Joe Ascroft from the Taxpayers Union writes:

The working group is expected to recommend that the capital gains tax simply extends the current income tax regime; capital gains will be treated as income, so the tax rate will be the income-earner’s marginal tax rate.
Given how low our top tax-rate kicks in at $70,000 per year, the vast majority of income earners paying capital gains tax will therefore pay 33 per cent tax on any capital gains.
This is an extraordinarily high capital gains tax rate. In 2011 and 2014, the Labour Party campaigned on a capital gains tax with a rate of 15 per cent – and arguably lost both elections on the policy’s unpopularity.
Now the working group is literally doubling-down with a tax rate more than twice that of those proposals.

And people will pay that 33% tax on nominal, not real gains. If your asset merely increases in line with inflation, you’ll still get taxed 33% on it. Basically the higher inflation is, the more tax you pay.

In Australia, for example, long-term capital gains (capital gains on assets held for longer than a year) receive a 50 per cent discount – so taxpayers pay half their marginal tax rate on any capital gains.
The result is that their top capital gains tax rate on assets held for longer than a year is 22.5 per cent – approximately a third lower than our proposed 33 per cent rate.
Canada has a similar policy of only half-taxing capital gains. While the United Kingdom and the United States don’t apply a discount multiplier to capital gains, they simply pay less tax on capital gains compared to regular income.
The top tax rate in the United Kingdom is 45 per cent, but taxpayers only pay 28 per cent on capital gains from property, and 20 per cent on capital gains from all other assets.
Taxpayers in Britain also receive a capital gains allowance; they only pay tax on capital gains exceeding approximately $22,000.
In the United States, the top capital gains tax rate is 20 per cent – and that only kicks in if you earn more than $625,000 per year. If you earn less than that, you’d probably pay 15 per cent – less than half the Tax Working Group’s proposal.
Why do each of these countries tax capital gains at a reduced rate?
They acknowledge the risk to investment posed by a punitive tax on capital. More investment in small businesses, new farm equipment, larger buildings and innovative technology is the pathway to stronger economic growth and higher wages.

So is Labour going to try and pass a Capital Gains Tax that would be possibly the highest in the developed word?

Radio NZ report:

The United States is calling on the international community to pick a side in the dispute over who should be recognised as Venezuela’s leader.
President Nicolás Maduro is under pressure after his rival Juan Guaidó declared himself “acting president” on Wednesday.
Several countries, including the US, the UK, Canada and some Latin American nations, already back Mr Guaidó as president.
But Russia, China and Syria are still recognising the socialist leader Nicolás Maduro, who also appears to have the backing of the military.

Russia, China and Syria on one side – I would have thought be pretty easy to choose a side. But alas no.

New Zealand’s Foreign Affairs Minister, Winston Peters, said it’s not New Zealand’s practice to make statements recognising governments.

Which is de facto support for the status quo.

So Syria, China and Russia back the socialist regime that has destroyed the country’s economy. Who is on the other side. So far I make it:

• US
• France
• UK
• Germany
• Spain
• EU
• Canada
• Brazil
• Peru
• Chile
• Argentina
• Organisation of American States
• Australia

I would have thought it would be pretty simple to work out which side one should be on.

Marc Thiessen writes:

If Rep. Alexandria Ocasio-Cortez (D-N.Y.) were a conservative, all anyone would be talking about is how uninformed she is. She would be facing trick questions from reporters designed to expose her lack of knowledge, and brutal sketches on “Saturday Night Live” mocking her intelligence and fitness for office. Instead, SNL fawns over her, while CBS’s “Late Show” host Stephen Colbert — far from making jokes at her expense – eats ice cream with her and asks how many and “f—s” she gives about her critics.
Boy, it’s good to be a socialist.

Yes she is the darling of the entertainment elite. But should she be?

This week, for example, Ocasio-Cortez declared that “the world is going to end in 12 years if we don’t address climate change.” She has said that $21 trillion in “Pentagon accounting errors” could pay for most of her massive $32 trillion Medicare-for-all plan — as if there were $21 trillion in unspent tax dollars sitting around in a Pentagon vault. She opined that “just last year we gave the military a $700 billion dollar budget increase, which they didn’t even ask for” — unaware, apparently, that the entire Pentagon budget is $716 billion. She wrongly claimed that Immigration and Customs Enforcement “is required to fill 34,000 beds with detainees every single night and that number has only been increasing since 2009” — when ICE is required only to have that number of beds available and that number has remained flat. She has declared that “unemployment is low because everyone has two jobs” — which is flat untrue. According to the Bureau of Labor Statistics, there are only 6 million to 7 million Americans with two jobs and 148 million with just one.

That’s a lot of inaccuracies in less than a month.

But she also appears dishonest. This week, she told Colbert that she has not been able to open a district office yet to handle constituent casework because of the federal government shutdown. “There’s a lot of things we can’t do as freshman members,” she said. “We can’t properly set up our district offices. We can’t get laptops delivered. We can’t start doing the work that we were elected here to do. . . . It takes the green stuff. And those workers are furloughed.” That’s wrong. Last September, Congress passed the 2019 Legislative Branch Appropriations bill, which funds congressional salaries and offices for the coming year. Ocasio-Cortez should know this because, unlike furloughed workers, she is getting paid. (If she doesn’t know this, what does that say about her?) The New York Times reports that the three other first-term members from New York have managed to open offices in their districts. A more likely explanation is that Ocasio-Cortez is spending her time building her national media profile instead of taking care of the constituents who sent her to Washington in the first place.

Too busy on TV to have an office for constituents.

Vox recently added up the cost of all her proposals — from Medicare-for-all, to free college, guaranteed jobs and the “Green New Deal.” The price tag was $42.5 trillion over the next decade — more than twice the current national debt. 

Just print more money!

It is a tremendous testament to America that someone who was working as a bartender in a Mexican restaurant a year ago can throw their hat into the ring, unseat a 10-term member of Congress and be elected to the House of Representatives. It’s what makes this such an exceptional nation. And it is obvious that she has political talent. But that doesn’t excuse her from the responsibilities as a legislator to learn the facts and serve her constituents. Even Whoopi Goldberg, an Ocasio-Cortez supporter, warned her on “The View,” “I would encourage you to sit still for a minute and learn the job.”
That’s good advice. Once people decide you are ignorant, it’s hard to recover — just ask Sarah Palin or Dan Quayle. Of course, they were conservatives, so the standards are different.

Very much double standards.

Stuff reports five ideas on electoral reform from Nick Smith. They are:

1. Entrench the entire Electoral Act so any change would require a 75 per cent majority in Parliament or a referendum.
2. Ban all foreign donations to parties and candidates
3. Defer the re-drawing of electoral boundaries due to the failed census
4. Extend the Electoral Commission’s role to local elections
5. A referendum on a four-year term.

I’m reasonably supportive of all five proposals. I think for foreign donations you need a de minimis threshold, but that could be lower than the current $1,500.

I really like the idea of entrenching the entire Electoral Act. That would incentivise the parties to propose changes that don’t favour one party over another.

I’ve long advocated that the Electoral Commission should run local body elections. It would be cheaper, and more consistent.

And also a long-term advocate of a four year term. That is the most important change.

I hope National adopt these ideas as policies.

Radio NZ report:

New Zealand drivers are crashing at higher rates than drivers visiting this country, Ministry of Transport data shows.

While exact information about the number of foreign drivers on New Zealand roads is not available, it provides enough information to suggest visitors to the country are less likely to crash.
And despite tourist visitor numbers continuing to rise, the number of crashes involving foreign drivers has not risen to match.
The data dispels the myth that overseas tourists are an increased danger on New Zealand roads.

The data, while not perfect, is quite compelling.

Their first graph shows the number of fatal crashes involving an international rental use has stayed around 20 for the last 20 years. But in that time the number of international rental users has gone from 400,000 to 1.5 million.

The data also shows the fatal crash rate of NZ drivers is 14.97 and overseas drivers is 1.61.

Now that second load of data is somewhat flawed as the ideal comparison would be crashes per million kms travelled. But we don’t have that. However the huge difference between 14.97 and 1.61 makes it safe to conclude there is no evidence foreign drivers cause more crashes – quite the opposite.

And the fact the number of crashes has remained constant while the number of foreign drivers has quadrupled is very strong.

Stuff reports:

Two-term Labour MP, former talkback host, and social agency leader John Tamihere has launched his bid for the Auckland mayoralty.
Tamihere has teamed up with former National MP and Auckland City Mayor, and current councillor, Christine Fletcher, in an unusual move to campaign with a ready-made deputy-mayor.
The pair launched their campaign, and its slogan “Shake it up and sort it out”, in Henderson in West Auckland on Saturday morning.

That’s a smart team up. Tamihere is popular in West and South Auckland. Fletcher in the eastern suburbs. Goff will dominate central Auckland, so Goff will need to do well in the northern suburbs to hold on.

Tamihere pledged to “open the books and clean the house”, and said it’s not clear how ratepayers money is being spent.
He promised to reduce the power of “faceless” centre city bureaucrats, and return more decision-making to communities.
Tamihere has called for more democratic control over public assets and wants to appoint councillors to the boards of all council-controlled-organisations such as Auckland Transport. That would require a law change.

His pledges included a “crackdown on waste and incompetence” with the establishment of an Integrity Unit that could investigate public complaints.
Tamihere has called for a “proper partnership” with central government, especially in housing and transport, and questioned the need for a regional fuel tax.

They all sound good, but not specific enough. Voters should demand an explicit commitment on maximum rates increases.

Fletcher took other swipes at current Mayor Phil Goff during the campaign launch.
“The ribbons Goff has been cutting are all the work of other people,” she told assembled media.
“I voted for Goff (in 2016) – but today council is divided, there’s paralysis on key strategic issues and the bureaucrats are running the ship. There’s a failure of leadership,” said Fletcher.

Goff appears to have alienated Crs on both the right and the left. This is not a good idea.

The Washington Post reports:

The Drudge Report, in big red letters, summed up President Trump’s announcement of a temporary end to the shutdown with three words: “NO WALL FUNDS.” Ann Coulter tweeted, “Good news for George Herbert Walker Bush: As of today, he is no longer the biggest wimp ever to serve as President of the United States.”

Ouch, Coulter knows how to burn.

Fox Business host Lou Dobbs, who described himself as an “an animated, energetic supporter of this president,” conceded that House Speaker Nancy Pelosi (D-Calif.) “has just whipped the president of the United States.”

Yep Nancy kicked his arse.

Eric Crampton writes:

Every January, Oxfam releases a report on global wealth inequality. This year’s Oxfam report contrasted the drop in wealth held by the less wealthy half of New Zealand with the rise in wealth enjoyed by the two Kiwis who made it on to Forbes‘ 2018 list of billionaires.
The report, and the  Stuff story on it, suggested that New Zealand’s rich have got richer while the poor have got poorer.
But Oxfam’s reports rely on the Credit Suisse annual reports on global wealth, released every October. The actual Credit Suisse figures vary considerably from how Oxfam has presented them.

The data didn’t back Oxfam’s narrative so they ignored half of it. Oxfam is basically a socialist lobbying organisation pretending to be a charity.

Oxfam’s report reached a vastly different conclusion to the underlying Credit Suisse figures because Oxfam ignored half the data in the Credit Suisse report. The contrast between the wealth increase for two Forbesbillionaires and the wealth decline in the Credit Suisse figures was painted as an increase in overall inequality.
But the wealth holdings of two billionaires, in a country of about five million people, really do not tell us much about what is going on overall.
Credit Suisse’s report uses the Gini measure of inequality in wealth holdings. The Gini measure compares everyone with everyone else rather than relying heavily on two billionaires.
Credit Suisse’s figures show that wealth inequality dropped from a Gini figure of 72.3 in 2017 to 70.8 in 2018. New Zealand currently sits between France and Canada – about where you might reasonably expect.
Discussing the report on Newstalk ZB, Oxfam’s Rachael Le Mesurier said “this gap is getting bigger”.
According to Newstalk, “she said the gap had been continuing to grow since the inception of their reports about five years ago”. But the Credit Suisse 2013 wealth report, which would have formed the basis for Oxfam’s 2014 report, had New Zealand’s wealth Gini coefficient at 71.8 – again, less equal than 2018’s figure.

So basically Oxfam lied. Inequality has been shrinking according to the official data. So they ignored it and just focused on two billionaires in the classic politics of envy.

Kate Newton writes:

Voices of younger, poorer and ethnically diverse communities in Auckland are being drowned out by older, wealthier, Pākehā residents, an RNZ investigation has found.
The 26,000 submissions made on Auckland Council’s long-term Auckland Plan 2050 were dominated by Pākehā in particular – even in areas of the city where they are a minority.
The plan, adopted in June last year, sets out six high-level goals for Auckland’s long-term future, including fostering a sense of belonging and participation among every resident.
However, analysis of ethnicity, age and gender data showed three-quarters of submissions on the plan were made by Pākehā, despite Pākehā making up only half the region’s population.

Submissions from people living in local board areas with above-average incomes outnumbered those from poorer areas by two to one.
The overall age of submitters was also significantly older than Auckland’s general population – seven out of 10 submitters were above the median age of 34.

This is an interesting analysis, but it also reinforces why submissions should not be seen as representative of the community.

A great saying is that submissions are for reading, not counting. You consider the points they make, but you don’t just go with the view that is most popular or frequent.

If you really want to know what the community thinks, you do a scientifically representative poll.

The Herald reports:

One of New Zealand’s most high-profile prisoners, who has been behind bars for four decades, will be released.
Arthur William Taylor was granted parole today after being denied 19 times prior. He was due to remain in prison until October 2022.
A New Zealand Parole Board spokesperson told the Herald parole was granted for Taylor at a hearing this afternoon.
His release date will be next month, while a full written decision outlining the Parole Board’s reasons will be available within the next two weeks.

Taylor was serving 17 and a half years for charges of explosives, firearms, kidnapping and conspiracy to supply methamphetamine, among other crimes.
The 62-year-old has more than 150 convictions for offences including bank robbery, burglary, fraud and drugs and has spent almost 40 years behind bars.
His first charge dates back to 1972 when he appeared in the Youth Court on a forgery charge.

Taylor is obviously a very smart man. As a bush lawyer he has won many cases in court around the rights of prisoners etc. He could presumably get a job, when released, such as working for a law firm (not as a lawyer, but legal researcher etc).

I hope he puts his considerable intellect to worthwhile pursuits, and doesn’t end up back in prison.

The Guardian reports:

Alex Salmond, the former first minister of Scotland, has been charged with multiple counts of sexual assault and two of attempted rape.
Salmond, who appeared at Edinburgh sheriff court for a private hearing on Thursday afternoon, was charged with 14 offences: nine charges of sexual assault, two of attempted rape, two of indecent assault and one of breach of the peace.

Wow, this is huge. There had been complaints of sexual harassment etc, but it was not thought his conduct included alleged criminal acts.

He was Scotland’s Head of Government. This is equivalent to a former Prime Minister being charged with attempted rape and sexual assault.

An interesting OIA find over here. A feminist who is against the changes to the Births Act to allow a change of sex on the birth certificate had been writing op-eds that were published on Scoop. After complaints Scoop not only stopped her contributing further, but deleted all her previous contributions without informing her.

She complained the Media Council. As part of Scoop’s defence the then editor wrote to a Green Party Minister and Under-Secretary asking for assistance with the complaint (which was dismissed).

What is interesting is the editor of a media outlet, asking a Minister and Under-Secretary for help. Scoop is known to be left-leaning but this interaction seems to be something new.

The Herald reports:

Police are investigating a text message, allegedly sent from the phone of National Party MP Sarah Dowie, to her former colleague and ex lover Jami-Lee Ross.
The police investigation is said to focus on whether the text message – which came after the break-up of their extra-marital relationship – constituted an incitement to self-harm, which is punishable by up to three years in prison.
Ross, 33, has previously named Invercargill MP Dowie, 43, as one of the women with whom he had an extra-marital relationship while National MP for Botany.
The text message included the words: “You deserve to die.”

I’m saddened but not surprised the media have named Sarah. The pretext of the Police investigation is just that – a pretext. The idea that a solitary “I hate you and wish you were dead” text message as a relationship broke up could be in breach of the law, is risible. If so, hundreds of thousands of people are probably also criminals.

Merely saying I wish you were dead is not the same as incitement. If there was a pattern of such messages, maybe. But a solitary angry message? Extremely doubtful. The fact the Police haven’t even bothered to interview Sarah Dowie suggests they don’t see this as a issue of prosecution.

The full text message was published on Whale Oil a while ago. It was sent two months before JLR was sectioned, and before the inquiry into Simon Bridge’s expenses leak. It was sent at 2.27 am, never a good time for texting.

The text message is full of hate and loathing, as sadly you often see when a relationship breaks up. In this case, it was more than that as Dowie’s marriage had also ended. People often lash out, in this situation. One may well make judgments on those involved for the relationship in the first place, and disapprove of such a text, but that is a long way from seriously suggesting it breached the law.

I also doubt the story that it was re-reading the text message two months later that led to JLR breaking down. That is all rather too convenient to make him the victim and Dowie the victimiser in all this. One could well argue he saw the old text message and jumped at a chance to make her feel guilty. I don’t know what is the truth, but I’m certainly not going to accept self-serving assertions as fact.

Anyway the worst kept secret in New Zealand is now out. I don’t see any public interest in covering the disintegration of a relationship between two MPs. It was obviously a horrendously painful experience, and they should both be allowed to get on and rebuild their lives.

We also should have great empathy for others who have been harmed by this, and will be suffering. Kids will be reading about their parents, and ex spouses having to cope also. They have my sympathy.

Finally, one interesting item. The Herald story has multiple photos of Ross and Dowie together. They are credited as having been “supplied”. That raises the question as to who supplied them. Pretty easy to guess I’d say.

UPDATE: I’ve been informed that the photos the Herald used were not supplied by anyone, but taken off Facebook and social media. If correct, then describing them as supplied is misleading.

The Herald reports:

Traditional six-monthly school reports to parents may be axed in a revamped school curriculum with more localised teaching topics.
A review group on curriculum, progress and achievement, set up to develop new ideas for primary schools after national standards were abolished in 2017, wants parents to get real-time digital information about their children’s learning instead of traditional reports.
A spokeswoman for Education Minister Chris Hipkins confirmed that he received a report from the review group just before Christmas, but said Hipkins was “still considering the advice”.
However, National Party education spokeswoman Nikki Kaye said she would fight to keep “standardised information” being reported to parents.

Is there any limit to the contempt for parents? First the Government wants to remove parents from any significant say in running the schools their kids go to. Now they don’t want them to get school reports.

Real time digital info is a good idea, but not as a substitute for a regular report that clearly sets out how a student is doing.

The Herald reports:

Any capital gains tax recommended by the Tax Working Group will be judged for fairness by the Taxpayers Union against five measures, including exempting inflationary gains and it being tax neutral overall. …

The union released a report today setting out its five measures of fairness:
• No valuation day – it favours grandfathering assets into a tax regime upon their first sale after the tax takes effect rather than the tax applying to all assets assessed at a certain value from day one.
• Exempting inflation – it says the tax should not apply to the inflationary part of the capital gain on sale, and only to the real capital gain.
• Revenue neutral – any additional revenue from a capital gains tax to fund tax cuts in other areas.
• Roll-over relief – Allowing for the deferral of capital gains tax on inherited assets until the first realised sale after the inheritance.
• Discounted rate of CGT – it favours a rate much lower rate than as suggested in the interim report, at the taxpayer’s highest tax rate.
Jordan Williams said if the Government put forward a reasonable proposal focused on fairness and steady reform, the Taxpayer’s Union would accept a tax shift.
“In contrast, if the Working Group process was just an excuse for aggressive tax hikes, we’ll fight it to the end.”

It will be interesting to see both what the Working Group recommends, and also what the Government decides to try and do.

Many in National will be sad at the passing today of Alan Towers, from pancreatic cancer. He was only in his mid 50s, so got taken far too soon.

Alan was the Northern Regional Chair of the National Party for several years, and also on the Board of Directors.

He was a very popular and gregarious person, who gave massively to the party which was in his DNA. A wonderful drinking companion.

I expect there will be a huge number of MPs and other party members at his funeral next week.

Stuff reports:

The justice minister’s United Nations speech in which National says he “apologised for being a Kiwi” has also been compared to David Cunliffe’s apology for being a man.
Little lead a delegation to New Zealand’s third Universal Periodic Review at the UN Human Rights Council in Geneva, where he said: “It is fair to say the justice system is broken”.

I can’t believe we have a Justice Minister who tells the rest of the world that NZ has a broken justice system. Ministers are now bad mouthing NZ internationally.

National’s Justice spokesman Mark Mitchell likened Little’s speech to ex-Labour leader Cunliffe’s 2014 apology for being a man, where he pledged to invest $60 million to tackle domestic violence.

“Now you have got Little apologising for being a Kiwi,” Mitchell said. He said the minister had “talked-down” the nation.

If Little thinks the justice system is broken, then as the Minister for the last 18 months he should resign.

During his speech, Little explained the Government’s wellbeing approach and achievements such as paid parental leave, the Child Poverty Reduction Act, healthy homes and the child, youth and wellbeing strategy but acknowledged New Zealand must still improve when it came to its broken justice system.
New Zealand had one of the highest incarceration rates per capita in the world and it has risen in recent years, he said.
He said the damaging effects of colonisation were still being felt today with Māori facing “considerable disadvantages and having a disproportionate number of Māori in state care and prison. 
There was no escaping the fact New Zealand had very high levels of family violence and the system was failing NZ women, girls and families, he said.

So Little calls the justice system broken because of high incarceration rates and high levels of family violence.

Using such cherry picked statistics, I reckon every country in the world could find their justice system broken.

The measure of success of a justice system isn’t the number of people in prison, but the number of victims of crime and the severity of the crimes.

Little seems to think the goal of a justice system is to have as few people in prison as possible, rather than having as few victims of crime as possible.

Our justice system is of course far from perfect. I support for example the proposed commission for miscarriages of justice. But I’d say our system measures up very well to most OECD countries. For example:

• A non-corrupt Police force
• Declining crime rate for the last couple of decades
• A huge reduction in youth crime
• A large fall in victims of crime since 2008
• A fall in recidivism

Again far from perfect. But there is a massive difference between imperfect and broken.

A reader writes in:

I think this might be worth a quick blog.
 
https://www.lawcom.govt.nz/content/our-people
 
In fact, of the 13 legal and polocy advisors apparently employed at the Law Commission, 11 are female and just 2 male.  Is this healthy for an organisation that deals with some very important legal and policy issues, which often become law in one form or another?
 
For instance, presently, the Law Commission is working on proposals to change the Property (Relationships) Act in a way that massively change the way pre-relationship and post-relationship acquired property is divided in a separation.  It also proposes an unprecedented, radical change to Trust law that would essentially render Trusts of no value in relationship property matters – the division of property would be assessed essentially as if the Trust did not exist, under their radical proposals.
 
To what degree have these radical proposals been able to gain momentum due to the heavy female representation of the LC’s legal and policy staff?

I think the reader has a fair point. An organisation dealing with such legal and policy issues should be more balanced in terms of gender representation. If it was 85% male, I’m sure it would be criticised for a lack of diversity.

I’ve personally found the work output by the Law Commission to generally be very good. But the area of property relationship law is incredibly controversial and complicated, and you often do see things through your own personal experiences and perspectives. That is why diversity is a good thing.

Radio NZ reports:

More than six months into KiwiBuild, only 33 homes have been built – well short of the 1000 target for its first year of operation.
Mr Twyford told Morning Report it had been tougher to get the number of houses built than was expected.
“I can’t guarantee that [1000 built by July this year]. I think it’s going to be tough to meet that target.”

I’m not sure what he means by tougher than expected. Every person who knew anything about the industry said that their policy was flawed and would not achieve their targets. Nothing which has happened since they went into Government should be a surprise.

The 1,000 target by 1 July is only 1% of their 10 year target and they are well off even that.

In 158 days they would have to build 967 houses.

However, Mr Twyford said if “you’ve got a household income of $100,000, you can afford to buy a home of $650,000”.
“That’s a deposit of $35,000 approximately. You can get $20,000 of that through the government’s homestart subsidy.

Well that is bullshit.

$100,000 happens to be the average household income. This means we also know what the average expenditure is. First take off tax and that leaves $76,000.

Next the household expenditure survey tells us the average household spends $52,000 a year on food, transport, communications etc etc, excluding mortgage or rental costs.

That leaves $24,000 a year for mortgage payments.

A $615,000 mortgage at the maximum term of 30 years and the default assumption of 6% requires weekly repayments of $850. The $100,000 couple can probably afford $500 a week.

This is why some Kiwibuild houses are not being bid for. They are not affordable for someone on $100,000.