Greens propose introducing universal payment of at least $325/week for those who don't work full-time, a wealth tax, two new top income tax brackets and ACC reform

Greens propose introducing universal payment of at least $325/week for those who don't work full-time, a wealth tax, two new top income tax brackets and ACC reform
Green Party election campaign ad

The Green Party has revealed its first policy it will take to the September 19 election.

It is proposing those not in paid full-time work, including students and part-timers, receive a ‘Guaranteed Minimum Income’ payment of at least $325 a week after tax. People with kids or disabilities would receive more.

To put this payment in context, single people on Jobseeker Support currently receive $251 a week.

The payment, which looks a bit like a universal basic income, would be paid for by extra revenue generated by the introduction of a wealth tax and two new income tax brackets.

Wealth tax, higher income tax brackets

People would pay 37% tax on income they earn over $100,000 and 42% on income over $150,000. These two tiers would sit on top of the existing tiers - the highest of which requires a tax payment of 33% on income above $70,000.

The Green Party is ditching its call for a capital gains tax, following Prime Minister Jacinda Ardern ruling this out under her leadership; instead calling for a wealth tax. This would be set at 1% on net wealth over $1 million and 2% on net wealth over $2 million.

It would be calculated on an individual level, so couples with jointly-owned assets would only start paying if they had combined net wealth of over $2 million.

A person with a $2 million house and a $600,000 mortgage, has a net worth of $1.4 million. So they'd pay 1% on $400,000, which is $4000.

The tax would cover the likes of property, shares, bonds, business assets, valuable art, and normal household items and vehicles worth more than $50,000. Assets held in trusts and those held offshore would also be covered. 

Asset rich, income poor retirees would be able to defer payment until they sell their assets.

The tax is expected to apply to the top 6% of wealthiest people in New Zealand and raise $7.9 billion in its first year.

Having two new top income tax brackets is expected to raise $1.3 billion a year and affect 341,000 people - about 7% of the population. 

Speaking to interest.co.nz earlier this month, Green Party co-leader James Shaw made the point that the quantitative easing being done by the Reserve Bank has heightened the need for tax reform to redistribute wealth. He was concerned the $60 billion-plus being pumped into the economy via the banking system would flow through to asset owners, not the real economy. Shaw noted that following QE being done in other parts of the world in response to the 2008 Global Financial Crisis, asset prices have increased more than CPI inflation. 

$100/week per child for all families 

Coming back to the Guaranteed Minimum Income, this would replace the student allowance and put money in students’ pockets regardless of what their parents earn.

Single parents would receive a top-up payment of $110 a week after tax, and people living alone would receive a $30 top-up.

The Green Party also wants to give families a $100 a week universal payment for each child under three years of age.

Looking at the welfare system more broadly, it would change abatement and relationship rules so people and their partners can earn more from paid work before their income support entitlements are reduced.

These changes are expected to cost $6.7 billion - $2.5 billion less than the additional tax revenue generated from the wealth tax and new income tax brackets.

Separately, the Green Party wants to legislate to require annual minimum wage increases in line with the median wage.

ACC reform

The Green Party is proposing to level the playing field between the support people receive when they can't work due to an injury, versus due to an illness.

Under the current system, ACC provides higher payments (in the form of compensation for lost earnings) for people who were employed at the time of an accidental injury.

In what would be a major $5.9 billion overhaul, the Green Party wants to turn ACC into an ‘Agency for Comprehensive Care’ so that it covers income support and work-accessibility support for everyone with a health condition or disability regardless of the cause.

It would also change ACC’s minimum payment approach so everyone gets at least 80% of the fulltime minimum wage regardless of what their income was when their condition emerged.

This would effectively create publicly-funded sick leave for people who need an extended period off work, for example to recover from surgery or chemotherapy.

The Green Party is proposing to phase in some reforms in 2021, and the rest in 2023. 

Here are its costings:

See this document for the Party's new policy in full.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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530 Comments

40
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Stick with green incentives, stay away from social policy.

41
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Every person in NZ therefore will have to submit to the government annually, an individual or joint statement of position, every bank balance, every share holding, each item, family heirlooms, paintings etc etc with an authenticated value? And who precisely audits that and does that then give that party right of entry to your home to do so. If so that in the first part alone is not just a direct threat to civil liberties in this country it is a full scale invasion.

10
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It's a Provincial Growth Fund, but the province this one supports is Wellington.

33
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Beige communist state on the way. One with no statues or artefacts that could cause offence to anybody. One where you need to submit your next sentence to a review board for authorisation before it leaves your lips. One where you are guilty of everything and you should feel ashamed of everything about you because you where born you. I fear for peoples mental health. What are we becoming?

400+ comments at 7am on Monday morning.

It seems like it's only the top 6% posting here reading the first 50 or so though...

15
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Maybe. I'm not in that 6% but i agree with many of the comments. The issue is is that the Greens clearly do not understand economic basics, appear to be completely wedded to a communist ideology that can not ever have a positive outcome for anyone and the country. Worse they seem to not understand recent history and how we got to where we are today. As concerning, some of the commenters, even though they also disagree don't seem to understand either.

Today, $1 million is not a lot of money (even though it is more than most of us can even dream about) and as has been pointed out below, a great many of the asset millionaires are accidental ones, and the Greens policy will, in my opinion, create a lot more poverty while shifting wealth not to those who don't have it, but to the Governments coffers while they don't do anything about the situation that allowed the circumstances to come about.

How can you judge that it will 'create a lot more poverty' or 'they are wedded to a communist ideaoligy that can not ever have a positive outcome for anyone'? Honest question.

I'm really not sure how I ended up there but apparently I'm in that 6% bracket, on the whole I support it and will be voting for the greens.

We've had years of kicking the can down the road and nothing has changed except wealth disparity got worse and asset bubbles exploded.

What I'm amazed about is how much outrage there is over this policy.

It's like every 1zb listener has commented here to vent their fury that a political party should want more equality. Sad state of affairs.

Older couple likely retired living in their own home. No other assets significant assets. Their house they have lived in all their married life, and given several renovations and extensions, is now valued in the millions. With only a pension, how are they to afford an additional tax? These circumstances are not unusual, even outside Auckland, and with individuals who have lived in houses for less time.

A wealth redistribution tax does not work, and has never worked. It is fundamentally rooted in envy/jealously. The Greens would be better off with a policy that worked on recreating jobs, directing COVID recovery funds into revitalising industry, particularly in the regions to create opportunities for every one. They also need to regulate the housing market to stop parasitic landlords fleecing their tenants, constraining rents to a maximum of 25 - 30% of the median take home wage for a whole house. This alone would save the Government in the vicinity of $2 billion a year in landlord subsidies, and help to address house prices, child poverty and a raft of other issues. But then the banks would squeal so would the landlords, so the Greens don't really care about the ordinary people do they. Just another bunch of plastic socialists! Bad for the people, bad for the country and bad for the environment!

bingo! That rent regulation idea is one of the best ideas that anyone has come out with yet, I like it.

Even better considering how few have any sympathy for the banks.

Totally disagree that the Greens idea is rooted in envy but we can agree to disagree on that.

That scenario above sounds exactly like my parents who might just scrape in, hence the tax is payable when they die, by you guessed it, me. I personally don't see that as the end of the world.

If the Greens were serious they would not be supporting an emissions trading scheme. Instead they'd be demanding legislation that limited emissions. And your personal circumstances aside, that tax proposal will cause many to sell their homes to avoid it or to pay it. their proposal does not make it clear that it can be paid on sale or death, but rather a bill received each year from the IRD for what is owed. And we all know that the IRD starts charging interest per month on unpaid taxes! And by the way, this tax will be based on a valuation. In other words it is a theoretical value only. Not a true value, which can only be determined when a property is sold.

But that aside I feel the way forward is to completely change the economic model we have been using for the last 40 odd years. We need to be talking about maximum population size, and national resilience and this means industries that manufacture what we need so we don't have to import all of it, and jobs that deliver decent wages all over the country.

What do you and I pay our rates on though? That's a thoretical value.

The problem is no one has had the gumption to introduce a tax like this so everyone is up in arms.

But that'll change in the future and it will come in sooner of later.

And most likely they'll (the greens) do what your average property developer does - ask for 500 apartments on a certain sized block of land, have the council tell them they can only build 100, argue the point for a while and come out with 250 which is all they ever wanted in the first place... ;)

Totally agree. Cindy said on the AM "show" this morning that Labour will "Trump" the Greens offer. This can only be good for retirees and beneficiaries as they, percentage wise, are living below the poverty line. The crime rate will reduce dramatically because these people will have enough funds to get by. Who knows what is going to happen post Covid, job wise. The AM show poll was skewerd of course because their viewers are National based so did not support the Greens proposal, otherwise I think maybe Richardson/ Garner voted 100,000 times to put it into the negative.

Sorry Murray but it would help your argument if you actually read the article...

"Asset rich, income poor retirees would be able to defer payment until they sell their assets."

How do the detail the deferment? And the tax is based on the theoretical value?

So the reward for people who have worked hard, made good life decisions and lived with a modicum of restraint is to be forced to give their money to those who don't or didn't? This is an insidious envy tax taking us one step closer to full blown communism - very un-New Zealand

A common and basic interpretation of socialism, as confirmed here by The Green Party all attired Lincoln green a la Robin Hood, is that funds that you have earned, paid taxes on and saved will be taken from you and given to those who have done none of those things.

Crypto’s and PM’s would be the only way - I doubt they wouldn’t be able to tax them.

We are all ffd with this labour/green coalition. Nats are absolutely uselesss idiots. No one will save us. All the commenters here will not have to worry about house prices. With these policies everything will be ffd.

Can we have a referendum on disestablishing the Green Party. They are spreading hate and facebook/social media need to ban them lol.

41
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What's the point of trying to have a go!!!!might as well just pump out some more kids and get on the rock n roll.....(dole)

20
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Its a mind-blowing policy .

What if you have a loss in the value of your shares or assets ( will you get a tax credit ?)

And do we really want to remain a low wage economy...............at the bottom of the OECD ?

10
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"What if you have a loss in the value of your shares or assets ( will you get a tax credit ?)"

Its not a capital GAINS tax, its a wealth/capital tax.. a loss in value means you still get taxed. Just a little less

14
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@pragmatist , lets be pragmatic ............this tax will ruin any capital formation ability that we do have ( and our Capital markets are very weak on any measure )

The proposed raiding of Kiwisaver is one example of wealth destruction .

The Greens are simply not in touch with reality

I agree, this is batshit craycray, i don't have a problem with the income tax adjustments, they're fine, but a 1% wealth tax on assets over a million when a freehold nothing flash house in Auck or Welly is worth a million? So by the time you pay the mortgage off everything else you have saved for retirement is getting taxed at 1% a year.
Along with mucking up a perfectly good ACC system (okay, it might need a little tweaking) to make it part of the social welfare system.
What small chance there was of me voting green in this upcoming election just evaporated.

Extending ACC to cover all heath issues means they have less scope to decline a claim. It also means it will be more expensive. I wonder if it includes paying for treatment? If it does then it is a step towards privatised healthcare. Wouldn’t have picked that as a green policy.

They see the actuarial surplus on the ACC books and see $$$$ to spend on the "poor" .

They dont realize the ACC is an insurer , its there as a safety net , its and Insurance Company , and it does not belong to the politicians , it belongs to you and me

I actually like the idea of extending ACC to cover sickness. Linking health with the ability to earn will mean it is cost effective to get people the treatment they need sooner. The way they see the costs will be different as they project the long term rather than just the budget for this year. There is no link between someone needing treatment and the lost income due to them being unable to work.

10
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This is utter madness. If they really want to trigger capital flight out of NZ, well, this is the best option.
Mugabe would have been proud. Brezhnev too. This is economic lunacy at its worst.
I thought communism died in the late 80's. How wrong I was.

What do you mean by ‘have a go?’ Do you mean speculate on asset prices?

This is green in the same way housing insulation was green - it's a move towards sustainability and reducing inequity.

Inequality of opportunity or inequality of outcome?

Equalty is not the same as equity - equality says 'the same as' where as equity acknowledges difference but still attempts to be fair.

"Inequality" is a merely a descriptor. One needs to ask the question "Inequality of what?"

If I demand that the rules be applied equally to all men, some will prosper while others will fail. This is life. We are not all equal in luck, ability, personal circumstances, physique and so forth.
Now, if you tweak the rules, so that some men are more equal than others, then you may end up with "equality of outcome" but it might not be to your liking.

What 'rules' are you applying in the first place, though? Because it's pretty much inevitable that the original rules you are talking about that are applied to everyone favour some.

The difference between equality and equity is not merely description as your answer illustrates: "If I demand that the rules be applied to all men equally, some will prosper whilst others will fail." Equity acknowledges fundamental differences at the outset and therefore seeks to find fairer - but different - outcomes for all.

There is massive inequity in this country and it has gotten worse. This proposed tax is for the top 6% of Kiwis who own a disproportionate amount of wealth. To simply say "That's life"fails to acknowledge the massive disparities between this top 6% and everyone else. It's not an either/or approach - it's about finding strategies by which these disparities can be addressed.

@Jolly .........lets just call a spade a spade ...... Stuffing some Polystyrene as "insulation" under the floor-boards of run -down old State Houses did nothing to reduce inequality or inequity

.

42
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Just made Nz first relevant again

21
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37% for over 100k will make me vote for NZ First we can't have a labour/green govt. They need Ron Mark, to take over from Peters though.

The problem is that Jacinda will drag them along anyway.

10
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Yes indeed a life line. Not on my watch proclaims WP and if you don’t want to risk jealousy taxes of this blatant nature, then just make sure NZF says in parliament. This too is now when Muller earns his spurs. A huge target to hit has been gifted and he must do so quickly, decisively if he and National are to get any traction going.

Nope voting for national is a waste of a vote this time in my opinion they wont be able to form a government.

Agree, cannot be done without a viable coalition party, but they have to improve on where they are at now surely. Slight chance of re-building a bridge with NZF if they can get up again? Probably not you would have to think.

Get Top across the line and you'll have an alternative coalition partner for Labour.

It will take them a couple more elections to shake the being associated with Gareth Morgan stigma.

TOP are not even registering on any recent polls I've seen, I think you're barking up the wrong tree there unfortunately

@tillers
NZ First always has been relevant. It moderates the looney left and the hard right. Winston, for all of his faults, is a natural leader and a first-rate thinker. Tracey Martin’s ok, too.

Winston is a looney too. But I am starting to come to the realization that he may be less looney than the others. This time I am very tempted to do what I never did before: vote for NZF.

14
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So they now want to extend tax to assets instead of just income?
Taxing the middle class (again) to give to the poor, the 21st century robin hoods

Of course people who use businesses or trusts are likely to be exempt and will still pay a lower tax percentage than nearly any employee

13
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Wealth held in trusts will be taxed too. 

I should also say that people with net wealth of $1 million aren't "middle class". Someone with a $1 million house and a $500,000 mortgage, won't be taxed. 

I'm updating the piece with more detail now. 

.

.

12
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The key difference is they are proposing to tax peoples assets - not just their income anymore... that is a massive shift
you do not control the your asset 'value' and given that if you own a freehold in Auckland you're net worth is likely over a million dollars...

It is becoming clear that becoming a high paid employee and owning assets in your own name and not in businesses is clearly a very bad idea
You become the scapegoat for government to tax everything you earn and also own (according to this proposal), I agree that lawyers/ accountants are going to become very busy

'Tax and spend' socialist bailout policies paid for by highly paid employees, The real wealthy don't keep their assets in their own name and likely shelter them in businesses or foreign entities in countries with tax treaties and a different set of rules

Greens are straying out of their lane - likely posturing to what Labour wants to implement anyway

you do not control the your asset 'value' and given that if you own a freehold in Auckland you're net worth is likely over a million dollars...

Yes, so this policy will have a moderating effect on Auckland house prices.

Wrong, it will help blow the housing bubble more. To generate income in retirement a property portfolio thats highly leveraged will result in more income than any other investment in this low interest rate environment.

$2m of bonds returning optimistically 3% = $60k - wealth tax on $2m
$10m of housing with $8m of mortgage, with even a 1% net yeild = $100k - wealth tax on $2m
(- income taxes on both of course)

Yeah but the 8m mortgage would cost 240k in interest. The rent wouldn't cover expenses.

I said NET yield of 1%, not gross. say 5% gross or something like that, less interest and expenses, leaving $100k postive cashflow.

Right, so you're just blithely asserting that the $10M property portfolio is going to be cashflow positive. Much easier said than done.

They will have to bring capital controls in to stop the flight. What I think they are talking about is a tax on hard assets, houses farms etc. Not cash in banks or boats and cars, like they are ever assets!

I believe cars and boats are exempt if they are under $50K - will link if I see it somewhere.

idiocy

So it's OK to own 20 $49,999 classic v8 gas guzzlers with no asset tax. Go greens! Dawks.

Every tesla will qualify.

My Landcruiser 200 has a depreciated value of $79,000 ( reducing rapidly to below 50k in the next 2 years or so ) and my yacht is worth only what someone would pay for it , not likely to get over $50k in the current economy .

So do I get a $100, 000 exemption for BOTH the yacht and the car .

And the poor bugger with a new $51,000 Hyundai SUV gets no exemption ?

That's how I read it. Just buy lots of $50k toys.

Quite a lot of gold will be lost in boating accidents.

It ain’t going to happen, end of story. National will be too close to Labour for the latter to entertain anything too left of centre. You could well argue that the Greens are a double edged liability for Labour: they’ll attract some young Left wing voters and scare off some older ones who see the two parties as a double act.

#suggestion: Jenee would you consider running an educational sidebar in the comments section? First suggestion for a topic, the actual meaning of 'Freehold' in the context of real estate.

Too bad for the large contingent of retired folk who might be asset rich (considering how much the value of their family home has increased with the property ponzi scheme) but have a meagre income.

Uh Oh
A proposed wealth tax just shows how far removed from reality the Greens are. La La Land stuff.
Sounds great but totally impractical - especially over the range of assets they propose. Great opportunities for creative accountants.
A CGT on the likes of property is far more practical and realistic but has been dismissed.

So if you save some of your after tax money in a savings account , you will get a triple whammy ?

Income tax
then
Withholding tax on interest
then
Wealth Tax

C'mon

How is that equitable ?

It’s not designed to be equitable. Everyone remember that Cindy will likely require support from the Watermelons so a vote for Labour is a vote for this.

"the highest of which requires a tax payment of 30% on income above $70,000"...its 33% on income $70k and over? And if this is not reduced Green Party are in la la land.

Sorry - that was a typo by me. It is 33%.

Nice work...this rate needs to come down to 28%. By not addressing this they are giving the finger to middle class..what's left of us.

19
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Awesome, tax working people for the consequences of poor Govt decision-making:

House prices go up because of migration, consenting and land prices? It's a chance to tax people.
Salaries go up so people can make ends meet on mortgages on massive house prices? Tax people again.
Failure to reduce expenditure in other areas to fully fund social welfare payments? You better believe you'll tax people.

19
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The welfare budget is a growing beast.. that one day will kill the country.

19
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I don't mind paying people more in social welfare if they genuinely need it. But foisting asset taxes onto the country because they're too scared to make hard calls in other areas of spending for fear of political consequences is cowardice.

Ok, what spending would you cut, then?

Accommodation supplement, WFF and superannuation.

I can hear the landlords screaming from here, and the beneficaries, and well, pretty much everybody that doesn't want homeless people on the doorstep. What else are you going to change to make it work?

Lower income tax, lower business tax. Implement land tax and capital gains.

Capital gains tax and land tax on RE? that'd be double dipping wouldn;t it? Or land tax on real estate, and capital gains on non real-estate assets?

Either way, i'd probably support it pending details.

Easy...super for the wealthy

Yep, more sitting down money for the "non-colonials"

During lockdown , welfare folk got an increase .

WTF was that about ?

Nothing changed for them , they still sat about at home doing nothing like they have done every day

Exactly right. Perfectly said, Boatman. According to some (the Greens in particular) success must be punished, personal accountability is a bad word and money grows on trees. Welcome to the joys of communism.

11
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And here's me thinking that house prices have gone up because there's a limited supply and massive demand, coupled with the expectation that prices only go in one direction.

I'm not surprised there are howls of protest on this forum from those who have benefited so well in the past. UBI and tax for the ultra wealthy is hardly a 'socialist / communist' idea (what do those terms even mean anymore? You prefer a capitalist China and Russia?). This is the Nordic model - it's been working pretty well for decades.

And here's me thinking that house prices have gone up because there's a limited supply and massive demand, coupled with the expectation that prices only go in one direction

House prices have gone up because the commercial banks can lend money into existence (particularly for mortgages) with arguably thin capital ratios. They've been able to do all this and clip the ticket at increasingly lower interest rates with higher loan amounts. No brainer really. Supply / Demand and buyer psychology have been important to some degree, but definitely not as much.

They lend money only to those who can conservatively demonstrate the risk is worth it i.e. existing property owners. House price rises therefore benefits both the banks and existing asset holders, whilst shutting out everyone else.

Banks have fought against losing their margins every step of the way - savers are basically paying the cost. QE adds liquidity for banks, but does not help first home buyers get a home. In order to ensure that our skyrocketing levels of poverty and inequity do not get worse, people need to have somewhere affordable to live and have enough money to live on. The point of a UBI funded by a top tier wealth tax is that it enables greater proportions of people to have a better standard of living.

That's a fairly good description JP. Therefore, why shouldn't the banks and the asset holders pay taxes on 'artificial' capital gains? Seems only equitable for those who disadvantaged becuase they were born too late.

Agree. Add it to the list.

Capital Gains Tax does not work that way , not anywhere .

CGT is only paid on sale of the asset , not simply as asset holders

'Born too late' - I have several nieces and nephews <35 who own 2 or more houses. And yes, some of them, not all, have student loans. They all have well paid jobs and are coupled up. Save one wage live off the other. How quickly their deposit grows. They see it as their 'superannuation'. One is a trained tradie and bought their first house at 19 after leaving school at 16. They don't own in Auckland.

@jolly penguin
I love my house and where I live. I don’t really care if it’s worth 500k or 1.5m, as I don’t intend to sell it. Your arguments seem to imply that I’m part of a conspiracy to become wealthy at the expense of the poor. What utter nonsense.

My grandmothers old house is now worth about $1.5m. It isn’t a flash house by any stretch of the imagination. It was the first house she ever owned. She never wanted to move because she liked the neighbourhood and neighbours. Taxing her because it has increased in value seems really harsh. She would have probably had to sell and move if she was still alive. Defeating the cost wouldn’t have been an option for her as she wouldn’t have wanted to owe any money.

39
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That loud cheering sound is every accountant, lawyer and financial planner in the country doing cartwheels.

Suggest buy shares in a clip board manufacturer. There will need to be hordes of bureaucrats mobilised to tote up, every year, what you have got and asking what happened to what you have no longer got. This and more is what is to be expected to come charging out of left field if this party should ever get any effective say in our government. Some warning now at least published. Perhaps the core of Green voters may not now be so willy nilly about casting their vote.

Yup..the last 6 months tax changes have been a bonanza

24
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..... and the greens immigration policy? (seeing as more people equals more pollution and degradation of the natural environment)

14
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The Greens want to have their cake and eat it too. They give lip service to supporting Maori but don't want to recognise it is Maori who are most opposed to, and who have most to lose from continued mass immigration. It doesn't fit their woke narrative.

12
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A prominent Maori intellectual interpreted the treaty as permitting only immigrants who had the queen as sovereign (UK, Australia, PNG, Canada, Barbados, etc). Nobody has proved him wrong but he was ignored.

10
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Corona Virus :, Many have benefited by various subsides and free printing / distribution of money by government.

https://www.timesofisrael.com/swinish-capitalism-fox-which-got-millions-...

Suppose to provide cushion to those affected by panademich instead proved jackpot to many.

It's becoming really hard (I think) to decide who to vote for in the next election. On one hand, we have a coalition who just want to tax tax tax everything, and on the other hand a party who wants to remove the foreign buyer ban if elected.

Yes, it's a game of picking the 'best' poison pill... red or blue pill...
left = employees lose (very high taxes - especially middle class, very poor and subsidies/ loans to businesses paid for by high taxes on middle class)
right = employees lose (house price inflation that primarily benefit investors who own properties in businesses)

A million dollar asset is hardly middle class.

11
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Well, it is if you purchased a house in Auckland 20 years ago for $300K paid it off and now it's worth $1.3million - we're not talking about people buynig now - we're talking about those who have paid their mortgages off or who have multiple investment properties
This will likely be the case for those heading into retirement

My issue is that taxing assets is a fundamental change, where you will have to declare ALL of your balance sheet items and be taxed on them (again) after you paid tax on the income to purchase the asset in the first place!

Well, it is if you purchased a house in Auckland 20 years ago for $300K paid it off and now it's worth $1.3million - we're not talking about people buynig now - we're talking about those who have paid their mortgages off or who have multiple investment properties
This will likely be the case for those heading into retirement

Reverse mortgages can pay the tax bills

Lol, get a mortgage to pay tax.. good one..!

Lol, get a mortgage to pay tax.. good one..!

It's a 'reverse mortgage'. Different animal. All their 'savings' is in their house. Those 'savings' were not 'earned'.

10
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Keep calm!
This...is how MMP works.
The Greens could have a platform of sacrificing each family's first-borne at this stage, and use it to negotiate less radical policies when, or if, they need to.
Read this manifesto in that light - it's part of their 'after poll night' talks.
NZ First will be out with something similar, and if there's one thing we all ought to hope for it's that either Todd gets his act together or Jacinda maintains hers, and we have one clear winner. One free of compromise. Chances? Slim!

Do you think you would get anything different if Labour won outright?

11
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God help us if Labour ever gets a clear mandate .............we're stuffed .

Like Britain in the 1970's

I might vote for NZF this time. I never voted for them. I am trying to avoid the bad scenario of a Labour-only government, or the nightmare scenario of a Labour government strongly influenced by the looney Greens.
The Greens with a significant influence in government would thoroughly stuff up the NZ economy and shaft the middle class big time.

11
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perhaps the Greens are doing the hard lifting for Labour.

17
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Aye the old market softener trick. Labour most surely have been consulted, and given their blessing. Now enter Sir Gawain, stage left, to chop off the nasty green knight’s head and save all the villagers from a fate worse than Labour.

Pure cynicism sir, true to your poisonous name.

Noxious MM, noxious but can be handy for the odd cardiac arrest from time to time.

Thats possible too ,because the Labour party learnt that a drastic tax policy never gets you elected

So will Labour publish their policy which does not include these proposals. Or will they do like they did in Clark’s government using Anderton as the front for tax increases.

15
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Green Party has lost ....

CGT should be on the card.....If JA has ruled it out, NZ should rule JA out, for country before induvudual alternatively why not go for referendum along with election for CGT.

14
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I have never voted Green but I probably will this election.
They seem to be the only party looking beyond the next election.
Presumably they will want more pollution taxes. Well as a Green Party, you would think they would.

Good on you Fritz , maybe you will only regret it when you get to 65+ and have to stop work ........... and when they smack your Kiwisaver , and you are forced to live on the piss-poor Super one day

11
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I think asset taxes are good idea but all new taxes should be tax neutral. So what happens to assets like farms that return only 1 -2%? Million dollar house now returns half what it used to, do assets half in value? What about deposits, is inflation deducted or should all asset taxes be ex inflation?

Asset taxes are a good idea but they need to come with huge reductions in PAYE. Personally I don't think wages should be taxed, I also believe in small government.

What happens to Aussie banks after house and farm values are halved? That's the problem today too many politicians, bureaucrats and councils, don't know what they are doing.

18
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Asset taxes are a bloody useless idea. They're complicated, they create issues with someone merely having something and having the cashflow to pay tax on the current value of the thing, regardless of their intent to hold the asset or pass it on. Arguably, some things like family garage projects and old bangers have a value of nil - they're never going to be sold on the open market, just passed down to the next. But because asset price inflation has smashed their market value through the roof, you face being taxed simply for owning a thing you may have owned for decades.

The reality is, if the government were prepared to be responsible with its own spending, we wouldn't need this kind of intrusion into our personal financial affairs.

As someone else has already said, those with the resources and mobile transferable skills will just leave, and the country will be even more reliant on an even smaller group of taxpayers. One decent pandemic and they're dead. Who pays for government largess then?

"Who pays for government largess then?"
LSAP, of course!
Taxes? A thing of the past. Government Balance Sheet Financial Engineering - that's the way of the future.
Russell Norman was on to it years back when he said "All we have to do is print the money" - and so we have!

Asset taxes are incredibly simple, we all have a rateable value, you just get sent a bill from IRD. Will be the end of councils taxing land they will have to go to a poll tax.

Agreed real simple. Use the council rating value or use the one all the specuvestors love at oneroof.

It may be simple to asses the value of your home , but it seems its going to be EXEMPT anyway .

The problem comes with the valuations of other assets , vintage cars , art , boats ( really hard to sell) furniture , antiques , holiday homes owned to scores of family members .

And the valuation of an income stream asset like a business or professional partnership is a minefield

Then how do you tax cash savings in the bank on which tax has already been paid , and the interest thereon is taxed ?

Tax 1% of your savings every year ?

How the F is that going to work or be fair on someone saving the buy a home ?

All valuations are subjective, i.e they represent the valuer's opinion as to what something may sell for. Bonds, shares etc can be valued on the basis of what an identical item sold for on a particular day, but no two houses or buildings or farms are the same. In our district two small farms were recently taken to market; one of twenty hectares with a rateable value of $750k sold for $600k, the other of forty hectares with a rv. of $1.8m did not sell but received a solitary offer of $900k.

21
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There is mental and then there is Greens mental. They should just stick to smoking the stuff they want legalised and leave the politics to the grown ups.

16
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Can only speak for my partner and I, but if this is what replaces a desperately required CGT we will leave NZ and never look back.

I know we wont be the only ones.

13
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CGT doesn't really work, unless you pay it on on unrealised gains and that would be a nightmare. The government need more money and income taxes and fuel taxes have pretty much been maxed out. GCT are a massive incentive not to sell, they won't correct the housing bubble either. NZ desperately needs affordable housing, that's not going to be a easy fix.

Define "work".

it gives the wrong incentives. In Ca they have a %44 CGT, why would you sell?

What are these "wrong incentives" assuming it's taxed at each person's income tax rate, and there's an exception for your main home? If you sell a rental property, you should be happy to pay tax on the capital gains as it's simply income. No different to the bright line test today, except we wouldn't have the artificial 5 year deadline.

CGT requires an increase in value, and for the asset that has increased in value to be sold. Assets don’t always increase in value, especially in inflation adjusted terms. And the prospect of having to pay CGT generally makes people reluctant to sell, unless forced to. The tax revenue it generates is thus lumpy and hard to incorporate into an annual budget. Oh, and it’s easy peasy to dodge it of course. Income tax, property rates and consumption tax are easy to administrate and virtually impossible to dodge. Just need to get the levels right so the less wealthy aren’t unfairly treated, as they are at the moment given the nature of GST.

haha, goodbye and thanks for the fish huh? Spoiler alert" you're probably too young to have read Hitchhikers Guide to The Galaxy

So your response to NZ introducing higher tax rates would be to move to a country that will ostensibly have a higher tax rate? Compared to other OECD countries, New Zealand has some of the lowest tax rates, well below the OECD average in fact.

14
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This old chestnut. They kick in at pathetically low levels here relative to our costs of living. You can be a rich prick for income tax purposes but still eligible for state financial assistance if you pop a sprog. How does that make sense?

Our student loan repayment threshold is half Australia's and theirs scales with income - and even at the top, it never gets to the same rate the NZ repayments do. Comparing % rates only tells half the story and people who push this as an argument usually know it too. Once you've paid PAYE, your student loans and GST on every dollar you actually get to spend/RWT on the ones you don't, your effective marginal rate gets pretty high. We are a low wage, high cost economy and our after-tax wages don't pay the bills.

How much more would you lie to see us pay?

The way GST is applied here is massively unfair to low income earners, as is our punitive progressive Income tax scale. High earners do very well in NZ by international standards. And that’s a fact.

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Do you understand the concept of net income? Even if your top marginal tax bracket is 10 points higher, it has no way near the impact on your net income if you can earn 50% higher gross income. There is a reason 500k+ Kiwis live in Australia.

But sure, just tax the hell out of high capability people. I'm sure that will really help create higher GDP per capita, better welfare systems and quality of life. Or it might just exacerbate the incredible brain drain that New Zealand has experienced and force us into immigration based growth model.

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As an OECD country Aus has a tax free threshold and lower cost of living including cheaper property making it way more affordable for middle income earners than NZ. NZ is just too small, has too few people actually paying tax to support the heaving masses who now pay none.

I don't rate NZs future if this lot get in with the next labour government. WFF (WTF as I like to call it) is now impossible to unwind. Look at the damage it has done and the incredible cost. Mad green policies could realistically be enacted in the next three years as they are baying for capitalists blood. Once enacted, those mad new policies and taxes are near on impossible to reverse and will get woven into the social fabric.

So here's the next question:
Do you vote NZ First to moderate Labour/The Greens?
Do you vote Labour because you don't want the Greens at all?
Do you vote National in the hope they can actually win?

This election is going to barely be about actual representation and more cock-blocking the people you don't like. In such, it has rendered MMP a failure as a system of representative government. It just doesn't work in situations like this.

If the 6 percent of people potentially effected by this gave their party vote to act (can still give their candidate vote to national) national could form a coalition.

On the subject of ACT, why did Seymour dump Beth Houlbrooke? Nothing in the MSM.

@Millenial ............CGT will never, and has never, solved any problems, least of all the cost of a home

I have no idea how you can be so uninformed as to how a CGT works

"They should stick to stuff they want legalised" Seriously? This is the oldest, lamest, stereotype of the greens. Total straw man argument (attack the person/s not engage the issue).

OMG people who say that are practically a redneck stereotype..

We could say instead that the Greens are not particularly bright, but we're trying to be polite.

They need to heed Dennis Thatcher then. If everyone knows you are a fool, why open your mouth and prove it.

13
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the ACC reform bits.. what a bloody dogs breakfast of an idea. They are raiding the ACC cookie jar to pay for todays social policy, then you'll have to replace the income that the ACC investments generate out of taxation.

Corrrect ..............ACC is not something to plunder

It has a clear mandate to be run as an Insurance Company .

Politicians cannot plunder it

12
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sounds like a 50 page tax return plus attached copies of valuations,invoices. etc;as already pointed out they should have stuck to environmental issues.they will be staying in their bubble indefinitely if they dont have a rip van winkle moment and wake up.

28
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They ought to come clean and rename themselves the Socialist Party.

The true green, environmental party will be the one thats stops crazy immigration.

Exactly.

17
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And after that they came for the kulaks, former peasants who through hard work had acquired extra cows and produced surplus crops for the market. And then they wondered why the markets closed and milk supplies fell. Soon the spectre of famine stalked the land.

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Ugly Soviet history... and there are those in this govt that venerate communists.

11
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Geez not these old bogeymen again.. how come when people talk about communism they never talk about Cuba having a better and more accessible health care system than the US? Old Soviet history has a lot to do with having a massive land area, low industrialisation and the remnants of feudalism. And Russia as ally in WW2 gets airbrushed out. I'm no fan of despotism, but call it what it is.

Constantly cracking remarks about the greens being akin to baby-eating communists is just lazy thinking.

It's well accepted there is a marxist element in the greens and its policy is influenced by this faction. The party has been wracked by struggles between the hard left and more centrist factions for control of economic policy. Using soviet history as a metaphor for heavy handed socialist interventionism and economic class warfare is a valid concept communication medium that most will understand. Touting accessibility of the Cuban medical system as emblematic of success is a well worn but desperate stunt to cling to about the only positive aspect of that basket case country. I'm not aware of attempts to airbrush out the soviet great patriotic war which made the biggest contribution of any country to defeating fascism - just while we are on the topic of lazy thinking.

Ah yes Marxism: "They who control the means of production control the ideas that circulate in society". Seems relevant to have some knowledge of Marx, even if he was writing for another time.

'Heavy handed socialist interventionism'. Oh yeah, that's what the Nordic model is .. not.

Cuba.. is not perfect. But neither are the flag bearers of democratic capitalism right now. My point was that 'communism' and 'socialism' get branded by many on this forum as if they are inherently evil and self interested market capitalism is branded as inherently better through reference to historically specific situations. This is classic binary thinking, which lacks relevancy in today's context.

Therefore my reference to the great patriotic war - Russia was a friend one day and an enemy the next. That's what's airbrushed out..

Russia and even North Korea are looking 'stable' compared to the leaders of the 'free world' right now. I'm certainly not convinced we've got it right with the current form of capitalism. It appears to be creating significant instability, both economically and socially.

Notwithstanding my comments above, that scares the hell out of me..

North Korea looking 'stable'?? This may be the most ridiculous statement I've seen all year

Its all relative.

North Korea

- no real economic or military power, nor weapons (yet to cause international damage).
- population faithful to the leader and dedicated to the countries cause

USA

- economy incredibly unstable, mass unemployment.
- pandemic raging through the country killing tens/hundreds of thousands of people.
- leadership in denial of pandemic and scientific appraoch to saving lives.
- local population rioting in the streets over inequality and perceieved/real racism.
- incredibly high rate of gun deaths/mass killings. Americans have killed more Americans than any terrorist can dream of doing.
- extreme political division, as bad as its been in the last 200 years and could result in a civil war.
- trade war with rising world power (China). Could result in some form of new cold or real war.

Relatively speaking, North Korea looks pretty stable compared to the US right now. If you can't see how very unstable the USA is at present (looking back at its history), well that's fine. Each to their own.

Unless you've got good Intel on the inner workings of NK, those are some big relative assumptions.

Not sure why everyone has such a positive bias towards the US. I’ve lived there - it certainly isn’t perfect and based on what we see on the news and the social media posts I see from friends it’s getting worse. If you think it’s stable that’s fine - I certainly don’t.

Which country would you rather live in?

It’s becoming less clear by the week! Currently the US but it isn’t trending in a very good direction.

Yes, apparently millions of Americans have been stopped at the Cuban border and turned back. Apparently Mexico’s taking a hard line, too. Trump’s building a wall to keep people in.

Watermelons.

Seems an exaggeration to compare what happened in Russia to the proposed introduction of new tax brackets. The USA had a top marginal tax of 90% after WWII and I don’t recall the history books mentioning famine.

Metaphor - 'a figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable' .... not to be taken literally. Your cows are safe.

Bogeyman. Repetitive use of a symbol to instil knee-jerk fearful reaction.

.

12
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If this happens then it will be the last straw for me, after putting up with three years of jaw-dropping incompetence from this unelected Dunning-Kruger government. I'll be selling up and taking whatever's left of my modest wealth overseas with me to invest elsewhere.

Oh yes, this old threat. Unless you're earning over $100k a year it doesn't sound like this is going to affect you, since your "modest wealth" is unlikely to be over $1M and therefore not taxed either.

Good luck moving to another OECD country, almost all of which have higher tax rates in their top brackets, as well as capital gains taxes.

It's not all that hard to protect wealth from thieving socialist hands.

Over $2M of assets, but significantly under $100K income before tax. Being an investor rather than a speculator I have no problem with a CGT.

That's not "modest" wealth. It puts you easily in the top 5% of NZers.

Top 20% approximately, but that's hardly the point.

Yeah, the point is you're going to take your un-modest wealth overseas to another country which has even higher taxes because you don't like this policy that puts taxes up.

If it’s existing wealth it may make sense to move e.g. the tax on my family home would be > $20,000.

Sounds like Ireland again...property bubble. Young people leave, excess supply of houses, bubble bursts.

23
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So you have worked hard for 40 years anf saved for retirement with funds earning interest and paying rwt. Net return less than 1 percent. The wealth tax will eat into that another 1 percent leaving you with negative return before you even have a chance to spend any. That dumb policy better get dumped along with the green party

And what most of the idiotic greens voters haven't clicked to yet.. it would encourage more investment in leveraged up property. It's a net worth tax. one freehold property to live in (at/under the $1m tax-free amount), and $2 million of boring bonds generating SFA return.. or $8m of properties, with $6m of interest only mortgages, still the same $2m net worth for the wealth tax, but far more income from the properties.

Lots of ways to do it, especially if you have adult kids and grandchildren. As you set out, more debt will become the norm. Ownership of the debt can sit with various arms length entities.

Yes lots of ways to do it. You could shift it off shore via a trust. Or how bout two trusts with the same directors with each trust being the beneficiary of the other? Meanwhile, people sleep in cars.

Rubbish, Cindy fixed Povvidy. We know because she doesn’t talk about it in her Facebook live feeds to her sycophants.

Only if banks are willing to lend against it...and I thought property prices were so high because of 'demand' (sarc) and not excess debt creation by banks?

@Houseworks , precisely ..........dont worry about NEGATIVE INTEREST RATES , the Government will actually tax your capital savings by another 1% .

How will this ever help a young family saving to buy a home ?

Not going to affect the young family saving to buy a house. They are unlikely to have combined assets of 2 million.

18
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We need a tax free range. Saves all the admin for those on minimal income. Get rid of WFF and just give lower rates. After all it is just an admin heavy way of returning tax.
<$25k tax free
$25-75k = 25%
75k -200k= 35%
>200k = 40%

Sounds reasonable

Before they do anything they have to close the loopholes that allow overseas companies to rort the tax system, otherwise it's incredibly unfair.

13
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All the comments are unbelievable and self centred.

The price stability economics we use requires a portion of the population to be unemployed (through no fault of their own - unless you want a slave economy and no minimum wage).

NZ's record on poverty and treatment of welfare recipients is also appalling.
Furthermore, income equality in NZ has be getting steadily worse.
https://www.stuff.co.nz/business/88455171/the-truth-about-inequality-in-...

The policy does need to go through cost benefit assessment, but would even some modifications, an increase total welfare of NZ society can be expected.

12
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Totally agree. But no surprises that these comments are so reactionary when most are recipients of benefits accrued through inequity.

It will bring about my early retirement. My self centred option is to vote for the Greens.

11
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Agree and bracket creep is a big part of this reason. Middle income couples with no kids are again asked to pay more tax while paying of student loans and trying to get their first home. Nut jobs

Agree but are you really surprised given how self centered our country and a large proportion of our citizens has become?
Put it this way, the top income taxes they are proposing are way lower than in the Muldoon era. In fact, you could reasonably argue that all the Greens are proposing is somewhere between Muldoonism and Rogernomucs. This I would suggest, is the 'right' place to be. It is a moderate position, far from radical as many may suggest...

10
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Yes, and look how well that high tax era under Muldoon worked out for us all. Subsequent post Muldoon cuts to tax rates delivered a higher overall tax take. It's an age old truism that the more you hike taxes the more incentive you create for avoidance.

And that's why I said the greens are halfway between Muldoon and Douglas, and that's a good thing.
I didn't advocate for a return to Muldoonism.

Well 1975 and the dancing cossacks are thus borne again and he and the rest of his mob would not hesitate to say I told you so. In some ways it’s a pity we don’t have someone in opposition of that calibre to cut this crap down here and now. You cannot in the free world have a government that will be authorised to enquire into and store information of all of its citizens financial positions. If that is not Orwellian in itself, it sure as hell is the start of it.

Dancing Cossacks??? Are you for real? It'll be reds under the beds next. How bout we return to McCarthyism since you're talking about 'freedom'?

Regarding your data rights - you don't have any if you're online. You've already given your metadata away for free. Orwell's 1984 already happened.

You don’t have any data rights. That rather confirms the objective then, the desired outcome for said ideal state. It’s moments like these you need a minto.

I'll have two mintos please, one for me and one for me mate.

It's not the state that created that situation but good ole market capitalism. To quote Barnum: If you're not paying for the product then you are the product. The likes of Facebook and Google ads (preferentiality) don't care what state (idealised or otherwise) you live in. All they need is an IP address.

And so a party that aspires to cabinet rankings, is already a lawmaker in parliament, would justify its position of harvesting information and keeping dossiers on citizens by using the precedent that that function it is already underway by data scavengers, hackers and fishing and scam exponents. Bloody sorry state of affairs that is then, run with the thieves. Within the surrounds of government that is subversive activity, not welcome in our country, past, present and future.

Unbelievable! Just who are these Greens anyway? The environment is one thing that most people understand needs protecting to a sensible extent but extreme social justice is something else and hopefully something most Kiwis will reject. Apart from being repugnant it just won't work as there will be endless loopholes to avoid capture - like you can be sure every expensive home will have a mortgage even a small one so it won't be counted.

It would be far more intelligent to bring in UBI through Reserve Bank QE at near zero cost rather than soaking the "rich" to pay for it.

The Greens are unlikely to be aware of the reality every business owner knows - tax is a massive 43% of your profit, made up of 28% company tax and 15% GST. That is already too high and now they want to take even more of their hard-earned wealth to hand out to those deemed to be in need.

Hopefully the policy will back-fire and drive voters away from them.

Seeing as the greens care about the environment I wonder if they would have allowed this monstrosity to have been built in such a beautiful environment (Queenstown area)?

https://www.trademe.co.nz/a/property/residential/sale/listing/2656475620...

Oooh. That is truly awful. Is that a BMW, Jag and Range rover parked there?
If Qt becomes like that it will not be long before it becomes a large sprawling slum.

Yep that's truly awful. But blame it on the council...

17
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GMI (minimum inc for bennies) is the green party way of vote buying to get themselves back into the public trough. They did this last election with an offer to increase all benefits 20 percent. Until metiria material girl turei got found out for her benefit fraud. The whole party is a fraud

The dole is miserably low. This is humane policy.

10
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The dole is meant to get you to find work ASAP , its a support for you when ur vulnerable and broke .

Here;s the message from WINZ .............Find a job you work-shy lazy skiver

the dole as it is does more harm than good, the whole system needs a shakeup. It shouldn't be a lifestyle choice, but neither should it be something that does nothing for anyone until they are on the absolute bones of their ass.

Actually she fessed up to a fundamental truth about benefits - they were devised to be 60% of living costs and not raised for 10 years. The idea was that desperation would incentivise job hunting. What it did was to create the means by which vulnerable people could be exploited. Or, if you had any brains, you could lie.

Her point was that the system is so bad that the only way to survive it you had to cheat. She was punished by the voters then for being honest.

So lucky our post-covid benefits are nearly twice the amount as pre-covid amounts... Well that's 'socialism' for ya. Can't have all those beneficiary bashers really finding out how hard it is to live on sfa.

So lets say Mom owns the life rights to a Unit in a retirement village worth $750,000 and a share portfolio worth $320,000 .

She will likely need this money to live over the next 30 years ( her monthly levy takes most of her Super payment)

Its simply unfair to tax someones life savings in their twilight years when they are not earning income , and are simply too old to work

Under this policy she'd be taxed an additional $700 per year or $13.46 per week - 1% of the $70,000 over the $1M threshold that she has in assets. Hardly going to break the bank or send her to the poor house.

It's also incredibly easy to evade in her case anyway if she really had to since gift duty has been abolished. Sell down $70k worth of shares and give to the children to hold as 'early inheritance', and children can pay her back a weekly dividend.

.. so your defense for this taxation proposal is that is is poorly designed and therefore easy do dodge. I see.

I'm not defending it at all, I'm just responding to Boatman's wowser of a post.

I think we need higher tax rates in NZ, but I'm quite skeptical about the loopholes in this policy, and I think there is a genuine issue with paying people out of work too much money, creating a disincentive to work. I much prefer TOPs UBI over this.

10
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Is why any capital tax must be accompanied by gift and inheritance taxes. Won't work without these supplementary taxes. The greens will be well aware of this and have these additional tax policies ready but hiding them for later.

wealth and inheritance taxes don't work, too easy to work around, they just enrich accountants.

I never had a "Mom". I did have a "Mum"!

Pedantic.

Disagree.

So let's say Mum has worked as a cleaner her whole life and has just been made redundant. She has no savings and children to feed. Her rent is more than her income and she lives in a garage with 8 other people.

You want to talk about 'fair'?

20
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Actions have consequences.. having kids leads to expenses. Not moving up to a higher skilled job leads to poor income. Doing both leads to a bad position.

Sorry, when did a basic human condition like having children become a justification for punitive accountancy based on your narrow range of values? What happens for those people who are unable to access those resources to upskill, or simply don't have the intelligence? Too bad, it's your own fault?

Jolly - this is where current form of capitalism is falling apart. In the US, unless you're born into wealth and your parents can afford to send you to university, you're life is likely going to be terribly difficult. Not exactly the land of the free. More the land of the oppressed for many - and its turning into exactly what Franklin and the founding fathers were trying to get away from when they declared independence and wrote the constituion. It was meant to be for 'we the people', not 'we the asset owners'. But that is what it has turned into and NZ is following in Americas footsteps, we're just behind in the timeline in my view.

I'd agree with that assessment. I think I live on a different planet to a lot of the folks here. In the world's I know it's damn tough out there and it's getting worse. It's pretty hard to have sympathy for what looks like the devil..

The general ‘successful’ mindset under this type of economic system is self interest. I don’t need to worry about others, I’ll just pursue self interest and everything will be fine. It’s when you look beyond that and see the barriers many face and the distortions in the system and the ways it’s beneficial to some and not others - often just because of the year they were born, you realise it’s probably broken and needs fixing - but everyone is in self interest mode still..it won’t be until it implodes (which I think there’s a real chance the current form of capitalism will destroy itself - look to the USA and the views of Dalio etc) that people will realise we need more than self interest.

Yeah I was part of a discussion on the quarantine forum which talked about the influence of Adam Smith's 'enlightened self interest' model. Smith was informed by Newton's model of a mechanical universe. The idea that the market behaves rationally is an extension of this 'enlightened' thinking. But neither people nor the market are wholly rational, and it's not a closed system anyway.

14
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Having children isn't a basic human condition. Having cancer or Ms is a basic human condition. If you choose to have children when you have neither the resources, time or compassion to meet their needs, you're the problem. Placing the burden of providing for these disadvantaged children on the taxpayer/public sector is not only irresponsible but its also proven to fail more often than not. "Basic human condition" - laughable

Right... The whole of human evolution only occured out of choices (that align with your values). Too bad if you're a Catholic or from a culture that values children as being an ordinary part of life - and if you don't believe/have contraception you're supposed to be able to support them - so if you can't it's your own fault and deserve to suffer.

Crikey. Completely rational if we're all machines - simple resource allocation based on productive outputs. Failure to comply results in loss of resource privileges until compliance or dissolution achieved.

Choices? Do as we say and be a machine or face poverty? Thanks, I'd rather take my chances with the rebels..

10
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Evolution = survival of the fittest. This also includes the most intelligent and resourceful. Those that can think critically and plan ahead.
If you're from a culture that likes to have lots of children that's fine. Just don't expect those that don't to fork out for your lack of insight. Do something about it

10
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One day an event will occur in your life that completely overwhelms you and you realise the support required from others in order to keep functioning in work, relationships etc. This could the tragic and sudden death of a partner, parent or child. At that point, if you haven’t experienced that pain, you may come to realise the ethical and moral challenges that the ‘survival of the fittest’ mindset has. Sure I agree with you that if we were animals living in the parks of Africa or cavemen who didn’t have a well evolved pre-frontal cortex. But we’re human, meaning that survival of the fittest becomes more a collective species concept as opposed to a me vs you or I win you lose idea. I think we’re smarter than that and can improve one another by helping each other as opposed to beating each other by the survival of the fittest concept.

11
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Sure you raise some good points. However, I feel I share similar views with the majority in NZ who want everyone to contribute. When they see those who actively refuse to contribute or make poor decisions get cash handouts, it not only incentivises this behaviour but it also enrages those who put in their fair share regardless of the tough times they've been through. Plenty of hard working kiwis out there that get no support even they're dealing with this "pain"

And everyone has been contributing - have you not seen how low our unemployment rate was prior to this crisis? So in historical terms, we have a very small number of people who haven’t been contributing. And there actually an optimal amount of unemployment to have. And in social hierarchies there will always been people that struggle - often no fault of their own.

Unemployment will rise now because of COVID. If you or your friend, or brother, or mother, lose your job next week because of a disease outside everyone’s control - who then will you blame? Are you going to tell them they’re lazy and undeserving of government support? They want to contribute but they can’t as there are no jobs. It’s nobody’s fault in particular. I’m sure you wouldn’t be that small?

Im fully aware of our employment figures and the impending job losses. Plenty of blue collar workers are coming into tough times. But why shouldn't they deserve government support? They pay their taxes and follow the rules only to be let down by successive governments who have allowed asset speculation to run rampant while neglecting the public services such as education and healthcare that they promised to invest in and fix. The average wage earner has seen their purchasing power evaporate, how many stay at home parents do you know? If anyone is owed anything from the government, it's the middle class.

They do need support, much like people with children that can't work!

If you want to bash 'beneficiaries' that is fine but its a pointless debate.

I know that. I'm saying we should be bashing politicians, who no nothing but tax increases, into actually giving some decent transformative policies.

What are your ideas policy wise? (honest question).

I'll rattle off a few. Stop low wage immigration, limit number of residential properties to be owned, no land sales to any foreign person/company, generous tax breaks for NZ startups so they stay here. Basically anything to achieve affordable houses and increase purchasing power of the worker. We need to stop our crazy obsession with cheap debt and house flipping and focus on productive enterprise that is stable and sustainable for the future. The amount of Kiwi entrepreneurs and professionals that take their IP and $$ overseas is frustrating to say the least.

Life in NZ is a poor proposition as a professional compared with Australia, which is a short plane ride away. The frustrations you have now are going to be the same in ten years. Congestion will be worse because we don't build anything. The houses we do build are overpriced and the already-built ones which are supposedly 'affordable' are poor by international standards. We only know how to keep importing people and keep wages sliding backwards relative to ever-increasing living costs, overseen by Councils and Govts who get bigger and bigger and have resorted to taxing inflation and now wealth to fuel their ever expanding waistlines. How do you beat the Greens wealth tax? By leaving and taking your family with you.

Evolution doesn't mean survival of the fittest. It means the ability to adapt to the environment of specific moments that also change.

As for the culture comment, you're basically saying that your culture's values are right and you reserve the right to enforce them on others. Colonialism in NZ is alive and kicking folks...

Well yes it does. Fittest to survive in the new environmental conditions. Adaptations both physical and behavioural.
You sound like a woke apologist. I never said anything about forcing my culture on anyone. I said that if you're culture leads you to have children that's fine, just don't expect the rest to pay for your individual choices. And I'm Maori by the way, so don't even try your pathetic identity politics on me with the colonialism bs.

"Sorry, when did a basic human condition like having children become a justification for punitive accountancy based on your narrow range of values? "

Umm, isn't the punitive accounting action against the single guy/girl working on the production line next to the guy with kids that gets handed and extra $200/week for having kids via WFF?

If you're using the metric that every individual is responsible for themselves and themselves alone, then I can understand your logic. As soon as one starts to consider the overall needs of society, taking into account their different opportunities, education, abilities etc, then 'having children' is not any more or less of note than anything else.

Although I do find it interesting that in your model children are seen as deficits unless proven otherwise.

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Oh, i gotta love me some"overall needs of society" which i'm sure you will be able to tell me exactly what they are..

If having children is not of more or less note than anything else, then why are we having this discussion?.. apparently you agree just because he managed to put his wotsit in her thingamajingy and wriggle around for 30sec is not reason enough to hand him some of somebody elses' earnings.

Choices.

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So maybe if we all worked as cleaners, made ill considered family planning decisions and lived in garages it would be fair???

@HOOK thank you for pointing this out .

The Greens have no interest in sharing the wealth ...............they are hell bent on all of us sharing the misery .

Besides , as a member of a professional body , I studied for nearly a decade , that was 40 years ago , simply because I knew it would enable me to get ahead in life

My grandmother did a menial job because she failed to get an education , and she told us to ensure we got well educated .

I have never forgotten what she told me as a poor, victimized and persecuted migrant from Eastern Europe .

I did the same- I studied for more than a decade, got a well paying job. Despite this, I could not afford to buy the house my grandfather could afford working in a factory job supporting a wife and three children. In fact there are basically no houses anywhere in my home city I could afford to buy.

Houses require 2 well-paid jobs now.

Attempting to have more equity in society does not mean we all have to suffer at the same level. It means acknowledging disparate opportunities and attempting to create conditions that are better for a wider range of people - and by better I mean better for them. This is what social justice is all about - pretty common stuff if you've come from an education or
Social practice background.. y'know, those parts of society that are interested in helping other people rather than taking self interest as the default setting?

Mum made some really bad choices then didn't she. And guess what... only she could make those choices. No one made her have the kids.

Oh really? No unprotected sex please, it doesn't fit with our system of values based on money being more important than people.

And what about those people who have children because of trauma?

Just pull out. Your need for free money doesn't fit into modern society

JP

You’re getting silly now. Time to have a lie down and a Xanax.

Perhaps she shouldn’t have had kids if she couldn’t afford them.

It sounds like people with low incomes (but large wealth in assets) can defer payment until they sell the assets (presumably designed so the money is only paid as part of an estate)?

Otherwise known as an inheritance tax by stealth. Part of the proceeds of grannys flat will go to the state. The Cunliffe crash and burn issue.

Or "The Auckland Council 'jeez we'd really like to make some savings here and there but why don't we just hike rates above inflation year on year and you defer it so we can pretend it doesn't have negative consequences while we run a subsidised Uber service for residents of Devonport".

There's no incentives for government to spend less and stop increasing taxes and we're now going to see fruits of leaving this unchecked at a local body level.

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The Greens new tax policy is so far out of left field it's almost farcical. The high earners will merely rearrange their tax affairs via income splitting or company registration to avoid (sorry - minimise) the tax burden so that there will be a net zero effect. If you have any doubt follow this example - I own a company, from which both I and my partner take drawings. After drawings and costs(our normal living costs and vehicles) the company pays no tax (no profit). The drawings are split so my partner and I pay the minimum tax rate. Effect? on 200K of turnover the government gets about 9K of tax. Less than 5%.. nice
This is what happens when you install a minority party in a governing arrangement - chaos

I guess they should close that loophole first then?

haha Miguel, which loophole? The tax minimisation one or the minority parties in Govt one?

Maybe I misunderstood your point, but you seem to be saying "My wife and I have decent incomes but we hide it using the company so we pay far less than the average person earning a similar overall income".

You can call it "tax minimisation" but I'd call it a loophole allowing you to shirk paying your a fair contribution to the essential services all New Zealanders use and benefit from.

Haha, you're bang on Miguel. I've paid my "fair share" (40k+pa) as an employee and I'm done with it. Watching successive Govts fritter it away has convinced me to "minimise" my contribution. Loophole? maybe but it's legal

Nope, Legal avoidance, not a loophole. The right of any citizen to avoidance is well established in law. Not evasion, that's an altogether different thing.

So you once 'did' pay your fair share, but are 'now' not paying your fair share.

How very moral of you.

That's not entirely true - see tax law Penny and Hooper vs CIR.

https://en.wikipedia.org/wiki/Penny_and_Hooper_case

If you restructure your affairs and pay much less tax than industry standard, CIR can deem it a tax avoidance arrangement.

Yep, then it becomes evasion. As established by the landmark Penny & Hooper case. Many other still legal avenues exist for avoidance though.

I've done some tax law study in the past but not a CA so certainly not an expert. I note in another comment you talk about making the children beneficiaries of parents assets - then the children using the beneficiary income to buy 'stuff' for the parents out of 'love'...is that not evasion as well under the associated persons rules? I would have thought that would be something that the IRD would be looking at?

IO. My comments were partly tongue in cheek, off the cuff. A bit more quality thinking would no doubt identify flaws in my thinking. But the sentiment behind them is formed from extensive exposure to high net worth people, the complex structures and steps they take to legally avoid tax and the limited ability of IRD to investigate. Penny & Hooper was in my opinion a widespread scam ripping off the tax system but it was obvious low hanging fruit, relatively easy for IRD to rightly prosecute. These Greens tax proposals would spawn a costly avoidance industry requiring hugely ramped up investment in the tax collection system. They are well aware such taxes deliver limited net of collection cost revenue wherever they are implemented, divert significant business energy and detrimentally distort investment decisions.

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Wow, essentially a boomer tax to fund the younger ones coming through.

I think this is great and they'll have my vote along with I'm sure the majority of my friends (30s).

More brackets, higher tax is much needed anyway. And I'm on over 100K. But very happy to pay my share into the pool.

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Whateva!!

Ah Hook, you win the genius reply award, outstanding effort there!

Although the admin behind calculating a wealth tax would be huge. How would you even go about it. Everything would need to be valued etc. Surely a capital gains tax would make much more sense.

Edit: read more and it’s only on assets over 50k. Still feel a capital gains tax makes more sense.

Even countries who DO have a CGT have ascertained it's not very effective given there are many ways to circumvent it. A CGT is inherently discriminate, difficult to administer and merely serves to enhance tax avoidance.

Land tax is by far the best tax, in combination with a capital gains tax at the same level as income tax would be fair. If that means lowering income taxes then so be it. All income should be taxed equally.

Might pay to think ahead a bit further, its not a tax on boomers who are already in/near retirement age, unless they have debt free assets of over $2m for a couple, and whose superannuation wont be taxed since it not an asset in their possession. Most boomers won't pay a dime more. But what is your kiwisaver + house + other assets going to be worth to you in a decade? Or at 55?

Good point. But if we’re lucky enough to be worth more than 2mil I don’t mind paying up. That’s a hell of a lot of wealth

Good for you. If you want to start now, you can take a few grand in an envelope and slip under someone's door in Remuera, given that the Greens believe in taking money from people who happen to own a home that has inflated in value but at the same time wants to give taxpayer subsidies to people who can afford to buy brand new electric cars.

The reason why society has to use tax instead of charity is because otherwise only the empathetic and charitable would participate in donating to make society fairer, which would leave the uncharitable and ruthless to rise to the top, take all the power and rewrite the rules in their favour. Everybody should play the cards as they lie. We just need to make the rules of the game fair and equitable... Game theory.

but at the same time wants to give taxpayer subsidies to people who can afford to buy brand new electric cars.

The electric car 'feebate' would also apply to second hand electric cars, making Nissan Leafs which you can already buy for around $12k even cheaper.

And? People who can afford brand new cars don't need the government to subsidise them. If you want to drive uptake of the used market (and help develop the businesses that service them outside of dealerships) then fine, have a capped rebate for used cars. But I'm unsure why someone who can afford a Tesla Model 3 needs help from the Government.

New cars eventually become used cars. There are very few options for brand new electric cars in NZ at present, I'm sure under this feebate policy that would change.

But I'm unsure why someone who can afford a Tesla Model 3 needs help from the Government.

They're not getting helped by the government. The policy is cost neutral. Other car buyers are subsidising them.

Exactly - one would assume, given the whinging Karen's regarding this change, that everyone here (in a relationship) has a net worth of $2 million or more!

Or simply realises that at retirement, in Auckland and Wellington at least, you'll probably want a freehold home worth ~$1m, and to cover 30years of retirement, investments that provide a decent income, which in this low interest rate environment for the foreseeable future) might mean $1m of investments for each partner.

$1m invested paying 2% is only $20k, less income tax, less wealth tax ($500k share of house + $1m investments = 1.5m, so $500k taxed at 1% = $5k), so that million dollar is going to give you a measly $13k on top of super every year. So you'll probably start spending your capital.

Just imagine if we didn't have asset bubbles as a result of driving interest rates to zero! But everyone tells me how great it is to have a property bubble?

Its a difficult one, but we've been stupid enough to put ourselves in this position. Imagine if interest rates were 5-10%. House prices would be much lower and returns on other invested capital like TD's and bonds would be much higher.....but no, we wanted credit asset bubbles, so now we need to sleep in the bed we've made. Home ownership rates would be on the rise as it would be easier for FHB's to save (better return) and prices would be lower due mortgage servicing costs.

It looks like a 'I want my cake and eat it too' scenario sorry Pragmatist.

Hey, i'm all for anything that slashes 50% off house prices.. just so long as it slashes the same % amount off the (owner occupier) mortgage that came with the house, otherwise recent FHBs get royally screwed. But no, i don't see 50% coming off, not acceptable politically, or economically. The RBNZ will keep suppressing interest rates and printing money, and the welfare state will keep handing out money left right and centre, and this merry go round keeps spinning, with nary a hiccup.

Yes and unfortunately as a result it opens up a political path for this type of wealth tax when many feel they’ve ‘missed out’

Yes I think that's the target audience Chameleon. Non-asset owners, likely millenials. Its actually not a bad strategy - despite the whinging Karen's who don't want to pay any tax on their assets, which have primarliy gone up in value because of RBNZ OCR and QE strategies.

Despite the bashing its taking here, politically it may not be a bad move. There are a number of younger people this will really appeal to.

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Taxing highly productive workers more to give to low productive workers. Dumb dumb dumb. The wealth tax isn't bad, but would be rorted until the cows come home to the point of it being ineffective.

Looks like a change to "screw the middle class, expand the lower class, slap on the wrist to the rich who will just use clever accountants". Brilliant way to have a competitive, productive economy.

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Can someone please explain to me how weakening those with some wealth will strengthen those without ?

We've tried, over the last 30 odd years, making a select few wealthy - and see where it got us. How do you define "some wealth"? A house, and other assets of 100k? 500k? A million?

This is an equal opportunity country , no one stopped you or anyone else from becoming "wealthy ".

Its got nothing to do with a "select few "

John Key grew up in a State Home ................just saying

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Pointing out that John Key's generation were provided with adequate social housing, free university education isn't really a great argument that we live in a equal opportunity country. All you are describing is that we USED to live in a equal opportunity country.

A friend who works at a low decile school sees the barriers faced by students from low income households. They have poor housing situations, food insecurity that all place barriers in front of a kid abilities to learn. Lets say they overcome all this, and the low income kid goes to university. They won't be getting mum and dad to pay, so they will likely come out the other side with a lot more debt. Now they wish to purchase their own home, but have to struggle with rents that take an increasing proportion of their income. And instead of buying a house at 3 x median income, its now at 8. So they have to save a huge deposit while house prices increase faster than they can save it. How are the majority of FHB able to secure their first property these days? They get help with their deposit from family (estimates are between 50-75% depending on region). So those who don't come from wealthy families are far less likely to escape being lifelong renters, or amass "wealth" as someone who comes from a wealthy family. And all this ignores the social connections and opportunities that are available to those that come from wealthy families.

So no, we don't live in a "equal opportunity" country anymore. It sounds like the Greens are attempt to "level out" the playing field for future generations - although I'm not sure their plan is going to achieve those goals - the goals to give New Zealanders equal opportunities to get ahead is a good one.

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OK Miguel, here's a case study for you. A child's parents dissolved their relationship shortly after said child was born. Father paid little or no support so Mother constantly struggled. Mother moved from Auckland to an extremely deprived small town ( a flat in Remuera to a place called TeTeko (google it) Childs mother was killed in a car accident when said child was 16 leaving him an orphan. Child got himself an apprenticeship at the local mill (Tasman Pulp & Paper) Child completed apprenticeship, served 10 years at the mill and left to become self employed. Child is now worth over 2Mil (stocks and property). I've seen the treatment meted out to children in low decile communities and it comes from the parents.. NOT the state. Everyone has choices and opportunities.. it's what you do with them that counts. Everyone is responsible for their own destiny, family wealth probably helps but is NOT a prerequisite. Blaming "family wealth" or the lack thereof for differing outcomes is a sop and does nothing but muddy the waters and obfuscates the real issue.. lack of parental responsibility,care and support. You could add accountability to that as well.

Fantastic comment.

Sure, there are always those odd exceptions, but if you look at the average kid in that environment, they are unlikely to break out. They see and acclimatise to the cars ticked up on finance, the poor financial decisions (Lotto, nags, etc), and the low ambition of their peers.

In fact, in your story I suspect the fact the mother died enabled the kid to break free, forced some harsh reality and a situation the kid had to get out of on him.

Oh yes, anecdote. The most powerful refutation available.

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