8. burt () says:

    DPF

    You said: “The operating surplus determines the level of tax cuts you can afford.”

    I’ll translate for the socialists.

    “Spend the money quickly before the end of the financial year or you won’t get it in next years budget” might work for justifying a Govt dept. operating budget but it’s the wrong way to justify high taxation.

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  9. SPC () says:

    The thing is burt, in the modern world global market cutting taxes locally boosts jobs and production globally.

    Whereas “churning” locally keeps the local economy sound while also ensuring that families can cope.

    WFF is puting the people first. The people do not serve an economy, the economy serves the people. People work in the economy to live, not live to work for the econonmy.

    In the economic sense, the real deal is not in either family support or tax cuts, but in whether we produce or not. That is a function of investment decision making – influenced by international competitiveness and local capabilities.

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  10. SPC () says:

    What such tables cannot account for is the effect of their and our family tax credits on the comparison.

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  11. burt () says:

    SPC

    “Whereas “churning” locally keeps the local economy sound…”

    Not according to the OECD, the state of my mortgage payments, the price of housing, the overly large BOP deficit you use to justify not having tax cuts. I’m not buying this spin SPC. F&P are buggering off, Sleepyhead looks set to follow so just where will the these people work to live in this economic utopia Labour has given us?

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  12. unaha-closp () says:

    Does the table include state payroll taxes or is it federal taxes only? For instance NSW has a 6% tax on all payrolls over $600,000.

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  13. SPC () says:

    Tax cuts fuel consumption of imports – this means growth offshore, not locally.

    by local economy, I mean people having jobs and or capability to feed and rent/accomodate themselves with necessities.

    Housing price is largely a function of demand and supply of housing and access to finance to partake of that market (we are awash with mortgage finance because of our high interest rates). Though interest rates are increased to manage inflationary consequences of any imbalance.

    We have a problem with this effecting the dollar value. It is a fact that we are struggling to produce for export at the dollar value we have.

    The only solution I see to this decline in competitiveness, is to cut the link betwen our interest rates and the dollar value. This can only be done by ending the float of our currency by fixing it’s value to another currency (the Oz dollar is appropriate, and at about 80 cents of their value – an effective 10% devaluation on what has applied on average).

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  14. Sean () says:

    SPC said

    :…We either pay more of our dollars in taxy or have less public services than they do”

    I think you meant “less public servants than they do” – stop using taxes for a bloated public sector wage bill that is achieving nothing.

    The fact is Labour have had three terms in which to make a difference for the better and they haven’t – look at what Costello, a Treasurer without the philosophical opposition to taxing less, and one who has made and is making a genuine and measurable difference to the current and future prosperity of Australians (and we Kiwis working there) has achieved in the same time.

    Labour in NZ only ever had one idea – tax people more because only Labour knows how money should be spent. The policy is intellectually bankrupt and this latest budget by Costello starkly highlights the price New Zealand and NZers have paid, are paying and will continue to prop up this disaster of a government.

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  15. Razorlight () says:

    Can some of you Journo’s (if you have not already) grab this table and run with it. Everyone needs to see this table so that more prssure is put on Labour.

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  16. Bogusnews () says:

    The thing that upsets me the most is that Labour was traditionally the workers party. If they hadn’t allowed expenditure in the state service to explode (Treasury has expressed alarm several times, as has the IMF and centre for independent studies.) All are very concerned that Labour are spending an additional 20Bil a year on the state service with no measurable improvement in service.

    If this massive expenditure had of been capped then they would have had enough money to virtually do away with tax. It genuinely upsets me because Labour had the chance to massively improve the lot of the poor people, but instead have pee’d it down the drain.

    Michael Cullen admitted (under duress) in Parliament last year that even after 6 of the best years in anyones living memory the average NZ’er is now no better off. While salaries have gone up, they have clobbered us with 41 additional taxes. So after six golden years under this incompetent lot we are right back to where we started. God help us if they are in for six hard years.

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  17. the deity formerly known as nigel6888 () says:

    SPC every one of your “facts” that you regretfully put forward is tendentious garbage.

    You are clearly running off a set of talking points and havent the faintest idea about economics – I mean, what respectable economist would argue that deadweight losses and churn generated net economic gain – simple bullshit.

    Now you reckon that fixing the dollar is the next good idea – brilliant, that will teach all those investment Johnnies. Hey, I’ve got one for you, how about a price freeze, thats bound to make us more competitive isnt it.

    Christ, its a sad day when Labour hacks start recommending Muldoonist policy.

    Guess Labour has appointed you as the after hours blog wrangler to try and damage control the Australian budget. Looking forward to Sonic’s identical take on the day shift.

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  18. Sinner () says:

    SPC you still don’t get it.

    80 cents of their value – an effective 10% devaluation on what has applied on average).

    On these figures, we could convert every NZ dollar to an Aussie dollar at about 75% of face value, join Aussie and pay their taxes —and most of the country will still be better off!

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  19. Sinner () says:

    SPC you still don’t get it.

    80 cents of their value – an effective 10% devaluation on what has applied on average).

    On these figures, we could convert every NZ dollar to an Aussie dollar at about 75% of face value, join Aussie and pay their taxes —and most of the country will still be better off!

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  20. Sinner () says:

    To make my point, the Hearld says that the gap between average New Zealand and Australian after-tax wages is nearly 40 per cent,

    and they are not even counting the currency effects.

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  21. Bogusnews () says:

    By the way, is that table correct? I thought the top tax rate in Oz was now 30%. I would have thought that would make a dramatic difference in the high income ranges when ours is 39%.

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  22. tim barclay () says:

    John Key could simply implement the Aussie tax rates as his policy and dare Cullen to match it. And Key could signal further reductions taking into account our higher GST. Cullen has not even indexed the tax rates to take account of bracket creep. There Cullen is talking in his pommy voice telling us how to live our lives. Prick.

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  23. writeups () says:

    It’s bloody stupid for cullen to argue that National tax cuts would have been pumping an extra $3 billion into the economy each year when his spending binges have exceeded that each year. What a silly fellow.

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  24. simon () says:

    Lets make this easy..

    Alter the existing income tax rates to;
    up to $50K ($38K) 15c (19.5)
    $50001 ($38001) – $75K ($60K) 30c (33)
    $75,001 ($60,001)+ 40c (39)

    Drop business tax to 20% for exporters, 30% for all others.

    Increase GST to 15% but exempt Milk (not milk products), Pure 100% Juice, Sliced Bread and Raw Vegetables from GST all together.

    Reintroduce interest on Student loans at the rate of inflation only after leaving F/T Tertiary Study.

    Introduce a 30% Capital Gains tax if you sell more than 1 house in a 7 year cycle (allow for bankrupcies, family emergencies, emmigration etc)But exempt any net profit from personal (but not Business) income tax.

    Require owners of more than one residential property to either be NZers or live in NZ.

    Abolish LACQ’s

    Abolish working for families

    Extend the paid Parental leave for Woman to 7 months at the rate of 75% of Median wage
    level.

    Peg NZ Salaries pro rata with Australian equivalents.

    easy

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  25. former swinging voter () says:

    SPC says that “WFF is putting the people first” and sings its praises.

    I’m not complaining but all WFF has done for our family has been to finance the purchase of a rental property, and turned us into landlords! Our WFF entitlement will now increase and hopefully we can “afford” to buy one more renter before the next election.

    You are right SPC, its been shit-hot for us – FREE MONEY!!! We didn’t realize that we needed it at all, but it was thrust upon us by Cullen (who knew better than us). In my heart though I feel soiled that he has bought my vote, but at that price it is bloody hard to refuse.

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  26. tim barclay () says:

    WFF is a very poorly designed policy though it has some merit for people with large families on very low incomes (who incidentally consume a vast amount of Government services paid for by singles and empty nesters). But the rest should have a tax cut so they get to keep more of what they earn. The Labour Party assumes people are on fixed incomes so they design a policy that gives an immediate cash boost but then places people on punative tax rates which has the effect of fixing their incomes at a low level.

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  27. toms () says:

    *sigh* More colonial cringe clap trap. What about state taxes? medicare levies? Working for families rebates? What about all you Aussie arse kissers just doing us all a favour and buggering off there? Please? No? I thought not.

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  28. slightlyrighty () says:

    I would love to see a breakdown of how much every dollar that reaches the public has cost the public.

    How much does every dollar that WFF provides to a Family actually cost? Would it make more sense to not have taken that money in taxes from that family in the first instance? DAMN RIGHT!

    Government Spending is out of control, The Treasury knows it, the IMF knows it, and Cullen has his head in the sand, solidly sticking to his everyone is wrong but me argument.

    I look forward to seeing the actual state of the government accounts after the next election.

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  29. Seamonkey Madness () says:

    “What about all you Aussie arse kissers just doing us all a favour and buggering off there? Please? No? I thought not.”

    Uhh, Toms, thats exactly what all the hard-working kiwis are doing. The Labour government has strangled their will to be productive, so they are rebelling to Oz, where they will be rewarded for their efforts.

    Whats the phrase again: “…and wealth for toil.”

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  30. Murray () says:

    See what you get when a lot of socialist arse kissers learn economics from a failed history teacher.

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  31. toms () says:

    Are you seriously telling me that once you take into consideration:

    – State taxes
    – medicare
    – ACC insurance
    – School fee’s in the tens of thousands
    – stamp duty when you buy your new flash Aussie home
    – land taxes
    – capital gains tax on any investment property
    – the inevitable sky rocketing water bills to pay for the desalination plants
    – all those tolls you have to pay on Aussie toll roads

    And throw in

    – Working for families tax credits if you stay in N.Z.

    You are better off in Australia? What a load of bullshit! NEW ZEALAND IS REALTIVELY LOW TAXED IN THE OECD!!! We’ve been down this path ad naseum, but the thickness of the skulls of hysterical and defeatist right whingers is apparently infinite.

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  32. waymad () says:

    Toms, it’s time to ask the Cuban question.

    Which way are the boats pointing?

    Not from Florida to Cuba, right?

    Now ask which way are the NZ wealth-creators’ boats pointing. (You’ll recall that wealth-creators do things like start businesses, hire staff, make stuff, pay mucho taxes, and even give their grubby left-over money away in large chunks, to deserving charities.)

    They’re pointing offshore, old chap.

    But of course, they’re all Evil Capitalists, so they don’t really matter.

    I feel a little Kiple coming on:

    “In the Carboniferous Epoch we were promised abundance for all,
    By robbing selected Peter to pay for collective Paul;
    But, though we had plenty of money, there was nothing our money could buy,
    And the Gods of the Copybook Headings said: “If you don’t work you die.”

    Rudyard Kipling, Gods of the Copoybook Headings, 1919.

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  33. PaulL () says:

    So, the usual idiots. Facts that you need to deal with:

    1. The Australian govt taxes less at every pay level under $250K.

    2. Australians get paid significantly more than NZers

    3. It isn’t because NZ employers are just choosing to pay less. It is because kiwis are less productive. Because of our national attitude, because of our education system, because of our legislative environment and because of low investment

    Labour have done nothing to improve this situation, in fact they have worsened it. Key gets this, I think the average kiwi will get it in the next election.

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  34. Sam Dixon () says:

    Any dicussion of tax rates that does not look at what is provided with those taxes is meaningless.

    You haven’t even looked at Working For Families, which is worth $5200 a year for a typical family with two chilren on $60,000.

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  35. Redbaiter () says:

    “Can some of you Journo’s (if you have not already) grab this table and run with it. Everyone needs to see this table so that more prssure is put on Labour.”

    Hmmm.. this blog apparently is even attracting comments from interplanetary travellers these days..

    Sir, you need to know that most (not all) journalists are leftists and will never write anything really critical of their masters. That’s why here on earth, the internet has become the main source of news for thinking people who are tired of the pro big government pro socialist anti freedom anti democracy crap that comes from the mainstream media.

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  36. toms () says:

    Thats funny waymad, I thought New Zealand’s population was growing. OH! I understand, you are talking exclsuively about the chicken run of largely white middle class New Zealanders who are fleeing to the land of Alan Jones where a man can still call a black a black?

    And PaulL – i find it deeply ironic that a right winger can blame our “national attitude” when the right’s policy prescription would reduce new Zealand to a branch office, Chile-lite economy of defeated peons, scrabbling about in a “little America” sterile vanilla Wal-Mart culture.

    And its doubly ironic to blame our “national attitude” when the first thing the hysterical right screams is “I’m off to Aussie.”

    And finally, whats triply ironic is the fact that one of the key reasons all the selfish right wingers rush off for – “better wages” – have been won for Australian workers by a powerful trade union movement and preserved by nationalistic protectionism.

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  37. J () says:

    “SPC” – great analysis.

    “Free market dreamers” – the Australian economy didn’t burst into flame overnight, it is a nation that didn’t panic in the 80’s and 90’s and didn’t become a pathetic lone poster boy for economic liberalisation.

    “It isn’t because NZ employers are just choosing to pay less. It is because kiwis are less productive. Because of our national attitude, because of our education system, because of our legislative environment and because of low investment”

    Only a person who doesn’t know their history would write such bullshit about their fellow countryman. In the nineties our wages collapsed never to recover thanks to the small minded vision of Ruthy Richardson and her absurd lengthening of a recession.

    “They’re pointing offshore, old chap”.

    New Zealand is an island at the bottom of the world . It’s not totally absurd that we would want to check out the rest of the world. It’s a reality of geography. Don’t panic about it, let’s work with it.

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  38. David Farrar () says:

    And Sam what is WFF worth for the majority of adults who do not have (non adult) children? Zip.

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  39. toms () says:

    Hmmm, murray tells us:

    “…See what you get when a lot of socialist arse kissers learn economics from a failed history teacher…”

    Failed? If the man who is deputy prime minister, minister of finance, and spent ten years as senior lecturer of history has failed, I wonder what that makes Murray? Oh oh oh pick me! I know! It makes Murray a bitter wee person who makes up for his own lack of success by dressing up in sub-Roman outfits on the weekend so he can pretend he is the sixth century Dux Angloricum, sweeping the barbarian scum from the landscape, and for an oh-to-brief few hours escape in fantasy his own signal lack of personal success.

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  40. Redbaiter () says:

    “Don’t panic about it, let’s work with it.’

    Who’s panicking? After you take a lesson in manners that includes educating you on speaking only for yourself, you should consider this perspective-

    Its great that they’re leaving.. every time a productive NZer quits the country, it brings the collapse of this whole shitty commie system one small step closer..

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  41. RedRag () says:

    DPF;

    WFF means that many families are paying less than 10% nett tax. Howard cannot match that.

    I’m amused also that your self-centered attitude towards those people who have children is coming from a man who has reached 40 chooses to not to have any.

    Anyhow it will be screams for tax cuts this week and then Key promising increased expenditure next week.

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  42. phil u () says:

    what toms said..

    both the lists of extras aussies have to pay for..that we don’t..

    that make all this rightwing claptrap just that..

    and citing murray as a ‘benchmark of success’..(heh-heh..!..)

    and of course..you are all still ignoring the (very big) elephant in the room..

    namely..the upcoming costs of global-warming/climate-change..

    (still got yr heads firmly buried in the sand..eh..?

    careful..!..you know what happens to sand during extra-high-tides..eh..?

    and rumour has it a few of them are on the way…

    eh..?

    phil(whoar.co.nz)

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  43. waymad () says:

    Toms, that’s a lot of adjectives chained together. Less is more, I’ve always found.

    Now, as far as I recall, my words were ‘offshore’. For F&P, that’s Thailand (if my elderly memory hasn’t slipped another cog). For SleepyHead, that’s China.

    So why fixate on Australia, Alan Jones and Men? Do I detect a Freudian slip, south of that cloth cap?

    The terror of the unions, of course, lies precisely in the fact that their traditional source of power – causing trouble at employment locations that are geographically fixed and essentially immobile – is rapidly withering away. The internet paradigm rules in business now: if there’s trouble ahead, just back up one hop and route around it.

    So a bit of flailing around is to be expected, I suppose. What you might call a rearguard action.

    And the only answer for NZ as a whole, is a long, hard slog, via better education, raised productivity, less deadweight, and a general willingness to Produce, to a position of general attractiveness.

    So that, you know, the boats point towards our fair shores once more.

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  44. little phil () says:

    J – are you really that thick?

    Fisher & Paykel, Sleepyhead etc. etc. are heading offshore because “we’re a little island at the bottom of the world”, and they want to “check out the rest of the world”….WTF!

    In the mean-time Michael (“I have’nt got a clue how to fix this mess”) Cullen fiddles, while the NZ economy burns. If he spent half as much time doing his job as he does spewing out his petty sarcastic jibes at everybody we might not be in this situation.

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  45. Seamonkey Madness () says:

    Wow, I’m surprised you held out this long to start on the personal insults. Not that we neeeded any hints before, but now Toms comes out as a true Labour supporter.

    What’s next – cancerous and corrisive?

    “…you are talking exclsuively about the chicken run of largely white middle class New Zealanders who are fleeing to the land of Alan Jones where a man can still call a black a black?”

    Nicely put. I would rather call a spade a spade, than having to stoop to PC claptrap jargon for it or getting tut-tutted for calling it like it is.

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  46. phil u () says:

    btw..who said this..?

    “…The climate problem will not be solved without mass participation by the general public in countries around the globe.

    And that’s where we come in..”

    answer:..rupert murdoch…today..in a speech promising the both the ‘greening’ of his business operations..

    ..and the use of his media empire to ‘push the message’..

    so..how’s them berries..?..all you climate-change deniers..?

    eh..?

    phil(whoar.co.nz)

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  47. Jeff () says:

    Why are we comparing ourselves to Australia like pathetic schools kids “Jonny has tax cuts, I want tax cuts too…waaa waaa waa” There economy is different to ours and they rake in huge amounts of company tax which is ballooning even more due to the mining boom. I am in Australia working in rural hospitals and the public are getting pissed off with tax cuts while health, education and roads are underfunded.

    Oh and this from the NZ Herald your views section from someone in Sydney
    “Don’t be deceived by the apparent tax rates here in Australia, these cuts equate to about US$16.00 per week, which is about an average daily road toll. Shift here and the first tax you will pay is stamp duty (about US$50K on a Sydney House). Any profit you make on a Holiday home or rental property is also taxed, then there are the State taxes, which were supposed to be removed when the GST was added. With no ACC you need to be insured against accidents (another couple of thousand a year). If your stayed for 10 years with a holiday home and earned US$50K per year (US$500K plus US$150 in property grow on the holiday home) you would pay US$200K in Federal taxes, US$40K in road tolls, US$35K in Insurance against accident, US$50K in Stamp duty, US$20K in Land tax, US$75K in capital gains tax, thats US$420K out of US$650, leaving you US$230K take home which would require US$23K in GST so the actual rate for a middle income earner is 68 cents in the dollar.”

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  48. bwakile () says:

    The real argument is not about comparative taxes but rather the future direction of this country. A lot of us don’t want a country where the government dictates all. I like the idea of success being an outcome of work. Tax should be at a level to support basic state responsibilities. I am probably eligible for a WFF payout but will never apply. Rather I spend my time preparing strategies to move my business offshore should Labour steal the next election.

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  49. Jeff () says:

    Oh and if the public wanted tax cuts and leave the private sector to build infrastucture, they would have voted National. They didn’t so get over it.

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  50. J () says:

    “Its great that they’re leaving.. every time a productive NZer quits the country, it brings the collapse of this whole shitty commie system one small step closer..”

    Anecdotally most of the people I know who leave New Zealand are either,

    a)bizarre ideologues who have never fitted in this country, usually spend the rest of their lives slagging off New Zealand

    b)or incredibly talented creative’s whose talents , due to a combination of population size and lack of appropriate (govt) investment in new industries can’t be utilised – they usually spend the rest of their lives in a positive reflection of the strengths of their home nation.

    And redbaiter don’t mention manners to me you absurd hypocrite ..manners,.. buddy you hate everyone

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  51. J () says:

    “Its great that they’re leaving.. every time a productive NZer quits the country, it brings the collapse of this whole shitty commie system one small step closer..”

    Anecdotally most of the people I know who leave New Zealand are either,

    a)bizarre ideologues who have never fitted in this country, usually spend the rest of their lives slagging off New Zealand

    b)or incredibly talented creative’s whose talents , due to a combination of population size and lack of appropriate (govt) investment in new industries can’t be utilised – they usually spend the rest of their lives in a positive reflection of the strengths of their home nation.

    And redbaiter don’t mention manners to me you absurd hypocrite ..manners,.. buddy you hate everyone

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  52. SPC () says:

    F and P and Sleepyhead are moving offshore because of the high dollar value, not tax rates. If people cannot make a profit producing here, tax rates have little impact on such decisionmaking.

    Cutting general income tax rates would exacerbate the impact of anti-inflationary policy of the RB on rising currency values.

    As to those concerned about a lower currency value impacting on their spending power (obviously those with no concern about our export earning industries or workers in them), also note a high dollar acts as a downward pressure on local wage rates.

    former swinging voter

    WFF at higher income levels, is as an alternative to tax cuts which was the other option. Either way your after tax income would be increased – allowing you a higher standard of living.

    But it was also a tax cut targeted to support families not empty nesters. It’s an incentive for those on higher incomes (who can then more easily afford to do so) – because we have the western worlds problem of replacing the baby boomer workforce when they retire. Historically it’s children from better off families who are likely to earn more and replace the retiring skilled workers.

    It’s effectively a supplementary policy to the Cullen Fund itself.

    National imagines they can undermine the government’s ability to afford future super by reducing our ability to store surplus wealth now and yet also they have no policy for encouraging replacement of our retiring workforce. Unless they are gambling that we can get our education system right and the browning labour force (out of lower income households) will earn the high wages required to cope with tax funded super (this issue is an important element of any discussion over a sustainable economy/policy course).

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  53. j () says:

    “Fisher & Paykel, Sleepyhead etc. etc. are heading offshore because “we’re a little island at the bottom of the world”, and they want to “check out the rest of the world”….WTF!”

    Well they’re checking out the rest of the worlds poorly paid workforces and/or better placed manufacturing locations. It’s a very ungeographically friendly world for New Zealand manufacturers; but the answer is not to piss on your workforce until they can compete with the undemocratic Communist – Capitalist Chinese worker. The answer is in careful long-term economic planning while not disturbing the natural energy of a first world economy ( ya know like Australia did).You know a conservative economic approach

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  54. tim barclay () says:

    It is no surprise that businesses are looking at off-shore. Small business people especially the ones who support Labour complain to me about all the extra costs they are carrying. I remind them of course who they vote for. And the ones who complain about some Government service, I again remind the Labour voting ones who they vote for and who is paying the taxes, to supply them with the free monopoly service.

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  55. TC () says:

    CULLEN: “If you give most people a tax cut, they will spend it,” he said.

    He knows best how to spend your money. Silly Kiwis for thinking otherwise.

    Better to let the government ‘reallocate it’ on things like record wages for government workers, upgrading office space in Wellington, and generally growing government faster than the majority of all other sectors.

    But that’s not spending is it?

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  56. gd () says:

    Memo to the Socialists and their supporters.

    An Australian worker pays 6.8% on $20K A NZ worker pays 18.2%

    An Australian worker pays 9.5% on $30K A NZ worker pays 19.1%

    A significant percent of the workforce in both countries earn these amounts. Forget WFF etc. This is the amount each government confiscates rom worker pay packets.

    Ironic that the NZ government who claim to stand for the worker takes up to 300% more from them than the Australian government who are painted as the Evil Empire as regards their workers.

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  57. Walsingham () says:

    As a kiwi living in Australia I’d like to point out that:

    (1) Sydney aside, houses are better value for money in Australia
    (2) Groceries are cheaper
    (3) Education standards are higher
    (4) Health standards are higher (medicare rocks)
    (5) You can still buy all your favourite kiwi beers here
    (6) It’s warmer
    (7) Better concert acts
    (8) Greater commercial opportunities
    (9) Far less “tall poppy syndrome”
    (10) The left-wing have spent eleven years in howling impotence
    (11) Costello has just about completed funding of the baby-boomers superannuation requirements

    Gawd, what WOULDN’T you move over here?

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  58. little phil () says:

    If manufacturers are moving offshore to take advantage of the worlds poorly paid workforce, therefore the workforce here is not “poorly paid”.

    They’re just highly taxed.

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  59. Sonic Bot () says:

    We interrupt this broadcast to bring a special message from the Beehive: comparing marginal tax rates with Australia is not in the public interest, nothing to see here, just pay your dues and move along.

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  60. side show bob () says:

    Phil u you really are a total tosspot are you not. Many of us “deniers” know the climate is changing, it changes everyday. Only a retard like yourself beleives man decides how it will change.

    Yes Rupert Murdoch has promised to leave no carbon footprint made by his business operations come 2010. This is simply good for business and makes economic scense.

    What you have failed to point out is the Rupert Murdock does not have to bow down to your beloved God, socialism. He is free to run his own business and is not told to comply or be taxed out of exsistence. I will bet any money you like all first world counties that have not signed up to the Kyoto con will have lower carbon emmisions then those that have signed up.

    You see my poor deluded little friend human behaviour can not be changed by decree, change comes through willingness and positive outcomes.

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  61. phil u () says:

    and those abo’s are kept well and truely in their place over there..

    eh walsingham..?

    not like back here..eh..?

    so..you forgot ‘haven for racists’..as a reason..

    (what you get when you ‘scratch’ most of the new zealanders resident in..say..queensland..?

    y’know..those ‘easy’/nasty put-downs of maori/pi..that fall so carelessly from their lips..?..that usually mark them as being what they are..)

    and don’t forget..lovers of cockroaches/bugs..etc..

    then there is the musical poetry of the local dialect..

    and..of course..that ‘pesky’ water issue..(as in lack of it..)

    and all that bad press about australia being the oecd country to ‘watch’..

    as it will be hit first/hardest from climate-change/global warming…

    “..why wouldn’t you move over there..?..”..

    eh..?

    and..ah..!..”..education standards are higher’..you say..?

    mmm..!!..yes..

    you can see that..when you talk to them..eh..?

    phil(whoar.co.nz)

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  62. side show bob () says:

    Phil u you really are a total tosspot are you not. Many of us “deniers” know the climate is changing, it changes everyday. Only a retard like yourself beleives man decides how it will change.

    Yes Rupert Murdoch has promised to leave no carbon footprint made by his business operations come 2010. This is simply good for business and makes economic scense.

    What you have failed to point out is the Rupert Murdock does not have to bow down to your beloved God, socialism. He is free to run his own business and is not told to comply or be taxed out of exsistence. I will bet any money you like all first world counties that have not signed up to the Kyoto con will have lower carbon emmisions then those that have signed up.

    You see my poor deluded little friend human behaviour can not be changed by decree, change comes through willingness and positive outcomes.

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  63. Ben Wilson () says:

    If you include super as a tax then the tale of the tape is very different. Ozzies are taxed more in all but the first 5 lines of the top table. Then of course there are the enormous duties that Ozzies have to pay on consumer items from abroad. Doesn’t show up in the income tax stats, but it’s tax just the same. For lower income groups you really need to consider benefits paid to get a real idea of the toll the government is taking. Comparative income taxes are not the whole story by a long shot.

    It’s a fiddle not to call it super a tax. I have about $20,000 AUD that I can’t touch for 20 years. The fact that I can get it then to fund my retirement doesn’t take away the fact that I have had to live without it in the meantime. And yes, I could get it back *IF* I was prepared to pay, yes, you guessed it, a lot of tax on it.

    If you want to make the case that Ozzies *were* much more heavily taxed in the past and they have recently changed that (I was there during the Howard years too, btw), then I could get it. I wouldn’t agree that the changes account for the income gaps between the countries though – the gap was already huge when I was there back in the mega-tax days. That’s why I went there. Ozzie is so different geographically, population-wise and economically to NZ that tax can only be a small part of it.

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  64. Karen B () says:

    Walsingham, as a Kiwi living in Australia, you really did sum it up. As another Kiwi living in Australia I’d like to add to your list

    12) Very little PC hand wringing that drove me mad in NZ. They call a spade a spade and what’s wrong with that
    13) Clothes are cheaper
    14) By and large people feel a sense of individual responsibility for their lives, far less of a social welfare, finger pointing mentality
    15) The media are not sensationalist
    16) There are a good number of right wing journalists
    17) The media is far more fair and balanced
    18) Australians have a sense of “Nationhood”
    19) Optimism pervades everything

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  65. David Farrar () says:

    I’ve just spent several hours going through Australian tax codes to work out how their low income offset works and finally cracked it. They phase it out eventually so it means at the higher incomes the Aussie tax take is under stated by $750. Will do updated tables.

    Doesn’t change things a lot except that it is now at $230,000 or so Aussies finally start to pay moer tax.

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  66. phil u () says:

    david..do you factor the working for families (tax-rebates) into your calculations/comparisons..?

    surely not doing so makes a nonsense of them..?..

    if one is trying to draw the bow you are..?

    as in how much better off the punters are over there..?

    phil(whoar.co.nz)

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  67. Redbaiter () says:

    Yep, NZ is so much better Phil, the Aussies are getting here in droves.. Right??

    Duh…

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  68. Ben Wilson () says:

    Karen & Walsingham, as a kiwi who also lived in Ozzie I’d also add.

    20) Racism is so common you stop noticing it
    21) When it’s hot, it’s unbearably hot, for a really long time
    22) Every time they can have a cheap shot at kiwis, they will
    23) The water is running out
    24) The cars they make are utter crap. OTOH at least they make cars
    25) Their farms are in disrepair
    26) They get pissed even more than we do
    27) You can seldom watch good rugby on TV
    28) There are junkies and beggars everywhere

    That’s the counter punching…but I loved Ozzie and would also add

    29) Fights in Ozzie consist of pushing and shoving, followed by the crowd breaking it up, rather than the NZ version of spreading out to create a better arena for the pleasure of onlookers.
    30) Ozzie chicks are hot
    31) They do like kiwis, even if they also like taking cheap shots on kiwis. Maybe that is why they like us.
    32) They have some really cool cities there
    33) By and large, they’re much like kiwis
    34) What the other 2 said

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  69. SPC () says:

    bogusnews

    “no measurable improvement in service.”

    The assumption that one can retain staff in health and education and police and the military services, as unemployment falls to low levels, without increasing wages is ludicrous. Of course public services now cost more, of course it was cheaper when jobs were otherwise scarce.

    National cannot change this, nor can they improve education or sustain health care services as the population ages without spending the money either.

    “deity”

    “SPC every one of your “facts” that you regretfully put forward is tendentious garbage.
    You are clearly running off a set of talking points”

    So you have an opinion too and I suppose we are forewarned you imagine only your own is infallible.

    “I mean, what respectable economist would argue that deadweight losses and churn generated net economic gain – simple bullshit.”

    You fail to note context, or relationship to another issue, which propably infers back to your presumption of your own singular and unique credibility.

    “Now you reckon that fixing the dollar is the next good idea – brilliant, that will teach all those investment Johnnies.”

    Tell it to those of the booming Chinese economy which has the yuan linked to the US dollar. You fail to note the similar policy of the indexed currency relationships pre Euro of the Europeans. And also failed to note the fix is relative to another countries floating currency value. One we have free trade with.
    We should have indexed the Enzed and Oz currencies in 1983 with CER.

    It would have been a good interim measure that would have allowed a testing of any viability to adopting their dollar (advantage lower interest rates). Yet we would have had full sovereignty over monetary policy while in this phase.

    “Hey, I’ve got one for you, how about a price freeze, thats bound to make us more competitive isnt it.”

    That you compare a common currency linkage tool (Europe) with a price freeze shows a certain simple mindedness.

    “Christ, its a sad day when Labour hacks start recommending Muldoonist policy.”

    It’s your own confusion of one policy with another which leads you to erroneous conclusions. Are you saying European policy is Muldoonist?

    “Guess Labour has appointed you as the after hours blog wrangler to try and damage control the Australian budget.”

    If I don’t take the “party” line on tax cuts as being good for New Zealand, I must be a Labour party hack? Yeah right great insight. I have voted Labour once in the 4 elections I bothered to do so.

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  70. Camryn () says:

    NZ has the second highest percentage of it’s people offshore of any country in the world (20% of our 5 million citizens, leaving 4 million at home).

    Sure, we like to “see the world”, but the high figure indicates that people aren’t coming back despite NZ being so physically nice.

    I take every opportunity to remind that million to vote.

    The country with the highest percentage of citizens overseas is Ireland, but people are heading back there in droves.

    Perhaps if we can manage a similar turnaround, some of ours will come back.

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  71. Ben Wilson () says:

    Camryn, our extreme remoteness coupled with being welcome pretty much anywhere, and able to afford traveling there explains a lot. If you want to be ‘in the thick of it’ you just can’t in NZ. Other remote peoples feel the same way but don’t have quite the same ability to just up and leave.

    Oh and most of those kiwis are only over the ditch. It’s more like being in another state than actually being abroad.

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  72. Outraged () says:

    Ben – if you seriously believe that NZ and Australia are different states on the same map, you’re a socialist beyond redemption The difference between NZ and Australia is stark. As noted on another thread, even their unions are in favour of tax cuts. What the hell does that say about our commie stooge pups who infest the Labour Party ranks here?

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  73. Ben Wilson () says:

    Outraged, I felt that Ozzie was overtaxed when I was there. Now it’s about the same as here. We, however, don’t have anywhere near the level of development that they have purchased with all that tax, so it is somewhat understandable that we might have a different opinion on whether more development is needed.

    And my opinion was formed by living there, thanks. Nothing to do with being a socialist, which I certainly was not when I moved and even now it’s a pretty hazy call. When I went there it was way more socialist than NZ and I still felt the differences were minimal when you compared to the next least different place.

    Perhaps you can suggest somewhere more like NZ than, say, the state of Victoria or NSW?

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  74. Some Fella () says:

    Ok here is the run down from someone (me) living in Australia. I have noticed a lot of incorrect facts from both sides in this debate.

    Incomes: I work in IT, so does my partner. I earn about 30% more in Sydney than I would (and did) in NZ. My Partner earns about 40% more. For reference our incomes are AU$90,000 and AU$50,000. Also this does not include the extra 9% that everyone gets that is put straight into private superannuation funds (it is comforting to know it is there growing away :).

    Labour Laws: I am in a relatively strong bargaining position so the work place laws over here work well for me, my partner is not in so strong a position. The new laws seem to be a mismash of good and bad, some of this is because of the Federal/State split. Also the political parties are at more extreme ends of the spectrum on labour law than NZ. I think the NZ approach of both National in the 90’s and Labour in the 00’s is much clearer and fairer for everyone even if you don’t agree with all the rules.(i.e. using the rule of law via effective laws and courts to even out the balances of power).

    Work: For me in IT and I would say this applies to other fields as well Australia provides much more opportunity and scope for growth. Also in my case I have had business trips overseas for clients that I hadn’t expected, Australian companies are much more global in their outlook than NZ ones.

    Tax: As evidenced by Davids charts above we pay much less Tax in Australia. On our current salaries as of 2009 when all the announced changes come into effect we will be paying combined $30700 in Tax in NZ on the same amount we would be paying $37740 a dollar for dollar difference of $7040.
    Dollar for Dollar things are slightly cheaper over here, of course just like NZ it depends where you live, shop and work (Kiwis who complain about Sydney being expensive when they live in flash suburb next to the beach really get me mad :). Some people on this blog have mentioned State Taxes, Tolls and Medicare levies. I have only ever encountered State Taxes on insurance premiums, they are in little places here and there but not on incomes directly and are not large (They probably don’t even cover the 2.5% difference in GST rates. Tolls, depends where you have a car or not (I don’t) and whether you live in the outer suburbs serviced by Toll roads, also there is always a free alternative and without the Toll roads a lot of that infrastructure would have never been built. Medicare levies, are not a huge amount %1.5 of income (with low income
    exemptions), plus another %1 if you earn over $50,000 and are stupid enough not to have private health insurance (I will explain below). One thing that is never mentioned is
    Tax Rebates, hardly anyone in Australia pays the amount of tax the official rates suggest, the tax rebate system is hideously complex and I would prefer to have NZ’s simpler system but if we did they would have to lower the taxes further. For example my friends with no kids who earn about 90,000 combined get about $1000,00 each year back and they are 100% honest in their claims. If you have children the amount you can claim back plus the benefits for child care etc add up to a lot of money.

    Health and Education: Education I can’t really answer but my general feeling from parents I know is that things are better here plus they have more choice in regards to private education, which is cheaper due to federal government funding (Public Schools are funded mainly by the states).
    Health care here is excellent, I have some Chronic health conditions and so use the system a lot, compared to NZ it is streaks ahead. I have private health insurance that costs $200 a month for me and my partner, I have the most expensive cover you can get. The $200 is 70% of the total the other 30% is paid by the federal government after the Medicare Surcharge rebate (1% of each income) the insurance costs me approximately 1% of just my income a year. After the first 12months of having it all of my pre-existing conditions were covered (the insurance companies have to do certain things in return for the 30% from the government), my eye care and dentists are also subsidised (I haven’t paid for a regular dental appointment with xrays in 2 years, fillings cost me $20 and a wisdom tooth extraction is $80). As a result of me and a lot of other middle, upper middle and high income earners being extracted from the public hospital system the public hospitals are by and large pretty good. In fact I recently visited a friend who doesn’t have insurance in hospital and had to check with him again that he didn’t since the public looked like a private hospital in NZ (except for the shared room). Doctors visits are easy; for colds, flu, regular medicine, known conditions the free Medicare doctors are the trick, you have to wait but usually 30mins maximum. If you want to go to a better doctor who you have a relationship with then it will cost you about $60 of which $32 will be refunded by Medicare. The major thing you notice here in regards to health is that it is hardly ever in the news by comparison to NZ, things aren’t perfect but there isn’t this constant feeling of fear about getting sick. Also you think the fact that Australia has enough spare health capacity to enable Kiwis to be sent over for cancer treatment would have been noticed in NZ.

    Transport: Sydney public transport has a lot of problems but having lived in Auckland I find it hard to complain (and also embarrassing to explain to Australians how bad it is). The Public transport frequency is more than adequate in my area and relatively inexpensive, we can travel an unlimited amount of times on all modes of transport in a large area of the City (about 10kms out from the centre in all directions) for $27 each a week. We easily live without a car.

    Other Costs: Electricity is cheaper, so much cheaper in fact we have signed up with a Green power retailer (www.jackgreen.com.au) and even on their 100% Green Power plan (these are all audited by the state governments) we pay less power than in NZ. We rent which costs us about $400 a week for a two bedroom apartment, we are 15mins from the city on public transport, the rent is about the same as what we would pay in NZ for a place as convenient and with as many amenities.
    Things like Capital Gains tax and Stamp duty aren’t an issue for us since we don’t own a house and even if we did the stamp duty is waved plus we would get a federal grant as first home buyers (even kiwis working here are entitled to this). Houses cost more to buy but that is because people earn more and Sydney is a city of 4.5Million people.

    Living Here: By and large Educated Australians are nice people, you do however have to watch the uneducated ones, they are very very very bigoted and racist and feel unashamed to spout off these views in public (in NZ my feeling is these views are nearly as common as here, but most of the people who have them know that expressing them would not be generally accepted by other kiwis). The conservative social policy of the Howard government can be a bit stifling at times and there are times when you feel like this is a bit of a theocracy, but that does not reflect the views of most ordinary educated Australians who are mostly tolerant and secular. I believe the populist streak in Au politics has a lot to do with compulsory voting which make the uneducated lowest common denominator more powerful in the election (My observation is that non-voters in NZ are mainly but not all people ignorant of human rights, politics and economics).
    The media here is two extremes the ABC is a proper public broadcaster and it’s excellence anchors the whole media landscape here (it stops the populist media from going to far). In contrast every time I come back to NZ I notice further slides down the road of popularism by all media, I think NZ is only a few years off being as bad as the bad is here but with no ABC to stop it sliding further.

    Anyways that is my honest run down, I have no political message to spin (in fact if I had to vote in Australia I wouldn’t want to vote for either side :-/ it is just the observations I have made living here. I would definitely recommended living here to anyone who was thinking about moving but at the same time I hope NZ will one day copy some of Australia’s good ideas and pass on some of its to Australia.

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  75. Some Fella () says:

    Ok here is the run down from someone (me) living in Australia. I have noticed a lot of incorrect facts from both sides in this debate.

    Incomes: I work in IT, so does my partner. I earn about 30% more in Sydney than I would (and did) in NZ. My Partner earns about 40% more. For reference our incomes are AU$90,000 and AU$50,000. Also this does not include the extra 9% that everyone gets that is put straight into private superannuation funds (it is comforting to know it is there growing away :).

    Labour Laws: I am in a relatively strong bargaining position so the work place laws over here work well for me, my partner is not in so strong a position. The new laws seem to be a mismash of good and bad, some of this is because of the Federal/State split. Also the political parties are at more extreme ends of the spectrum on labour law than NZ. I think the NZ approach of both National in the 90’s and Labour in the 00’s is much clearer and fairer for everyone even if you don’t agree with all the rules.(i.e. using the rule of law via effective laws and courts to even out the balances of power).

    Work: For me in IT and I would say this applies to other fields as well Australia provides much more opportunity and scope for growth. Also in my case I have had business trips overseas for clients that I hadn’t expected, Australian companies are much more global in their outlook than NZ ones.

    Tax: As evidenced by Davids charts above we pay much less Tax in Australia. On our current salaries as of 2009 when all the announced changes come into effect we will be paying combined $30700 in Tax in NZ on the same amount we would be paying $37740 a dollar for dollar difference of $7040.
    Dollar for Dollar things are slightly cheaper over here, of course just like NZ it depends where you live, shop and work (Kiwis who complain about Sydney being expensive when they live in flash suburb next to the beach really get me mad :). Some people on this blog have mentioned State Taxes, Tolls and Medicare levies. I have only ever encountered State Taxes on insurance premiums, they are in little places here and there but not on incomes directly and are not large (They probably don’t even cover the 2.5% difference in GST rates. Tolls, depends where you have a car or not (I don’t) and whether you live in the outer suburbs serviced by Toll roads, also there is always a free alternative and without the Toll roads a lot of that infrastructure would have never been built. Medicare levies, are not a huge amount %1.5 of income (with low income
    exemptions), plus another %1 if you earn over $50,000 and are stupid enough not to have private health insurance (I will explain below). One thing that is never mentioned is
    Tax Rebates, hardly anyone in Australia pays the amount of tax the official rates suggest, the tax rebate system is hideously complex and I would prefer to have NZ’s simpler system but if we did they would have to lower the taxes further. For example my friends with no kids who earn about 90,000 combined get about $1000,00 each year back and they are 100% honest in their claims. If you have children the amount you can claim back plus the benefits for child care etc add up to a lot of money.

    Health and Education: Education I can’t really answer but my general feeling from parents I know is that things are better here plus they have more choice in regards to private education, which is cheaper due to federal government funding (Public Schools are funded mainly by the states).
    Health care here is excellent, I have some Chronic health conditions and so use the system a lot, compared to NZ it is streaks ahead. I have private health insurance that costs $200 a month for me and my partner, I have the most expensive cover you can get. The $200 is 70% of the total the other 30% is paid by the federal government after the Medicare Surcharge rebate (1% of each income) the insurance costs me approximately 1% of just my income a year. After the first 12months of having it all of my pre-existing conditions were covered (the insurance companies have to do certain things in return for the 30% from the government), my eye care and dentists are also subsidised (I haven’t paid for a regular dental appointment with xrays in 2 years, fillings cost me $20 and a wisdom tooth extraction is $80). As a result of me and a lot of other middle, upper middle and high income earners being extracted from the public hospital system the public hospitals are by and large pretty good. In fact I recently visited a friend who doesn’t have insurance in hospital and had to check with him again that he didn’t since the public looked like a private hospital in NZ (except for the shared room). Doctors visits are easy; for colds, flu, regular medicine, known conditions the free Medicare doctors are the trick, you have to wait but usually 30mins maximum. If you want to go to a better doctor who you have a relationship with then it will cost you about $60 of which $32 will be refunded by Medicare. The major thing you notice here in regards to health is that it is hardly ever in the news by comparison to NZ, things aren’t perfect but there isn’t this constant feeling of fear about getting sick. Also you think the fact that Australia has enough spare health capacity to enable Kiwis to be sent over for cancer treatment would have been noticed in NZ.

    Transport: Sydney public transport has a lot of problems but having lived in Auckland I find it hard to complain (and also embarrassing to explain to Australians how bad it is). The Public transport frequency is more than adequate in my area and relatively inexpensive, we can travel an unlimited amount of times on all modes of transport in a large area of the City (about 10kms out from the centre in all directions) for $27 each a week. We easily live without a car.

    Other Costs: Electricity is cheaper, so much cheaper in fact we have signed up with a Green power retailer (www.jackgreen.com.au) and even on their 100% Green Power plan (these are all audited by the state governments) we pay less power than in NZ. We rent which costs us about $400 a week for a two bedroom apartment, we are 15mins from the city on public transport, the rent is about the same as what we would pay in NZ for a place as convenient and with as many amenities.
    Things like Capital Gains tax and Stamp duty aren’t an issue for us since we don’t own a house and even if we did the stamp duty is waved plus we would get a federal grant as first home buyers (even kiwis working here are entitled to this). Houses cost more to buy but that is because people earn more and Sydney is a city of 4.5Million people.

    Living Here: By and large Educated Australians are nice people, you do however have to watch the uneducated ones, they are very very very bigoted and racist and feel unashamed to spout off these views in public (in NZ my feeling is these views are nearly as common as here, but most of the people who have them know that expressing them would not be generally accepted by other kiwis). The conservative social policy of the Howard government can be a bit stifling at times and there are times when you feel like this is a bit of a theocracy, but that does not reflect the views of most ordinary educated Australians who are mostly tolerant and secular. I believe the populist streak in Au politics has a lot to do with compulsory voting which make the uneducated lowest common denominator more powerful in the election (My observation is that non-voters in NZ are mainly but not all people ignorant of human rights, politics and economics).
    The media here is two extremes the ABC is a proper public broadcaster and it’s excellence anchors the whole media landscape here (it stops the populist media from going to far). In contrast every time I come back to NZ I notice further slides down the road of popularism by all media, I think NZ is only a few years off being as bad as the bad is here but with no ABC to stop it sliding further.

    Anyways that is my honest run down, I have no political message to spin (in fact if I had to vote in Australia I wouldn’t want to vote for either side :-/ it is just the observations I have made living here. I would definitely recommended living here to anyone who was thinking about moving but at the same time I hope NZ will one day copy some of Australia’s good ideas and pass on some of its to Australia.

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  76. karen B () says:

    Yes, the difference is stark and the sad thing is, it wasn’t as stark 10-15 years ago. It’s fascinating to see the differences between a country run by socialists for years and one run by liberals/conservatives for about the same time frame. (I think?) The most fascinating bit is the policy impacts on societies attitudes and the way people go about living their lives. Huge optimism and can do attitudes vs whinging, whining and a hand out mentality. Helen Clark -that will be your legacy and you should be ashamed.

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  77. Infomercial () says:

    Dad4Justice, who doesn’t have a voice on Kiwiblog these days, would like (through me) to introduce his good friend Working4Labour4Ever.

    Working4Labour4Ever wants everyone to know that NZ no longer has a savings problem. Yes it’s true – we’re all compulsory savers. The bad news though is that NZ has a bad-ass spending problem. Having Labour tugging at our happy-clappy collective purse strings is like watching a lunatic dentist drill holes in teeth – or if you prefer – is like having David Benson-Pope in charge of a “sex education in schools” programme.

    Stay tuned for more good insights from Working4Labour4Ever. This service is brought to you by our home-grown economic talent pool – Sonic, Phil “eh?” Whoar and Phillip “read my thesis” John.

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  78. Ben Wilson () says:

    SomeFella, that’s a pretty good run-down, certainly tallies with my experiences. I also work in IT.

    The only thing I disagree on is Sydney vs Auckland transport. That you live without a car could be because you can get everywhere without one, or it could be because it’s not worth the frustration and cost.

    Cost: For $2000AUD the only car I could get over there was a clapped out 1970’s Chrysler Sigma. Yes, Chrysler did make Sigmas before Mitsubishi bought it. It completely died on me after 6 months. By comparison here I got a 1990 Toyota Windom for the same price. To get something equivalent to that crap Sigma would have cost me about $100 here. Ozzies don’t notice the cost because they’ve fully bought into the mentality of borrowing heaps to get a new car, availing themselves of inanities like salary sacrificing for the tax cuts to buy themselves an $80,000 car. The cost of registering the car was outrageous. The cost of parking everywhere was shocking. Imported cars have big tariffs and locally made ones are expensive.

    Frustration: The time spent in the vehicle in either Sydney (or Melbourne) was approximately triple anything I’ve experienced in Auckland, for comparable distances. I hear that Sydney is even worse than Melbourne, being more hilly and less ‘planned’. I was there (Sydney) last week and it sure seemed that way.

    The trains were great, though. So of course you don’t bother with a car. In Auckland people get outraged from spending half an hour in the car commuting into the city during rush hour, mostly because they don’t know any different. In Sydney only wealthy people or people that have to have a car for work would even bother.

    These days my commute is as long as it takes me to walk from the bedroom to my office :-)

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  79. Joe () says:

    Forget about money or wealth saved for the future when the baby boomer retires. Money or wealth alone is not enough. Money is just a claim on future goods and services. If we don’t have enough young people to replace the retired, or have increased productivity, then no matter how much you will have saved for your retirement, there simply won’t be enough goods and services available for everyone.

    You may say we can always import, but if we don’t improve our BOP via export, who’s going to sell us products from overseas?

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  80. Bogusnews () says:

    SPC

    No improvement of services – what I mean by this is that under National, we had a waiting list of 100,000. Under Labour, when we finally got the figures from Annette King, the list had gone up to 180,000.

    Now SPC, I don’t give a toss how you want to cut it. As far as I am concerned, when you increase spending in Health by 4Bil a year and the waiting list doubles then we have a problem. This cannot be put down to just increasing salaries. Please don’t insult my intelligence. Any time you increase spending by 40% on a service and the waiting list doubles in only six years, then I say (very kindly) there is no improvement in services. I can’t imagine how anyone with any intelligence would see it any other way.

    If you want I am very happy to debate the appalling state of other social services. This is before we start talking about the horrifying statistics of people in dire hardship. They have increased by 27%. I repeat, this is after years of favourable economic conditions.

    The facts are, we are 20Bil a year down the hole on our state service. I can’t see we are getting 20Bil improvement.

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  81. Bogusnews () says:

    SPC

    No improvement of services – what I mean by this is that under National, we had a waiting list of 100,000. Under Labour, when we finally got the figures from Annette King, the list had gone up to 180,000.

    Now SPC, I don’t give a toss how you want to cut it. As far as I am concerned, when you increase spending in Health by 4Bil a year and the waiting list doubles then we have a problem. This cannot be put down to just increasing salaries. Please don’t insult my intelligence. Any time you increase spending by 40% on a service and the waiting list doubles in only six years, then I say (very kindly) there is no improvement in services. I can’t imagine how anyone with any intelligence would see it any other way.

    If you want I am very happy to debate the appalling state of other social services. This is before we start talking about the horrifying statistics of people in dire hardship. They have increased by 27%. I repeat, this is after years of favourable economic conditions.

    The facts are, we are 20Bil a year down the hole on our state service. I can’t see we are getting 20Bil improvement.

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  82. phillipjohn () says:

    Australia has many more hidden taxes than New Zealand does, which, once you tally up don’t paint too rosy a picture of our neighbours, so I wouldn’t get too carried away here fellas.

    I actually think that we can stand to keep the surpluses rolling in for the moment, if only for security purposes. After all in 3 years time we are going to be extremely vulnerable energy wise. That is, according to the International Energy Agency (the most respected energy authority on the planet) soon after 2010, oil production by non-OPEC member states is likely to start declining. basic growth in oil output will therefore come from OPEC countries, especially the Middle East and Africa.

    http://www.energybulletin.net/9073.html

    So there we have it – are energy future is soon to be at the mercy of a small number of despotic regimes. The IEA goes on to say “Conserve energy, conserve oil! And diversify, please. Get out of oil!”

    So are we going to leave it up to the market to secure our energy future or is the government going to provide some real leadership for a change and start getting us out of oil?

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  83. Redbaiter () says:

    Fuck off with your never-ending peak oil scaremongering crap you delusional insect.

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  84. insider () says:

    I don’t think PJ was going on about peak oil, he was talking more about the economic/poltical implications of concentration of resource ownership in despotic hands. Look what’s happening in Venezuela with oil production.

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  85. still holding my breath () says:

    phillipjohn – good to see you’re onto it! Without your intellectual firepower to look after us, the global warming/sars/ebola/Y2K/peak oil/birdflu bogey man would have got us by now. Thankyou, thankyou, thankyou…

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  86. David Farrar () says:

    Redbaiter – You’ve made some great contributions recently. It would be appreciated if you can keep up the quality ones and try to refrain from telling delusional idiots to duck off :-)

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  87. Some Fella () says:

    Ben Wilson:

    Thanks for the support.

    I fully agree about the prices of cars, they are bloody insane.

    It is of course a result of Populist “Aussie Battler” politics. Which means they maintain high Tarrifs on car imports (esp second hand), in order to protect the jobs of the “Battlers” working in the car industry, at the same time as costing every other “Battler” more money to buy a car. And the charges from the state governments for car rego are one way they have to make extra money so they milk it.

    For me it really is that I can get most places I want to go on Buses, Ferries and Trains. But we have on occasion hired a car for a weekend.

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  88. The Economist () says:

    Phil-Phil-Phillip J-J-John the resident socialist says:

    Australia has many more hidden taxes than New Zealand does, which, once you tally up don’t paint too rosy a picture of our neighbours, so I wouldn’t get too carried away here fellas.

    Jesus – are you for real? We’ll use one-syallable words for you: Australians EARN MORE than New Zealanders. Yes Phillip John, even if we were to accept your “hidden taxes” point – which is very much a moot point (let’s not get started on Labour’s “hidden tax” agenda – the tax impost is applied to a HIGHER LEVEL OF TAXABLE INCOME.

    How’s that Masters paper of yours coming along?

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  89. Redbaiter () says:

    Mr. Farrar- Fair enuff.. this idiot tho attempts to drag every thread onto the coming “oil crisis”.. preach preach preach, at the same time as he sneers at the Brethren for THEIR religion… good grief..!!

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  90. tim barclay () says:

    Just looked at Jordan cCarter’s blog on tax rates transtasman. He talks about state taxes. Cater could start his analysis with GST which is 25% higher in NZ with no expemtions and income tax rates which are much lower in Australia. Carter could also mention that NZ is running a far higher budget surplus than Australia. That higher budget surplus represents the living standards of odinary New Zealanders. Cullen is a thieving prick who does not give a damn about the individual balance sheets and living standards of everyday New Zealanders. I assume he will act before the election but he could afford to act now but does not.

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  91. J () says:

    Oh, such short memories our economic free market gurus have. All that “pain” we had from the 1984 – 1994 Actlabournational economic reforms was supposed to deliver us an economy that would trump slow to reform, union dominated Australia yet here we are staring enviously at their salaries.

    ..And paranoids like red ‘everyone’s a commie” baiter want us to believe that another dose of the same kind of economic mismanagement will put us back on track. Stick to the facts. Australia’s success is not due to the kind of crazy reforms that we did?

    Conversely our salaries were devastated by the weakening of the bargaining power of the Labour market at a critical time. Stick to the facts. Don’t reinvent history.

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  92. PaulL () says:

    J, so you think we should have just left Muldoon in power, because he was managing things just fine? Or am I missing something. It is easy to complain about what was done in the past, but to be intellectually honest you have to explain what the alternative was that you would have chosen. I don’t believe that the NZ govt had one – for god’s sake, Muldoon left the country essentially bankrupt. Have you read any of the good histories of the 1980’s Labour govt?

    I would also note that until National’s last term our income growth was actually on a par with Australia’s. It was only once this Labour govt took power that things started to slide. The policies that caused problems are not those of 1984-94, they are the policies of this government.

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  93. phil u () says:

    redbaiter..

    it is not a religion..

    it is more a fact of life..

    and you can deny all you like..

    reality will eventually bite you in the arse..

    phil(whoar.co.nz)

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  94. Redbaiter () says:

    Phil, you wouldn’t recognise a fact if it was nibbling your knob. Its a religion, and you’re a fanatic.

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  95. burt () says:

    tim barclay

    “I assume he will act before the election but he could afford to act now but does not.”

    I expect him to put in place a threshold shift effective April 2008. But the funny thing is that due to his staunch anti tax cut ideology he has painted the party into a corner. Dammed if they do dammed if they don’t. Dammed if they are tiny, dammed if they are large.

    It’s justice for the pain they have inflicted on the savings of ordinary Nu Zaylanders while they grow their precious surplus.

    Roll on 2008, any cuts offered in this budget will be just an aperitif compared to the election bribes.

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  96. J () says:

    “Would also note that until National’s last term our income growth was actually on a par with Australia’s.

    Yeh,that may be the case but see, the last seven years have been a boom time for both economies (first world economies are basically cyclical however only one had strong enough Labour unions to make sure that some of that boom went to the workforce too .

    Our companies have made fortunes in the last seven years and our workforce has been too weak to get much of it.

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  97. J () says:

    “Would also note that until National’s last term our income growth was actually on a par with Australia’s.

    Yeh,that may be the case but see, the last seven years have been a boom time for both economies (first world economies are basically cyclical however only one had strong enough Labour unions to make sure that some of that boom went to the workforce too .

    Our companies have made fortunes in the last seven years and our workforce has been too weak to get much of it.

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  98. PaulL () says:

    Crap. Australian unions are only marginally stronger than NZ. I was at the budget launch in Canberra on Tuesday, and the message was clear – this election is the last roll of the dice for Australian unions. They are becoming irrelevant, and only a Labour govt can make them relevant again. In NZ, the Labour govt has made ours relevant, and it hasn’t delivered anything to NZers.

    The reality is that NZer’s gross income has risen over the last 10 years, and their take home hasn’t. The govt has expropriated the gains, leaving the workers with nothing. Animal farm anyone?

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  99. burt () says:

    J

    Our workers are being taxed at ‘rich bastard’ rates set in 1999. Australian’s are being taxed at ‘rich bastard’ rates set in 2007. How can you possibly not see that it’s not only about comparison, it’s about being fair and reasonable.

    PJ has done a most excellent job of explaining why the thresholds should go up, as the more you are paid the greater the effect of the progressive system, this alone shows that the thresholds not adjusted since 1999 are robbing people irrespective of your ideology about progressive or flat tax systems.

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  100. J () says:

    “J, so you think we should have just left Muldoon in power, because he was managing things just fine?”

    Well our politics are fucking dumb because you only basically get two century old choices, Ruling party #1 or Ruling party #2 .So Ruling party 1 # sucked and then Ruling party #2 gets in and they suck. It sucked for sure which ever way you went in 1984. Labour lied and national sucked.

    So the ruling party in now are at least paying lip service to how fucked up that choice was and is trying to bring new ruling parties in. I support that and fuck any old party that doesn’t…but in 1984…hey what a choice..dickhead a or dickhead b..

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  101. J () says:

    “Crap. Australian unions are only marginally stronger than NZ. ”

    Nah , they’re not, although it looks like the are trying to break them now…ya know , now Aussies in the financial good times and why?

    I mean after they were in the economic equation for so long. We are so disloyal to our unions fighting for the poorest worker but still pushing up everyones salary.

    And..hey even marginally makes you more powerful if you get my drift. Power to people not the executives…power to the workforce who bear the brunt of the hard work…

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  102. PaulL () says:

    Do you actually work J?

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  103. PaulL () says:

    Just asking, because at my company the management work pretty hard. And everyone is paid well above award (such as the award is). We do a lot of work with govt, and I’m a little dubious about the unions there – all the good people are on AWA and paid well above award, the wasters are all on union-negotiated awards.

    I just wonder a bit when people are suggesting that the union is negotiating their pay – I usually find that most people who are a) in the workforce and b) good at their job have very little time for unions. I may be generalising, but I did wonder whether you were actually out in the workforce.

    Unions in Australia have been declining for years – it didn’t just happen last year. Declining for the same reason they have been globally – people in general don’t work in huge factories governed by award rates anymore. People more and more are working in small companies, are individual contractors, or are paid exactly what they are worth. Sure, it is hard on those that aren’t worth very much, but that might indicate that they have chosen the wrong profession, and they perhaps should try something else that they are actually good at.

    Unfortunately for some, that is the way the world is going. Fortunately for others, it means that individuals are going to capture an increasing percentage of the value they create. Global labour markets, global shortage of talent, these things work to the advantage of those who have found their niche. And here I am not just talking of professional people, I have good friends who are plumbers or electricians, and are making fantastic money just because they have basic disciplines – like getting out of bed and going to work, or turning up to a job on time.

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  104. J () says:

    “I just wonder a bit when people are suggesting that the union is negotiating their pay – I usually find that most people who are a) in the workforce and b) good at their job have very little time for unions. I may be generalising, but I did wonder whether you were actually out in the workforce.”

    There are no unions for the vast majority of workers. Yes, I work , it nearly fucking kills me sometimes and I’m angry because of that.Noone ever mentions unions at work because its just aint the thing to do and I make a fuck load of money for my company and its good product and probably off you.

    “but I did wonder whether you were actually out in the workforce.”

    fuck you brother

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  105. J () says:

    “Sure, it is hard on those that aren’t worth very much, but that might indicate that they have chosen the wrong profession, and they perhaps should try something else that they are actually good at.”

    hey wife and kids dad’s decided to give try something different. Big fat burger takeaway……….(six months later) oh that venture failed now i’m very poor,, goddam it I must find something else I’m good at. For master.

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  106. J-Walker () says:

    J

    fuck you brother

    You don’t seem to be the brightest bulb on the Christmas tree.

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  107. Redbaiter () says:

    “Noone??”

    Get an education you socialist barbarian.

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  108. PaulL () says:

    Master being the wife, the almighty dollar, or the evil capitalist overlord?

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  109. J () says:

    “Get an education you socialist barbarian”

    I tried to, but they took the money out of the schools while I was getting one so my inglish isn’t so perfecrt but my commmitment to freedom is.

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  110. J () says:

    “Master being the wife, the almighty dollar, or the evil capitalist overlord?”

    Master being you, you cock. Its’ your dumb idea.

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  111. J-Walker () says:

    Your commitment to freedom? You think that qualifies you for a libertarian passport? Given that you’re a socialist apologist, I guess there’s not much hope for you. Because socialism is all about slavery to the government. Try reading some books and then come back and have this discussion with us.

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  112. J () says:

    “Because socialism is all about slavery to the government. Try reading some books and then come back and have this discussion ”

    What about slavery to the firm. Just as bad.We are heading that way.Read some more books

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  113. J-Walker () says:

    You really are a commie dickweed. The government takes taxes from you forcefully. A firm pays you for services rendered. And employees can resign so they’re not slaves to the firm. Big difference of principle you moron.

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  114. Joe () says:

    I work hard and earn ~90k in salary a year, so I’m not a freeloader. And yet I think socialist in some areas is good. Education and health are the top ones for that. Oh… btw, I was the first generation that need SL and also repaid in full before it became interest free, so I think I’m entitled to say a bit about education.

    I consider myself fortunate to have been able to achieve what I have done so far (not a lot but above average). But I wouldn’t say that it’s been all up to me alone, circumstances helped along the way. So I guess what I’m trying to say is that there’re people who are less fortunate than many of us and need helps from the government.

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  115. J () says:

    “You really are a commie dickweed. The government takes taxes from you forcefully. A firm pays you for services rendered. And employees can resign so they’re not slaves to the firm. Big difference of principle you moron.”

    when did you last resign? You only resign when you’ve got somewhere to go that’s better than where you are. Save the moron arsehole and argue the point.

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  116. J-Walker () says:

    J – obviously you’re so illiterate that you missed my point. That’s to be expected of socialists. They can’t debate logically. So one more time for the ignoramus. You have to pay the government taxes. That means you’re are a slave to the government. The firm has to pay you salary or wages for services rendered. That means the firm has a legal obligation under an employment contract – which the employee enters into on voluntarily. No-one holds a gun to your head. The fact that you haven’t resigned to go somewhere better recently is probably a sad reflection on your prospects, but it is completely relevant to the point that you also have a choice of workplace. It’s called an “employment contract” for precisely that reason. So the “moron” label will have to stick with you. Sorry.

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  117. Anon () says:

    No point debating with J – waste of brain cells.

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  118. J () says:

    “The fact that you haven’t resigned to go somewhere better recently is probably a sad reflection on your prospects.”

    Yes, that’s the point of the argument mr employer, people’s prospects. They are a lot more limited than the fantasy world free marketers describe.

    The movement of labour is a very slow process; it’s not like changing your bank account. Talk to the real world…and its obvious J-walker is not part of the workforce, or at least the ones that do the hard work or he would understand my point.

    “No point debating with J – waste of brain cells.”

    Agreed, maybe you haven’t got many to waste

    Although why is it on this site that the free marketers argument always collapses into this kind of abuse. You don’t see Sonic, Phillip John, Ben Wilson and co giving up on their arguments so quickly just to end with abuse. Suggests an element of shallowness don’t ya all think? An argument so thin it only lasts a couple of posts before you start screaming insults.

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  119. J () says:

    “”Obviously you’re so illiterate that you missed my point. That’s to be expected of socialists. They can’t debate logically. So one more time for the ignoramus. You have to pay the government taxes”

    Right that’ll be the organisation me and my brothers and sisters get to vote out if we want,the organisation we voted in, unlike you and walmart.

    “That means the firm has a legal obligation under an employment contract – which the employee enters into on voluntarily.”

    Because there’s such a variety of work to choose from with these great salaries….. And everyone knows standing alone is a much better way to bargain than bargaining as a collective (tuis billboard please), that’s how WW2 was won right.

    Unions have done nothing for the workforce over the years except provide the very basis of the rights workers enjoy today.

    Get real. There is imbalance in the employment equation at the moment and if you don’t understand that and speak to that problem you will have a miserable time in the next thirty years as an employer.

    That’s why New Zealand has a hardcore 48% – 52% centre left vote. That vote will be hard to diminish. Already the National Party is trying to make overtures to it but they’ve got to do a lot more. Reality please.

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  120. PaulL () says:

    J, I don’t think you’ll find any party in NZ trying to remove unions from the landscape. Freedom of association and all that – if you want to join a union nobody will be stopping you. What parties of the right generally don’t want is to force people to join unions, because they recognise that for some, even many, people a union is not the right option.

    I still argue that unions are largely for wasters, and that those who are good at their job will always do better by negotiating individually. But wasters can go to work too, and if they want to use a union to jack up their wages beyond what they are worth instead of changing their behaviour or their job so that they are worth more, well, they are welcome to do that.

    Of course, there are a lot of studies showing that those who are wasters don’t usually know it, and think that they are in the top 10% of employees at their company. So it is entirely possible that many people are out there who think they are really good at their job but are not paid particularly well.

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  121. J-Walker () says:

    J

    Master being you, you cock. Its’ your dumb idea

    You’ve never sprayed abuse? What a laughing stock you are.

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  122. J () says:

    Yeh I loose it sometimes in the face of constant irrational abuse,I’m only human, so apologies to PaulL for “cock” if he was offended, it wasn’t meant to read so heavy…. but it was a dumb question.
    JWalker go read the threads again and see the pattern of abuse.

    “What a laughing stock you are.”

    ..And don’t try and bully people with attempted humiliation. What a laughing stock you are too, ..see its pathetic……..stick to your argument

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  123. J-Walker () says:

    Such arrogant hypocrisy as we’ve come to expect from leftists. You haven’t even put up an argument, nor had the courtesy to respond properly to mine, so get to work.

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  124. J () says:

    Some waster history for paul,

    The 8-hour day movement or 40-hour week movement (a.k.a. the Short-time movement) had its origins in the Industrial Revolution in Britain, where industrial production in large factories transformed working life and imposed long hours and poor working conditions. With working conditions unregulated, the health, welfare and morale of working people suffered. The exploitation of child labour was common. The working day could range from 10 hours up to 16 hours for six days a week.[citation needed]

    Robert Owen had raised the demand for a ten-hour day as early as 1810, and instituted it in his socialist enterprise at New Lanark. As early as 1817 he had formulated the goal of the eight-hour day and coined the slogan Eight hours labour, Eight hours recreation, Eight hours rest. Women and children in England were granted the ten-hour day in 1847. French workers won the twelve-hour day after the February revolution of 1848. A shorter working day and improved working conditions was part of the general protests and agitation for Chartist reforms, and the early organization of trade unions.

    The International Workingmen’s Association took up the demand for an eight-hour day at its convention in Geneva in August 1866 declaring The legal limitation of the working day is a preliminary condition without which all further attempts at improvements and emancipation of the working class must prove abortive and The Congress proposes eight hours as the legal limit of the working day.

    Although there were initial successes in achieving an eight-hour day in New Zealand and by the Australian labour movement for skilled workers in the 1840s and 1850s, most employed people had to wait to the early and mid twentieth century for the condition to be widely achieved through the industrialized world through legislative action.

    The Eight hour day movement forms part of the early history for the celebration of Labour Day, and May Day in many nations and cultures.

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  125. PaulL () says:

    Thanks for the history lesson J. And the relevance to today is? Are we now seeking a 30 hour week?

    My position is, quite simply, that this fascination with the workers and the employers is old hat. In today’s economy many people are both employer and worker, very few people work for large industrial concerns any more, and with the very low unemployment across the world at the moment (so don’t go claiming credit for Labour – unemployment is also very low in Australia) the balance of power is really with those selling labour, not those buying it. If you can’t get a decent salary in today’s environment then I submit that you either
    – aren’t valuable to your employer
    – your employer is an idiot and you should get a new one
    – you work for a monopoly provider (i.e. the govt)

    Funnily enough, the only area of union growth in our country at the moment is the public sector – obviously a lot of people are concerned that their employer (the labour govt) would not negotiate fairly with them.

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  126. J () says:

    Are we now seeking a 30 hour week?

    No, a 40 hour one again. Most people work at least 50 hours plus…..don’t you?

    and the lesson was that unions help make us (the workers) strong and productive and free so don’t shit on them so easily.

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  127. phillipjohn () says:

    “Fuck off with your never-ending peak oil scaremongering crap”

    Unsurprisingly you seemed to have missed the point that I wasn’t talking about peak oil. I was referring to the point that more and more the availability and price of oil is going to be dependent on the whims of a few despotic regimes. No intelligent person with knowledge of the industry disagrees with this point. Have a look at this recent Financial Times article for instance:

    “Increasing state ownership and rising resource nationalism are emerging as the main long-term threats to global oil supplies, says a report for the industry by an energy consultancy.”

    and further that:

    “Resource nationalism, which is limiting access for international oil companies, and the national oil companies’ failure to reinvest profits in production, are limiting outlay required to replace existing resources, which are being substantially depleted”

    This is a real concern because:

    “Should demand outstrip supply, you will have a run-up in prices, massive demand destruction and substitutions.”

    http://www.ft.com/cms/s/dd44e336-fe6a-11db-bdc7-000b5df10621.html

    90 % of our transport energy needs, and 40% of our total energy needs are currently sourced from oil. So the real question is, do we wait until the market sends us a severe recession, or do we start to reduce our dependence on foreign oil now – thus cushioning the landing?

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  128. PaulL () says:

    PJ: We wait until the market pushes up the price, people will naturally reduce their usage. Didn’t kill us during the recent increase in prices.

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  129. J () says:

    j-walker I have addressed your argument a number of times – primarily your simple assumptions on the mobility of labour You haven’t even put up an argument, nor had the courtesy to respond properly to mine, so get to work.

    – please reread this thread and to help extend the debate I have included an excellent analysis from Sam Dixon below of our current economic position,

    “Also, its silly only to look at part of an argument, the question of what tax we pay relative to Australia also raises questions of what services we get in return for that taxation, what the fiscal impacts of tax cuts would be and what tax cuts would do to the macro-economic situation.
    – You can’t call for taxcuts and call for more spending every time there is a problem, and complain about interest rates and inflation – these are all interrelated, you change one, you impact on the others – right now the Government is walking a fine balance based on an underlying assumption that Government ought to make sure that everyone has decent work, decent pay and access to good quality public services, sure you could find macroeconomic balance points based on other political philosophies – say a low tax, low spending, neolib model – but that would mainly mean saying screw you to the least fortunate among us so that people on higher incomes could have some more shiny things, and I’m glad my Government refuses to do that.”

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  130. J-Walker () says:

    Ah – so you’ve reposted the same comment on the correct thread this time, J?

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  131. phillipjohn () says:

    Paul:

    there is a critical tipping point where at a certain price (if sustained for a certain time) the price of oil will start to have a significant impact on economic activity. i.e. as oil is a cost in virtually every good and service, their prices increase when the price of oil increases, demand decreases and jobs are shed. (and of course there is the effect that increases in oil prices have on inflation).

    Now, we obviously didn’t reach this tipping point last time prices went through the roof (BTW you will note that they haven’t actually come down that much) -they didn’t go high enough – In real terms they went to about 75% of the highest price of the 1970s-1980s oil shocks.

    But here’s the present picture. Production is flat in all OPEC countries (they could increase production but they wont because they want to maximise the long-term profits from their resource base – this means high prices over the long term) – non-OPEC production is flat save for very minor increases, and is set to start an aggregate decline in around 2010. We have growing global oil demand of 2-3%. Now you don’t have to be a professor of economics to figure out where the price of oil is going.

    So, the equation is simple really – we can use those big juicy surpluses to start decreasing our economy’s dependence on oil, or suffer the full consequences when the price gets to the point where it starts to shrink our economy.

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  132. Anon () says:

    Phillip John – you are boring because you always talk about peak oil. Can’t you talk about anything else?

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  133. PaulL () says:

    J – you are painting a picture as if the current trade-off we have is the only possible one. In starting this thread DPF was pointing out that the Australians have a different trade-off, one that involves lower taxes and (in general) better social services than we have in NZ. So, in answer to your question, as a start I would choose those settings instead. I actually think we can do better than just copying the Australians, but it would be a reasonable starting point.

    PJ – personally I am all in favour of instability in the middle east and OPEC holding back production. That gradually pushes up the price of oil as demand increases, and people start choosing other options. Coal is a viable replacement for a decent proportion of what we use oil for today, and clean coal technologies are economically viable with only a small rise in oil price. Solar and nuclear become viable with roughly a doubling in oil price (although technology improvements would bring that price point down).

    I’m not sure what you are suggesting when you say that govt spending could influence our reliance on oil. I don’t see it as a government question – other than that the govt could push up the price of oil through a carbon tax. To me that is a response to the risk of greenhouse warming, not to the world running out of oil.

    Interestingly, if you are right then we may as well stop worrying about greenhouse warming, since most of the projections presume that we burn just as much oil as we want. If we run out then clearly that won’t happen – under your scenario we go into global recession and our carbon emissions plummet.

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  134. J () says:

    J – “you are painting a picture as if the current trade-off we have is the only possible one. In starting this thread DPF was pointing out that the Australians have a different trade-off, one that involves lower taxes and (in general) better social services than we have in NZ. So, in answer to your question, as a start I would choose those settings instead. I actually think we can do better than just copying the Australians, but it would be a reasonable starting point.”

    Paul ,what I’m saying is how did the Australian economy become so attractive? What were they doing in the same period we were tinkering with our economy (1984 onwards)? They never had a ruth or a roger if you get my drift or until very recently weak labour legislation.What were the prerequisites to their economic health? It wasn’t low taxes, that’s a recent thing.

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  135. phillipjohn () says:

    “Phillip John – you are boring because you always talk about peak oil. Can’t you talk about anything else?”

    Sorry to bore you, who ever you are – but you’re wrong to say that I only talk about peak oil – in fact I’ve definitely been known to talk about global warming, and on the odd occasion 9/11 conspiricy theories :-)

    The reason I talk about peak oil a lot is, well, because it’s actually an increadibly important issue (we are, after all talking about global recession). If you research the issue seriously you will soon realise this. and here’s a great place to start :
    http://www.theoildrum.com/story/2006/11/15/83857/186

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  136. phillipjohn () says:

    PaulL, you say that:

    “if you are right then we may as well stop worrying about greenhouse warming, since most of the projections presume that we burn just as much oil as we want.”

    but you also said that:

    “Coal is a viable replacement for a decent proportion of what we use oil for today”

    you do see the problem here don’t you? Coal is a far more potent green house gas than oil – and believe me, when faced with declining liquid energy supply (recession) our use of coal will increase -

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  137. PaulL () says:

    Before 1984 Australia was to the right of NZ (in economic terms). Shortly thereafter NZ moved to the right of Australia. Australia has gradually move to the right as well, NZ has started moving towards the left.

    Your argument that the NZ is suffering from the policies of 84-94, and Australia is doing well because they didn’t do those reforms, is interesting, but wrong. Virtually all of the reforms that NZ made were also made in Australia. Australia’s growth rate is increasing as they make reforms, NZ’s growth rate is decreasing as our current government makes the reforms that you seem to think are the correct ones. Our growth rate 84-94 was the same as Aus (after our reforms), and has fallen behind as they made reforms and we went backwards. The statistics simply don’t support your view.

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  138. PaulL () says:

    PJ, carbon sequestration is viable with large scale coal fired power plants – I guess my term “clean coal” was a bit vague. Personally I think nuclear is the answer for most of the globe (especially China), in NZ I think the best answer is more hydro. Conservation of energy would go a long way too. I am still amazed that anybody would build a house with single glazing in the south island.

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  139. PaulL () says:

    Further adding to that, as oil prices increase people will use more fuel efficient cars. An efficient car (say, for example, a VW Golf diesel) uses around half the fuel of a less efficient car (say, a Ford Territory petrol). People are already voting with their feet, as the price of oil rises more people will do so, and either Ford will go out of business, or they will need to fix the fuel economy of their vehicles.

    Let me be the first to predict the demise of the SUV – it simply won’t be economic for the average “soccer mom” to drive around in the things.

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  140. J () says:

    “Our growth rate 84-94 was the same as Aus (after our reforms), and has fallen behind as they made reforms and we went backwards. The statistics simply don’t support your view.”

    Well funnily enough, they kind of do. Our growth rate from 1985 to 1992 was woeful when compared to the Australians yet at the same time we were running the economic liberalisation flag a lot higher up the flagpole. Go figure, we reduced all the prices at the shop all at once.

    When we abandoned the uncertainty of Ruthy and Rogernomics we returned to normal first world growth levels, that is we re-entered world cyclical growth trends only complicated by our impact from the “1998 Asian” crisis. The 2000’s have seen steady growth for both economies with the Aussies supplemented by an unprecedented mineral export boom to china.

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  141. Dr AB () says:

    The inflation rate is influence substantially by government spending.
    The way around this is to reduce the amount the government has to spend.
    1. Increased personal tax threshold levels, but a proportion of this is required to go into a compulsory saving scheme – hence money not spent in the economy and therefore not inflationary. This should have been done years ago.
    2. Tax breaks on people who choose to take out private medical insurance and send children to private schools – reduces the cost of public health care and public schooling. This is only fair as they are not getting the full benefit of public funded institutions
    3. Reduced tax on set-up companies in key areas of technology and research and exporting for two years.
    4. A capital gains tax on secondary property – i.e properties purchased as investments but for which are a huge loophole for people to avoid taxes and gain the benefit of capital gains. This will stop the rampanging house inflation.

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  142. Redbaiter () says:

    “Let me be the first to predict the demise of the SUV – it simply won’t be economic for the average “soccer mom” to drive around in the things.”

    Only tiny minded penny pinchers think the price of petrol is something to get excited over. In terms of running a car, its a virtually inconsequential cost compared to say depreciation. Your silly prediction is comparable to prophesizing the demise of business class air travel.

    Mind you, if socialists keep their hold on power for much longer, its pretty easy to predict the demise of everything. Ask the citizens of the Soviet Socialist Republic. Oh, hang on….

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  143. PaulL () says:

    Redbaiter, what part of cost/demand curves do you not understand? Price goes up, people consume less. I think the demand for petrol is somewhat elastic, many people use petrol they don’t need to. The statistics on new car purchases support this.

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  144. RedRag () says:

    A capital gains tax on secondary property – i.e properties purchased as investments but for which are a huge loophole for people to avoid taxes and gain the benefit of capital gains.

    Mostly an urban myth driven by envy:

    1. Currently investors are seeing a miserable 3-6% return on their properties. The rent almost never covers the full cost of owning the property inclusing the mortgage and rates/insurance etc. The difference is usually partially funded by the investor, and partially by the IRD.

    In other words at present rents are being subsidised by the tax payer. If you remove that subsidy rents will rise and those tenants saving for a deposit will fall even further behind.

    The average tennant stays about 9 months and usually moves on for reasons such as relationship changes or a new job. Many are at a stage of life where home ownership would be fiscal suicide. Home ownership is not a universal panacea for all that ails us.

    2. It was never a “tax loop hole”. The depreciation and losses claimed by residential investor companies is done on exactly the same basis as almost all other commercial enterprises. There is little justification for treating property investors differently…and if you did the sophisticated ones would merely re-structure their businesses.

    3. Investors do NOT significantly drive the market. Usually they look to buy as cheaply as possible, usually properties that are in the last 25% of their economic life that families no longer want to live in, or if they did would require significant rennovation. Alternatively there is a minority of investors who also build their own properties, these people ADD to the market supply. On what grounds would you deny them access to normal business tax rules?

    My information is that the price bubble has become so high and returns so low that local kiwi investors (mostly Mums and Dads with one or two properties) have shut their cheque books, yet the market continues to overheat. Investors as a rule do not buy houses in the top 50% of the market, yet that segment has seen exactly the same price rises.

    The solution to the housing problem is two fold:

    1. There is an excess of credit supply. The Reserve Bank will almost certainly need to re-jig the banking rules to reflect this.

    2. There is a shortage of quality affordable housing for first home buyers. Cheapish properties do exist, but often they are on the remote fringes of cities (which adds transport costs), or they are very run down and need extensive rennovation.

    One approach to this would be for the State to use Housing NZ to improve supply. HNZ should target say 5% of it’s portfolio to be turned over every year. Existing long-term tenants should be funded into ownership and these houses replaced by HNZ using the huge infilling opportunities it has.

    In effect HNZ should fill the entry-level gap in the market where private enterprise has failed. The goal could be for HNZ to provide at least 20% of all new houses built every year…. and in doing so setting a quality benchmark in the market that no other developer would go below.

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