A double fail

November 20th, 2011 at 9:00 am by David Farrar

Almost everyone is aware of The Press debate two weeks ago when couldn’t answer John Key’s question about how much revenue their proposed CGT will bring in the first year it starts, and what year that is. The result was a week of bad headlines for Goff, and serious damage to Labour’s economic credibility.

So after that fiasco, you would have thought that the first thing a semi-competent party leader would do is to make sure they can answer that question without hesitation. But amazingly Phil Goff couldn’t answer it for a second time!

On yesterday:

Duncan        One of the crucial questions that John Key asked you that night was around capital gains, and he asked you in your first year what sort of money do you raise in the first year, and you didn’t know.

Phil              Well the figures are out there, the figures are it’ll raise 26 billion in 16 years.  And what I said, let me finish this, it starts slowly, it starts with you know 20 – 50 million or whatever, it gets up to half a billion very quickly, gets up to a billion in about eight years, and then it hits about three billion.

Duncan        But do you know in the first year what it raises.

Phil              Yeah I’ve got it right here…

Duncan        No – do you know without looking?   It’s 68 billion (DPF: meant to be million)

So even after a week of ridicule over not knowing his numbers, Phil Goff still couldn’t answer, without looking it up, that Labour’s CGT will only bring in $68m in its first year.

Now of course no party leader will know every number, but again after what happened last week, this is one number that should have been tattooed.

But the problems for Goff don’t stop there. In a fit of loyalty Trevor Mallard in an online chat said that as campaign manager he takes full responsibility for Goff not being prepared for The Press debate. But the two Davids have told quite a different story to The Nation:

Here’s what said:

N: Should he not have known those numbers for a debate like that?

DC: Well I’m sure he does, and did, but you never know the bounce of the ball on the day and what comes to mind but that’s really a question you should address to him

N: So , did he know the numbers did you know the numbers then?

DC: Well some of those questions were numbers that had been previously released by our tax package… but it’s sometimes it depends about how the question is framed at the time but I’m not going to second guess – Phil’s done a great job on this campaign….

So Cunliffe is saying that Goff did know and that basically he just stuffed up.

And Parker:

N: When was the fiscal strategy ready? When did you know it?

DP: Well it had been prepared in advance of our savings forum. Phil had determined we would release the strategy two days after debate.

N: Had he seen the numbers

N: Yes he was of course aware of the numbers, he was aware of the numbers when we made decision to increase kiwisaver compulsory — our fiscal numbers were worked out at that stage. The exact date of release was the Friday, the press debate was the prior Wednesday, the two day gap between that I don’t know there’s a lot in that.

Parker basically confirms that the numbers didn’t change in those two days, that Goff could have answered the question on the Wednesday if he had been on top of it.

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19 Responses to “A double fail”

  1. George Patton (352 comments) says:

    Last question Mr Goff – how many MPs will you have after the election?

    Oh, that’s easy, 28.

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  2. Mark (1,471 comments) says:

    I don’t think there is anyone who doesn’t know that goff stuffed up. That said I am strongly in favor of capital gains tax. We have a horrendous imbalance in investment in non productive assets and industry in this country. Residential investment housing has a market capitalization more than four times the value of the NZX. The tax working report tells us that there is over $200b invested in residential investment real estate yet the tax take was negative. In other words the government were net tax contributors to the financial returns enjoyed by this class of investors.

    The changes in tax depreciation was a poor option as it hardly addresses the real tax incentive to have high leverage and transfer the tax losses generated to other forms of income. Labours problem in relying on CGT in their budget is that, as the tax working group tells us, it tax ten years for CGT to become fully effective. That does not mean it is wrong it simply means Labour have not worked the maths correctly.

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  3. Other_Andy (2,562 comments) says:

    @Mark

    You already pay tax when you invest in real estate. Anybody who buys and sells real estate for profit pays 15% GST.
    Using more taxes to manipulate the market will have unintended (?) consequences.
    It will raise the cost of housing and rentals as sellers will pass the cost to the buyers.

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  4. coolas (115 comments) says:

    So Goff stuffed up the numbers. Big deal. What Farrar should be worrying about is the latest Horizon poll showing that the biggest stuff up is Key and his handling of the ‘storm in a tea cup’ saga. Spin as much as you like but Key has scored a spectacular own goal.

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  5. Lazybum (259 comments) says:

    Coolas – I contributed to the Horizon Poll and said I would vote Green. I certainly will not be voting Green.
    That poll is a joke.

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  6. Manolo (13,517 comments) says:

    Et tu, Brute(s)?

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  7. Dave Stringer (188 comments) says:

    Residential investment housing has a market capitalization more than four times the value of the NZX.

    Is that any different to Canada, the UK, Australia, even the USA?

    There is a reality here that, unlike those other countries, we don’t have the domestic market to grow anything like a reasonable industrial economic base, nor the will to develop one based on services (such as banking, IP licensing, etc.). Take a simple example. . . . . .

    There are something in the region of 1.5 million ‘family’ homes in new zealand. Let’s suppose that each of them has need of a new vacuum cleaner every 5 years, giving a market of 300,000 units per annum. Lets hypothesise a business plan that will give a 25% market share or 75,000 units per year. Lets suppose that there are no bought in parts and we can sell a unit for $55.00 to a retailer who will on-sell it for n average of $100.00 (allowing a starting price of $144.95 and a disposal price of $60.00). The last hypotheses – the R&D cost on a unit (based on a two year product life) is just $5.00 and it only requires 2 hours of direct and indirect labour to creat a unit from raw materials. What does all this mean? It means that even if everyone in the business (CEO, Finance Dept, production workers, R&D, sales – EVERYONE) accepts an income of $13.00 per hour, the money available for parts, transport, accommodation, financing, marketing, residual GST and return on capital per unit is just $24.00. If anyone can show me a serious business plan that will deliver such a cost per unit and their 25% of the capital required I will match them dollar for dollar!

    Should we focus on IP creation and sale, such as the work being done by Xero and it’s brilliant founder? Of course we should, but there just isn’t the risk appetite to make such freams come true. Rod Drury has been called a “Rich Prick” almost as many times as John Key has, and having come up withhis own Angel Investment money through bloody hard work is one of he very few who have made some money and remained in New Zealand and continued to invest here. Hundreds of others have resented the tall poppy attitude of the “entitled” New Zealander, and gone off to pasteurs new (anyone remember the original SAUSAGE software entrpreneur who shot off to Auz in less than 90 days ?

    Lets get real folks. A total rethink of our economic structure is needed if New Zealand is to avoid becoming a life-style back-water with most revenue being created by dwindling sheep and cattle herds, and “hey dad look at the funny people” tourism!

    Avote for MMP is a vote for me to get out of NZ and take my capital with me.

    Enough, this has turned into a rant – Sorry DPF, have a great Sunday.

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  8. tvb (4,313 comments) says:

    Goff cannot do simple maths. In his very lengthy career he has NEVER held an economic portfolio. You would think after 30 years in politics he would have. So Goff is dumb with maths, something he has kept concealed until now. Contrast Johnn Key he can speak maths like a second language. Now that is not what is necessarily required of a prime minister but if a leader is numerically illiterate now that is something to hold against him. Why? Because a Prime Minister has to at least have a basic grasp of economic and accounting – even Helen Clark could fake it. But Goff cannot even do that.

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  9. tvb (4,313 comments) says:

    Maybe Goff has a very poor memory for numbers. I have a problem with names but not numbers. John Key has a first class memory for numbers, maybe Goff simply forgets them.

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  10. adamsmith1922 (890 comments) says:

    DPF

    On Q & A this morning with Espiner G., Goff was as bad. He muttered on about the expert panel and BERL re CGT, but seemed all at sea on detail. So I rate it a triple fail.

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  11. kowtow (8,135 comments) says:

    I am no supporter of Goff or Labour however it is utter partisan bullshit to suggest someone cannot refer to notes!
    As to Garner I saw him trying to make something of the notes issue also….oh dear how pathetic,grasping at straws in a pretense of relevance and cross examination.

    I’d love to see some of these hacks operate without notes. Wankers.

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  12. tvb (4,313 comments) says:

    Yes but Espener smells something wrong with Goff when it comes to numbers.

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  13. Brian Marshall (201 comments) says:

    As I understand it, the Labour CGT hasn’t even been designed yet. It’ll be decided after the election if they get elected. (insert tui ad here). Phil Goff could make up figures from the top of his head and not be wrong. That’s how crap their proposed ideas are – He can’t even invent an amount when put to the test.

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  14. thedavincimode (6,606 comments) says:

    Brian Marshall

    That is the point. How can they project numbers when they haven’t even finalised the detail?

    One major issue that appears to be ignored in discussion around CGT and which nobody appears to have asked the fuckwit Goff about is its application to deceased estates, inheritances and gifts. These are all capital gains.

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  15. kiwi in america (2,495 comments) says:

    coola
    He’s stuffed up for the THIRD time on Q&A – for crying out loud he’s had two weeks to swot up on this and surely he of people would know that the media will be zeroing in on this issue. Sorry mate – not ready for the big job – never was never will be. If you Labour lackies want to hang your dwindling hopes on the Horizon Poll with no track record of accuracy then good luck to you. I do recall the left bleating on that it was the Roy Morgan poll that we really should pay attention to. Voters have paid attention to the left leaning media’s obsession with trying to make Key look bad over the trial teapot tapes and they’ve rewarded Goff and Peters with a poll demotion. But go ahead – keep hope alive and get all your mates on the left to keep on voting over and over again on the Horizon poll to magically push Goff over the line!

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  16. kiwi in america (2,495 comments) says:

    *trivial not trail

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  17. jaba (2,118 comments) says:

    when you watch the 2 Davids, you can see that they carefully lined the knife between Goffs 2nd and 3 rd rib and come Sunday morning, it will be a race to see who can push their knife 1st.
    when will the expert tax group be named?
    Key looked a statesman in full control of his facts and direction, Goff was hopeless again and Peters was .. well Peters and said nothing.
    Another thing that gave me the shits was Williams and the John without a h semi support Peters

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  18. coolas (115 comments) says:

    Howdy Kia

    Bit skewed in your assumptions. I wish Goofy Goff had been rolled a year ago ‘cos he is a liability to Labour who I’ve never voted for. But even he is far preferable to the deceitful, lying, two-faced Key. And just so you don’t wack out with other assumptions I did vote for the Bolger National government once but was turned right off by Shipley whose cut of the same cloth as Key; self-serving and narcissistic. And yeah polls are just polls with margins of error. The poll that matters is next Saturday and I reckon Key will be rolled.

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  19. kiwi in america (2,495 comments) says:

    Coolas
    Here’s a little lesson in political reality and history. The average of the big 5 polls (not Horizon) ONBC/TV3RI/Herald Digi/Roy Morgan/Faifax a week out from the 2008 election were accurate as follows: they overstated National by 1.4%, they were spot on with Labour, overstated the Greens by 1.7%, understated ACT and NZ 1st by 0.65 and of course the Maori Party’s party vote is irrelevant because of the overhang. Oh and all the electorate polls in Epsom had Hide trailing the Nat candidate by about the same margin that Banks is trailing by in the current polls and Hide still won.

    Go ahead and do the same exercise with the 5 reputable polls out there (note Fairfax have not released their latest poll but the HoS have done another poll and it is close to the Roy Morgan poll). Then apply the same adjustments for over or undersampling that occured in 08 and then come back and tell us how Key gets rolled. Then add in the Horizon poll as the 6th poll of the average (as skewered by unscientific sampling as it is) and still tell us how Key gets rolled.

    Yep – Labour’s line all next week – ignore the polls the only poll that matters is the one on Saturday. So you are right – Goff will be rolled and should’ve been a year ago – but he wont roll Key.

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