Difficult for Key to dismiss core findings of the Tax Task-force , if most of their recommendations are revenue neutral , to the government . Key is still missing the essential point that our economy has become unbalanced . And those imbalances may lead to an exodus of the young to Australia , if we cannot make NZ an economically attractive place to stay . We are already so far behind Oz , and they have their own report in the pipe-line , to further enhance their fiscal strength . The pressing need for us to shift taxation from production towards consumption appears to have eluded John Key . As has the need to scale down all-comprehensive government " services ", we simply cannot afford them . Get with the programme , Mr Prime Minister , or the electorate will send you a " Dear John " .

Betcha don't believe in Santa either , Les . Oooooh , you curmudgeon , you . ( gotta go and be brutal to the city's newspapers , catcha in the morn. )

New Zealand cannot privatise its way to prosperity. It simply doesn't work that way. Don Brash and ACT may be keen on privatisation, but they are simply wrong. Privatisation is an idea that has been and gone. Check out John Kays article in the FT on UK privatisations. He concludes that they have simply not worked. They made the management into Lottery winners, made money for bankers and consultants. However what they did not do was lower costs for consumers (excluding those better explained by technology changes) or create world class companies. The similarities between the poor performance of Telecom and BT are illuminating. Privatisation of monopoly businesses is a disaster for New Zealand. The idea that ownership does not matter has been discredited by experience .If Don and the boys want to be seen as credible they had better up their game and change their tune or retire and give someone else a go as the amount of media oxygen they consume is smothering real debate.

Strongly agree with Roger -move from Tax on Production to Tax on consumption.

Don't worry, I'm sure Jonkey will show strong leadership and make the difficult decisions needed to deliver the easy does it minor changes that will make stuff all difference to anything in the long run, and willl satisfy most of the people's cultural guardian instincts for the next few months until some other major issue contronts the nation such as whether the duck shooting season should be extended.

Fran O'Sullivan has good article is The Herald on this topic,,

Tax cuts in plan to catch up with Oz

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10612472&p...

I don't normally find much to laugh at in Fran O's articles, however, these directly reported bits seemed not a little ironic. Re. killing The Cullen Fund:

"The taskforce also believes such a step would remove the temptation for politicians to use the fund for political purposes."

And, "Dr Brash told the Herald last night the Ministers of Finance and Economic Development had asked the taskforce to "give its best professional judgment and leave political considerations to one side". However,

"The taskforce is also understood to have recommended against introducing a capital gains tax on property - one of the issues examined by the Taxation Working Group."

I'm all for 'joined up thinking', but it's like the TINAs have got all hands to the pump from where ever they can be found. Bless. As I said, "NZ's amusing interpretation of Neo.lib'ism", second para, here:

http://www.interest.co.nz/ratesblog/index.php/2009/11/06/opinion-how-neo...

No progress until the property ponzi stupidity is brought to an end. Families need affordable housing. It means disposable income increases. Consumption can increase. Tax revenue improves. Employment improves. Banks harvest falling profits...
"AAArrrrhhhh we can't have that....bugger the families...keep the bubble going no matter what...tell the peasants anything..jeeez that was too close for comfort...who brought that idea into the Cabinet room?...I will not have ideas in this Cabinet room that threaten bank profits....."

According to the Herald they are going to recommend road pricing which is a good idea. I dont see why Key would have a reason to reject that as being contradictory to his mandate.

Well Les you've had plenty to chew on haven't you! This debate is really getting warmed up now and not just on these blogs either. Pretty soon there are going to be some decisions made and let us all remember deciding to do nothing is actually still a decision.

It will be interesting to hear what the Labour Party politicians have to say about all this. More socialist rhetoric about defending the people I guess after they have taken the last nine years to royally screw them by ensuring the landscape will rob them of opportunity in well paying jobs.

Mathew:

I dont see why Key would have a reason to reject that as being contradictory to his mandate.

I can't remember Key being given a mandate. We disliked his team and ideas less than the team that came in second. He is part of a government that includes 'non-mandated' parties.

"In the end the cook will declare the stew tastes of too much "NO" and"... introduce their own pigshead instead.

Politcal games - scare the population with the worst possible option so that when they introduce something a little less disturbing, Joe blogs relaxes in a sigh off relief, instead of being up in arms.

Re: Tax Reform

Too many welfare dependants and socialists in this country to allow such a change to the tax system unfortunately.

"Where's Your Backbone Mr Key?"
http://www.scoop.co.nz/stories/PA0911/S00463.htm

"How spineless do you have to be to dismiss a report before it has even been released in order to try to stop the public debating these kinds of issues? John Key has a remarkable ability to dismiss expert advice when he believes it may conflict with his personal popularity," Sir Roger said.

Interesting..... (from page 98)

"As already noted, we do not share the popular view that the income tax system treats leveraged purchases of investment rental properties in a way inconsistent with other assets, especially other real assets. Un-leveraged owner-occupied housing can certainly be seen as being treated in a preferred manner (an issue dealt with in the McLeod review of the tax system in 2001). But any bias is not obviously greater in New Zealand than in many other countries."

phil the tax cuts, which increase productivity by leaving money in the hands that earned it as a fair reward for risk and previous investment, and hence allowing bigger profits available to be invested in further production, rather than bureaucrats salaries - because business expenditures drive growth, not consumption, and all government spending is consumption - but more than that, the main point of this report is to state the size of the 'State' has to be curtailed down to government spending of 29% of GDP, rather than its current 50%.

From that type of cut in government (waste) spending, the tax cuts are consistent.

This is the direction NZ has to go.

Recommendation 36
All parliamentarians should dig for gold on the SI Westcoast for a week just on bread and wine to prepare for the real life in 2012.

No news in this; Brash has blown the dust off his old manifesto. He must be our number one recycler. Oh, and look who's in there, but our old friend Sir Roger. What a surprise. No wonder Key, being a canny politician, didn't even wait until the report was out to say he would not act on it THIS TERM. When will he act on it?

What's the point of the taskforce report? Is it a tester to see how loud the squawks are, therefore what National can get away with after the next election?

More to the point, when is a govt full of alleged businessmen and bankers going to come up with a humane and achievable long-term plan to haul NZ out of the mire of debt instead of reusing the same old economic equivalent of mushroom compost?

Mark H, gov't spending (according to the Fran O'Sullivan article) is 37.3% of GDP this financial year.... not that that is much comfort however!

And Mark (without the H) regarding page 98 - unbelievable. Didn't someone once call the Brits a nation of shopkeepers? Well, Dr. B. must have a vision for 2025 where instead we are a nation of slum landlords! And I bet there is no recommendation for the Government to cease its subsidy of private rents by way of cutting the accommodation supplement.