Listen to Deborah not Otago University

Newsroom has an article from two academics at Otago University supporting the removal of GST on food – something opposed by almost every tax expert alive. The article is labelled “expert opinion” and they support the Maori Party bill on the grounds of “we need to start somewhere”.

An actual tax expert is Labour’s spokesperson Deborah Russell who noted:

I just want to take the House through some numbers and some evidence on this, to explain why we think there are better ways to address the cost of living. So, back in 2018, in the midst of all its paperwork, the Tax Working Group did produce a background note on GST, and, in it, it very explicitly examined the possibility of taking GST off kai, and looked at some of the numbers. They estimated which households would get a benefit from it. Now, by the time that’s adjusted for food price inflation since 2018, there’s been about a 28 percent food price inflation. A decile 1 household—so that’s the lowest-wealth 10 percent of our households—would, in today’s terms, get maybe about $19 a week benefit from taking GST off kai; a decile 2 household would actually get $18 a week; and a decile 3 household would get $23 a week. That’s the kind of benefit that would flow to low-income households from taking GST off kai. But a decile 8 household would get $46 a week, and a decile 9 household would get $53, and a decile 10 household would get $68 a week. The benefits of this change would flow primarily to high-income households. That’s the evidence of the Tax Working Group in 2018.

So the “expert opinion” from Otago University is that we should reduce the cost of living for the lowest income households by $19 a week and the highest income households by $68 a week!

The actual fiscal cost of doing this, of taking GST off food, would be—again, in today’s terms—about $3.3 billion to $3.9 billion.

That’s a lot of money to only reduce costs for the lowest income households by $19 a week.

The UK shows why it is one of the most tolerant countries there is

Vaughan Gething has just been elected as First Minister of Wales. He is black (his mother is Zambian) and this makes him the first black leader of a country in Europe.

It also means that none of the four leaders of the UK are white men. And I (especially) have nothing against white men, but it is pretty remarkable that a country would have so many leaders not from the majority ethnic group. In most countries it would be unthinkable to have one, let alone so many. And this hasn’t happened because of quotas or a desire to have diversity for its own sake, but because they happened to be the ones who got elected. It speaks well of a country that people are judged not on their skin colour or religion.

So the UK currently has:

  • A Prime Minister who is Indian and Hindu
  • A Scottish First Minister who is Pakistani and Muslim
  • A Welsh First Minister who is Zambian
  • A Northern Ireland First Minister who is a Catholic woman
  • A Home Secretary whose mother is from Sierra Leone
  • A Secretary of State for Business who grew up in Nigeria
  • A Secretary of State for Energy who is Indian
  • A Mayor of London who is Pakistani and Muslim

It is ironic that so many young people are brought up to think the UK is a racist country, when in fact they show the benefits of not judging people on their race or religion.

General Debate 27 March 2024

Unaffordable and Undeliverable

The Herald reports:

Of the currently estimated $280 billion required to deliver these investments, only $80 billion has been appropriated.”

Officials warned that the $280b cost of that investment “far exceeds the funding available”.

They sought new Transport Minister Simeon Brown to note that Labour’s planned investment was “unaffordable and undeliverable”.

This is Labour’s transport package. They announced projects which had no capacity to be delivered or funded, yet they continued to try and pull off what was effectively a con job.

he officials estimated that in order to pay for the plan, revenue into the National Land Transport Fund (NLTF), which mainly comes from fuel taxes and road user charges, would need to increase by 17 per cent a year for the next five years until revenue into the fund doubled from $7.3b in 2021/22 to $15.6b in 2026/27. Fuel excise duty is currently charged at 70 cents a litre. If all of that increase came from fuel taxes, it would mean increasing that to $1.40 per litre. GST and ETS would add another 40 cents to that price.

So Labour’s plan would have seen petrol tax doubling and the cost of petrol exceeding $3.50 a litre so a 50 litre car would cost $175 to fill up.

Petitions can have an impact

Most petitions to Parliament achieve little as they are raising a policy issue that MPs are divided on, and hence won’t lead to any change.

But some petitions can lead to change, and even lead to a debate in the House as happened to the petition of Claire Dale about mobility parks. It was debated in the House on Thursday and the recommendations from the Petitions Committee supported by all parties and the Government.

It is a useful reminder that disagreeing on many policy issues doesn’t mean MPs won’t work together in other areas where the common goal is to improve things for New Zealanders.

Highlight’s from Grant’s valedictory

Grant Robertson’s valedictory is here. Some of the more humorous extracts:

I was poached from Marian’s office by Heather Simpson to come and work for Helen Clark. My job description was to count to 61—the number of votes that we required to pass legislation. In the five years I worked for Heather, I received four emails—take that, Mr Ombudsman. 

She set incredibly high standards and is the best political operator I have ever seen in this building. She also had a Southland sense of humour that I appreciated. One day, a mysterious stain appeared on the carpet immediately outside her office door. Her executive assistant (EA) Stephen Woodhouse and I were staring at it when Heather appeared, grunted, and said, “Well, I guess now you know where the bodies are buried.” I have always presumed that was a joke.

Heh. Great sense of humour.

Being the Minister of Finance is an extraordinary privilege. It gave me the unparalleled opportunity to spend time with my colleagues when they were at their most stressed and anxious. I want to—[Laughter] You’ll know! I want to particularly thank Willie Jackson for his patient and calm advocacy. I genuinely felt his aroha when he said to me “Why do you hate the Maoris?” when I had just given him a billion dollars’ worth of funding. I also want to thank “Chippy” for not following through on his annual threat to resign during the education budget process, and all other colleagues who responded so well to the limited amount of funding we had available.

LOL at the Willie quote. I guess he is the same in private as in public 🙂

I remember vividly the day we shut the borders. We did it on a teleconference of Cabinet. I was in Jacinda’s electorate office with her. When the call ended, we looked at each other and recognised the enormity of what we had done. It felt very heavy. I tried to lighten the moment by noting that I knew when we went into coalition with New Zealand First our immigration policy might change, but I didn’t think it would go this far. Jacinda didn’t laugh.

I would have!

I endorse “Chippy” ‘s view that you cannot be the dog that barks at every car. It can be tough if there is a convoy of stupidity going by, but it’s still the right strategy. 

I know National MPs in Opposition who would agree with that!

What if the Interislander folded?

The Herald reports:

StraitNZ was founded by Ōtorohanga businessman Jim Barker in 1992 as Strait Shipping.

Its current Cook Strait vessels are the Strait Feronia, and the Connemara.

They each make four Cook Strait crossings daily and carry about 35 per cent of total Cook Strait passenger volumes. The business also operates a road freight network which carries about 55-57 per cent of all road freight, said McMahon. The company employs up to 600 people, depending on the season.

I didn’t realise they already did 35% of Cook Strat passengers and over 50% of road freight.

They do all this without costing the taxpayer a cent. In fact I presume they make a profit.

This makes me wonder what would happen if say Kiwirail just announced it would stop the Interislander service in say five years time.

The first thing I expect would be StraitNZ (Bluebridge) would increase their capacity – perhaps going from two to four ferries.

The second thing I expect is that one or more other operators would emerge as competitors to them.

This could be a good outcome.

An okay bill

Labour MP Camilla Belich has had her Employment Relations (Employee Remuneration Disclosure) Amendment Bill drawn from the ballot.

The bill, on the surface, seems quite good. Basically it strengthens the rights of employees to disclose their salary or remuneration to others. I see this as a good thing. There might be unintended consequences but would definitely be worth supporting at least to select committee.

General Debate 26 March 2024

Will the media call him far left?

Green MP Ricardo Menendez March said in Parliament:

I rise in support of the Companies (Address Information) Amendment Bill. As a true Marxist, I’m not really one to stand up for the petite bourgeoisie …

Now it is no real surprise that Ricardo is a Marxist. But what I find interesting is that an MP can call themselves a Marxist and the media won’t even blink. Will they ever refer to him as a far left politician (hard to go further left than Marxism). Some try to call anyone on the centre right “far right” but not even Marxists are called far left.

You do have to admire the tenacity of Marxists though. There’s been around 50 countries that have implemented Marxism, and it has failed in every single one of them. In fact up to 100 million people have died at the hands of communist regimes. But the Marxists insist that it is simply because none of them have implemented it the right way, and give them a taste of power and all will be great!

NZ’s problem is too much spending, not a lack of tax

Labour and Greens in 2017 campaigned on capping core crown expenditure at no more than 30% of GDP. This was their election pledge. At one Budget I asked Grant Robertson about the policy and he (admirably) replied it was a limit, not a target.

The latest forecast had expenditure at 33.4% of GDP. That 3.4% difference is massive. It is $14.3 billion.

If Labour had kept to their 2017 promise (the temporary increase in 2020 for Covid-19 doesn’t justify it still being this high in 2024) then there would be no need for expenditure cuts. In fact we would have a $5 billion surplus instead of a $9 billion deficit.

The tax take as a percentage of GDP has increased also. It is currently 29.1% (32.3% for all core crown revenue) or $122 billion and in 2017/18 it was 27.9% or $80 billion. So tax has increased $42 billion in nominal terms and as a percentage of GDP it is $5 billion a year higher than it was.

Part of this is because of fiscal drag. We have an intolerable situation where people who do not work and are on welfare get their welfare payments indexed to inflation, but working people do not get tax brackets indexed, which means you net income drops due to inflation even if your gross income stays the same in real terms.

In April 2011 a worker earning $70,000 paid $14,020 in tax or an effective rate of 20%.

In December 2023, a worker earning the equivalent of $70,000 in April 2011 would earn $94,282 today.

The tax on $94,282 would be $22,033 on an effective rate of 23.4%. You have had a tax increase in today’s dollars of $3,177.

What the Government has promised in its budget is not tax cuts in the normal sense of the word. All they will be doing is partially refunding us for 13 years of tax increases.

The claim that spending has to be cut because of tax cuts is nonsense. Spending has to be cut because it exploded to $14 billion a year more than what Labour promised. This is why Labour was also announcing spending cuts just before the election.

The tax cuts will not restore us to where we should be. The person on $94,000 will only get a tax cut of $1,043 to compensate them for tax increases of $3,177. It is less than a third of the extra tax we have been paying.

The real solution is to treat tax brackets like benefits, and have them automatically adjust every year. If it is good enough for people not working to protect them against inflation, it is good enough for those who do work.

Home detention for attempted murder

The Herald reports:

A high school student wrote a detailed “kill plan” and told his ex to stay away from school on the day he wanted to kill her new boyfriend.

But when his plans went awry, the teen instead went to his schoolmate’s home days later, swinging a machete at his victim’s head, slicing open his chest and forearm. …

The defendant started dating a girl in 2021 but, as the relationship progressed, he became “possessive” and would get jealous if she spent time with other boys.

Police told the court the boy felt deeply for his girlfriend, verging on an obsession.

The pair split after several months, and she began seeing the victim.

The defendant started to compile information from the internet and began forming a “kill plan”, which Judge Kelly described as “chilling”.

The last entry in his kill plan notes read: “If arrested, it is what it is”.

Days before the attack he told another classmate he had been hired to kill someone.

The next day he went to school, planning to use a knife to kill the victim, but his plan was thwarted after showing the knife to a friend.

He cold bloodedly planned to murder his classmate because he saw his ex GF as his possession.

Justice Grice took a starting point of seven years in prison, but with discounts for factors including rehabilitative prospects and time already spent in a youth facility and on bail, she came to an end sentence of 12 months home detention.

Once the law changes, his sentence would be four years and three months which seems much more appropriate for attempted murder.

A worrying $52 billion discrepancy

Bryce Wilkinson writes:

Senior Fellow Bryce Wilkinson’s analysis reveals that since March 2009, New Zealand has spent $158 billion more overseas than it has earned, but its NIIP has only fallen by $32 billion.

Statistics New Zealand shows that receipts from overseas reinsurers have made a significant contribution to funding that $158 billion.


“We do not want more natural disasters, so we can hope this source of funding is temporary”, says Dr Wilkinson.


But the big mystery is who has been funding the $52 billion that Statistics New Zealand has had to attribute to “errors and omissions”. This discrepancy is even more pronounced in the past two years, with $36 billion of the $62 billion current account deficit seemingly funded by mysterious sources.

I had no idea there was such a mismatch between our current account deficit and our balance sheet. There should be serious work undertaken by Statistics NZ to try and reduce this discrepancy. $52 billion is too large an error, even over many years.

General Debate 25 March 2024

Good suggestions on fast tracked consenting

The NZ Initiative has some good suggestions around the Govt’s fast track consenting law:

  • Eligibility criteria for projects should include economic efficiency, with cost benefit analysis used to help prioritise projects for referral and approval.
  • Expert panels should include expertise on economic analysis.
  • Final decision approval, including the ability to apply conditions, should either be given to
    the expert panel rather than Ministers, or if Ministers remain decision-makers, disclosure
    requirements be included covering reasons for declining expert panel recommendations,
    applicants’ meetings with Ministers and any political donations applicants make.
  • Include the Minister for the Environment in the decision-making process to ensure
    environmental considerations are given sufficient weight.
  • A sunset clause to make fast-tracking temporary while wider substantial RMA reform (and
    reviews of other conservation-related legislation) is undertaken.
  • The compensation payments under the Public Works Act should be increased to incentivise
    early agreement with landowners.

I have previously written on the need for enhanced disclosure requirements if Ministers are decision makers. I like the proposal to have a fourth Minister involved as decision maker, and to have a sunset clause for it. Also a very good idea to make sure all expert panels have an economist on it. We’ve seen with Wellington City Council what goes wrong when no one on an expert panel understands economics.

Is Grant saying the unions are homophobic?

1 News reports:

Labour MP Grant Robertson says being gay was “a factor” — though not the entire reason — behind his unsuccessful runs at his party’s leadership in the mid-2010s.

The outgoing MP put his name forward for the Labour leadership in 2013 and 2014 and was narrowly defeated. While he had won the majority of support from his caucus colleagues both times, he lost once other votes from the wider party membership and union affiliates were counted.

In 2013 Grant only got 17% of the union vote. In 2014 he only got 19% of the union vote (and would have won if it were not for them). So one can only assume that he is saying the unions are homophobic.

Karma

Raw Story reports:

Attorneys for Donald Trump declared Monday that he is unable to secure the $464 million bond due in his New York fraud case, saying that turning over the entire amount is “a practical impossibility” — and that development could lead to his New York empire becoming property of the state, a legal expert said.

“He is now being asked to put up a bond to secure basically a half-a-billion-dollar judgment, which would represent about one-twenty eighth of his entire assets as Donald Trump [and his lawyer Alina Habba] say,” Kirschner said. 

Kirschner went on to say that if Trump’s assets are valued at the level he says they are, “I would think insurance companies and sureties would be beating down his door to do business with him.”

This is the hilarious part. Trump pathologically exaggerates his wealth. Because he did, he got hit with a massive fine. He can only appeal it if he puts up a bond, but no one will lend him the money because they all know he massively exaggerates his wealth.

General Debate 24 March 2024

Jacinda documentary will get $2 million, not $800k of taxpayer money

The Herald reports:

The $3.2 million documentary has already had $800,000 of public money approved by the Film Commission – and is likely to be eligible for a further $1.2 million in taxpayer money through the government’s screen production rebate (SPR) scheme.

So $2 million of taxpayer money for a hagiography.

“It is authored by New Zealand filmmakers who have firsthand experience of this significant period in New Zealand’s recent history. It’s important to note that this film is not a biopic of Jacinda Ardern, but rather it is focused on the reaction to her leadership.”

You can just imagine it, can’t you. It will paint her loss of support as all being about sexism, racism etc and nothing to do with a lack of delivery, a cost of living crisis etc.

Hamas, not Israel, is the party refusing a ceasefire

Slate reports:

Amid all the calls for an Israeli cease-fire in the war with Gaza, a few key facts are getting short shrift. Israel has put forth a cease-fire plan. It was negotiated along with U.S., Egyptian, Qatari, and Saudi diplomats. Its terms are quite favorable to Hamas. And Hamas is the party that’s rejecting it.

The plan, which has been on the table for two weeks, calls for a 40-day cease-fire. During this period, all military activity by Israel and Hamas will stop. Israel will suspend aerial surveillance over Gaza for eight hours of each day. Hamas will free 40 hostages—one a day. They will include women, children under 19, people over 50, and ill hostages. In exchange, Israel will free 400 Palestinian prisoners—a 10-to-1 ratio.

A 10:1 prisoner ratio and a 40 day cease-fire.

Meanwhile, the six-week cease-fire plan seems as if it has something to offer for all sides. Diplomats from neighboring Arab states have been pushing Hamas to take the deal. The Wall Street Journal recently reported that Qatari officials have threatened to expel Hamas’ political leaders—who have been living in cushy houses and condos in the small, oil-rich nation—if they don’t accept the cease-fire, though no action has yet been taken.

So Israel, US, all the Arab states think it is a fair ceasefire. But Hamas won’t agree.

senior Hamas leader openly said, in an interview with Russian TV two weeks into the war, that protecting civilians was the United Nations’ responsibility, not his. They don’t care about the lives or well-being of ordinary Gazans. As long as he and other Hamas leaders survive, down in their tunnels or wherever they happen to be, they’re willing to hang on.

Lovely people.

Had she never heard of Jimmy Carr?

Newstalk BZ reports:

Comedian Jimmy Carr is in hot water after jokes at a recent gig left one woman saying he used his platform to “put down those who have a tough life”.

Carr, whose shock comedy often leaves audiences gasping, was performing a warm-up gig in for his upcoming tour when he began directing comments to a woman in the audience.

Carly Ahlen, 44, was in the front row at the Orchard West Theatre in Kent, England, when Carr asked her why she was wearing a beret.

“I used my right hand to lift my beret, exposing my hearing aid,” Ahlen, who is deaf, told Metro.

“I hoped he was at least a decent guy and would move on, knowing I was deaf. It didn’t work. It had the opposite effect as I was like a sitting deaf duck now,” she said.

She said she was using a transcribing app to read Carr’s jokes as he performed them.

Carr pushed on, asking if she was going to use her phone to “call for back-up from the French Resistance”.

Ahlen said the British-Irish comic then doubled down, claiming “you can say anything about deaf people because they can’t hear you”.

“I was shocked — this isn’t comedy,” she said.

“Comedy is an amazing tool for progressive change, yet Jimmy decided to use his platform to put down those who have a tough life.

Had she never heard about Jimmy Carr? Carr always makes fun of people in the audience – they are some of his best bits. And if you really think comedy is simply a tool for progressive change, then go to one of those progressive comedians’ shows – also known as the unfunny ones.

For those who do actually like comedy, here is some of Jimmy;’s best audience insults.

General Debate 23 March 2024

Princess of Wales undergoing chemotherapy

Cancer is tough at any age or stage, but battling it while having three young children is extra tough. Hopefully the chemotherapy is successful.

Ipsos polled the Sir Humphrey questions

Ipsos report:

In a famous Yes, Prime Minister episode Sir Humphrey Appleby once explained to Bernard Woolley how you could get contradictory polling results on the same topic – in this case the reintroduction of national service – by asking a series of leading questions beforehand and asking the key question you want to know about in a certain way. 

But what would happen if we asked Sir Humphrey’s questions today? To find out we asked 1,000 British adults the first set of questions that were positive about national service and 1,000 British adults the second set that were negative. Below is a comparison of the results. You can see that it is indeed true that you get different results on the level of support for the reintroduction of national service based on the way you ask the question and the questions you ask before it.

The results are:

Ipsos point out:

First of all, to be clear, we would never ask questions on such a topic in this way. These are taken from a comedy sketch, a sketch that works because of the obvious absurdity of what Sir Humphrey is suggesting.   At Ipsos, we take great care not to ask leading questions. Questionnaire design is a key part in how our researchers are trained. Our professional reputation is based on providing quality data and acting with integrity. It is why clients come to us.

Related to this, it is worth pointing out that Sir Humphrey’s central allegation – that polling companies don’t publish all of the questions they include in surveys – is not allowed under British Polling Council rules. Under these rules, polling companies have to be transparent. They must publish all relevant questions asked in a poll in the order they were asked. Interested parties can then reasonably disagree on question wording and so on in an open way. In many ways this acts as something of a public peer review of survey results.

The same in true in NZ. All relevant questions must be published, and for political polls the primary voting question should be asked before any other question which could influence it.

Why conservatives like Trump

I am no fan of Trump. No amount of good policies can make up his manifest psychological flaws. I’d take a zombie Biden over a robust Trump anyday.

But Trump has won the GOP nomination for President, and has a better than even chance of winning in November. This can be quite baffling to people as to how this is possible.

There is an answer on Quora, which helps explain his appeal well. It says:

I want you to try to imagine something:

Imagine that, for your entire life—or at least a significant chunk of it—the people who run for high office in your country have been, essentially, carbon copies of each other.

You’ve quit watching presidential debates, because there’s no point. You already know what everyone will say. The candidates are just talking heads. Zombies. Robots. They don’t give straight answers to moderators’ questions. They dodge, they prevaricate, they bring every conversation back to themselves and their pet issues. Their statements are a meaningless mishmash of buzzwords carefully calculated to appeal to their base and avoid offending anyone. And at the end of the day, they’re all the same: career politicians who just want your vote and the status quo to continue.

You are desperate for a candidate who’s different. Who says what’s on his mind, consequences and image be damned. Who promises to make real change, clearly means it, and isn’t just saying what he thinks you want to hear. Who is, in other words, not a member of the establishment, that shadowy political class currently running the country and driving it deeper and deeper into debt and chaos. In fact, he’s someone who will fight them and stick it to them, horrify and disgust them. (Them and their useful idiots, the woke progressives, who claim to stand for justice but in fact support tyranny and injustice.)

For such a person, you’d be willing to overlook almost any flaw.

And so it was with Donald Trump. People who only consider the man’s personality and character without really understanding what he represented (and still represents) to the American people are missing the key aspect of his appeal. The 2016 American presidential election wasn’t just Trump vs. Clinton. It was self-made man vs. professional thief. Private businessman vs. corrupt corporatist politician. Dark horse vs. reigning champion. Scrappy underdog vs. galactic overlord. Outsider vs. insider. Anti-establishment vs. establishment. The disenfranchised vs. the enfranchised. The real America vs. the privileged coastal political elite.

Get the idea, now?

The American political arena is chock-full of smarmy, slimy, wishy-washy politicos who speak in sound bites and talk a big game but never deliver. It doesn’t need any more. What it needs is more Archie Bunkers—assertive, unvarnished, politically incorrect types who care less about their positions and more about fixing what’s wrong with the country.

When the hero you’ve waited for your entire life finally comes along, you don’t turn your nose up at his hairdo or his spray-tan or his ego-stroking. You load him into the barrel of a gun and fire him at the enemies of the American people.

Now I might not agree with everything said, but I think it is a good explainer of how many feel. Polls have shown most Americans have felt negative about the direction of their country since the 1970s. Doesn’t matter who was run office. So when an outsider comes along, he strikes a chord with the disillusioned.

This is one reason it is important in NZ to have Governments that do actually achieve things. If the population stays disillusioned for long periods of time, then populists do well.