excellent ideas, but no chance of happening unfortunately

Gareth never fails to surprise and entertain . And this little gem merits a go ! Cannot be worse than the shamozzle Cullen & Co. bequeathed to us . Yes , Kate , if only Gareth was holding the reins . Even our man , Bernard , would get things cracking along . But , Brash is not a tired old fool , naughty of you , Kate ! 60- something is the new " middle age ".

Go Gareth , go you good thing !

Why not , indeed , Bernard . This is a wee ripper of an idea . Original . Brilliant . And workable !

If we are to lead the world in something , this plan of Gareth Morgan's is the just the thing to set us apart . And to put us onto a growth path . And incentivise people to stay here . Why try to catch up with Australia , when this scheme will launch us over their heads . Imagine 747's bringing beleaguered Australian immigrants to our fair land , girt by sea . Great to be girt !

This makes sense - whereas Brashes bulldust was unrealistic - who'd going to gut the public service just to make the rich richer.

Mark : Gareth's plan appears to slash the role of the IRD and WINZ , for a start . And in the private sector there is no advantage to employ tax consultants , trust advisors , loophole leapers , and the like . A mass of untapped property wealth gets the tickle up . Investing in property will require a positive cashflow to mitigate the tax levied . Cool ! Less tax directly on productive endeavour , business and wages . Wayyyyy cool !!!

Ray, Gareth is not advocating a CGT. He is advocating essentially a central government rating system on land and plant - you're going to cop that even with just the one house I imagine.

You now would get the dubious privilege of being extorted by both local and central government just for trying to live in your house.

And the more I think about the tax on the (depreciating) value of plant and equipment the more that dumbfounds me. Why? One of the hardest ways to make money at the moment is cropping, due to it's capital intensive nature vis a vis plant and equipment, plus for the same reason all the rural contractors, and for that matter urban manufacturers: so this will be another nail in their businesses, plus will only serve to increase the cost of basic items such as food, so low income working families will be worse off than the affluent for whom this would be pocket money anyway.

What's the idea of a CCT on plant and equipment please? (And does this mean depreciation deductions on same are to go?

At first glance...... A breath of fresh air.... I'm going to read his whole presentation..!!!

There is hope..!!!

This is in stark contrast to what Don Brashes' team managed to come up with.
And to think this is only Gareth Morgans ideas about tax reform..!!

Bernard,...... Can u get Gareth Morgan to write a "Shadow" report on his ideas for closing the income gap with Austrailia..?????

Love Gareth's proposed tax restructure. It is innovative,bold, and does appear to be simplistic compared to various other proposals that I have heard so far

Ben - A land tax, when we have the potential for hyperinflation, will deliver state sponsored theft at its worst. Out of declining 'real' incomes for households and businesses etc 'tribute' will be demanded for an alleged increase in 'wealth' occurring via nominal house prices etc. As with Weimar Germany, they will be no real increase in wealth for Joe Average - just the destruction of his savings, confiscation of his income and, ultimately, the loss of his property. Do not fall for this garbage - demand sound money that the politicians and their masters cannot inflate.

I've suggested this before but here goes. Take 5-10 different tax/benefit/govt spending scenarios and apply volunteer test groups of 20 or 50 households (representative of different income groups) to each for 12 months and see how each one works out in the real world. ie they live and breathe their respective regime. You'd have to monitor it closely so their was no cheating but would I think it might give a quick and accurate idea of the real implications of different proposals.

PS Bags not Don Brash's proposal.

Roger Douglas proposed the CCT in his alternative plan to beat Australia as well (see http://www.act.org.nz/files/Catching_Australia_by_2025.doc).

A struggling firm can also opt to a deferred payment system pending resloution of its problems, taking advantage of a lower corporate tax rate in the interim.

A struggling firm can also opt to a deferred payment system pending resloution of its problems.

Oh. And that's taking complexity out of the tax system?

Looks good at first blush, but might be too simplistic. Can people on the benefit (and we must accept that there will be some) survive on only $10k/year?

It won't work....sorry Gareth...one fatal flaw....no scope for the pollies to rort the system!

Wally ....Hows about if we promise to let John back next election - for having the cajones to do something. He may have to shed a lot of his colleagues though, as, like you, I suspect they won't be happy.

Gareth is grown up enough to pretend it was John's idea all along.......

Stevek ....Liking it more and more - Just make sure GST doesn't apply to things we all need (food).

CGT gives Australian tax advisors plenty to do.

As Mark Hubbard points out, Gareth doesn't say anything about changing FBT, RWT, NRWT, GST, DRWT etc

John Key has been saying for ages that he wants a flat top tax rate.

I don't see substantially less work for the tax advice industry than what we have now.

The most radical thing about the plan is that it will cut WINZ to 5% of it's current size (which would be fantastic of course.)

I see your point Mark H.

BUT PAYE earners have taken it on the chin for a long time. ( that is one of the most unfair taxes there is).
I'm not smart enuf to figure out all the implications.... but I do think it is a fairer tax system for all the PAYE earners out there... and that is good.

In general I like Gareth Morgans ideas... Puts incentives in the right places.

Much of the increase in Farm values was to do with farmers consdering that they had 2 businesses... one farming and the other Property investing. ( with tax free gains)

I have not done the maths... so I don't know if this would be tax neutral for Capital intensive industries... ( maybe they would need to figure something out for really capital intensive industries )
My guess is that depreciation deductions will stay... I'm sure of that.

Maybe it will start a trend back to smaller family style businesses..??
e.g the family farm vs crafer style Corporate farm..???

I like his idea of all beneficaries ..and everyone.. getting $10,000.
That gives them the incentive to work part time...
For the really unable..???? not sure if they can survive on $10,000

If everyones ist $40,000 was basically tax free........ I don't think people would have a problem paying more for wheat..... more for power....... etc.

Yeah.. I think this is a good starting point .. Could lead to lower unemployment, productivity gains, and a new focus on income generation ..rather than tax free Capital gains.

Best Proposal I've seen so far..

Also, this is just a proposal for tax reform... It would be interesting to see what ideas he might have for GOVT reform.....?????

TUM TE TUM : and the IRD . Imagine the savings to the economy , of not needing so many public servants to administer the flow of money . A boon to the tax-payer and businessman alike . Fancy having such efficiencies within the productive system , lowering the cost of producing our exports . Ka-Zowie , Batman , Gotham City has turned on the lights !

I would really like to see more details. I am burdened by my knowledge of loopholes and really want to see all capital items treated as equally as possible.

Nath - no, taxing land is what drives the lifestyle subdivisions - you can't afford the rates anymore as the city has encroached on your farm. It has been valued as a potential subdivision. You sell. It gets subdivided. It will never revert.

This proposal just adds another rates charge. Which hastens the process.

Nath... he is proposing having indexes of asset classes to simplify the process

Morgan isn't neutral on the matter. Look at his occupation he's a fund manager.

A land tax is a wonderful idea. What if the value of land decreases however? You have political taint in keeping land values as high as possible as governments are sucking off the revenue. Will farmers get exemptions and subsidies?

And land tax will hurt renters more and these tend to be lower income people. If you own a rental property or land in general you are going to seek to pass it on in terms of higher rents.

A CGT is no answer considering 1st homes are exempted. Too many NZers own their own homes. And again the government has an incentive to raise prices and valuations making housing affordability less affordable.

The answer is a massive package of consistent reform rather than a piecemeal approach. Gaining consensus in a country where so few people are net taxpayers (tax - welfare transfers is a positive number) will be near impossible, a politician is going to have to suck it in and make a big call.

Cactus Kate...
Morgans proposal may not be perfect, but it does broaden the tax base.

He says:
"Tax theory holds most economically efficient income tax is a poll tax "“ provides incentive to work at least to extent to pay tax. Trouble is it's inequitable.
A poll tax on capital can be similarly considered "“ yet we seldom do. Yet under-utilisation of capital is common."

How do you figure that a land tax will hurt renters..???
The biggest group to benefit from this proposal are the PAYE people... These would be the renters you talk about... Any increase in rent should be much less than their gain from paying less tax.

He says we pay $27 billion in income tax .The cct tax would raise $19 billion.

It would be interesting to see if we could get consensus on something like this.. Surely it would appeal to the majority of people...?????

CCT sounded appealing. That is until I did some figures. We are on NZ Super, own our own home and a bach with some savings. With CCT our tax annual tax (excluding GST) would triple from about $5500 to $16,000 pa. Selling the bach would reduce the tax but with our own home we would still face an increase of 15%. We could then spend the cash on european cars and overseas holidays and thereby increase the balance of trade deficit. If 25% of baches were sold how would that effect the housing market?

I am with Cactus Kate and Mark Hubbard on this one.

Sadly it appears that there is no politician with the vision and ability to make the big call. Its a bit like being in a drought waiting for the long promised rain, that never seems to come, but one day hopefully the drought will break!

Morgan is tainted with the "industry" he is involved in and for his promotion for AGW.

bruce,

My guess is that owner occupied houses would have a proportion tax free.
BUT .. yes... you would be worse off .

I think this is aimed at using tax policy making NZ more productive...

I suppose the flip side of your situation is the huge debts that students can end up with, before they enter the workforce.

Doesn't make it any easier for you thou.... Maybe something like this could be phased in..??

cheers Roelof

Sally - try reading (and comprehending) the 'Poles Apart' book. He does not, at any stage, 'promote' AGW.

I have my beef with his kind - their approach is fundamentally flawed - but he does not do bias on AGW.

To be a valid referee, you have to start out in different colours from either team. He does that, you don't.

I agree with this - but it will never happen as people in Government will not let it either because they are taking advantage of the current tax system (think of the recent debacle over MP's allowances) or they are in the pocket of some business or the other who benefit from tax breaks under the current system.

KA John Says:
"Stevek "¦.Liking it more and more "“ Just make sure GST doesn't apply to things we all need (food)."

Now this is an area that seems to be consistently over looked...
We tax alcohol and tobaco...A parrell to these with negative effect on society , hospitals etc is junk food....When a bottle of sugar fizzy is cheaper than milk or water...
When a cardboard packet of refined, bleached adulterated flour, mixed with a little water and stretched into long thin strips is cheaper than a Cali.
Something is structurally wrong. Correct it by removing tax on real food and increasing tax on junk crap, and reduce our health bill.

The down side is the x and y generations will not go for it....they will live longer and their children will blame them for everything because the retirement cost.

"Valuation - linked to value index of the asset class" is the issue.

The true value of an asset is set by the market. A willing buyer prepared to bet their imagination, skill and effort to produce a return or create/restore value and a willing seller seeking the best price from all potential buyers. What the asset cost to make is irrelevant (unless the builder holds it), what the buyer actually achieves (in terms of return, innovation and value add) is unknown until after the event. Sure there are averages across asset classes but some are going to be overtaxed and others under. Great ideas unlock hidden value! (for example)

It's a good tax but I see it as being really difficult to administer fairly. To be fair it needs be based on the (continuously tested) market value of the specific asset (and it needs to include cash deposits and bank reserves, so that money is forced to chase real returns).

PDK

Agreed the real issue with capitalism. http://sociologias-com.blogspot.com/2009/11/paradox-of-wealth-capitalism....

Taxes are easier to understand.

Taxes serve 2 purposes. The first is to gather revenue for the govt. The second is to provide an incentive to change undesirable behaviour or processes. If all taxes met both criteria, not one or the other, we would be better off. Also some taxes such as GST or fuel tax, while arguably regressive, are impossible to avoid and cheap to administer. It is income tax and company tax that involve complicated tax avoidance structures and mind boggling depreciation schedules. And as any small business owner with a fluctuating income will tell you, provisional tax is potentially terminal. Remove the need for these and the number of IRD staff would shrink dramatically. I would rather have more money in my pocket and the option of how much I then spend on consumption or housing. A land tax and luxury vehicle tax would be progressive as the first thing just about anybody does when increasing their income is upgrade their property and car. But if you have a high income and want to live in a very modest house and drive a modest fuel efficient car, and save the rest rather than consume it, then good luck to you. The environment would be better off too if we could maintain a standard of living on lower consumption.

Great stuff - at last some sense

2 other ideas - instead of taxing small companies, partnerships and sole traders on the business, tax them on their drawerings from the business each year. Effectively, that is what all employees are taxed on. Why should small business be treated differrently? Gets rid of application of masses of tax legislation for these people and encourages investment in small business

Consider why interest rates are exempt from GST. Why not charge it. For a home owner paying 10% interest, this will increase their effective interest to 11.25% - should help quell inappropriate house price increases. More imprtantly, businesses would get the GST back, so has no negative effect on them and gives the Reserve Bank a margin between business and domestic interest - should help keep the dollar down

Fiona

"It's a good tax"

Wash your mouth out....there is no such thing. It is all theft.

What can be printed out of nothing can't be stolen. The only reason to tax it is to create a demand for it.

Bernard

Remember when I said that you, Rod Oram and Gareth should form a "Coalition of Commonsense"?

This is EXACTLY the sort of stuff that needs to be promulgated, plus the Domsday scenario of what's going to happen if nothing is done

Powerdown,
"There is no compelling reason to doubt the view that human activity is causing a rise in the atmospheric concentration of greenhouse gases, and that this in turn will lead a rise in global average temperatures, we can expect the effects of climate change to be making themselves felt in earnest in 2020. And we can probably expect the rise in temperature to be faster than the currently favoured predictions, given that most of the new evidence that emerges daily suggests that the world is warming more and faster than had been expected by those who compiled the IPCC's Fourth Assessment Report."
http://www.scoop.co.nz/stories/HL0911/S00280.htm
So he doesn't at any stage promote AGW?

Question: Would CCT tax the overseas owners of local assets in a more extractive way than current double tax agreements allow?
The tax system could even make the rate higher for overseas owners.

I have not seen comments on the mechanics. I take it that effective tax would be the following formula:
Tax = (Income - $40,000) * 0.25.

Thus someone on $20,000 would actually receive an additional $5,000 per year. The refund should be paid through PAYE so that it means no additional bureaucracy overhead.
Someone earning $0 per year would receive $10,000. Only where someone does not have an employer, does the state need to pay the person. How many beneficiaries do not have part time work?

A two adult household would get a minimum $20,000 in hand per year. If one member of the household is working, then the rebate or payment can still be paid through PAYE.
If we say that children also have a minimum income (scaled up as the age rises) then the same mechanism through PAYE can also apply.

I have always thought that having a separate payment for Working for Families (WFF) outside of PAYE was silly. My employer deducts PAYE and then someone at IRD works how much to send me as a "Tax credit". If my income changes they send me another letter. Sending letters cost government departments a bucket-load of money. If WFF calculations for PAYE earners was done by the employer then it would save lot of overhead. Employers have to already have to have a computer program to work out PAYE because of the silly non-WFF receiver tax credit.

Cross posted here:
http://www.propertytalk.com/forum/showpost.php?p=200040&postcount=6

I lived through the change from a property tax (council rates) in the U.K. to that of a Community Services Charge (incorrectly maligned as a Poll Tax). My annual charges dropped by about 65%. The whole idea was that everyone should pay something for the services the councils provided. Beneficiaries and students were only required to pay 20% of the annual charge. Millions of people who had never before paid out of their own pocket were now required to do so. For the first time they were forced to consider how the councils spent their own money. Some people resisted paying their fair share, supported by Socialists, who in turn sought to discredit the system in every way possible, extending to civil disobedience outside the courts when those who refused to pay were summonised. When Margaret Thatcher was de-selected by her own party and John Major became Prime Minister, he promised to dump the tax in order to win the General Election. Sadly a great change in the system which was working (with resistance declining rapidly) was confined to the history bin. The U.K reverted to a property tax system, where the declining number of private property owners are paying more and more for those who do not directly contribute. Yet these non-contributors have a vote in local body elections, and ensure that someone else is rorted (the ratepayer) for their own personal gain. The point I make folks, is that if radical changes are made to our taxation system, political expediency may ensure that it will be short lived. Without cross party consensus all is doomed, and already Labour has come out firing against any changes.

Lew Burton : In fact I deal with Goldmoney Sacks weekly . Merely having a little cheek , given Iain's deep dislike for them . Sorry for offence to you , Lew . None was intended . The GS lads have even invited me out for lunch and a chin wag ! However , just now I shall go to the back of this class , and ponder the error of my ways ( and the depths of a bag of gummy bears........ahhhhhhhhhhh ) . Cheers , buddy .

Why not just go the 'whole hog' and re-introduce the edicts of the Roman Emperor Diocletian. After all, a land tax/capital tax is simply a form of 'denouncement' in which some civil servant arbitrarily declares you to have 'wealth' upon which you must pay 'tribute'.

The fundamental problem with these proposals is their inherent dishonesty. Why? Because no account is taken of the fact that most 'capital gain' is simply a reflection of monies purchasing power falling over time. In consequence, more pieces of paper - describing themselves as dollars - are needed to buy capital goods (especially land and houses). Within this no real capital is created - indeed capital is destroyed because bad 'debt money' effectively drives out good 'sound' money. This is why a single match was recorded at some 90,000,000 Marks at the terminal stage of the Weimar insanity in November 1923. People were awash with 'capital gain' (imagine what house prices must have risen to) but they could scarcely afford to feed themselves or to light a cigarette.

If this country is to have any hope of a prosperous future - and I personally could not care less about comparisons with Australia - it must first embrace sound money. That requires the gold-standard - not some litany of new taxes that can only take us deeper into the abyss of collectivism and environmental destruction.

Malcolm absolutely agree with you. I'm sure Iain P. does too.

Walter, you can't agree with both Malcolm and with Gareth. They fundamentally don't agree with each other.

But just to make sure you end up on the 'right' side of the debate, Malcolm is right. All this fiddling with taxes isn't addressing the problem causing asset bubbles and malinvestment within the economy: that is our Central Bank distortion of interest rates, and then via cheap credit and the fractional banking system, the inflationary pumping of the money supply by governments.

Sound money, either a gold standard, or a basket of commodities, or perhaps some system such as free banking. Regardless, that's where the revolution has to be, that, and in peoples minds - that is, laissez faire: getting the government out of business and our lives.

The idea seems to have merit. The tax rate could be adjustable. For example, we may decide to tax property assets more than manufacturing assets to encourage an economically 'better' return on the capital employed. Can someone tell Bill English?

John Jackson:
I find it stunning that such an ironic comment about Mr English will simply be accepted as a 'joke' rather than an expose of potential endemic tax 'fiddling'.

Last week I seem to remember that NZealanders voted themselves one of the least corrupt countries in the world. Is this naivety?

The bottom line is that a low wage economy results in low productive.
Case in point we have just purchased a new $200,000 folder that requires 2 men to operate it.
There was a semi automatic version that cost $7500,000 that only required 1 operator
At the current rates of pay there is no incentive to perches the better machine as the recovery of cost over wages is in excess of 10 years.

Had wages been higher then we may well have opted for the higher/better machine. For the country that would have resulted in a 50% in crease in productive.
The fact is that the employment contracts act while braking the power of the unions and that was a good thing ,also forced wages down to such a low level that the 40 hour week dose not exists any longer.
Asking workers to work longer or hiring more workers to perform the same job dose nothing for the country.

Capitol gains tax cannot work in any form
If I pay $350,000 for an investment property then rent it out the rent will never cover the cost of servicing the mortgage let alone the other assorted cost.

The rental return on an investment property is at best 3.5% but the cost of credit is around 6.5%
There for the average house rent must double in order to break even.
The only resin for doing this is the hope that in 10 or 15 years inflation or in other words capital gain will give me a return.
If you tax that capital gain then only an idiot would invest in a rental property.

So if we all pull out of the rental market were will you find a house at reasonable rent.
Look at Queensland Thousands of good hard working families living in motels that the taxpayer is subsiding due to the chronic shorted of rental accommodation.

What with the double taxing of returns when investing in the share market or investment industry along with excessive fees and sharp practice going unpunished.
Money mangers, bridge corp., Hanover, robot Jones and a great many others.
All walking away Scot-free and you still expect me to invest in nz .yer right.
It is off shore for me.

All of this is just re-arranging the deck-chairs on the Titanic. The end of irredeemable debt money is coming and with it the illusion of huge 'capital gains'. Of course, the reaction of governments - and vested interests - will be to try to re-ignite things like house prices, whilst denouncing Joe Public's greed. It is conceivable, that in nominal terms, they will succeed - yet this will only be at the cost of destroying our remaining capital via hyperinflation.

The powers that be are not fools - certainly those who really run the show. They know that the 'shell game' of unlimited debt money issuance is approaching its nemesis and with it the parasite state they have spawned. This is the moment of greatest danger for the middle class - the inflection point when the state goes from taking your income - via taxation and inflation - to beginning the outright confiscation of your property. Insist on sound money - not more taxes!

Christopher:

You're a baby boomer then!
Keep this approach up, and there really won't be anyone left to pay your pension.
My comment was not meant personally, it merely represents a concern that the only people NZeallanders rip off is one another! How did it get this way.

Fammi sapere come leggere questo articolo, un sacco di cose che prima non sapevo.grazie mille~mi piace questo articolo!

Most are talking of the debt that holds us all back. Please correct me if I am thinking wrong here or too simplitic.
Good debt produces an income which creates a profit over borrowing cost. Does not matter what the asset is you borrow for.

Bad debt does not make a profit, so why would you borrow? Tax avoidence?

A few years ago a group got around the country informing us of an investing idea that would save you on tax, Negative Gearing / property. I put it to you that housing and a lot of dairy farming debt in very reccent years is bad for us all. Instead of striving for be free of debt and making bigger profits, individuals go out and buy another and then another.....greed.

Rob, yours and my incomes as exporters are directly affected by the $ value. Money flowing into this country pushed the $ up. These investors are on a no loose money go round. Buy our $, it goes up, make more with our higher interest rates, take money out again and gain on exchange rate.

Mr Morgan proposes a minimum income of $10,000. and 25% flat tax, plus 1.25% of capital
My issues about this are:-
1. The assumption is that the low economic performance of NZ is a result of capital allocation to tax favoured assets. An alternative view is that the high proportion of government expenditure ( national and local) in unproductive activity; and the balance of New Zealanders aspirations towards life style, not economic maximisation, is much more significant than the illogical tax system. In which case "Good Answer, wrong question".
2. The poverty line is currently about $18,000, and we have something in the region of 17% to 22% (depending on how you define it) of children living in poverty. So I think the numbers probably need to be reworked with the minimum level more "needs related" ( i.e. parent/s with child/ren different to solo individuals no dependents) or you still need a complex Social Welfare bureaucracy to support those who need it. ( I note US research-Holzer- suggesting that Child Poverty costs the US economy 4% of GDP.)
3. Mr Morgan invokes "effective reform of the welfare system". I'd suggest that this isn't just a financial process, it's a cultural process. We are caught between not wanting to support the lazy; and not wanting to see kids starve, die of sicknesses, and be uneducated; and wanting individual freedom of choice. ( Choose 1 or 2 of 3) To do this, tax reform has to be developed as part of a "social engineering" process, along slightly more sophisticated, ( and intrusive) lines than just "carrot and stick" approaches.
4. Mr Morgan proposes that a capital tax " encourages utilisation of capital". People who care about economic return now, try to maximise capital returns. People with sufficient to leave capital idle can probably afford the tax with no pain. I wonder if such a tax does change behaviour in aggregate?
5. Given the IRD rort on Use of Money Interest now, which bears no relationship to the true value of the money, and the complexity of trying to pay on time to avoid it; I'd expect the bureaucrats to game the system as they do now.
6. Valuations for many assets would be a field ripe for gaming.
7. Capital in cash is already "taxed" by politically managed inflation at 3% p.a.
8. And the idea that you can simplify the bureaucracy in NZ is probably a dream. Public servants have too many votes.

I think that key issue is that it's not only about how you tax, but about the total amount that is used for central and local government "administration" costs, and ill considered expenditures that we wouldn't make with our own cash. Unless we can change the culture, irresponsibility, and size of the civil service, the tax take is always going to be eaten up by career advancing civil servants in unproductive activity. To his "Tax advisers might have to get a real job," he said. You might add "Civil Servants".

Its great that new ideas are being put up for debate, but I won't be holding my breath that pollis or civil servants will take them seriously. Much too threatening.

My suggestion, following Ben Franklin, is to pay MP's nothing. Since we have over 400 candidates for 120 jobs, the pay is obviously above the market level necessary to fill the jobs. And citizens doing it as an unpaid public service might be inclined to make somewhat better long term decisions Johnny P

I don't understand why the capital gains tax would stop the mass investment in property by small investors. Wouldn't the tax payable just be another write off on PAYE tax through LAQCs?

Gareth Morgan and Don Brash's ideas for a lower flatter tax regime sound good with greater incentives to get currently unproductive people into work, but there are issues some of which have been identified above.
Will Gareths proposals pull any more capital towards non-property investment? No, why would it?, it's not making property less attractive or the other investment types any more attractive.
Two, as I see it, we are simply living beyond our means. We import luxury goods (as we do not make them ourselves anymore) and we are not exporting sufficient to pay for them. Farmers and other exporters have a hard job remaining competitive with our dollar being so high.
My solution is to forget about all the side shows, GST, beneficiaries, capital gains tax, etc. and DEVALUE the NZ dollar. Of course that will not be universally popular but it will assist exporters and it would spread the pain equally across the board for all New Zealanders. It would be transparent and simple, lets say 10%?
Of course it would also need a brave government. Do I think the current government is brave enough? No way.
Alternative? Slowly keep selling off our lifestyle to million dollar immigrants and our industries and lands into foreign ownership.
Lastly what is so wrong with a persons home being "unproductive". If it's providing shelter to several gainfully employed and productive people then it is doing exactly what it is meant to be doing. I think any CGT or broader land tax is merely stealing from the prudent to pay debts incurred by the imprudent.

In answer to earlier comment by K A John about rental property owners not replenishing housing stock, I have personally taken on derelict and near-derelict houses, spent countless hours replacing rotting flooring, roofs, fences....not to mention heat pumps smoke alarms......yes there are those speculators who just bought for gain with no sense of responsibility, I bought the results usually. My point is your narrow view of property investment needs a little broadening...

Sorry Tony - just restating Gareth really

"People shelter income in non taxable forms "“ the common one being in assets which deliver a substantial portion of their return in capital gain or imputed rent.
Capital that is accumulated simply for tax sheltering doesn't make much contribution to economic growth"

I guess this doesn't include those who repair derelict houses and sell them on quickly with reasonable 'profit' to cover their effort/ labour.

It applies to those who use existing tax legislation to purchase property as a means of offsetting their tax liability - sticking someone in it to cover the mortgage, and then hoping to further profit in the form of untaxed capital gains.

Was this construct created when the state couldn't afford to build state homes?

It just seems somewhat perverse that so many people have ended up doing this - and accepting it as a good thing.

Why couldn't the 'young family' have bought this house in the first place?
Maybe too many people queueing up to buy, rent and exploit this tax loophole?

It all seems a little nasty!

Gareth Morgan on the CCT interviewed by Maggie Barry;

http://www.radiolive.co.nz/BARRY--Gareth-Morgan-CEO-of-Gareth-Morgan-Inv...

My response, B Hanson, is that the debasement of our currency is not the answer to our problems. We then play into the secenario painted by malcolm, that hyperinflation becomes the end result of that process. It may very well turn out to be the case! But it will be the ruination of our country. I note some journalists over the Tasman are speaking in simiar terms to you, and it worries me fundemantally, that this type of 'solution' is becoming a race to the bottom, for all countries. Energy costs, wages costs ( excepting soldiers wages!) , export and import balances will be the least of our problems if this type of thinking succeeds.

http://www.businessspectator.com.au/bs.nsf/Article/The-new-gold-standard...

No economist myself, but seems more efficient and effective than the current creaking system. Difficult to argue against the logic of integrating the tax and welfare system with a guaranteed minimum income. Would probably also be good for the voluntary and training sectors. Just need to get people power behind it with something like http://guaranteedminimumincome.org .

A Comprehensive Capital Tax is a very interesting idea. I have been interested the notion of a guaranteed minimum income, but have struggled to come up with a suggestion which when combined simply with income tax, would generate sufficient government revenue, while providing an acceptable effective marginal tax rate on income. I would suggest refining the guaranteed minimum income by paying it from birth to every citizen, (or to their parent/caregiver) though at a rate which varies depending on age. (eg low as a young child, higher as a teen, lower though the bulk of one's working life then trending upward as old age is reached) The key is eliminating the current benefit system, with all it's overhead cost, complexity, and in many ways sheer unfairness. Similarly a flat tax on all income, at a moderate rate, would save huge "wasted" effort in tax planning and complex avoidance mechanisms. This, along with our universal GST and the Capital tax idea, sounds like a combo which could actually work. We really need some smart thinking to steer our limited capital resources to the areas which will produce income for NZ inc., while enabling the price of our real capital assets to trend toward levels which make sense from a rational investment perspective. If we don't, we will end up completely broke as a country.

I want to work online ..
There are some thin if the legitimate work as a line there. Most are sites and marketing study for the site owner rich, not you. The only thing is true legitimacy Ebay, selling things you already own
Many companies all over the world need your opinions on their products. They will send you a simple online survey forms, where you need to fill it out and they pay you money.

PART TIME MONEY