Gareth Morgan for PM.

We have got to toss out all the existing tossers (both the elected ones and all their working group/symposium/review hangers on) and get in a true reformer - who doesn't need a bunch of middle aged cronies to tell him how to run the country and who isn't pushing his own (and his mates) personal agendas.

Amen to that , Kate . How do we get Gareth to have a crack at politics , himself ? Remember how many votes Bob Jones got , prior to MMP . He'd have been a contender , but for the FPP system at the time .

Gareth's no nonsense style , his watcha see is watcha get , would attract a considerable voter bloc . And shore up a " discontented " group who normally go to ACT or to NZFirst .

C'mon Gareth , roll yer sleeves up , and toss your hat into the ring . All to gain , and nothing to lose .

Like his mo too...
Careful though - you may blast the TWG report so much that doing absolutely nothing is 'acceptable'.

He's in Peru at present

PS. The 'Guaranteed Minimum Income' would see the complete abolishment of WINZ.

If you want an idea of what that will save the country in lower cost of government - I highly recommend that every NZer regardless of current circumstances should pop into the local WINZ branch for a visit.

Sit in the waiting area for just one hour - look at all the capital infrastructure in the room, think of the building lease costs, consider the total wage bill for just that single branch, consider all the wasted man hours associated with all the citizen/clients waiting to be seen, imagine what the back office/head office costs are associated with administering this bureaucratic goliath .... consider just how much bigger this monster might get if unemployment doubles.

Then ask yourself whether just paying every NZer over the age of 18 years a GMI isn't the most sensible, easy, cost effective means of tax/welfare reform.

The fewer "rules" there are to administer in government - the less government costs.

There are no "rules" associated with administering a GMI - and it will serve in the long run to break the cycle of welfare dependency - as the GMI does not increase with family size - and if you stay with the partner of your children - you get two GMIs - more money than you get if you decide to go it alone.

Presently, of course there is much more financial incentive to be a solo parent.

The more I think about it, the more the Big Kahuna makes sense.
Who is to say that one person is more entitled to a share of the public purse than another?
From that point of view it makes sense that everybody should get the same back.
The GMI along with a flat tax would put no barriers in the way of personal productivity No benefits, no dependency. That has got to be good.

And Andy M - in terms of the 'share of the public purse' - it's not really a total welfare state kind of proposal either.

For those working - the GMI (at $10,000pa with a flat tax rate of 25%) simply represents our first $40,000 of earnings being tax free.

I love the idea of trimming the tax code from two volumes to two pages, and yeah, the primary obstacle to doing that is political, but just because it's a political problem doesn't mean it's not real.

It's a political problem because it'd uproot and raze a massive part of the state, and everyone who's a part of that. It's not just beneficiaries, but taxpayers of all descript.

Sure, resources would be more efficiently allocated under this system - a lot more - but consider the upheaval as income distribution and investment choices get flipped on their head, and tens of thousands of civil servants, tax lawyers and accountants suddenly become (more?) useless. We might scorn them at the best of times, but how do we manage wiping out a massive chunk of the economy?

And we have a crummy mess of a tax system because bits get tacked on for political purposes, and it makes the tax system less efficient. But are we willing to make the tax system a sacred cow, outside of the democratic system, like currency? If we get public outrage about asset-rich pensioners living it up on the universal benefit while hard working families struggle to get by, are we willing to say "no, the tax system can't be changed, ever, for any reason"?

I will vote for him. Where do I sign up??

I thought his idea on an equitable tax system ($10K each adult, flat rate of tax for all, etc.etc.) was brilliant, and it is so unfortunate that our government is (and always has been, and probably always will be...) weak at the knees when it comes to radical ideas that will actually make things simpler.

Keith Ng said tens of thousands of civil servants, tax lawyers and accountants suddenly become (more?) useless. We might scorn them at the best of times, but how do we manage wiping out a massive chunk of the economy?

Indeed - this would have to be a very significant consideration for any government - but many of those individuals are highly resourceful and intelligent people - who could easily turn their energies to real sector, productive, income and export returning ventures. Frankly, they need that incentive and the country would benefit enormously from their shift toward a more productive focus for personal gain.

"turn their energies to real sector productive, income and export returning ventures"

Sorry Kate, Not overnight they won't.

Needs to be more convincing ...

Love the dream however.

I can attest to Gareth's popularity in Nelson. A couple of years ago he did a slide show/ lecture about his trip to Africa and his economic thoughts. Proceeds went to charity.

I went along to see the man in the flesh really, but I was astounded at the turnout - 1800 people in a small place like Nelson. I'm not up to date with my figures but there are only 80,000 or so residents in Nelson and Tasman as far as I am aware. That must be more than 3% of the adult population.

I also went to John Key's pre-election visit to Nelson - must have been at least 60 people there, maybe more....

Crikey Roger W, was there nothing on the telly?

Oh that would be fun to see Mork...a Kahuna Party and oh bugger it's a one man show apart from the hoards of wannabee flunkies rushing to dress in Kahuna gear and leap on the bandwagon. Lots of born again pollies desperate to get the snouts back into the trough. Gareth knows dam well how the sycophants come oozing from beheath the rocks all smiles and looking like that creature in Lord of the Rings.

Wally : Don't be rude to cousin Rodney . He has packed on a bit of beef , since the Gollum role . Man knows how to ACT !

Gareth Morgan does make a little more sense than most contemporary economists, but his understanding of land tax is poor compared to the economists of a century or more ago. The tax working group emphasised the immobility of the land tax's target, a real and significant virtue (despite Gareth's unsupported "weak theoretical grounds" slur), but not the only one. For a start Gareth's analogy with a tax on non-mobile labour fails, because such a tax would be distortionary (discouraging employment in those particular jobs and/or pushing up the prices of those particular services) while a land tax is not, because the supply of land is (in contrast to any form of capital) completely fixed. Capital is that which is accumulated by a nation through thrift, and so land is not a form of capital.

"Capital is that which is accumulated by a nation through thrift, and so land is not a form of capital."
Bollocks. You are confusing capital with savings, which are just one form of capital. Capital is anything used in the production or sustenance of wealth. It can be anything, and land definatley qualifies. It can even be a willing labour force. If I had 100 fit smart people willing to work diligently for me for a very fair wage, that would be....capital.

He has said it all with....

"At least then the public would be aware of what is possible and be totally au fait with precisely why we can't go there "“ solely because of political preferences"

The solutions will have to come from an even broader debate than that dished up by the TWG. My friends tell me that debate has already started and outside of any political party. Great news!

As a mere slip of a lad, I worked as one of many spin-doctors on Roger Douglas's December 17 1987 flat tax package, so was intrigued when Gareth brought out his GMFI proposal and concern for high effective marginal tax rates. I hadn't heard that discussion for more than 20 years, so deeply politically unsaleable was the wider fiscal and public sector upheaval that went with it, and the opposition to anything that looked like feathering the nests of high income taxpayers.
Gareth's proposal is not identical to Roger Douglas's, but it is similar enough - and political attitudes appear to have shifted so little in the last two decades on these kinds of issues - that I'd be surprised if it could get legs outside a relatively small group of rationalist cheerleaders of the sort who follow business news closely.
Having said that, I'd be delighted to be proved wrong.

To all,

There's a couple of issues with the Big Kahuna plan. The NZ$10,000 GMI is very seductive, but would leave a lot of a people an awful lot worse off. You'd have to do some serious research to work it out. The number may work out to be quite different, and expensive, assuming you wanted to not cut the income of the poorest.

Do people really want that?

Also, a tax on capital would tax some very mobile assets. There's a danger you'd chase away an awful lot of investment in equipment and businesses. Also: what is capital? Intellectual capital? Goodwill? Simple doesn't necessarily mean good.

The other point Gareth doesn't really address is the overall size of government, apart from getting rid of MSW and large parts of IRD (which of course is a good thing). You couldn't really make a call on GMI and Capital Tax until you had a plan to reduce the size of government.

I think all this is do-able, but you'd have to be careful with the detail.

Gareth running for political office would be an awful lot of fun (for us). Maybe not for him though.

cheers
Bernard

Bernard : No one seriously believes that Gareth's big kahuna plan would be implemented . But the fact is our political landscape needs a mother-of-all-shake ups . And GM would get 5-10 % of the votes if he just turned up on the ballot papers . More if he electioneered . We are jaded of the self-serving fluff and nonsense of both Labour and National . They need a scare to sober them up to the reality that they are our servants , not us theirs . .......... Gareth would remind them !

While I am listing the virtues of a land tax consider this: other than council rates, what tax is paid in NZ by a foreign landlord who own a Newmarket apartment, the rent of which is boosted by the improvements to the Auckland rail network being made by NZ taxpayers (and less directly by every other cent we spend)? I suspect many of them don't pay anything, because when the Tax Working Group asked the IRD how much land was owned by foreigners the IRD said they didn't know.

Good letter in the herald today - If land tax is implemented it should be directed to Maori in lieu of treaty settlements. Would save millions in legal fees.

More like a half-grabbed cock bag of fine tunings!!

I once have a purple ghd straighteners,and it is very convenient.One day my friend lily came to my home and saw my ghd straighteners,she said she likes very much,and she will buy one.

"Gareth Morgan has described the Tax Working Group's recommendations as a "˜half-cocked, grab-bag of fine tunings from a cumbersome committee that diagnosed a broken system but proposed little real reform'."

And our government is extremely unlikely to adopt anything more than the weakest stuff out of that grab-bag too. Look what they do when a taskforce recommends REAL reform. No wonder these guys watered it down, after what happened to the Don Brash 2025 lot.

While in other countries governments and the private sector are undertaking urgent steps to make sure, imports are limited and dependency from foreign companies are restricted to keep employment/ manufacturing as good as possible, here in NZ we are still talking about modification of the tax system to increase productivity.

Walter

@Walter

Thanks again... don't stop.

It is well recognised that people who have a choice (ie not those on PAYE) will generally comply with what they perceive as a fair and balanced tax code "“ only when wedges exist does widespread gaming of the system happen.

Low, broad and balanced taxes on earnings capital gains and consumption are widely recognised as fair broad and balanced "“ this should have cross party support.

The conversations Selwyn references are a clear indication that the current system is broken - time to be bold and sort it out.

We will see on the 20th May, I am saying that more in hope than expectation.

@Walter

Is it lack of capital investment?
Or just deluded complacency (don't respond to that - I said it!).

4 million people biting each other to death (again, don't respond to that).

Too many voices, all searching for points of difference.

Hydro/wind/geothermal/solar (occasionally), abundant water, land, food.
Should be easy really.

Wish I had more brains.

Thanks again.