Just a bit rich coming from Annette King , that Key and English are wasting tax-payers money by not heeding advice of the treasurey . And Michael Cullen did what , for 9 long years , Annette ? Methinks Ms. King is having an ideological burp .

I would like to know why a person with no expertise in tax, can think he knows a flat tax structure would fail. Who is it giving him instructions on what to say?

@RT: The Treasury however seem full of right wing zealots...hence why Cullen I suspect didnt pay them a lot of notice, especially when IRD could forecast the economy better.

@Wally who says it would succeed? ie make the country better off...if that's the goal? Simple really the Govn needs a certain amount of tax income and progressive taxes are how virtually all countries achieve that income.

Rather than dither about flattening the tax system, start making sure its working as is....if the very rich can tax dodge now, they will still tax dodge and pay even less while the poor make up the difference if we went flat.

If we are serious about making NZ richer then we need to be seriously looking at making exporting profitable....make it here and sell it elsewhere...that provides jobs and income to NZ...So look at making exporting greatly tax reduced by some method. Blanket company tax reductions just allow foreign owners to export more profits off-shore, which damages balance of payments...and makes it easier for churn businesses, neither really assist NZ.

regards

regards

Bernard hits the nail on the head with his question - the evidence and the logic says a good tax regime is like a good golf shot - low and flat. So the only real interest is the question "is John Key serious about economic reform?" Unfortunately the answer is simple. "Of course so long as it doesn't look like compromising political survival."

To be fair, he is far from alone in that..... hopefully, at the margin he is better than some others.

To Make New Zealand richer we have to eradicate debt, stop relying on CG and increase PROFIT for all businesses.

If they are not VIABLE, then they should fail.

We are still bailing out UN-VIABLE businesses.

Also become a SOUTH SEAS TAX HAVEN...eh JOHN....ie....NO TAX..

"the evidence and the logic" what evidence? what logic?

I see no evidence. Logic no, idealogy, yes....

regards

The best guidance for NZ is to look at what has worked overseas. Obviously there is no one country with 'best practice' and everything in interrelated. We know CGT and land tax did not work in USA, Australia or UK. We know flat tax has worked in Eastern Europe, Russia and other places. We know large governments do not work and government spending usually leads to lower productivity. There is no perfect answer.
just some are less bad than others. Overall smaller govt and people largely taking responsibility for themselves works best. No it is not perfect. If you take extremes like say Cuba you can see the effect of large govt interference. Unfortunately there is no extremes the other way but countries that introduce more freedoms produce overall better results. Take China. Economic freedoms has improved enormously over the last 20 years and the results speak for themselves (obviously they still have a long way to go!).

@Stephen: "We know CGT and land tax did not work in USA, Australia or UK." actually we do know....at least some of the comments I have seen suggest a CGT actually takes off the worst ie does have some effect.

"We know flat tax has worked in Eastern Europe, Russia and other places. We know large governments do not work and government spending usually leads to lower productivity."

Russian Govn has a huge oil income to boost its earnings....Eastern Europe seems to be one huge basket case....hardly poster boys for a flat tax regime that "works".

We dont know large Govns do not work...and we dont know Govn spending leads to lower productivity, this is conjecture and political ideology.... I can accept that total Govn does not work, just as total non-Govn does not work...what we should be doing is testing the scenario/problem for the best solution, if its Govn, its Govn, if its private, its private, and not get bogged down in politics and ideology.

"If you take extremes like say Cuba you can see the effect of large govt interference." In what way? Cuba actually has a good health care system, of the "large interference" was actually where it has been crippled is from the USA's effective boycott/isolation of its economy.

Further, Cuba isnt large Govn but total Govn, you cannot easily of fairly take an extreme failure (be that failure or success) and say some % of that solution well it doesnt matter that's a failure as total was a failure as well, its totally out of context... Looking at Cuba did it fail? given the hardships Cuba faced at the hands of the USA then indeed its actually a success, ie its people survived despite the US embargo.

Compare to North Korea...now that is a basket case...

"Overall smaller govt and people largely taking responsibility for themselves works best." The USA is a case in point against that, ie they are one of the few countries not to have a socialised healthcare system, but a private one, yet they have a shorter life expectancy and huge healthcare costs, 17% of GDP....thats double the cost on GDP compared to just about any other country with a socialised / public healthcare system.

China, yes this is an improvement, but its gone from total control, to well still pretty much total control...far worse still politically than NZ.

regards

Frankly, I think the country is so stuffed, nothing the fools in the Beehive dream up can prevent twenty years of shite. Only those who manage to keep all four trotters and their snouts in the public trough will come through smelling of roses.

Steven, no-one "forces" you to pay for education or healthcare or any other product or service in a free market. The only organisations that can (legally) force you to do anything you don't want to do are governments. I don't expect taxpayers to pay for insurance on my car house and contents so why should I expect them to pay for my health insurance?

And again, holding the US health system up as an example of "free market failure" would be laughable if it weren't so tragic that people are being conned into supporting statist health systems by misinformation. The US system is a mess (few deny that) but that is a result of interventionism at state and federal level that results in bizarre rules and anomalies that push costs up overall while subsidising some groups. The interaction with Medicare and Medicaid subsidies means that people are disconnected from the cost of the health services they use (like they are in New Zealand's socialised system).

Funnily enough the New Zealand insurance market is much less regulated than the American one, particularly in health insurance. But because we think Nanny State will save us only about 33% of us have health insurance whereas 93% of us have third-party car insurance for example. If people need to look after themselves they tend to do so.