A review of things you need to know before you sign off on Tuesday; more interest rate tweaks, house prices becalmed, retail spending slumps, truckometer trends hold, swaps stop falling, NZD holds, & more

From RNZ.

"Internal Affairs Minister Brooke van Velden said she understood Fire and Emergency New Zealand (FENZ) was working with the brigade to give back the money raised during last weekend's charity ride, following "several negative comments" and complaints from the public"

Its OK to accept donations from the tabacco industry but not a fundraising ride organised by a Wellsford motorcycle club.

Don’t even bother to visit the site now. Reminds me way back in the days of the Christchurch Press there was a reporter who penned lightweight, vague opinion pieces. He was a relative of friends of my grandmother who referred to him, in the vernacular of their age, as a milksop and that actually describes the whole damn outfit nowadays.

Then form and run a business - and have honesty about the intent of buying and selling in so many cases for capital gains. We don't need the sometimes-a-business-sometimes-not model.

Do it as a business.

I thought they were just "mom and pop" saving for their retirement? But yes they are defined as a business according to the MBIE.  A unique business model that doesn't have the same complex range of overheads and challenges most other businesses have to endure, yet the most vocal and disingenuous.     

Luxon is 100% correct.  A business won't pay tax on capital gains, that's not limited to just rental properties.  

https://www.business.govt.nz/news/if-youre-a-landlord-youre-in-business/

Nup.  It's an investment and they're both different models with different tax treatments.

A for profit business won't survive more than a couple of years if it's not making a profit and it's usually not relying on capital gains or tax refunds to fund it.  A standard rental property usually does not make positive cashflow until the mortgage is extinguished or considerably lowered.  A retail or service business is actually choosing to provide a service - landlords try to justify themselves they're doing the same when the majority couldn't give a shit and would gladly take the gains if they could do it without tenants.  The Residential Investment Property market (note 'investment') was highly promoted as tax free gains, tax refunds and the tenant paying your mortgage.  No other "business" is promoted this way and most business owners actually require an interest in what their offering to run it for the benefit of their customers and therefore themselves. It's a basic premise that has been lost in the narrative of "creating" wealth buying and selling houses to each other or owning as many as possible.

This is all why for the past 2 decades we've had the overinvestment in house speculation over productive businesses, why we've had tax issues and the need for government to introduce various forms of taxes and tax credits, the lack of infrastructure maintenance and social services (health, education, police etc), and the financial stability and inflation issues.  It's the expansion of financialisation/investment into peoples need for a home.  Basic greed and exploitation - the fundamentals of capitalism.

She was technically incorrect and also technically correct - capital gain is generally the only profit a rental property makes.  And Luxon's not being economically incoherent with his answers?

But the highlight of the interview to me was Luxon not being able to answer the $800M hole and the belief that not only will the landlord tax relief package reduce rents but will apparently add more supply to the rental market.  And in his own case if he doesn't have the cost pressures he must be able to significantly lower rent taking the pressure off renters.  That was his rant.

I don't understand how you only saw her one error?  I didn't think you were a Luxon fanboy.

It. not a business, it an investment like shares, funds etc. And with investments specific tax rules get written. FIF rules an example.

Tax advantages ...hmmm

I quite like a few of these clangers by Kunstler

https://kunstler.com/clusterfuck-nation/twilight-of-the-blobs/

"In our zeal to become Gods, we miss a lot ... Bitcoin has gone “hockey stick” the past month, meaning on a chart the move up looks nearly vertical. Do you know why it’s going up? I’ll tell you: it’s going up . . .  because it’s going up. People and groups of people (wealth funds, banks) see the up-trend and deduce that Bitcoin is going “to the moon.” Meanwhile, they view the tea leaves of the currency scene and see a lot of brown, crumbly debris where there used to be “capital.” The money itself is losing its “moneyness” all over the place...

My point was that for once, David was right.  Today.. they did nothing.  I agree that the trend for now is down, and rather steeply.  Just need to see how long that trend continues.

People are going to lose jobs, sure.

Very hard to say by how much, there still seems like plenty of demand. It has actually really fired up in the last couple of weeks, the common theme is businesses that have been super busy over COVID, who've had to defer new projects or upgrades, due to either being too busy over COVID, or haven't been able to get work done, because there was no one to do it.

I really don't want to increase my payroll, but it does seem like the next 12-24 months will still be presenting more than enough opportunity.

Ok this is speculation:

1. They’ve kept the bust under cover very well to date

2. One of the companies has received quite favourable press coverage before in granny herald. Who knows maybe they chucked a fair bit of money the herald’s way as advertising revenue and the herald is doing ‘the honourable thing’ lol

They're us.

We have the technology to deliver better democracy, but everyone's too distracted.