Ha I was right

October 19th, 2007 at 8:04 am by David Farrar

I pointed out on Tuesday that Dr Cullen was clearly wrong with his assertion that there was nothing in the Australian package for people earning under $30,000 a year.

He now admits he was wrong. But get this – he still tries to attack the package on the basis that those earning under $11,000 a year get nothing from it.  Ummm, that’s because in Australia they are already scheduled to be paying 0% income tax under the tax laws passed last year. So Dr Cullen is complaining that people who pay zero income tax do not get a tax cut. Why do we trust this man with our money?

Just remember that the caring Dr Cullen will tax someone  earning $30,000 almost four times as much as the nasty Peter Costello.  Cullen will thump a low income worker on $30,000 with an average 19.1% tax compared to Peter Costello’s proposed 5.0% average tax.

No wonder he had to lie about the package.  It makes his lack of action look so much worse.

Tags: ,

152 Responses to “Ha I was right”

  1. Tane (1,096 comments) says:

    Don’t get too cocky David. I’ll have some figures up on The Standard later today you might be interested in.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. burt (8,272 comments) says:

    You post em Tane and we’ll fisk em.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. Sam Dixon (596 comments) says:

    And again, you’re leaving out all the other tax differences between Australia and New Zealand – payroll tax being the major one – income tax is just one way that an employee’s earnings are taxed and looking at it in isolation is useless (just like looking at average ordinary time wages and claiming that tells you somehting aobut what the typical New Zealander is earning is misleading).

    How aobut putting up comparative tax wedge figures? They compare the total portion of the cost of employing someone that goes to the government in taxes – think you’ll find its a different story.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. ghostwhowalks (377 comments) says:

    DPF has been wrong so many times, but that doesnt count does it.

    Remember the great interest free loans for students that you ‘predicted’ would have students racking up the borrowing.
    Then again maybe a ‘peace prize’ could be coming your way.

    Your analysis of Howards tax cuts was very facile , in all that is being offered ( and on past experience will be taken away again) is yearly indexation due to inflation. First indroduced by Fraser in 1977 ( but dropped soon after). We could come up with ‘huge numbers’ if nationals tax cuts of 1999 were added up cumulatively for the last 8 years. ” national gave tax cuts of $10 billion”.
    But they lost the election where labour promised tax increases .. Ha Ha

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. burt (8,272 comments) says:

    Sam

    Dr. Cullen seems to think people should be paying income tax from the very first $ they earn. Aussie don’t share this view. Clearly you are also upset that Aussie didn’t introduce a 19.5% bracket to keep low income workers poor and needing welfare. Booo hoooo.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. Razorlight (52 comments) says:

    Tane

    David is simply pointing out that our Finance Minister was and is wrong.

    He has admitted it himself

    Simple really

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. NX (504 comments) says:

    It sucks to be in a relationship with no kids or single in NZ. Aussie is the place to go if we want to keep more of our money.

    ^^ what is Labour’s problem with us??

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. David Farrar (1,898 comments) says:

    I love how people try to argue against the simple fact that very low income workers in Australia pay no income tax on what they earn.

    The comparative tax wedge is for the overall economy. It doesn’t address whether a worker gets to keep more of their pay or not at a specific income level. And the fact that gross salaries are higher in Australia also negates any argument about the impact from payroll taxes on gross salaries.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. Pascal (1,969 comments) says:

    Tane, if the Standard could actually load in under a minute I’d be happy to read them. As it stands, your site is so slow it makes decision making in a Communist country look like Speedy Gonzales.

    Sam, as has been pointed out to you, New Zealand has much higher secondary taxes than Australia. 10% GST versus 12%. GST exemption on food. And so forth. The OECD figures were quoted to you in another thread.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. Owen (5 comments) says:

    Sam – Australia 8th, NZ – 13th http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10470651

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. bwakile (757 comments) says:

    Bureaucrats and politicians have complicated the tax revenue mechanisms to con people into not realising how much they are paying. Comparing apples in NZ with bananas in Oz is not easy.
    This is why a vastly simplifed taxation system with reduced collection costs makes sense to me. Surely we are a perfectly sized country to attempt this.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. ZenTiger (435 comments) says:

    Sam, do you see the irony in your line of argument?

    The Australian right’s tax policies are shown to be more worker friendly than the Labour Government, so you are trying to show how the centre right parties are not business friendly, by imposing payroll tax!

    So Sam, are you saying that even though NZ Labour is not worker friendly when it comes to taxation (NZ at 19.5 cents in the dollar versus Oz at ZERO on the first 16K), it is business friendly??

    Note also in Oz that payroll tax only applies to large businesses, giving small business a chance to compete against bigger marketing budgets.

    And where Oz pays Medicare levies, we get charged ACC.

    And they still manage to pay workers a decent super package on top of all that.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. Sam Dixon (596 comments) says:

    Pascal – agian GST is only part of the story, you can’t look at them in isolation.

    If you want to know how much of their income a worker loses in tax, you have to look at the tax wedge.

    If you want to see overall how much tax takes from all people’s incomes you need to look at tax revenue as a % of GDP (and then do adjsutments around tax on foreigners etc, and it won’t give you a real pitucre for the typical joker).

    If you want to know who gets more for less, you also have to take into account services that are provided by one government and not by the other (ie. if people in two countires ahve the same tax but one doesn’t have free education people in that country will have to pay for education on top of the tax they pay to get the same benefit as the peopele in the first ocuntry get solely from tax), service quality etc -at that point its so complicated and so subjective that you really aren’t comparing apples with apples.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. Sam Dixon (596 comments) says:

    Zentiger – payroll tax or incoem tax, there is no difference in terms of the eocnomic impact on employer and employee – check out the tax wedge grpah on wikipedia.

    the tax wedge is any tax arising from an employee’s employment, whether it is paid out by the employer before gross wages (payroll tax, ACC levy, social insurence in Europe) or by the employee after gross wages (income tax) they are economically the same.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. Wycroft (873 comments) says:

    Hey Sam, Tane, perhaps you’d get a better hearing if you set up some signs, handed out pamphlets and spoke from an upturned beer crate in the departure lounge at the airport to the 700 New Zealanders a week who just don’t seem to get why you’re so right and they’re so wrong?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. casual watcher (289 comments) says:

    The fact is my little lefties, Labour is not really the working mans’ friend at all. Imagine if that got out, imagine if the dullards at Nat HQ managed to get hold of that little gem. So just what or whom do Labour really represent aside of their outdated and discredited ideaology ?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. Sam Dixon (596 comments) says:

    Wycroft – so you’re conceding the argument already? Moving on to immigration?

    I’m just checking that we agree Farrar’s wrong on this point before moving on to the next.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. Ross Miller (1,704 comments) says:

    Cullen lies; Tane lies; Sam lies; Ghostwhowalks lies etc etc

    Sorry, perhaps thats a little harsh. Lets settle on ‘they wouldn’t recognise the truth if it bit them in the bum’.

    Guess what the common denominater is?

    Fact is that Aust beats us in the taxation stakes whatever way you want to run the race.

    And that coupled with the huge disparity in the standard of living and you don’t need to be a rocket scientist to work out why our best and brightest are leaving in droves.

    What do we get in return? …Sonic

    sad

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. Bevan (3,924 comments) says:

    Sam, if New Zealand is undertaxed in comparrison to Australia, whay are 700 Kiwis relocating there every week?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Sam Dixon (596 comments) says:

    casualwatcher – one of the dullards at Nat HQ is our illustrious host. The reaosn they don’t put much emphasis on these figures (putting htem out through their blogger rather than media releases) is that a moments competant analysis shows them to be worthless in isolation. And for all the media’s faults they are usually able to see statistical tomfoolery for what it is.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. Kevin (1,122 comments) says:

    You really have to look even further than the tax wedge at the end result. Aussies generally pay lower taxes and get more for their tax money such as higher super contributions, family friendly policies and a less aggressive interfering state. Thats why we are loosing a lot of our best people there and failing to attract them or their equivalents back – the proof of the pudding….This gap is widening and will only get worse unless our government and our society has a radical re-think on the politics of envy.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Sam Dixon (596 comments) says:

    Ross Miller – don’t call me a liar unless you can point to a lie. I don’t call you a necrophiliac.

    Bevan – so, given up on tax? Immigration it is? I’m just asking because I’ve got work to do and don’t wnat to waste time on tax if you’ve already conceded the point.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. Razorlight (52 comments) says:

    Well said Wycroft

    Money talks, and we will walk to find it, for me all the way to the UK.

    I have no doubt you truly believe in what you are saying Sam but the reality is Kiwis are leaving and staying away because wages are higher and taxes are lower overseas.

    I work through a limited company in London as a Solicitor. This is basiclly a sham company legally incorporated to gain massive tax advatages. Moral of this story is there are tax advatages here for me. I take home more each week proportionally than I would at home.I dont know anything about wedges, but I know I pay around 20% tax here on a high income

    And don’t think I am an isolated case, there are literally thousands of us here, not on OE’s but as highly skilled immigrants to the UK.

    Tax is a major reason I am hesitant to come home.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. krazykiwi (9,186 comments) says:

    Sam, if New Zealand is undertaxed in comparrison to Australia, whay are 700 Kiwis relocating there every week

    Perhaps because the govt is happy to loose National voters (surely the majority of the 700) and replace them with new immigrants who buy the Govt-funded lies about how good Labour is?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. Lesley (44 comments) says:

    Bwakile: We can’t compare our apples with their bananas because they won’t take our apples. But by looking at some of the tax regimes I would certainly like a 1 or 2 of their bananas.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. Pascal (1,969 comments) says:

    Sam: <i>agian GST is only part of the story, you can’t look at them in isolation.</i>

    I agree, that was one example highlighted out of the whole document. However, by the OECD numbers Australia is better off than we are. They did not look at just GST in isolation.

    And no, I do not believe that people are conceding the taxation point. What they are in fact pointing out to you is that a large number of people are voting with their feet and moving from a repressive tax regime in New Zealand to a more open, honest one in Australia. How is that conceding the point when they are futher strengthening their point?

    P.S. On the topic of lies – DPF is not at National HQ, is he? :)

    [DPF: As is on my disclosure statement and I blogged at the time, I am doing some consulting to Party HQ at the moment. Will be over soon thank God. And incidentially it's not in an area at all related to what I blog on]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. Pascal (1,969 comments) says:

    Razorlight: Tax is a major reason I am hesitant to come home.

    And why would you? Really, sacrificing a percentage of a higher income in a country that is not suffering from the same interest rate / inflation debacle that we are suffering from … honestly why would you?

    Especially when you consider you’re just across the channel from all the touristy spots in Europe and having a weekend break in the south of France is just a few hours away.

    It sounds good man. Just remember to keep on voting for the right party every election :)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. Bevan (3,924 comments) says:

    Bevan – so, given up on tax? Immigration it is? I’m just asking because I’ve got work to do and don’t wnat to waste time on tax if you’ve already conceded the point.

    Stop squirming Sam and answer the question. We are in competition with Australia for the best immigrants for our workforce, in some instances our own countrymen. Tax and take home pay come into that competition.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. Sam Dixon (596 comments) says:

    Pascal – as far as I know DPF is still working at Nat HQ, he certianly was for the last couple of months. He mentioned it himself (back on July?)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. sdm (39 comments) says:

    I am a long time reader but this is my first post on this blog. Please dont bite…..hard

    It is obvious to all those with an IQ above room tempature that we are over taxed. In New Zealand we penalise success. In Australia they reward it. It is a socialist principal, each according to their needs. But thats not a country I want to live in.

    Tane, I dont know whats worse. Somebody who wants high taxes, or somebody who lies about lowering them.

    People want to control their destiny. Labour wants the state to forfull this role. Costello etc encourage people to get off their arse and make their lives better. In 700 people a week from NZ want that oppertunity.

    In New Zealand however, the government wants us to be dependant on them. Our finance minister is hoarding our money. As David blogged succiently the other day. Real wages are not going up at the rate one would expect. This government is to blame. Now I do know that they spent 90% of their time blaming the 90s for the failure, but the fact remains that their tax take has almost doubled, with no obvious social benefit. Middle NZ is being screwed to fund pet projects for Labour’s constituency through hand outs.

    I dont want government handouts, I want more of MY money back

    Regards

    Scott

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. Kevin (1,122 comments) says:

    Sam also forgets where our high taxes go – all the money we waste training and keeping in good health the future Aussie workforce.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  32. Tane (1,096 comments) says:

    It is obvious to all those with an IQ above room tempature that we are over taxed.

    If you had an IQ above room temperature you wouldn’t be mindlessly trotting out National Party lines. Have a look at tax take as a % of GDP (http://www.thestandard.org.nz/?p=441), then the tax wedge figures and get back to me about being ‘overtaxed’.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. krazykiwi (9,186 comments) says:

    sdm – thanks for your post. and welcome !!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  34. milo (525 comments) says:

    Hey! Attention Tax Wedge fans. Riddle me this.

    Kiwisaver is increasing New Zealand’s tax wedge. Is it therefore a Bad Thing? If it is a Good Thing, does this make Australia’s more generous version of Kiwisaver, contributing far more to the tax wedge, an Even Better Thing?

    Oh, and if you get past that one … riddle me this. What type of family is the tax wedge calculation based on? And what proportion of the population is represented by such families?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  35. Lee C (4,516 comments) says:

    welcome scott. Kiwiblog is the thinking man’s blog. It won’t be purdy, but it sure will be fun!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  36. Lee C (4,516 comments) says:

    sorry … and thinking woman’s blog.
    Hah spot the oxymoron!

    sorry.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  37. Kevin (1,122 comments) says:

    Tane you cant look at tax take you need to look at government revenue – it has been steadily increasing since the 50s with a blip downwards in the 90s. Over that same time what we get for taxes has steadily declined – we have lost universality and had steadily increasing user pays. User pays is not figured into the graph you point to. Lack of value for money for taxes is robbing our children of the future they would have if the money was left in the economy to be reinvested in increased industrial capacity.

    We then would not need to export our land and best people and other non renewable resources to pay for imports, and we would not be headed down the path of becoming a land of head officies, government bureaucracies and servants looking after retired people who have made their money overseas.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  38. Doc (91 comments) says:

    Hah!

    As a single, childless, white, male wage earner (seemingly, Labour’s most targetted demographic for siphoning out revenue)- I just got my tax cut from Dr. Cullen! I have now moved from paying 40.3% tax to 39.0% tax.

    (thanks to now being above the $99,817 of income for the current financial year)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  39. milo (525 comments) says:

    Gee, why won’t any of the Tax Wegies answer my question? Guess that tax wedge comparison doesn’t really make much sense after all.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  40. sdm (39 comments) says:

    I think Kevin sums it up best when he writes ”

    Lack of value for money for taxes is robbing our children of the future they would have if the money was left in the economy to be reinvested in increased industrial capacity”

    Thats the issue isnt it.

    Consider – is our health system improving? No. What about our education system? No Way. Crime and Justice? Nope.

    All this money they just throw at these areas achieve very little.

    What you fail to understand, and what I continually tell my leftie friends, is that if you continue to make it difficult for business and the middle class to live, and you dont provide incentive based policies, then they will up and leave. And then the country is stuffed, because we cant all be public servants!.

    Also, one of the key differences between the left and the right is whose money they consider taxes to be. The left views tax take as the governments money…….its not!!! Its our money.

    And any amount of WFF BS wont cut it. All that does is create state based dependancy. Socialists may be all for it, but I am not

    Scott

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  41. Sam Dixon (596 comments) says:

    The OECD tax wedge is for the average worker. It doesn’t include Workling for Familes or family tax credits becuase the OECD classifies them as government spending (a debateable stance).

    Kiwisaver is a voluntary super scheme administered via the IRD, its not a tax, so not part of the tax wedge.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  42. David Baigent (172 comments) says:

    Hey Doc, You forgot to add GST to that…. Petrol is how much today.
    What’s the GST in that. etc.etc.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  43. Wycroft (873 comments) says:

    Razorlight, me too – as far as I’m concerned wedge is just a colloquial term for money. All I know is that Labour is taking too much of mine.

    As a concerned expat in the UK I hope you’ll do more than a little bit of awareness raising among the thousands of you over there so that they’ll all cast special votes for National at the next election.

    A strong vote out of the UK could probably offset Labour’s coralling of scared and over-taxed South Auckland workers and beneficiaries and bussing them to the polling station with their instructions on how to return Helen to power.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  44. Sam Dixon (596 comments) says:

    Scott – the value for money or the ‘waste’ arguemnt are the last fallback positions of the tory after everyhting else is lost (‘ok, the surplus isn’t as big as we though and not consistent enough to pay for tax cuts!’ ‘ok, we not taxed relatively hgihly compared to other countries’ ‘ok, the publci wants public servics and wants them improved, not cut for tax cuts’ hmm, maybe there’s all this waste we can eliminate’) – well, go to wastewatch.co.nz and see how successful the National Party’s Research Unit was at identifying government waste.

    health, education, and crime stats are all improving – go to stats.govt.nz and look at them yourself.

    there is no evidence that a) Labour is letting all this waste happen for the hell out it (and why would it? increased services for less tax is a sure vote winner) b) theat National would somehow do better.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  45. Julian (177 comments) says:

    Tane and Sam and others dance around the issue going on about ‘apples with apples’ etc, but by a simple comparison of wages your argument is destroyed.

    ‘Cullen will thump a low income worker on $30,000 with an average 19.1% tax compared to Peter Costello’s proposed 5.0% average tax.’

    This is the issue. And it’s not just at low incomes either. Half the people I was at university with are living in Sydney and Melbourne and are paid far in excess of what they would be here, for the same jobs.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  46. krazykiwi (9,186 comments) says:

    Kiwisaver is a voluntary super scheme administered via the IRD, its not a tax

    The employer’s contribution to kiwisaver is effectively a tax. Given the massive number of small businesses in NZ this directly impacts business owner profitability and therefore their income.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  47. ManukauMum (62 comments) says:

    “Ha I was right” – DPF
    aren’t you always “Right”, David?

    [DPF: heh]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  48. Kevin (1,122 comments) says:

    Scott I agree with you almost entirely except that “it does not acheive anything”. Actually in the short term is achieves a lot – it hides the fact that we have not enough industrial capacity capable of providing long term sustainable emloyment and by hiding the unemployment keeps the “estabilishment” in power in the short term.

    We have an incredibly complicated non-transparent system for redistributiong the wealth flowing into this country (mainly from primary production and tourism) to everyone so they don’t feel left out. It will take decades to unravel this system even if there is political will to do it.

    What we need is a genuine broad based political agreement to unravel this system and phase ina genuinely sustainable clean green productivity based system that will be sustainable in the long haul for our children and grandchildren. Taking the weight of the shoulders of the overburdened taxpayer and reducing the bloated state must be an integral part of this. I cant see how to achieve it but I cant see how to get sustainability any other way.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  49. Lee C (4,516 comments) says:

    He ‘dresses’ to the left, ManukauMum.

    perhaps too much detail…

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  50. kiwi in america (2,454 comments) says:

    Sam Dixon
    You say that David’s comparisons are unfair because other taxes need to be taken into consideration. You cite the payroll tax but that is paid by the employer and not the employee. Aussie GST is lower and has numerous exemptions (especially food – a major percentage of household expenditure for the low paid). So then you say what about the government services. So tell us – what government services do Australians lack due to their lower taxes that Labour has so generously provided for in New Zealand with higher taxes. I haven’t lived in Australia since the early 80’s but travel there frequently. Their health care is better, the education system seems similar, their roading infrastructure is far superior as is public transportation (esp in Sydney and Melbourne).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  51. Castafiore (262 comments) says:

    Poor Sam Dixon ,

    It was obviously his on duty day by the amount of his exasperated posts above.

    The 9th Floor have this ingenious system to share around the work load of making all facts used by National appear disingenuous and out of context and not the complete picture.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  52. Kevin (1,122 comments) says:

    Sam the crime stats are improving because of a continuing reduction in “dishonesty offences” Violence is still spiralling out of control and costing this country big time in lost money and productivity that could be put into growing a sustainable economy and the environmental benefits that will flow from that.

    Education figures such as number graduated are improving because of falling standards and the proliferation of half baked courses and educational institutions. In this way we are I admit just blindly following the rest of the world but why do we always do that – cant we think for ourselves. Give our best scholars the best training and they are more likely to stay and contriibute big time. Cynically put them in the same category as pet homeopathisists and they we say stuff you NZ.

    Health – at what cost have these small improvements come – at the cost of billions bled out of phasing in a sustainable green economy – more short term gain for long term pain.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  53. PaulL (5,981 comments) says:

    Sam: you think DPF is wrong. About what?

    About Cullen admitting he was wrong (thereby admitting DPF was right). Seems to be a simple fact to me.

    About Australia having lower taxes on those on lower incomes? The only argument that I’ve seen from you is that we cannot compare, it is far too hard. Apparantly there may be differences in government services. I have news for you, there are – Australian services are better – looked at the pharmaceutical benefit scheme recently). Apparently there may be differences in indirect taxes. There are – NZ GST is higher than Australia’s, and Australian food is GST exempt.

    Apparently payroll tax is relevant. True, payroll tax is a state tax (levied by Labour govts surprisingly). It is levied at around 6c in the dollar after deductions, and where your total payroll is over around $1 million per annum. Small businesses provide 40% of total employment in Australia. Even if we count this full 6% Australia taxes lower than NZ.

    Apparantly tax wedge matters. The tax wedge counts super. Only by a stretch of the imagination could money that comes tax free and is paid into a personal account, given back to you when you retire, be considered a tax. Milo’s question is relevant.

    So, after all that, Australia gets better services, if we include payroll tax they still pay less tax, and dpf is still right. And it turns out I CAN compare. And that you are clutching at straws because you don’t like the answer.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  54. Sam Dixon (596 comments) says:

    KIA – economic impact of payroll tax and income tax on an employee’s net income is the same – I assume you’re econoically astute enough to draw a supply and demand graph for labour – now insert a payroll tax or an income tax, both are factors of the employee’s net wage (the price of their labour) both result in the saem higher cost to the employer and lower net wage for the employee than if there were no tax.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  55. Kevin (1,122 comments) says:

    Well its a democracy so we could let the electorate decide by having a referendum about what % of GDP the government should be limited to in tatality and what mix of income tax, GST and user pays we should have.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  56. side show bob (3,660 comments) says:

    Well said sdm.

    Shit Sam I just saw this pig fly by my window and it had written on it ” a vote for Labour is a vote for the future of this country”, you are not missing any pigs are you?.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  57. Tina (687 comments) says:

    Desperate Mickey’s problem isn’t fiscal it’s philosophical.

    People controlling their own lives with their own money has always been poison to the comrades.

    And even more worrying is a Treasurer who gives a running commentary on what he thinks the exchange rate of the Kiwi $ “ought” to be.

    Geeez…..I wonder if Peter Costello would accept a weekend consultancy to run the NZ economy?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  58. burt (8,272 comments) says:

    One of the funniest things about this (apart from the fact that people paying no tax don’t get a tax cut – how bad is that…) is that given the minimum wage in Aussie no full time workers earn under $30K.

    So Dr. Ideology fails logic and reason on two scores. He can’t understand that people paying no tax can’t actually receive a tax cut and he can’t understand that all full time workers earn more than the first ‘threshold’ he had a little hissy about.

    He’s clearly not a very smart man.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  59. nh (20 comments) says:

    Sam Dixon,

    Bringing payroll tax into an argument relating to after tax incomes for individuals is completely off the mark but would expect nothing less in your attempts to pull the argument away from Cullen’s error and crazed ideological reluctance to even discuss tax cuts.

    Payroll tax relates to businesses with a total annual payroll over $600k so doesn’t pick up a lot of small businesses. It is a tax of 6% on the payroll over this threshold. Of course evening things up is the fact that Australia have had a corporate tax rate of 30% for around 5 years rather than the 33% we have here. Thankfully that is coming down.

    The burden of the tax is met by the company. Sure that can effect the amount that an employer will pay an employee although the market will dictate what an employee is worth. I somehow doubt you will agree with this (just a hunch) but since you are “economically astute” to have pulled the supply and demand argument on KIA’s reply you’ll be aware that there is such thing as a labour market. Same thing with super in Aussie – 9% on employee earnings but something the companies live with. They certainly don’t seem to be finding it too hard to pay all the kiwis that are flooding over there.

    Also interesting that on the other hand you say in NZ that you can’t bring Kiwisaver (your post of 9.55am) into the equation because it is voluntary. Well contributions aren’t voluntary to the employer no matter what their size. It’s voluntary to an employee but as most people with half a brain and a decent income have worked out you’d be stupid not to get in on it. Therefore it is compulsory for companies to contribute.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  60. Nominal (15 comments) says:

    “It is usually calculated for single workers without children at the average earnings level, or for a married couple with two children on average earnings.”

    Of course, according to Sam, Tane, etc it is *completely meaningless* to use any average data in comparisons. If it is not using the median then it is contemptible and must be ignored.

    Hmmm.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  61. Sam Dixon (596 comments) says:

    Milo – like I say complusory super is caught becuase its a counted as a tax – its the complusion that’s importnat, kiwisaver contributions are voluntary.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  62. Wycroft (873 comments) says:

    Wouldn’t it be lovely if some of the gathered hacks were either informed enough of the issues or quick witted enough to point Cullen’s lies/forgetfulness out to him during the media scrum? That way exposure of his lies/forgetfulness would be the money quote on the nightly news and people like DPF wouldn’t need to follow up the next day drawing this stuff to our attention. Once again Cullen misinforms the nation, the hacks simply let him, and the vast majority of the country – whose only exposure to these issues is on the evening news – is led to believe Labour is something it’s not – a good custodian of the economy and our way of life.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  63. stan (108 comments) says:

    I don’t understand why you hate Michael Cullen so much. If you want to blame anyone for the state of today’s economy and the fact that there is so much poverty in New Zealand you have to study a bit of economic history and look at the Rogernomic reforms in the late 80s. Roger Douglas has definitely got to be the worst thing that ever happened to our country, he lowered the tax rate from 60c in the dollar and now Labour are finally bringing things back to normal again. Did you know that we are now very lucky have a surplus (which is good for the country, because it means we’re not in debt)?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  64. Tina (687 comments) says:

    And they say sarcasm is dead

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  65. pete (416 comments) says:

    Nominal:

    I’ve been waiting for someone incapable of subtlety to interpret “the mean shouldn’t be used where it’s not appropriate” as “the mean is an evil capitalist plot and should never ever be used ever”.

    By the way, using medians:

    Median income growth 1991-2001: 0.75%pa
    Median income growth 1999-2007: 3.6%pa

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  66. Bok (740 comments) says:

    Sam I live both in NZ and Aus. Pay tax in both countries and you are talking absolute crap. If you dont know what you are talking about ,dont say anything. Before we thought you were talking crap, every time you write something we know you are. Happy to show you my books and that of my family to show that we are taxed far lower over there than here and happy to show you how a friend on low income is a damn sight better off in Aus than here.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  67. Sam Dixon (596 comments) says:

    Nominal – a lesson on why we use medians rather than averages when the goal it to see how the typical person has experienced a change.

    An average is the sum of all individuals’ incomes divided by the nmber of individuals. First, when you have, as in our society, a small precentage of people who earn a lot more than most people the average will be dragged higher than the range that most people earn (incomes are distributed in an asymetrical, truncated bell cruve, therefore the average sits well above the median) – in fact something like 70% of adults have a lower incoem than the average income.

    Then, if you have a chagne income distribution so that the incomes of the wealthy steam ahead while other’s remain constant or fall the effect will be drag the average up while for most people incomes haven’t acutally moved as much as that number suggests.

    So, why use a median instead? Because you always know with a median in a bell curve that a) 50% of individals are below that number and 50% above b) incomes are concerntrated around that figure ie the median gives a good picutre of what the typical person is earning. Also, median is not subject to outlier distortion as average is – so rapid, large increases for a very small percentage of the popualtion don’t influence the median while it drags the average up = the median gives a truer picture of incomes and income changes for ordinary New Zealanders.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  68. Bok (740 comments) says:

    And again meaningless bullshit spouted. Sam jesus I liked to smoke a pipe but I took it out of my mouth every now and again.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  69. Sam Dixon (596 comments) says:

    yesterday DPF presnted chagnes in average ordinary time wages as conclusive proof that people were getting wealthier under National than Labour here are the faults with that analysis:

    It uses averages rather than medians (see above)

    It only looks at wages, so doesn’t take into account higher employment (both proportion of people working and hours worked per employee) or shift of income from wages to other sources of income (as many higher income people have done to avoid the 39% bracket)

    It only takes account of ordinary time, therefore missing out the effect on incomes from people losing overtime and penalty rates under National and their gradual restoration under Labour.

    The National figures covered 9 yers, the Labour ones 8

    If the question is ‘are people getting wealthier faster under National or Labour?’ than DPF’s figures can’t give us the answer.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  70. Sam Dixon (596 comments) says:

    Bok – bro it looks like meaningless bullshit to you but to those of us who studied econometrics its first year stuff.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  71. Bok (740 comments) says:

    Sam I have run a huge company and made plenty of money over 30 years and in 4 continents and 6 countries. And you have sat and listened to people tell you about economics….mmmm my wife is halfway through a MBA and you listen to others theory…mmmm.
    My mother was the first female CEO of a major international financial institution and you… ah why do I bother?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  72. Tina (687 comments) says:

    The only way to get an Aust Tax system and Aust Superannuation is to move there.

    Ditto Bok…..I pay company and personal tax in Aust/NZ.

    Sam obviously doesn’t……he’s full of prunes.
    I guess it’s near impossible running the party line when the emperor has no clothes.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  73. Bok (740 comments) says:

    Let me explain something those at varsity may have not given you clear enough direction.
    John earns $2 in NZ
    Jack earns $2 in Aus
    John only gets $1 the taxman takes the rest.
    Jack gets all of the $2.

    Now taking that Jon wants to feed his wife and kids he buys a cheap loaf for 99c and 12.5% of that is tax – terefore the baker uses cheaper flower in order to make a little profit.

    Jack has $2 and decides to buy a $1.20 loaf of bread (Not GST so maybe a bit better flower used.)

    But not only that Jack gets to drive his car to buy the bread because the fuel is a good 30c cheaper. and he has enough to maybe put away 5 c towards next week.

    Do you understand how it works?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  74. PaulL (5,981 comments) says:

    Pete – after tax and inflation adjusted is the comparison that is useful.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  75. Pascal (1,969 comments) says:

    The point Sam makes about Median is a good one though and using that takes a better look at society than the Average would.

    However, what does that have to do with the fact that Australians are better off – particularly when looking at the lower income brackets?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  76. iiq374 (262 comments) says:

    “Because you always know with a median in a bell curve”
    Sam – please stop giving statisticaians and those understanding economics such a bad name by spouting crap.

    If your distribution is a bell curve then you don’t need to worry about the difference between median and mean – they are the same. They are not the same once it’s skewed (at which point its not a bell curve…), which your other points clearly raise as being the issue in the first place.

    Unfortunately some of what you say is right, in line with the normal Cullen policy of say something true and then follow with the crap you hope people are sucked in by.

    Of course the other reason to use medians is because they are resiliant to transforms while the mean is not…

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  77. Nominal (15 comments) says:

    Sam

    I don’t need lessons in what mean and median are, thanks.

    I was wondering why you are so keen on insisting that median incomes are used for some purposes, but are happy to use ‘average’ when quoting whatever statistic you think supports your case.

    Really, I think you would be better off studying Mark Twain

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  78. milo (525 comments) says:

    The problem with your analysis, Sam, is that you seem to have no understanding of the Fact v. Value debate in science. Thus, you smuggle your values into your analysis and present them as being scientifically justified. Sure, the median may give a different view. Perhaps it is even a a better view for many of the purposes of this debate. But is says nothing about “ordinary New Zealanders”. This is a value laden term which you use and abuse as you see fit. And in fact, you haven’t even defined. Is somebody well above the median wage not ordinary? What about somebody well below, are they ordinary? Just who is ordinary.

    Let me guess, you will define an ordinary New Zealander in terms of median wages. Then you will justify the choice of median wage for analysis as it best represents the ordinary New Zealander. Well, that’s a circular argument which demostrates nothing.

    So blind yoursel with econometrics 101 if you like, but don’t smuggle in unrelated value-laden concepts and pretend they are justified by your analysis.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  79. Jazzy (13 comments) says:

    KIA, I have been in Australia for the last year and working in rural health (hospitals servicing 100k+) is severely underfunded and goes without a lot of basic equipment, from friends who have children I gather eduction passes a lot more costs onto parents than previously and roads are a mess once you leave the tourist routes ie north of Noosa. My partner and I can’t wait to leave Australia and think New Zealand is not too bad after all.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  80. pete (416 comments) says:

    PaulL: see my original post <a href=”http://www.kiwiblog.co.nz/2007/10/how_has_the_average_worker_done_under_labour.html#comment-355156″ rel=”nofollow”>here</a>. The figures are already inflation adjusted. Tax adjustment won’t make a big difference, but you’re welcome to try that yourself. I’m not making that adjustment because I think it’s incorrect to do so.

    Pascal: the point is that DPF is gloating “Ha I was right” about Cullen’s mistake, despite making an elementary error yesterday.

    [DPF: I made no mistake at all. I used mean data because that is what was available for the time period I wanted. Almost everyone uses mean data because it is what is provided quarterly. Incidentially even if I did make a mistake (which of course happens) I am just a blogger not the Minister of Finance with an office of 20 and a Department of 500 plus.]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  81. milo (525 comments) says:

    Oh, and on Kiwisaver. It’s not voluntary for the employer. For them, it is compulsory, and so contributes 4% or so to their tax wedge.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  82. Jazzy (13 comments) says:

    Oh and many Australians pay up to $20 a day in tolls just to get to work, do you not think $5000pa should be included in you “comparisons”

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  83. milo (525 comments) says:

    DPF made an elementary error. The Exclusive Bretheren are the devil incarnate. The emails were not stolen. The auditor general has got it wrong.

    That’s right Pete, keep repeating it and maybe somebody will believe you.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  84. Sam Dixon (596 comments) says:

    Bok – I’m not at uni, I’m just saying econometrics is something I understand, and you called it meaningless bullshit when I explained to you why we use an average rather than a median. Thought perhaps you didn’t have that education. I mean its not a matter of theory, its how numbers work.

    Its super that you’re rich.

    milo – the debate is surely over whether the bulk of people got wealthier faster under National or Labour – that’s why we use median because most people’s incomes are distributed around the median, not the median ( draw yourself a truncated, asymmetrical bellcurve, you don’t even need numbers to see that the bulk of values are less than the average).

    Don’t get your knickers in a twist, I’m not saying you’re not ordinary just because you earn a lot – you’re extraordinary – I’m saying averages don’t give a good picture of what most people experience becuase they’re influenced by the experience of what are known mathematically as outliers, a very few rich people getting richer much faster than everyone else.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  85. Bok (740 comments) says:

    Jazzy with that statement

    ” Oh and many Australians pay up to $20 a day in tolls just to get to work, do you not think $5000pa should be included in you “comparisons”

    I would love to know where you live. What a crock. I use the highest tolls (Sydney and Brisbane) and it’s nothing like that (secondly public transport is about 10times better than NZ and far better utilized ( $35 per week on concession in sydney (unlimited travel)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  86. PaulL (5,981 comments) says:

    pete: I still argue that it isn’t an elementary error. Your opinion is that average is the wrong statistic to use. That means that dpf doesn’t agree with you, it doesn’t mean he made an error.

    Median weekly income and median household income are very different statistics to the median wage. Household income in particular is sensitive to increases in workforce participation, which may or may not be a good thing. On the one hand increased workforce participation may indicate a strong economy and the ability for those previously underemployed to obtain employment. On the other it may indicate income stagnation for the primary income earner, thereby forcing others in the household to work when they would prefer not to. If you had median weekly income for both periods and compared those, that would be valid. Comparing one period of median weekly income against another period of median household income is a little dodgy. Some might even say an error :-)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  87. krazykiwi (9,186 comments) says:

    Must be tough being the duty troll when presented with such a formidable array of experience, logic and professional rebuttal. And it’s Friday too. Not fair. Not fair at all.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  88. pete (416 comments) says:

    I see what you did there milo. List two facts, one reasonable belief, and one obvious absurdity and hope that the latter will discredit the former.

    Learning spin from the master I see.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  89. milo (525 comments) says:

    Sam Dixon: I have no objection to your analysis that the median has advantages as a measure of central tendency in an asymmetrical distribution. But it does not therefore follow that DPF made a mistake, or that his analysis was wrong.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  90. Bok (740 comments) says:

    Sam it is very clear that you have no idea of economics. Selective input will always distort any mathematical model. You have no idea. And with something as practical as after tax income it is very simple to compare apples with apples.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  91. Sam Dixon (596 comments) says:

    milo – good point onthe complusory employer contributions – but as its still the employee’s choice whether to join at all so I’m not sure whether the OECD will count it (plus, compuory contributions aren’t in yet).

    And anyway, I’m not arguing that its bad if a tax wedge gets alrger – its DPF assertion that Australia has less tax on work and that’s better which I’m refuting.

    Jazzy – yeah, that’s one of my eariler points, its just impossible to compare the tax that each pay when you take into account that some coutnries get things paid for in tax that others have to user-pay (tax comparisons between EU and US are a classic case – US seems lower but EU is paying health costs out of tax, US largely isn’t, you add private health costs and suddenly EU seems pretty good)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  92. Nat Girl (8 comments) says:

    The rats are starting to leave the Good Ship Labour – led by Maharey……..

    (Sorry a bit off topic but pertinent none the less)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  93. burt (8,272 comments) says:

    Bok

    The problem these fools don’t support a position, they support a party. (Labour). They say they are left wing yet they bag the Aussie tax system because it taxes low income workers less and high income earners more than NZ.

    They call themselves left… Rubbish… They are Labour supporters and Labour could tax low income earners at 100% and they would say it was good.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  94. pete (416 comments) says:

    Clever trap there PaulL.

    I play the game honestly, and point out that the data to answer the question properly is simply unavailable, and I get:

    If you believe that the statistics would be different if median was used instead of mean, then go get those statistics and forward to dpf. I am absolutely sure he would post them. Until you do that, you may as well stfu.

    I provide data that’s not very good, but still a lot better than David’s, and get:

    Comparing one period of median weekly income against another period of median household income is a little dodgy. Some might even say an error.

    (not implying that that was intentional on your part)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  95. Jazzy (13 comments) says:

    Bok it was all over the news not long ago. People living in Penrith need to work in the city to earn more money to pay rent, and were paying more than $20 a day in tolls. Also, if you live in Penrith and want to go to the beach it is $50 return including tolls and petrol.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  96. PaulL (5,981 comments) says:

    Pete, trying to find the income inequality stats over the relevant periods to try to come at this in a different way. If we can show that the skew in the bell curve did or didn’t change over this period, that would be another way to know whether the median would be materially different.

    Looking here: http://www.stats.govt.nz/products-and-services/Articles/income-distrib-May99.htm
    I get statistics that don’t take me all the way to current day. But they do have these interesting quotes:

    “Wages and salaries, and market income overall became more unequally distributed. This increased inequality in wage and salary distribution was primarily driven by greater inequality in male wages and salaries. This changed largely between 1986 and 1991 and is at least partly caused by the fall in men’s employment over those years. In contrast, there was no marked change in the inequality of women’s wages and salaries.”

    That says to me that much of the rise in inequality was actually unemployment related, and occurred under the earlier Labour govt (and, I know, they weren’t a traditional Labour govt, but both National and Labour profited from the policies introduced in that period).

    Also: “# The number of people receiving benefits and New Zealand Superannuation increased from 1982 to 1996. The largest increase was in the numbers on the unemployment benefit. The increase was concentrated in the period between 1986 and 1991.
    # Numbers of people receiving benefits and New Zealand Superannuation fell in the 1991 to 1996 period. ”

    This says to me that the belief that the National govt drove up unemployment is untrue – it came down under National, but had previously gone up under the non-traditional Labour govt that came before.

    “Income inequality at a personal level increased between 1986 and 1991 for market, gross and disposable income and was steady between 1991 and 1996. These trends in income inequality are similar to the trends in inequality of wages and salaries.”

    This suggests that, during at least some of the period that National was in power, income inequality wasn’t rising and therefore average income is as good an indicator as median during that period.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  97. Nominal (15 comments) says:

    Jazzy

    Make sure you don’t take up work in rural health in NZ then. You are likely to get a nasty surprise.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  98. Sam Dixon (596 comments) says:

    milo – we’ll see. The problem is DPF has provided a set of figures that a very conveniently flawed in ways that favour a picture of people getting wealther faster under National than Labour (ordinary hour rates are certainly not the first measure you come across when looking on stats for income figures, he specifically chose them for the picture they give) .

    your favourite union joker and mine, Tane, said yesterday he was going to put together the figures on median income – which we agree is a far truer picture of how incomes have changed for the bulk of people – so I guess it’ll be on the Standard at some point.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  99. burt (8,272 comments) says:

    Sam

    We know one thing for sure, if the picture painted by the median is not all you want it to be – it won’t be posted.

    So if it’s not there in a few days – you loose. Will you admit your argument is political party based rather than fact based?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  100. pete (416 comments) says:

    I pretty sure DPF conceded that the median was technically correct; he just thought we were “dreaming” that using the mean instead of the median made much difference.

    [DPF: The median is better to use generally, if talking about average in the sense of someone with as many people above than below them. But better is not the same as right and wrong]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  101. gd (2,286 comments) says:

    Cullens just a tosser and a loser Those that attempt to support him here and elsewhere just show how dumb and blind they are.

    Aussie politicans of all colours are so ahead of the dimbulbs we elect its no wonder that they look at us and shake their heads.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  102. burt (8,272 comments) says:

    It goes like this:

    A tory Govt in Aussie taxes low income workers less than a left-wing Govt in NZ.

    A tory Govt in Aussie taxes high income workers more than a left-wing Govt in NZ.

    The supporters of Labour may support our position, the supporters of left-wing ideology would not.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  103. milo (525 comments) says:

    Sam,

    The other thing is that there are many other measures. Household net worth, for example, or net worth as a multiplier of disposable income. All of them are affected by exogenous macroeconomic factors (eg. minerals, dairy prices). It’s undisputable, I think, that Australia is a wealthier country. The extent to which this is due to economic management versus good luck can’t really be quantified.

    But I do think that New Zealand has disadvantages that we have to work hard to overcome. My concern is that we are doing the opposite, and trying to divide the pie up more ‘fairly’ instead of growing the pie. I just don’t think that will work when we have a rich neighbour hungry for skilled labour.

    Yes, income inequality has some undesirable consequences. But pissing off your most productive sector and abating away the desire to get ahead also has some very bad consequences.

    Imagining that we can be a relatively rich country in the most remote place in the world is fundamentally an absurd proposition. We can only keep reality at bay by being cleverer and more productive. I don’t see the current government doing enough in that direction.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  104. krazykiwi (9,186 comments) says:

    Nat Girl – Maharey quitting. well spotted. rats jumping ship indeed!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  105. Bok (740 comments) says:

    No Jazzy
    Not good enough. Reading it in the papers. And do you know how far Penrith is from the beach? FFS. That is like saying nipping down to Raglan is expensive. The closest beach is just over 60 km as the crow flies and just over 90 km using the most direct route. So you are talking about a 200 km round trip with one toll of $8.00 (one way only) If you want to tell porkies, get at least something that is a c
    little closer to the truth.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  106. pete (416 comments) says:

    PaulL: I tried that route too, with little luck. I suspect, from what little evidence I could gather, that Labour have reduced income inequality.

    I note that you managed not to conflate 80s Labour with 00s Labour — very honest of you.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  107. Policy Parrot (174 comments) says:

    In fact, the reason why so many Kiwis are going over to Australia is that there more high-paying jobs over there, not because taxes are lower.

    The Australian employers’ response to a shortage in demand has been to up wages. Employers groups are even demanding the Australian government invest more in tertiary education (vocation and academic) so that there are more skilled staff.

    In, New Zealand however, employers don’t want to pay more, and simply will not pay the market rate. This is why they struggle for staff. Kiwis are just fed up with not being rewarded their worth.

    The only way this situation can be solved is by boosting wages to more appropriate levels. The state sector has boosted its wages to frontline staff, yet the private sector remains behind in all but executive and shareholder returns. Tax cuts are small fry in the debate – and where they are not small fry – they are irrelevant with regard to the people leaving.

    I can hear “productivity” being argued. However, do jobs in Australia necessarily require you to work or harder in a majority of cases? Unlikely. It is simply this: A greater portion of the nation’s earning is portioned out the super-rich than in Australia. Yet this super-rich class is similarly unproductive as Australia’s.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  108. virtualmark (1,528 comments) says:

    milo at 12:01pm … well said, couldn’t have put it better myself

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  109. Sam Dixon (596 comments) says:

    milo – i’m not arguing Australia isn’t a wealthier country, it obviously is. I’m arguing that DPF only looking at one element of the tax wedge and presenting a very limited part of income for comaprison between Nat and Lab is very misleading.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  110. Linda Reid (415 comments) says:

    Yeah, Maharey is quitting – but he plans to collect 2x full time salaries for the next 12 months. Jerk.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  111. Sam Dixon (596 comments) says:

    Someone was talking aobut NZ’s health, education getting worse earlier – I recommend having a scan of the Social Report http://www.socialreport.msd.govt.nz/documents/Social-Report-2007.pdf

    look at all them trend lines.
    – education outcomes, health outcomes, workplace injuries, median incomes, disposible incomes, crime, house crowding, assault mortality, water quality, aerosol pollutant levels, road deaths, etc etc all heading in the right direction.
    – one that always strikes me is the fall in suicides tracks the fall in unemployment, especially youth unemployment, from its mid-1990s high
    as the Report states “This report shows social outcomes have improved strongly since the mid-1990s, as did previous reports”

    there’s no overall comparison with 10 years ago as there was in the 2006 report (worth looking at) but there is a comparison with Australia http://www.socialreport.msd.govt.nz/comparisons/australia.html

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  112. Bok (740 comments) says:

    I love these genii who 1, has never been to Assie, 2 has never lived there, and 3 probably never even read an aussie paper other than the centrefold of Australian Penthouse pinned up in Irish Bill’s office, know so much about Australia. Geez

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  113. virtualmark (1,528 comments) says:

    Policy Parrot, I wouldn’t be too sure about the A greater portion of the nation’s earning is portioned out the super-rich than in Australia

    If you think the “ordinary bloke” gets a higher income in Australia you ought to see what the super-rich get compared to their equivalents in NZ. From what I’ve seen the income disparity between Aussie & NZ just expands as you go up the pay scales.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  114. burt (8,272 comments) says:

    Sam

    Post your story on the standard.

    Will you still post if if the facts don’t match your expectations ?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  115. Bevan (3,924 comments) says:

    your favourite union joker and mine, Tane, said yesterday he was going to put together the figures on median income – which we agree is a far truer picture of how incomes have changed for the bulk of people – so I guess it’ll be on the Standard at some point.

    And what data will the standard be comparing the mean data against? The Australian Mean, or the Australian Average?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  116. krazykiwi (9,186 comments) says:

    In fact, the reason why so many Kiwis are going over to Australia is that there more high-paying jobs over there, not because taxes are lower.

    This is ‘a fact’ is it? I doubt it, but here’s an opinion: One of the many reasons why Kiwis are going over to Australia is that the combination of higher incomes and more reasonable taxation structure makes for a better quality of life. Just an opinion …

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  117. krazykiwi (9,186 comments) says:

    In fact, the reason why so many Kiwis are going over to Australia is that there more high-paying jobs over there, not because taxes are lower.

    This is ‘a fact’ is it? I doubt it, but here’s an opinion: One of the many reasons why Kiwis are going over to Australia is that the combination of higher incomes and more reasonable taxation structure makes for a better quality of life.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  118. Policy Parrot (174 comments) says:

    What is even more ironic, Bok, is that people of a certain political persuasion always try and discredit their opponents through denigration – i.e. calling them idiots.

    Maybe these people know a bit more than you think. You have a largely unique perspective on life because you have lived on a very high income in several countries.

    Do you actually know all of the claims that you assert to be entirely accurate?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  119. Tina (687 comments) says:

    http://www.stuff.co.nz/4241270a6026.html

    Those poor Aussies keep suffering under their superb Tax and Superannuation system that has delivered the greatest increase in personal wealth in any developed country @ !9%pa over the last 5 years.

    They must be really sorry they can’t have Mick and Hulun running the economy….they don’t know what they’re missing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  120. burt (8,272 comments) says:

    Policy Parrot

    I have a sister on unemployment in Aussie, a brother on a low income and a mix of friends (who have left NZ in the last 8 years) on a mix of incomes.

    Which one of them (or combination of them) so you want me to talk about to prove that Bok knows exactly what he is talking about irrespective of his or my own person circumstances ?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  121. Bok (740 comments) says:

    Oh dear Jazzy
    If you really want to play that game get on the ball. What you have done is taken the most expensive route, with tolls operating at peaks and suggest that people as a rule use that to go to work. It’s like saying that it cost workers in Browns Bay pay $280 per day to go to work in the CBD that according to you (and note your $20 per day equated to $5000.00 per anum.) In NZ it cost an extra $67 000 to get to work and unlike you I have even given the worker a four week holiday.) And that is just because that what I paid this morning for a Taxi from the CBD going against the traffic to Browns Bay ($140), now if I was sitting in the traffic the other way it might have been as high $180 for one way so now the kiwi worker is in fact paying an extra $360 per day to get to work or $86 000 working for me or for you $93 000.

    Now we both know that that is in Helen’s words…just silly. So now I accept your apology. And dont lie about where you live…it is also silly.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  122. Policy Parrot (174 comments) says:

    Shoot – I’m sure the blog readers are interested…

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  123. Bok (740 comments) says:

    PP I also refer to them as genii. Take your pick. Also I earned my money through work as those who know me. And last but not least, I can sit here and type because I have worked hard enough to be able to have time to sit here and chat not on others money.

    There are people here who have met me and know that I have earned the right to make . I Have driven from Penrith to Bondi..Have you?
    I pay tax here and in Aus. Do you?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  124. burt (8,272 comments) says:

    Policy Parrot.

    Sister: gets more cash in hand in Aussie, it buys her more than the benefit here. She knows this for a fact as she is a professional beneficiary. (10 years plus in both NZ & Aussie)

    Brother: Earns minimum wage, lives in a nice flat and has enough dosh to have a reasonable life. His last job here was also minimum wage and he borrowed money from me to get to Aussie. Now on minimum wage in Aussie he has enough to visit here once or twice a year.

    Friends: Where do I start. The one who earns about $9m Aussie a year or one who earns about $50K aussie after leaving a $30K job here last year?

    What do you want to compare ?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  125. stan (108 comments) says:

    So none of you tax cut apologists are able to address the points I’ve raised regarding the benefits of Labour’s fiscal policy? That’s just like you Right-wingers to ignore the issues that completely own your arguments and continue debating on moot points. Pathetic.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  126. stan (108 comments) says:

    (Yes I’m bored) :P

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  127. Bok (740 comments) says:

    Sorry stan.
    It is a bad look. I apologize to any-one I have offended. I just wanted John to be proud of me. And Bill, Murray and Lockwood.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  128. Bok (740 comments) says:

    This sarcasm thing rocks!!!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  129. Tina (687 comments) says:

    stan….sweetie

    Let’s face it, anyone aiming for a 60% marginal tax rate will be presumed to be an escapee from a secure mental health facility.

    Run while you can, bro…..they have dogs.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  130. Jazzy (13 comments) says:

    Bok, where do I live? I have not stated anywhere here. And yes it may be a more expensive route than driving down Parramatta road during peak but if someone needs to travel at peak to get to work then what time would they have to leave home to get to work. Bankstown to cbd $2000pa in tolls to get to work.
    The point of the exercise is to show than although income tax in Oz is less, there are big differences in services paid for from those taxes pay for and what is user pays. So simple income tax comparisons are not useful.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  131. PaulL (5,981 comments) says:

    pete: Clever trap there PaulL.

    No, wasn’t intended as such. If you have a sequence that shows median income, then I think we can use it. The sequence you used show median household income in one period, and median income in another. I deliberately put a smiley on the end of my suggestion that it could be called an error, but agree I wasn’t clear on that. I’m not calling your integrity into question, just saying that the numbers you have probably aren’t close enough to being useful, and that if I used the logic of others who are commenting here, I would immediately scream that you were deliberately misusing statistics.

    I think this is probably the same problem dpf had – there is no good sequence that uses median, the question is whether using average is a sufficient proxy for median.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  132. Pascal (1,969 comments) says:

    And does Jazzy count public transport, the benefit to the environment and the costs relating to that into his equations? Public transport that might not be feasible in NZ but is exceptionally so in Australia?

    Unlikely. There are too many factors to make a simplistic statement like that, as Bok has rightly pointed out.

    In, New Zealand however, employers don’t want to pay more, and simply will not pay the market rate. This is why they struggle for staff. Kiwis are just fed up with not being rewarded their worth.

    I can’t remember who said that and honestly, I’m not in the mood to wade through the posts of people who simply cannot understand that the quality of life for everyone, from the poorest to the richest, is better in Australia in part because they have managed their economy better than we have managed ours. The fact that we are losing people to them should be clue enough!

    People hardly leave the nation of their birth to go somewhere where they’ll be worse off, now will they?

    However – have you considered that the businesses in NZ might not be paying as much because they are already running mostly on margins? That the taxes, direct and indirect, they are forced to pay here reduces their competitiveness?

    I’m not stating that as fact, simply suggesting an alternative to the myopic viewpoint that employers are evil. ;)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  133. Bok (740 comments) says:

    Pascal that is the point. The reason Jazzy that I talk about where you live is that you say you are in outback australia (If that was not you then I apologize) My point is that if you lived anywhere in Aus you will know that public transport as Pascal and I have said is about 10 times better than here.

    I can get a bus from Byron to Coolangatta Airport for half of what it would cost me to travel from Auckland to Warkworth.

    I am simply saying that you are, like Sam simply snatching figures out of the air in order to make your point.

    Let me give you another example. If you want to include tolls, how about housing. In Australia a house on the beach at say Oceaan Shores might set you back say between 750 and 1.2 mil. Yet the empty section next door will only cost you 350.

    Now in NZ a $750 000 beachfront house (if you could find one) could be even less than an empty section.The point is that you pay for the house there not the land. That means that you could buy a $350 000 section of prime real estate and you could if you are a builder build a house very cheaply. IN NZ that is not possible. So do we now add that in to the mix?

    Off course not.

    How about the cost of cars?

    Petrol.

    Holidays?

    The poor worker needs a break as well. A week in the Gold Coast could be had for $350.00 for a three bedroom apartment. (4 to 6 people)

    And flying say from Melbourne to Coolngatta can cost as little as $80 pp return so for a family of say 4 the holiday could be well under $1000. Try going from Auckland to Queenstown or even Christchurch for a holiday for 4. Maybe $3000 if you are lucky. So do we factor that in?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  134. philu (13,393 comments) says:

    the case is boosted for any tax-cuts to be..

    ..a raising of the tax-free limit..

    and a cutting of the lowest rates..

    it is the only formula that makes sense..

    as ‘two birds etc’..will be cuts for those who need it most..

    and some adressing of our ‘low-paid economy’ status..

    and ..as i’ve noted before..

    all that money will again circulate in the economy..

    spent on goods and services..

    what’s not to like about that..?

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  135. philu (13,393 comments) says:

    do you live in byron bok..?..

    i’m used to live there..(for about five years..choice place..!..)

    and i’m thinking of opening some radio stations there..

    (ahem..!..as whoar goes ‘global’….)

    what is the competition like..?

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  136. Bok (740 comments) says:

    Only Half the year Phil. It is the best place on earth.
    Only place I know where there is virtually no aggro between whatever ideology takes your fancy once you are cracking a sunset on main beach

    Radio sucks. the local station tries to hard to be alternative. (Tibetan monk chants etc.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  137. Bok (740 comments) says:

    It is a really funny place. It gets to you.

    Here I get angry at people, there I just get along.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  138. milo (525 comments) says:

    Bok – isn’t the attitude difference amazing? I sometime wonder if it’s the sunshine that does it.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  139. baxter (893 comments) says:

    ”So Dr Cullen is complaining that people who pay zero income tax do not get a tax cut.”…..Typical Socialism. I t reminds me of the wealthy man who took his mates to the restaurant where they were each charged for their meal in ratio to the amount they earnt.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  140. Bok (740 comments) says:

    Sure is milo
    I believe that I might have extended my life by years going there.
    The great thing is that it does not matter whether you are a rich business owner or a construction worker, every-one gets on and share surf stories. One of my joys is to get a coffee at 7 am at the hole in the wall in wall in Lawson street and chatting to others about the surf.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  141. kiwi in america (2,454 comments) says:

    Sam
    A payroll tax is not paid by the worker. The price of labour is the market price of a particualar job in a particualar industry in that country. An Australian employer pays this if he/she wants to attract/retain staff. If a person is a personnel manager in a hospital for arguments sake and in NZ and the market salary is $60,000. Lets assume for arguments sake that Australian hospitals pay the same salary (in AUD) of $60,000 (the reality is that the equivalent salary in Australia is likely to be higher). Lets assume an identical tax rate in both countries. Ah but Australia has a payroll tax and yes – the Australian hospital pays a percentage of the $60k personnel manager’s salary to the State Gov’t. The Aussie worker DOES NOT pay this tax and the Aussie hospital personnel manager’s salary is not REDUCED to compensate the employer for the payroll tax as you seem to allege. Thus trying to say that the presence of payroll taxes in Australia in way reduces the take home pay of the Aussie manager is an absurdity. We know that the Aussie manager is likely to be paid a higher salary than his/her Kiwi counterpart and will be taxed less and thus will take home more pay.

    Now you have alluded to the fact that overtaxed NZers receive special advantages paid for out of taxation that compensate for the difference in the take home pay. When I asked for you to tell us how Australian taxpayers are disadvantaged by their lower taxes vis a vis Gov’t services you link to a mealy mouthed social wellness survey from the NZ MSD that shows that (even allowing for all the silly categories measured) that it’s about even stevens. So you are going to have to do better than that to prove your contention – that somehow lower taxed Australians get govt services on the cheap compared to their higher taxed Kiwi contemporaries.

    JAzzy
    Compare like with like please:
    Tell me with a straight face that Auckland has better roads than Sydney or Wellington has better roads than Melbourne. Australia, despite its vast distances, has a motorway-like divided highway from Melbourne – Sydney – Brisbane. NZ cant even manage that on the 120 km from Auckland to Hamilton.
    Compare rural healthcare in NZ with rural healthcare in Australia please. The major Australian centres offer better health care than there Kiwi equivalent. Compare apples with apples. And if NZ is so marvelous then come back and see for yourself.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  142. tim barclay (886 comments) says:

    The Auatralian Labour Party have more or less adopted Howard’s plan citing the need to encourage people to work harder. Cullen sees tax policy as a means to give the drones extra money. No wonder skilled kiwis are leaving this place at an accelerating pace. She cannot credibly go into the election with Cullen fronting tax policy but little Micky will not go quietly.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  143. pete (416 comments) says:

    I’m not calling your integrity into question, just saying that the numbers you have probably aren’t close enough to being useful,

    You were clear enough, I never got the impression that my integrity was being questioned. Note that I never claimed my numbers were useful; just that they were better than David’s worse-than-useless numbers.

    The Standard have put up some median data, and the results are as you (or at least as I) would expect.

    David’s put his spin on the median data into a later post. Turns out the mean/median issue wasn’t the biggest one (just the most obvious). So some humble pie (not much though) required there. Most of the distortion seems to come from his restriction to “full-time workers”, a rather unstable category over that time frame.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  144. Peak Oil Conspiracy (3,326 comments) says:

    Stan Green Eggs and Ham:

    You want a response – I’ll give you one:

    I don’t understand why you hate Michael Cullen so much.

    I don’t understand why you don’t understand why we hate Michael Cullen so much – something to do with new standards of budget surplus?

    If you want to blame anyone for the state of today’s economy and the fact that there is so much poverty in New Zealand you have to study a bit of economic history and look at the Rogernomic reforms in the late 80s.

    Hmmm… how many years has Labour been in government, Stan? I don’t understand why you love Labour so much.

    Roger Douglas has definitely got to be the worst thing that ever happened to our country, he lowered the tax rate from 60c in the dollar and now Labour are finally bringing things back to normal again.

    Wouldn’t “bringing back to normal” involve increasing the tax rate to 60c in the dollar? Is this your argument? Dude… you’ve got a credibility problem.

    Did you know that we are now very lucky have a surplus (which is good for the country, because it means we’re not in debt)?

    Hello… anyone home? Stan, look at public and private debt statistics, and then can we have a private conversation about them It does need to be private; you’re embarrassing yourself enough in public already.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  145. Peak Oil Conspiracy (3,326 comments) says:

    Oh and Stan:

    So none of you tax cut apologists are able to address the points I’ve raised regarding the benefits of Labour’s fiscal policy? That’s just like you Right-wingers to ignore the issues that completely own your arguments and continue debating on moot points. Pathetic.

    Consider yourself bitch-slapped. Benefits of Labour’s fiscal policy? Pathetic.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  146. Peak Oil Conspiracy (3,326 comments) says:

    DPF:

    Off-topic but a curiousity of mine: I’ve noticed that sometimes my posts, and those of others, don’t show up the smart-tag features properly – so blockquotes and italics get mixed up with other text. Any particular reason for this?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  147. clintheine (1,571 comments) says:

    I take it that Sam and Tane have never lived in Aussie or paid taxes/worked in Aussie or even left NZ to know for themselves how highly taxed they are currently. If they are in employment that is….

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  148. Manolo (13,783 comments) says:

    “If Sam and Tane are in employment that is….”

    Highly unlikely given the countless postings of both, including the “don’t attack Labour” letters to Wellington’s Dom Post from Mr. Dixon addressed from sunny Hawkes Bay.

    A harrowing fortnightly trip to WINZ is what work possibly means to them.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote