The cost of not indexing tax brackets

Stuff reports:

New Zealanders would pay up to almost $6000 less tax a year if tax brackets had been adjusted with inflation, data shows.

That is per year. If tax brackets were automatically indexed every year to inflation, the cumulative impact on someone’s take-home pay would end up being well over $100,000.

The adjustment of the minimum wage in April to $22.70 an hour is equivalent to a salary of about $45,000 a year, meaning even those earning the least are approaching the middle tax band.

If thresholds had moved in line with inflation over that period, the current thresholds would be up to $21,259 at 10.5%, $21,260 to $72,890 at 17.5%, $72,891 to $106,298 at 30% and $106,299 to $199,616 at 33%.

Someone on the minimum wage who works 41 hours a week will now be taxed at the 30% marginal rate.

If tax brackets were inflation indexed then your earnings between $48,000 and $73,000 would be taxed at 17.5% instead of 30%.

An average earner on $60,000 would save just over $2000 in tax. Someone earning between $70,000 would save $3258, or 23%.

This is earners being punished for inflation. The Government inflation indexes welfare payments and Superannuation to ensure their after tax income remains constant, but by not indexing tax brackets it means someone who stays on the same real wage gets less and less in the hand every year. It’s wrong, and all parties in Parliament should be voting to stop it.

Maybe it is patient choice, not racism?

Stuff reports:

‘Woeful’ is how a leading doctor is describing her own unconscious bias in prescribing contraceptives, amid the launch of a world-first cultural safety plan imploring clinicians to turn a mirror on themselves.

Dr Samantha Murton, chairperson of the Council of Medical Colleges, ran the numbers on 987 patients who identify as female from her Wellington practice. “My question to myself is do I prescribe contraception fairly and safely for all populations that I look after?” 

The answer was a resounding no: a total of 17.3% are prescribed contraception, but for Māori, that figure drops to 12.2% and for Pasifika, 5.8%.

“This is woeful. What am I doing differently for this population? What am I not doing that is creating this discrepancy? I will need to explore further,” she said.

It is a good thing to have a doctor look at an area such as contraception, to see if there is a difference by ethnicity.

But upon finding there is, I don’t understand the self-flagellation that it must be due to some sort of racism on the part of the doctor – ie it is what they are doing or not doing.

First of all, contraception is the choice of patients. Some patients do want to get pregnant. Some are too old to get pregnant. Some are not having sex. Some may not like contraception. Some may have religious beliefs about contraception.

There may be differences in the age composition of the patients. If one ethnic group is much younger that may explain why they use less contraception. There could be confounding variables.

Now it might be that there is some implicit bias on the part of the doctor – that they doesn’t push contraception to Maori and Pasifika patients as much as they do to Europeans.

But it also might be they see certain patients less often, and hence don’t get the chance to discuss contraception as often. Or it might be that European women are more confident in asking for contraception.

Having found that there is a discrepancy by ethnicity, I would have thought the next step would to try and use data to work out why, rather than jump to conclusions it is the fault of the doctor. What you really want to find out is whether women of particular ethnic groups are not accessing contraception, that they would like to access. Would make for an interesting research project – so long as the researchers genuinely wanted to find out the answer, as opposed to have an ideological answer decided at the outset.

General Debate 12 February 2023

Vance on transport

Andrea Vance sums up the state of our transport systems:

Vance also points out:

Waka Kotahi, the land transport agency for which Wood is responsible, is currently one of the Government’s most problematic departments.

It is under fire because the road network is in a mess, and it can’t seem to deliver major projects on time or on budget. Even the ones it finishes have to be redone.

The agency also has a deserved reputation for being wasteful. From the $51 million squandered on the abandoned cycling and walking bridge project across Auckland’s Waitematā harbour, to the $70m-plus spent on the doomed light rail project

Let’s Get Wellington Moving (which WK oversees with the local authorities) has spent $83 million – $47m on consultants – and delivered only a pedestrian crossing. In EIGHT YEARS. And the walkway cost an eye-watering $2.4m.

Yep eight years and $83 million to deliver a $2.4 million pedestrian crossing!

And what has happened to the Minister in charge? He has been promoted to the front bench!

Prebble on co-governance:

Richard Prebble writes:

Where Chris Hipkins is right is when he says there is considerable confusion over co-governance. Government delegates powers all the time, not just to Maori. Government should do more de-centralizing of decision making. In this form of “co-governance” the government retains the ultimate power.

What is concerning is co-government, the idea that government itself is a partnership.

Co-government arises from Labour’s decision to put a radical revisionist version of the treaty at the heart of all its decisions. The revisionists claim the treaty is an agreement between Queen Victoria and 500 or so native chiefs to govern in partnership forever.

To meet this revisionist treaty Labour is establishing co-government with unelected, unaccountable, self- selected, hereditary tribal elites. It is the opposite of everything Labour use to stand for.

This view of the Treaty as a permanent power-sharing partnership is embedded in Wellington – in the Government, the public service, academia and NGOs.

New Zealand has been since 1853 a Westminster parliamentary democracy. Those who rule us are under the rule of law and accountable to us, the electorate. 

Parliamentary democracy is fundamentally at odds with being governed in partnership by hereditary tribal leaders. It does not matter whether the Prime Minister calls it a partnership, co-governance or mahi tahi,(working together); it is incompatible with democracy.

New Zealand is not a democracy when one partner is accountable to the electorate and the other partner is not. 

Even if the revisionists are right and some chiefs misunderstood the treaty they were signing, it is not a reason to abandon 170 years of parliamentary democracy. 

The treaty granted rights not just to the chiefs but to all Maori. Article three of the treaty grants Maori full citizenship rights. Maori have had voting rights from the first election in 1853. To reinterpret the treaty as a partnership is to reduce everyone’s citizenship rights, including the citizenship rights granted to Maori.

No doubt it was galling to some chiefs to discover that the treaty means every Maori has an equal vote. The treaty is why no New Zealand court has ever upheld slavery. While it did not happen immediately, the treaty freed Maori who were slaves and gave them full citizenship including the right to vote. 

The Treaty was about equality.

Guest Post: Where was the diversity in our list of New Year Honours?

A guest post by John Wren:

The 2022 New Zealand Honours acknowledged and recognised around 200 citizens who had made meaningful contributions to the well-being of our country. 

On reading, I could only identify two or three names who had contributed directly to creating the wealth which fuels our society’s ability to address well-being. 

The list lacked diversity.

New Zealand as an entity is no different than the corner dairy. Its survival and growth depend upon customers purchasing products and services that more or less fall within the general categories of Food, Fibre, or Fun (tourism). New Zealand produces these products and services very well and, in many cases, we lead the world in design, quality, sustainability and reliability.

A typical dairy needs customers to purchase and continue to purchase its products – just like our country. If the customer stops purchasing, the dairy goes out of business. Customers usually stop purchasing because the price is too high, the business is unreliable, or the quality is poor. On the other hand, any business that does these things well is profitable.

So just like the corner dairy, it is only the profit from “New Zealand Inc” that can possibly create the rewards we need to fuel what we refer to as “well-being”.  The government and their supporting bureaucrats appear to be blind to how fundamental this is – as we can clearly see in their selection of the heroes who were honoured at the New Year.

The heroes we should recognise are those, who through their commitment, passion and personal risk, have built businesses that contribute to enhancing the well-being of every New Zealander.

Unfortunately, this government and its advisers don’t understand that diversity must be all-encompassing – recognising not only social, ethnic and gender but also productive wealth creation.

May we never again see an honours list that lacks diversity in its recognition   of New Zealand’s heroes. Let us see farmers, winemakers, manufacturers flower growers, game designers, hoteliers and restaurateurs represented amongst the heroes who have contributed to the well-being of all of us.

Those who deserve to be honoured are those building the foundations for our future, by creating and managing entities that produce the wealth on which we will build a vibrant New Zealand.

Exterminate, exterminate

Stuff reports:

The battle to demolish one of Wellington’s most visible buildings continues, with the university trying to remove heritage protection from the Gordon Wilson Flats.

For years, Te Herenga Waka – Victoria University of Wellington has been trying to demolish the flats and construct Te Huanui, a new – section of the university campus with teaching and research facilities.

There’s one major obstacle: the flats are on the Wellington City Council’s heritage list, meaning the university needs a resource consent to knock them down.

This year independent commissioners will hear submissions on the council’s proposed district plan and one submission is from the university, asking the council to remove the heritage listing.

They are an ugly eyesore with no redeeming features and the block should be demolished by way of a low level nuke.

Councillor Iona Pannett – well-known for her support of heritage and character protections – said the building should be restored.

“I know a lot of people find it ugly, but heritage doesn’t have to be pretty to deserve its status,” she said.

She flatted in the building for a brief period and believed “it would go for so much money” if it was properly done up. The rooms were big and sunny, and featured a unique “maisonette” structure where the apartments are two storeys.

If Iona is right, then she should set up a consortium to buy the building, renovate it and make so much money from it.

General Debate 11 February 2023

Lange on the Treaty

Don Brash quotes different politicians on the Treaty. David Lange said:

David Lange gave a seminal speech in 2000 in which he said “democratic government can accommodate Maori political aspiration in many ways. It can allocate resources in ways which reflect the particular interests of Maori people. It can delegate authority, and allow the exercise of degrees of Maori autonomy. What it cannot do is acknowledge the existence of a separate sovereignty. As soon as it does that, it isn’t a democracy. We can have a democratic form of government or we can have indigenous sovereignty. They can’t coexist and we can’t have them both.”

And Sir Apirana Ngata:

Apirana Ngata, perhaps the greatest Maori leader we have seen since 1840, asserted in 1940 on the centenary of the signing of the Treaty that “Clause 1 of the Treaty handed over the mana and the sovereignty of New Zealand to Queen Victoria and her descendants forever, that is the outstanding fact today. That but for the shield of the sovereignty handed over to Her Majesty and her descendants I doubt whether there would be a free Maori race in New Zealand today.”

Winston Peters:

Winston Peters has often ridiculed the notion that Queen Victoria, head of the greatest empire the world had seen to that point, would have been willing to go into partnership with hundreds of mainly illiterate Maori chiefs whom she had not even met.

Brash concludes:

In my view, the meaning of the Treaty is very clear: it involved chiefs ceding sovereignty to the Crown, having their property rights protected, and being guaranteed the same rights and responsibilities as the citizens of England. It was an extraordinarily enlightened document for its time – indeed, for any time. Nothing like it happened in Australia, or North America.

It was an enlightened documents, but it is being twisted into an anti-democratic document.

Retail crime doubled in four years

Police data

The chart above is based on data released by the Government to Mark Mitchell through parliamentary questions.

The level of retail crime incidents has doubled over the last four years. You could call it a pandemic of retail crime.

Minimum Wage Increase – Employee Impact

This post is from PaulL, regular commenter and occasional poster here at Kiwiblog. It follows on from the previous series on Effective Marginal Tax Rates (EMTR), looking at the minimum wage increase, who it benefits, and by how much. That series can be found here.

The government is increasing the minimum wage from $21.20 to $22.70 from 1 April next year. At the headline level this is a 7% increase, which is roughly the CPI increase in the past year. So this is an inflation adjustment, in real terms people on the minimum wage will stay exactly where they were.

But is that true? We know from the EMTR series that the abatement rates are a problem. We also know that the minimum wage is getting awfully close to the 30% tax rate, so bracket creep may mean that we’re not getting full inflation compensation.

Who is really getting the bulk of the minimum wage increase. Spoiler alert – for many of those most in need, the government will be pocketing 80% of the minimum wage increase. They’re asking businesses to pay more, but the lion’s share of that money is going directly into government coffers, not to the people they would profess to be helping.

Let’s dive into the numbers.

Continue reading »

General Debate 10 February 2023

Why the RMA replacements bills should also be added to the bonfire

Almost everyone who has had to deal with the RMA knows it is a terrible piece of legislation. For 20+ years politicians have tried to improve it, but failed to do more than modest improvements.

So I was excited that the Government was going to not just amend it, but replace it entirely with entirely new legislation. I thought nothing could be as bad as the RMA.

I was wrong.

What Labour is pushing through Parliament is so deeply flawed that it is unfixable. It would be not just worse than the RMA, but worse by an order of magnitude. Why?

Well the pithy one-liner is “co-governance for your deck”. But it goes well beyond that.

  • Despite what the Minister claims, it does introduce co-governance. Decisions on regional plans get transferred from elected local territorial officials to regional appointed groups – appointed by both TLAs and Iwi. Sounds similar to Three Waters? Yep – but this is for everything to do with what you can do on your land.
  • The only difference to Three Waters is rather than mandate 50/50 in legislation, they have said at least two members of each Regional Planning Committee must be appointed by Iwi. The Waitangi Tribunal has already stated that anything less than 50/50 will be a Treaty breach, and a failure to do so will inevitably see lawsuits from Iwi. And the law requires those deciding on the numbers to abide by the principles of the Treaty
  • Rural areas may lose control of their own plans. For example Masterton may want roading improvements, and the new Mayor of Wellington will get to partially decide what happens in Masteron – they’ll probably get cycleways instead. 
  • The Minister for the Environment will have huge powers, in collaboration with a National Māori Entity, to set rules for every region.
  • Rather than have two or three desirable outcomes, the new law would require the Minister and regional plans to not ‘compromise the well-being of future generations’, upholds ‘the intrinsic relationship between iwi and hapū and te Taiao’, promotes 18 different system outcomes that range from maintaining land in highly productive soil and also building houses and also restores the ecological integrity, mana, and mauri of air, water, soil, coasts, wetlands, estuaries, lakes, rivers and biodiversity.
  • This means that beyond doubt every aspect of every regional plan will result in ten years or more of litigation because no-one will be able to develop a plan that meets all these different outcomes.
  • For a decade or more, there will be a huge chilling effect on developments due to the uncertainity

Federated Farmers have done an example of what this new law would mean in terms of someone wanting to do some commercial fishing and someone wanting to milk a cow.

The commercial fishing boat has simple rules. They buy some quota and they can catch fish. Their petrol supplier buys some ETS units, and they can burn petrol on their boat. Fairly simple.

But if you are a farmer who wants to milk a cow you have to get a resource consent with decision makers considering water, cultural heritage, biodiversity, te mana o te wai, greenhouse gas emissions, natural features of landscapes, the need for highly productive soils to be maintained, te oranga o te taiao, the mauri of the land, plus the intrinsic relationships of local hapū.

If you are lucky you might get to have a resource consent within three years and for less than $100,000 after all the spending on RMA consultants and lawyers for the inevitable court battles.

The RMA replacements bills need to be scrapped. They won’t make things better – they will make things much worse.

Remember how he was a reformed man!

Stuff reports:

A high profile senior Mongrel Mob member who once enjoyed fleeting international fame for having ‘Notorious’ tattooed across his face, can now be revealed as the man who assaulted a good samaritan in Napier.

Poutawa ‘Puk’ Kireka, 35, appeared via audio-visual link before Judge Russell Collins in Napier District Court on Wednesday. He pleaded guilty to assaulting the man as well as kidnapping and assaulting his partner, and possession of cannabis.

He brutally beat up a 76 year old man because they gave a lift to the woman he was beating up. In 2021 he said:

I’m living proof it can be done, with the right support and the right people around you, you can turn your life around.”

“People will always judge me for the patch I wear but people will also support me for the positive vibes I reflect out to the people,” he posted on the page.

“Actions will always speak louder than words, true leaders always lead by example even behind closed doors.”

Actions do speak louder than words.

Also worth noting he has two previous jail terms for violent offending, including shooting a woman. If Three Strikes had not been repealed he would be in line for a sentence of 14 years with no parole.

Further on Boys’ Education

Some schools are doing for boys exceedingly well. It is not the “system” as such it is largely the approach of the schools. Some boys’ schools with high reputations need to do a great deal better. The data speaks for itself and I would hope MANY parents are asking questions.

A rare article focusing on boys’ education

Newshub reports:

For women, the hard-won right to higher education was an economic game-changer and proved a positive boost for society. But women haven’t just caught up, they’ve surged ahead.

The gender gap for tertiary graduates is now wider than it was in the 1970s, just the other way around. …

Author Richard Reeves told The Project on Tuesday there are structures and systems that aren’t working as well for men as they used to.

“[The] prime suspect here is the education systems, where there are fewer male teachers, there’s less vocational training, and really we’re seeing boys falling further and further behind girls in the classroom.”

Reeves would like to see the education system reformed to better work around the needs of boys.

“We need to reform the education system to serve them better, so more male teachers,” he said.

“I would start boys in school a bit later because they just develop later, and more chances to run around, more chances to learn with hands because on average – of course this is all on average – boys learn better that way.”

Great to see a rare article on this problem in the media. We get 1,000 articles a year on the gender gap in earnings and almost none on the gender gap in education.

The idea of boys starting a bit later is an interesting one.

We also know that boys do far better in single sex schools, yet no new state single sex schools in decades. I’d like to see this policy reversed.

General Debate 09 February 2023

Why it is good Labour u-turned

People should celebrate that Labour scrapped or delayed four policies. The reason everyone should be happy about that is that were basically terrible policies. Labour thinks they are great policies, but unpopular. I think they are terrible policies.

Yes Labour will still try to implement most of them if they get a third term. but if they don’t then the policies stay dead, which is a good thing. And while National had said it would scrap them anyway, it is harder to scrap something already implemented – and takes up time and energy which is better spent on implementing your own policies.

So why were the four policies Labour u-turned on bad policies. My summary:

Compulsory Unemployment Insurance

  • The largest tax increase in a generation at $3.5 billion annually
  • Would have reduced family incomes by almost 3% with take home pay for some couples dropping $70 a week
  • Is regressive, giving four time as much money to high income earners as someone on the median wage
  • Would pay people up to $400 a day for six months to not get a job

Biofuels mandate

  • Would increase the cost of fuel by up to 10c a litre
  • Would not reduce domestic greenhouse gas emissions at all
  • May increase global greenhouse gas emissions
  • Similar policies in 2008 led to global food prices increasing 75%, pushing 100 million people below the poverty line
  • The amount of grain turned into biofuels could feed 1.9 billion people for a year

RadioNZ/TVNZ merger

  • Was combining a public broadcaster and a commercial broadcaster into an entity which would be neither, and inevitably do both things badly
  • Was likely to reduce media diversity
  • Was going to cost $3 billion over 30 years
  • Would have increased the power of the state over the media

Hate speech law change

  • Could have criminalised legitimate criticism of religions
  • Treated people’s religious beliefs (something people choose to have) the same as innate characteristics such as race, colour and sex.
  • Likely chilling effect on speech as activists would use law to try and get Police investigations of people they disagree with

So again these were all lousy policies that we should not mourn. But we should remember Labour still thinks they’re great policies, they just accept they are unpopular.

Hipkins announces four u-turns

Pm Chris Hipkins has announced four u-turns on policies, in a bid to try and win re-election (when they can bring them back). The are:

  • RNZ/TVNZ merger – scrapped
  • Compulsory Unemployment Insurance – delayed
  • Biofuels mandate – scrapped
  • Hate speech laws – referred to Law Commission

No decision yet on Three Waters and Auckland Light Rail.

NZ’s worst landlord still at it

The Herald reports:

A tenant who installed a security system at her home to protect her and her daughters from gang-affiliated neighbours said her landlord, the Government, did nothing to help her.

The woman claimed two rival gangs who shared a driveway with her were involved in a stabbing, someone being hit with a car, wild parties, and caused rat infestations from endless amounts of rubbish.

Eventually, her friends and family stopped visiting because of the intimidating neighbours and she became depressed and anxious.

Now, she’s been awarded more than $3000 in a recently released Tenancy Tribunal decision.

This is example no 1,827 of what happens when you no longer have consequences for terrible behaviour from tenants.

Decent law abiding tenants should not live in fear because of Government policy that vicious criminals can terrorise the neighbourhood without being evicted.

Kāinga Ora produced written notes showing the tenant complained on four occasions, although she claimed to have complained more than this, but it did not issue a 14-day notice for the neighbouring tenants.

A 14-day notice can be served if a tenant or landlord breaches the Residential Tenancies Act 1986, meaning they have 14 days to fix the breach.

Incredible. They really are the worse landlords in the country.

“Given the nature of the complaints that Kāinga Ora has recorded which refer to family harm, drugs, gang activity and intimidation, it would be reasonable to expect a landlord to take the matter seriously,” adjudicator Tracey Lee-Lewis said.

But Kainga Ora doesn’t care if it loses in the Tenancy Tribunal, because it is effectively us taxpayers who pay the fine – not the directors or senior management of Kainga Ora.

The worst possible way to describe New Zealand

Two academics write in the Herald:

In our own work, as academics focused on Indigenisation and decolonisation of education systems, we talk of New Zealand and Aotearoa as two different countries occupying the same land. Te Tiriti is about relations between these two countries.

This is arguably the worst possible way to describe New Zealand. It is a mindset that can only lead to division, strife and worse. Its probably how people used to describe Yugoslavia.

The simple reality is two countries occupying the same land is never good. It is Cyprus.

It is a way of looking at the world that divides the huge variety of New Zealanders into two camps – those with and without certain ancestors.

General Debate 08 February 2023

Stabbed 23 times for a cigarette

Meet K-Cyn Jack Parezz Nathan.

  • Meth user who would constantly ask neighbours for food or cigarettes
  • A neighbour once refused and a few days later Nathan stabbed him in his stomach with a 15cm knife, causing a wound two to three centimetres wide and five to six centimetres deep.
  • Two days later he visited his other neighbour and when she refused a cigarette, he stabbed her 13 times to the head and neck area, and 10 times in the chest and limbs before kicking her in her throat and stomping on her face.
  • As he stomped on her face he said “You’re dead bitch”
  • He was on bail at the time of the offending
  • He later told a friend “I just popped a bitch”
  • He has showed no remorse

He was sentenced to just nine years jail, with a non-parole period of four and a half years. Due to Three Strikes being repealed, any future offending will get just as lenient sentences.

Some questions:

  • What was the offence he was on bail for?
  • Why did Police not arrest him after the first stabbing?
  • Does anyone think he won’t commit more violence in future?

Labour talks, National does

The Herald reports:

In the past five and a half years, Little has overseen 13 settlements become law, worth $690 million. However, five of those, worth about $300m, were actually signed under National’s Chris Finlayson, prior to Little taking over the role, and making up the vast bulk of the work.* The last under Finlayson was Ngāti Tūwharetoa, with the Deed of Settlement signed on July 8, 2017.

In the preceding nine years under a National government, according to the Ministry of Māori Crown Relations Te Arawhiti there were 46 settlements were passed into law under Finlayson’s watch worth just over $1.23b – more than twice the rate of Little.

In reality this means that Little has settled eight claims, while Finlayson settled 51. So it is more like three times the rate.

`How has Labour’s Class of 2017 gone?

Eighteen Labour MPs entered Parliament in 2017. which ones have become Ministers and which have been sent a message saying thanks but no thanks?

Allan, Kiri – Minister of Justice

Andersen, Virgina – Minister of Communications

Coffey, Tamati – Chair, Maori Affairs Committee

Craig, Liz – none

Eagle, Paul – retiring

Jackson, Willie

Kanongata’a-Suisuiki, Anahila – none

Lubeck, Marja – Chair, Education Committee, retiring

Luxton, Jo – Under-Secretary for Education, Agriculture

McAnulty, Kieran – Minister for Local Government

O’Connor, Greg – Deputy Speaker

Prime, Willow-Jean – Minister of Conservation

Radhakrishan, Priyance – Minister for Community

Russell, Deborah – Minister of Statistics

Strange, Jamie – Chair, Economic Dev Cmte, retiring

Tinetti, Jan – Minister of Education

Warren-Clark, Angie – Chair, Social Services Committee

Webb, Duncan – Minister of Commerce

So there are five 2017 MPs who are standing again but haven’t been trusted with a role in the executive. They are bolded above.

Four of them are List MPs, so it is doubtful they will receive a high list ranking. The other is Greg O’Connor who holds Ohariu. He is the only (non retiring) electorate MP who came in, in 2017, not to have been promoted to the Executive.