Did Dunne the Useless really have anything to say?
I am surprised it even got reported.

Russell Norman , Les ! ......... I could let rip , 'cos momma always told me to eat the greens , but I shall refrain , ....... today .

I thought it was a dead animal, stuck on his nut.

But is it?

Hang on a minute, the nuthouse is starting again...oh the pomp...the majesty of it all...and a prayer..just the ticket but hey ...no music...NO MUSIC...hey you lot..we want some music when you start up ... where's the dead animal on the nut..hard to spot with so many dead animals in the House.

Matt S: The problem there is that the great unwashed don't really care too much, just so long as there's not too much impact on them. Bringing in CGT or ring-fencing rentals would cause a lot of pain to certain smallish groups have been well insulated from tax (farmers & landlords in this case), both also vociferous & influential in National party circles. Since they care a lot about it, their demands are much more likely to be pandered to than the broad group of sheeple.

Therefore I think that the increase to GST, well signalled by Bill English, will be the main change.

NZ in top 10 countries for income disparity

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1060...

It's interesting to note that Singapore, a nation Key is inspired by and is number two on the list, has a land tax.

It's also worth noting the Hong Kong Government derives a major proportion of its revenue from land. Land tax is one of the major taxes in Hong Kong yet it has failed to put an end to speculation.

A couple of stories to note:

http://tinyurl.com/n5oonc

http://tinyurl.com/kmv5rm

@THE Chairman: I haven't read anything/anywhere that says a land tax/CGT is expected to stop land/house speculation on its own...at best it would dampen the worst excess. Its usually suggested as part of a series of measures....so 1) Land tax, 2) Stop the tax loss rort...3) stop the WFF rort....4) Clean up the financial industry and equity markets so they are transparent, honest, clear and easy to understand so investors can safely go there...

regards

Steven - We don't need to mess around with a "series of measures" trying to treat the symptoms when there need only be one measure to treat the cause.

Easy credit is what fuels speculation. Requiring higher deposits is the answer and comes with the benefit of increasing personal savings.

Due to our over representation of foreign ownership in lucrative vital sectors, a corporate tax cut offset by a new land tax will merely see more of our much needed capital flee our shores.

Admittedly, the tax system needs a clean up but I'd be very wary of introducing a land tax. The political tinkering come each election time would be a bureaucratic nightmare.

No need to go picking on Jelly Key, there CCB. He and the Boys ( well to be fair Judith and Paula ARE DOING something) are going to get stuck into it.... in their next term.
Their next term might be kicking off in 2020, though, the way they are going at the moment....

I still like the idea of taxing the mortgage so that it raises the effective interest rate paid ...

Stunning idea Dave. Why don't we knee-cap first home buyers as well to make it harder for them to meet their repayments?

Simple really.....We can view the results and order accordingly as Australia and Singapore have it all on desplay.

Stop giving PAYE deductions to property speculators (ring fence losses as Australia does)

Bring in Capital Gains Tax (CGT) on everything other than the family home (as Australia does)

At introduction of CGT exempt all current investment so that CGT is not retrospective (as Australia did)

Capital Gains Tax only applies on the difference between inflation and the realised value (as Australia does)

Progressively introduce compulsory superannuation (as Australia did)

Increased contributions in times of pending inflation and reduced contributions during recessionary periods (as Singapore does)

Adopt a managed dollar as part of our monetary policy, against a basket of our trading partners that ensures both price stability as well as protecting our tradable economy (as Singapore does)

Recapitalise Kiwi Bank to take market share and hard wire its behaviour to the needs of the RBNZ thus reducing the negative impacts of the big four Australian Banks on our economy

When we have addressed the current distortions then we should consider promoting "˜winning behaviours' through the tax system (as Australia does)

ruru/MH
Despite my wording there is no suggestion of putting tax on the mortgage of an owner occupier.
The purpose is to balance the position by making the mortgage interest paid by an investor non deductible against rent income (either in whole or in part)
Comprehend that?
That is positive for buyers because it removes competition for investment in housing from heavily geared investors.
Simple really.

Why shoudl those reaping the benefits of previous govt largesse continue to benefit just cause they already own?

a) Politics is the art of the possible. Go this route and you will pick a huge fight.
Thereby making the tax impossible to introduce.

b) For CGT to work you need good record keeping. Rule a line in time and go from there.
Where do you start from? If someone inherits a house do you take the purchase price the person they inherited from as the initial price? Do you take inflation into account? Do you take a valuation at the time of the inheritance as the starting point for CGT calculations? What is fair in those cases? If they inherited 5, 10, 15 years ago what price do you use?

As Aussie introduced CGT back in the 1980's more and more is caught by the CGT net as time goes by.

And it still hasn't stopped a speculative boom in Aussie. A bountiful supply of credit with little if any prudent lending criteria has driven the booms.

c) The traditional approach to introducing a tax like this is to have a "grandfather" clause. You cannot please everyone. Make it more palatable and it might get over the line.

Dear Mr Dunne, Mr English, Dr Brash, Mr Key and TWG, see:

http://www.interest.co.nz/ratesblog/index.php/2009/10/22/top-10-at-10-bo...

Steven,

a) GST is not regressive, it is neutral

b) Why should owner occupiers be exempt? What is inherently better about people owning their own homes, than investors owning rental properties? I dont see one.

Crazy bill - The problem with that theory is the paper value of such land doesn't generate an actual real return (unless the asset is sold) to enable the landowner to pay the tax let alone a tax increase relative to the increase in land prices.

Rental properties would see the tax passed on to those who could least afford to pay. Moreover, if land prices rise faster than the overall economy, where exactly would the additional capital required to pay a new land tax come from? Paper gains don't pay real costs.

The capital shortfall would only drive the local economy backwards.

The silver bullet to ending property speculation is to put an end to easy credit.

ring fencing = trouble
...we don't want to be going down that path

Accountants will find ways to work with the rules to minimise tax obligations, the IRD will try to catch investors that are not working with the system as they intended. Net result taxpayers pay more for the administration overhead.

As another thing to think about, let's consider:

(A) A property investor owns a building and I rents it out to an engineering company to run its business from.
or
(B) An engineering company buys a building to run its business from.

The net tax result is the approximately same (difference being company tax rate versus personal tax rate). So if we are saying lets end property investing, then we are saying stop (A)... Hmmm, that would certainly not help the economy, lets say the engineering company is a new business, they cannot afford to buy a building outright, so if (A) was stopped then that business would not have an opportunity to start.

I know what you are saying, it is really only residential property investors that need to have the reigns pulled in "“ if we go down a path that distinguishes residential from commercial for a tax obligation perspective that is just playing with fire. I would also argue the same point on own home as well (all properties need to be treated the same).

An increase in GST is only temporarily inflationary . And it barely caused a ripple at all in Oz , when they finally brought it in . But it does have a small impact on discouraging consumption . And there is the rub . If a GST rise is accompanied by an income tax thresh-hold decrease , it is revenue neutral to the Gumnut ( spit , ka-pooey , wastrals ) but acts as a lever towards encouraging productive endeavour . Up to a point of course . Balance being the goal ........... But who amongst us can hit the mark ( not you , Hubbard ! ) consistently ?

As I have argued before, the 'property confiscation phase' is now approaching. This requires government - by decree/denouncement - to declare that you have made a 'windfall' on property and must thus give them tribute. Of course, in underlying conditions of deflation how can this happen? Their answer will probably be the printing press - creating an illusion of capital gain on which real tribute must be paid with your annual income. Can't pay - then go to the banks and borrow for your tribute. Still can't pay - then you must sell.

If the likes of English want a land tax then let them measure said values against gold - not fiat rubbish like the New Zealand Dollar. Somehow I don't think he would be too keen on this because the myth of ubiquitous 'property wealth' would soon be shattered! The only answer is to abandon socialism - but I don't think he would be too keen on that either?