News.com.au reports:

Yesterday Mr Turnbull outlined what he called a “once in a generation reform” toredesign the tax system for the first time in 74 years.

The plan involves the federal government cutting its own income tax and giving the states the ability to collect their own taxes.

While details have not yet been revealed, some have suggested the federal government could give the states 2 per cent of the income tax rate, which Mr Turnbull said would raise about $14 billion for the states.

When asked whether this was actually “double taxation”, Mr Turnbull said “no”.

He said the plan could mean different states had different rates of income tax, but they already had different rates of land tax, payroll tax and stamp duty.

“The fundamental question is this: Are we sick of the blame game, are we sick of the finger pointing, are we sick of states not being responsible for much of the money they spend?” Mr Turnbull said.

“What we are proposing is that we begin a grown up conversation, a rational conversation, about a solution that does not involve any new or it doesn’t involve any additional tax.”

Mr Turnbull described the plan as a change to the way income tax was allocated.

“It is too easy for states and territories to just go to the federal government ATM and too easy for them to just blame the Commonwealth for not having enough money,” he said.

“It will deliver a better government because people, politicians and parliaments will be more responsible for more of the money they spend.

“They will have to be answerable to their voters for the money they spend.”

The proposal has both good and bad aspects to it.

The good is that there might be competition between states to have the lower income tax rate. People may move to states with a lower tax rate.

Also it would force state government to live within their means, rather than just demand Canberra fund everything.

The bad is that most governments like spending, and over time you may get all states increasing their income tax rates and Australians may end up paying more tax than ever.

You could set a maximum rate for state income tax, but if you do this would become the de facto rate for all.

Eric Crampton writes:

In principle, a Universal Basic Income, as floated by the NZ Labour Party, sounds great. It’s once you start looking harder at implementation that things quickly become, well, messy, writes Eric Crampton.

If you like a UBI, economist Kevin Milligan tells us you can choose two of the following three options. But only two.

1. A high enough basic income that few people on current benefits are made worse off;

2. A low phase-out rate so that lower income workers do not face sharp penalties for accepting work;

3. A cost that isn’t massively higher than current spending on benefit programmes.

You cannot have more than two of these.

Labour could never do a UBI that doesn’t do 1 and 2 so hence the only sort of UBI Labour could do is one that costs massively more than current welfare spending.

Christopher Snowden has constructed a European Nanny State Index showing which countries are the worst and best to be able to eat, drink, smoke and vape.

The seven most nanny state countries in Europe are:

1. Finland
2. Sweden
3. UK
4. Ireland
5. Hungary
6. Greece
7. Lithuania

The least nanny state are:

1. Czech Republic
2. Germany
3. Luxembourg
4. Netherlands
5. Slovakia
6. Austria
7. Bulgaria

I’d love someone to calculate where NZ would come on this index!

They have correlated the nanny state index to life expectancy and found that there is no correlation between nanny state policies and higher life expectancy. Likewise no correlation between heavy regulation of alcohol and lower rates of alcohol consumption.

The Auckland Ratepayers Alliance has a list of the 250 organisations Auckland ratepayers are funding through Auckland Council being a member of them. The list is staggering. ARA say:

It’s bad enough Auckland Council is funding the Chamber of Commerce and the Property Council. Now we discover the Council is funding the Bibliographical Society of Australia and NZ; the Public Relations Institute of NZ and even the UK Institute for Archaeology.

We’ve asked, but the Council has refused to tell us, how much it has spent on the Property Council to date. It’s not good enough. Ratepayers deserve transparency.

Ratepayers will be aghast to learn how many overseas based organisations the Council has been funding with locals’ rates. Why on earth is the Council funding the likes of the Institute of British Engineers, the International Society of Automation, or the Oral History Association of Australia?

Other ones I have spotted are:

• Acoustic Society of NZ
• Bioenergy Association
• Cruise NZ 
• NZ Innovation Council
• NZ Remuneration Network
• Toastmasters

Mayoral Candidates should come out with a list of which ones they would chop!

The Herald reports:

A man who was killed after allegedly breaking into a home in Australia was an ice addict and had previously been jailed for raping a teenage girl.

I’d say the chances of the home owner (and father) being found guilty of murder by a jury are basically zero.

The Herald reports:

New Zealand Post will stay Government-owned, says Finance Minister Bill English, after news it is axing up to 500 jobs over three months.

The planned cuts, announced yesterday, form part of the 1500 to 2000 job losses NZ Post signalled at the end of 2013.

“New Zealand Post can confirm it is about to enter a period of consultation with, predominantly, managers and specialists at head office and in support roles. The roles are mainly in Wellington, Auckland and Christchurch,” a spokesman said yesterday.

Commenting on the news, English said NZ Post was adjusting to the reality of falling letter volumes and “working out how to become a bit more of a logistics company”.

Asked by reporters if the Government wanted to own a logistics company, English said: “It’s Government-owned, we’re going to be keeping it, so they’ll have to find a solution.”

Despite the very good management, NZ Post has a bleak future as it is selling horse and carriages in a motor vehicle world.

The Government should sell it, while it can.

UPDATE: Liam Dann agrees:

The time has come to split Kiwibank from its parent NZ Post and sell them both.

Kiwibank is ripe for partial privatisation. If the Government floated 49 per cent on the NZX it could net $750 million and deliver the company some much needed capital to grow and boost its profitability. …

NZ Post is politically more difficult and splitting Kiwibank out of the business would leave it vulnerable.

To make the split work the Government needs to really bite the political bullet and sell NZ Post too.

As evidenced by the latest large scale job cuts, the business is facing disruption a scale that threatens its very future. The business of letters is dying fast and the business of parcels is already fragmented and highly competitive.

It should be sold completely, while it is still worth something. Its best long-term option is to be part of an industry consolidation and taken over by a bigger freight and logistics company.

I like that idea – sell 49% of Kiwibank and 100% of NZ Post.

We should also sell TVNZ while it is worth anything. In a decade or two NZ Post and TVNZ will probably resemble Solid Energy!

The Herald reports:

An expansion of a radical pilot that allows adults to avoid court and criminal convictions for low-level offences has strong backing, including from Police Commissioner Mike Bush.

Three pilot iwi justice panels – also known as marae justice panels – have been running in Manukau, Gisborne and Lower Hutt since July 2014. A similar community justice panel operates in Christchurch.

Police steer some low-level offenders to the panels instead of court. Offenders must be adults, must intimate guilt or admit the offence, and the offence must carry a maximum penalty of six months’ imprisonment or less.

Family violence and methamphetamine offences are excluded. Common charges dealt with by the panels include driving offences, possession of stolen goods and trespassing.

Appearances aren’t limited to Maori – in South Auckland for example, about 60 per cent of participants are non-Maori.

I’d be against this if it was race based, but if they are effective, open to all, and reduce reoffending they’re a good thing.

The threshold seems appropriate – minor offences only.

If an offender is not a recividist offender or a violent or sexual offender, then the focus should be on rehabilitation and stopping reoffending.

But when the offences are serious (such as rape, GBH) or someone is a recividist (a repeat burglar) then the main focus has to be on protecting the community by having them out of circulation.

Panellists always include one police staff member and a mix of community leaders and volunteers, church leaders, kaumatua, social workers and school teachers.

Manukau Urban Maori Authority (Muma) run their marae justice panels weekly at Nga Whare Watea Marae and Papakura Marae.

Irirangi Mako, justice services manager, said agreed actions with offenders include volunteering at a local marae or food bank, a formal apology to a victim or agreement to make repayments.

“Agreements can also include working with other agencies or services that support positive change such as counselling and anger management courses.”

The Ministry of Justice has noted a “huge” level of community support for restorative justice panels, saying once people enter the court system it becomes harder to address the causes of their offending.

The key thing is to have a robust evaluation of how they work. What is the reoffending rate of those who go through these panels compared to those who do not (after adjusting for types of offences etc).

The Herald reports:

National MP Andrew Bayly is aiming to be one of a select few to reach both the North and South poles.

The MP for Hunua and avid mountaineer sets off next week to “complete the double” – a 10-day, 120km trek to the northernmost point of the earth.

Fewer than 50 people are believed to have achieved the feat, beginning with English explorer Robert Swan in 1989.

An amazing achievement if he does it.

The MP, a former British and New Zealand soldier, was not deterred by the death of experienced English explorer Henry Worsley in Antarctica in January. Worsley caught an infection while trying to cross the continent alone.

“He was a really strong, hard nut, but he just literally walked himself to death,” Mr Bayly said. “He pushed himself excessively. You’ve just got to be prepared to say no.”

The problem is your decline can be incremental, so you don’t realise how bad a shape you are in.

Accompanied by his eldest son James, 20, and an expedition guide, he will be pulling a 40kg sled through the snow. To train for the expedition, he has been dragging a car tyre, named “Ted”, along rural roads in his Hunua electorate.

“When you’re out walking for that length of time around Karaka … you get some pretty odd looks and you build up an affinity towards your travelling partner,” he said.

Maybe the tyre could stand for Labour in Hamilton West 🙂

Mr Bayly is using the trip to raise $10,000 for the preservation of kokako, an endangered native bird found in the Hunua Ranges.

Sure there must be easier ways to fundraise!

Barry Soper writes:

Just like old times Clark appeared in front of a media scrum and with a smile said she’s got nothing to announce right now, with an upward inflection on the now.

Well maybe not now, but for the top job candidates there will be formal interaction with General Assembly members in a couple of week’s time which presumably means an announcement from her is imminent.

It really all comes down to Russia. If they signal one of the Eastern European candidates is acceptable to them, then they’ll get the job. If Russia effectively vetoes all the Eastern European candidates, then the race is wide open and Clark becomes a viable candidate.

She’s certainly got the devoted support of her successor and texting buddy John Key, who’s on record as saying he’d lobby every leader of every country he knew to help her, and given the dressing gown diplomacy he displayed at the last APEC summit, that’s most of them.

And the globe trotting, glad handing we did to secure our seat on the UN Security Council, would also have put this blip on their radar screen. The council will make the final decision and the fact that we’re on it won’t do Clark any harm, even if the former Aussie PM Kevin Rudd puts up his hand.

His CV, collapsing the Labour Party a couple of years into his dysfunctional leadership, wouldn’t do much for his candidacy over Clark who fought off a leadership attempt, united her party and led if for nine years in Government.

This got me thinking about the political impact here of a Clark candidacy. It could be quite negative for Labour.

First of all there would be the implicit comparisons – The last Labour PM was so good, she is running for the top job at the UN, while the four leaders since Clark struggle to tie their shoelaces up some days.

And you’d have several months of images of Key going around the world, campaigning for Clark, looking like a bi-partisan statesman putting the interests of NZ ahead of partisan politics.

So if I was Andrew Little, I’d be on the hot line to Putin begging him to let through one of the Eastern European candidates!

Steven Joyce released:

New information has been released today which shows what graduates go on to earn once they have studied in different disciplines at universities and other tertiary providers.

Four factsheets on the national employment outcomes for young domestic graduates, released by the Ministry of Education, follow the earnings and employability of students for the first nine years following graduation. The information comes from a dataset administered by Statistics New Zealand using the earnings for each discipline based on actual tax returns.

“Those with a bachelors degree earn on average 40 per cent more than the national median earnings after five years in the workforce. Those with post-graduate qualifications above bachelors earn even more. These benefits continue to increase over time,” says Tertiary Education, Skills and Employment Minister Steven Joyce.

The figures show that after five years those with a bachelors degree in medical studies earned 201 per cent more than the national median earnings, those with a bachelors in banking and finance and law earned 65 per cent more than the median and sales and marketing was 47 per cent above the median.

Those with qualifications at the bachelors with honours, post-graduate certificate and diploma level generally had even higher premiums than those with bachelors degrees. Graduates with a qualification in accountancy had earnings 100 per cent above the national median earnings, while graduates in civil engineering had earnings 91 per cent higher, graduates in mechanical and industrial engineering had earnings 83 per cent higher, while graduates in banking and finance had earnings 77 per cent above the national median.

Yet Labour says students should not contribute one cent towards their degrees, but instead taxpayers should spend an extra $1.2 billion a year helping some of the most privileged and well off in society.

Stuff reports:

Transport Minister Simon Bridges has rejected a call for the Government to set a deadline after which the sale of new petrol and diesel vehicles would be banned. 

Software entrepreneur and electric vehicle champion Sigurd Magnusson said New Zealand should follow Norway, which plans to stop sales of new petrol and diesel cars from 2025.

Which would basically mean only rich people can own cars.

Electric cars will become more popular as the technology gets better and their prices drop. Also once petrol prices increase again, that will provide an incentive.

It is not the role of the Government to dictate what fuel source a car must use. It is appropriate to have a tax on certain fuels to recognise their external costs, but that is a world away from a ban.

Thomas Simpson blogs:

However interestingly enough there seems to be another factor which acts as an even stronger predictor of support for the fern – namely the proportion of the party vote received in the 2014 election by the National Party.

The coefficient on NAT is statistically significant at a 1% level but neither of the other two factors are. As a result it may be the case that the apparent association of young people with the old flag is an artifact of a correlation between youth and not supporting National. Obviously there are many more uncontrolled for factors which could be correlated with supporting National and voting for the new flag – but the strength of the correlation and the apparently weak explanatory power of the other factors has me wondering whether New Zealand missed a chance to have a proper discussion on a change to how we present our identity as a result of party politics.

It was meant to be about the flag, but some chose to campaign against their own election policy and make it a partisan issue.

From 538:

micah: So Trump does really poorly with women — it hasn’t stopped him in the Republican primary, why will it stop him in the general?

natesilver: Because winning 51 percent of 100 percent is way harder than winning 35 percent of 35 percent?

Silver nails it.

Trump will lose them the presidency, the Supreme Court and quite possibly the Senate.

Stuff reports:

A group of five young Bay of Plenty men have been spared convictions after pleading guilty to sexual contact with underage girls.

At least one of the victims said she’d felt forced to make a complaint against the young men by the police, despite saying the sex was consensual.

Police were remaining tight-lipped on the girl’s allegation of coercion on Thursday night, saying they had concluded a “comprehensive investigation”.

One of the accused, who faced charges involving two of the girls, all of whom were aged 14 or 15 at the time, will have to pay reparation of $500.

Lawyers for the accused, aged 17 or 18 when the alleged offending occurred in the small town of Opotiki, were going to speak individually for their clients but Judge Louis Bidois proposed instead that they all appear at once during the packed courtroom sentencing on Thursday.

Reading a victim impact statement in the hearing at the Opotiki District Court, one of the girls implied she had been coaxed into following through with a complaint by police.

Standing with her mother, she said she never considered herself a victim or felt she had been mistreated in any way.

Instead, she said the laying of the charges and enduring the police investigation had impacted her adversely.

She said her then boyfriend had made her feel special and had text her daily for six months.

When he was going hunting on one occasion she told him to look after himself. She later spoke to him when he was on a ridgeline and had phone reception.

She said she did not want his future ruined because of her because he never forced her to do anything she did not want to do.

She said police told her he needed to pay for what he had done, but she said she did not want that and wanted to hold onto the memories they created together.

Police had not listened to how she felt and the investigation had “made her feel dirty and disgraceful”.

She was adamant she was not a victim and was just being used by police to make an example.

Judge Bidois discharged the men after deciding conviction would be disproportionate to the offending.

While hey broke the law, I’m surprised the Police prosecuted.

There is a difference between say a 50 year old and a 14 year old having sex, and a 17 year old and a 15 year old.

I think the current age of consent of 16 is set at the right level. However I think that a better law would be one that said if someone is aged between 14 and 16, and their partner is no more than two years older than them, then that is not a crime.

This is from Stoppress.

Here’s the trust in institutions in NZ compared to other countries.

• NGOs 54% NZ vs 55% world
• Business 51% NZ vs 53% world
• Government 41% NZ vs 42% world
• Media 38% NZ vs 47% world

So the average in NZ is close to other countries, except when it comes to trust in media.

Earlier this month BMW lent me an i3 to try out for a week.

The BMW i3 won the AA New Zealand Motoring Writers Guild Car of the Year title in 2015 – the first electric car to do so. It has also won the World Car Design of the Year Award and the World Green Car Award.

The first thing you notice driving the i3 is you don’t need brakes. It is effectively a one pedal car. Unless you need to stop very suddenly, you just release the accelerator and within a couple of seconds you’ve stopped. When you release the accelerator, the i3’s kinetic energy is regenerated by the vehicle to recharge the battery., which slows the car down.

It takes a while to get used to the inertial pull, but once you do it is more relaxing than a normal car.

The acceleration is rather wicked. You can reach 100 km/hr in 7.2 seconds and you almost bounce out of traffic lights.

The car can go for around 200 kms before needing charging (takes around four hours). So not a car for cross country travelling, but great for around cities. It also has a small two nine litre fuel tank as an emergency backup which recharges the battery.

Like all BMWs, it is more a computer on wheels than a car. It even has automated parallel parking. You just pull up next to a car, hit a button and it will reverse into the park for you. Superb. It has all the normal built in GPS, bluetooth etc.

The doors open in opposition directions giving a nice view of the interior. The dashboard and video unit are all quite low down, so that you get an enhanced view through the windscreen.

The i3 costs around $80,000. However the cost of the electricity is around one fifth of the cost of petrol (my estimate), so over time it becomes more cost effective. Also there are no road user charges for electric vehicles (for now).

I have little doubt electric cars are the way of the future, especially as the technology gets better. As a get around town car, I loved it. Beautiful design and smooth driving. Not having to brake all the time was a real plus.

For those in Wellington:

The New Zealand Initiative welcomes you to a panel discussion on the rise of ‘lifestyle regulations’. While we may be used to policies that address the negative outcomes of smoking, we now see policies aimed at what you eat and drink too.
 
But will current and proposed policies actually achieve their intended outcomes? And even if they did, at what expense?

Join us for a discussion with:

• Jenesa Jeram, Policy Analyst, The New Zealand Initiative
• Dr Girol Karacaoglu, Chief Economist and Deputy Secretary, The Treasury
• Marama Fox, Co-leader, Māori Party
• Jamie Whyte, Author and Fellow, Institute of Economic Affairs

Wednesday, 20 April 2016
5.30pm – 6.00pm   Arrival
6.00pm – 7.00pm   Presentation Q&A
7.00pm – 8.00pm   Drinks and nibbles

Mac’s Function Centre
4 Taranaki Street, Ground Floor (Cable Room)
Wellington

Looks like it should be a good discussion.

You can RSVP here.

Stuff reports:

Hawaiki Cable says it has secured the funding to lay a new internet cable between New Zealand, the United States and Australia.

The cable is believed to have a price tag of about $500 million and may mean faster and cheaper access to overseas websites and online services for broadband users.

The company said in a statement that a contract under which United States firm TE SubCom will build the cable came into force on Thursday and construction would now begin.

This is great news. It should lead to greater competition and more resilience (note Southern Cross is effectively two cables so we are already protected from a single cable failure).

There’s been talk and efforts for almost a decade to get a second cable to the US. Great to see it finally happen. Well done to Hawaiki.

Radio NZ reports:

About 150,000 workers will get a 50 cent-an-hour pay increase from today with the minimum wage rising to $15.25.

Now the highest in the world, relative to median wages.

But a cleaner who does night shifts at Auckland Council said the rise was still not enough to make it easier to support her family.

Before today, Lupe Funua’s wage was $15.10. That rate would be pushed up 15 cents to match the new minimum wage.

With a three-year-old son at home, a baby due in a few months, and a husband who was also a cleaner on minimum wage, she said every week she worried she was not earning enough.

Radio NZ doesn’t mention Working for Families (which has also increased for low income workers).

If they both work FT on the minimum wage their combined income is $63,440 a year.

On top of that they will get for 2 children, WFF of $111 a week.

Also on top of that will be a parental tax credit of $2,200 for the new child. And they may well get other support such as the Accommodation Supplement.

She wanted the living wage, which advocates had set at $19.80.

Who doesn’t want more money. However if you increase the minimum wage overnight to $20 an hour, there would be massive job losses – possibly including her job and her husband’s.

Jim Rose writes at NBR:

The Universal Basic Income of $11,000 per year, as proposed by the Morgan Foundation to replace existing welfare benefits and NZ Superannuation, will benefit everyone except those for whom the modern welfare state was founded to protect.  

The proposal will leave sole parent beneficiaries $150 per week worse off and NZ Superannuants $50 per week worse off under the Morgan Foundation’s own calculations.

This is something few are aware of. The Morgan Foundation now say that a UBI would not replace NZ Super for some decades, until a UBI is of the same value as current Super. However this means you don’t get the savings from abolishing Super to fund a UBI.

For the most vulnerable, such as sole parent beneficiaries, to be no worse off under a universal basic income, it would need to be at least $15,000 per year. The Treasury calculated that a flat rate income tax of 50% or more would be needed to fund a $15,000 per year universal basic income.

I suspect it would end up much more than this, as many people would avoid a tax rate of over 50%.

The Morgan Foundation’s universal basic income proposal keeps its flat rate income tax down at 30% by introducing a comprehensive capital tax of 1.8% per year. Note that this isn’t a capital gains tax but a tax on capital in and of itself. It would tax New Zealanders, including cash-flow poor retirees, simply for holding a family home.

This is key. They do not propose a capital gains tax but a tax on basically all assets. Even if your house doesn’t increase in value you’ll be taxed just for owning it. If your home is value at $1 million you’ll pay almost $20,000 a year just for owning it.

Ironically, it’s been the Labour Party which has been most honest about the challenge of funding a universal old age pension and health spending in an ageing society. Now, after years of being upfront about the need to cut the entitlements to NZ Super, Labour wants to extend the scheme to all New Zealanders over the age of 18. 

Superannuation eligibility the day you leave school! You never have to work!

“Another radical Islamic attack, this time in Pakistan, targeting Christian women and children. I alone can solve.”

He sounds like a reverse Yoda!

Have to say the Unaoil investigation by Fairfax and the Huffington Post is great investigative journalism. We need more of this.

Hopefully prosecutions will follow – both of Unaoil executives and of companies that paid them to bribe.