Wednesday, February 10, 2010

Did somebody say something? [with ongoing updates]

Liberty Scott responds to John Boy’s “step change” no-change.

     _quote He shouldn't have wasted his time.
    “National is truly back to form, the conservative do-nothing tinker party.
    “Unless voters demand it, the next serious chance for uplifting New Zealand will come with the next serious economic crisis. That wont be for another generation.
    “There will be ever increasing government waste from picking losers; mediocre centrally-planned and provided education and healthcare; a continued growing underclass of hopelessness; and a largely low value commodity based economy struggling to get market access to a world that ignores it.
    “Not enough to encourage me to return to the highly taxed, low value currency backwater when there are opportunities in the US and Europe.
    “There is nothing in this to remotely encourage me to return.”

In other words, John Key is just being a National PM.

More comment from around the traps:

  • MACDOCTOR: “Apparently, John Key gave a speech today in parliament. Must have slept through it.”
  • Cactus Kate: “I am not even going to rate the speech as it was just like sex without the orgasm. Not worth bothering about.”
  • NO MINISTER:  “. . . Spending Political Capital - 10 cents at a time.
  • Eric Crampton gives it a C- grade: “Well, the good news from Key's speech is that we're not going to get a land tax. The bad news, surprisingly, also is that we're not going to get a land tax. . . “
  • Visible Hand in Economics “There was nothing in the speech . . .
        “I’ve heard rumours they would change GST in October.  Increasing GST just before Christmas, with no compensation, and coming out of a recession with elevated unemployment is what I would term moronic.  As a result, it can’t be ruled out. . .
        “I heard today that we were going to hear about ‘significant changes to the tax system,’ something about a ‘step change.’  Other than the possibility of a slight shift from income to consumption taxes there was nothing in this speech.  To be honest, it makes me laugh a little.”
  • NBR: “If the Government goes ahead with its entire tax reform package it will be able to cut the top rate of personal tax, corporate tax and trust tax to 30 percent, as well as creating a tax free earnings threshold and compensating low income people for the rise in GST, a tax expert said today.
        “Buddle Findlay tax partner Neil Russ said there was a ‘smorgasbord of options’ that the Government could take if it raised GST to 15 percent and cut the depreciation claims on investment properties. . . ”
  • Bob Buckle, in the Herald, notes the small print: Buckle also found it significant that Key had only ruled out a "comprehensive" capital gains tax.  "It is still distinctly possible they are thinking about some more restricted capital gains tax, such as one applying to property sold within two years or three years of buying it. . . "
  • Fran O’Sullivan fills in some details: “But he left property investors up in the air by failing to say exactly what measures his Government would announce.
        “Tax experts suggest these could involve any or all of the following options: Wiping depreciation on buildings (the Taxation Working Group estimates this could be worth $1.3 billion), putting rental losses in quarantine so they can't be offset against other income, restricting tax losses to $10,000, or, taxing all gains on residential properties after April 1, 2011.
        “The upshot is property investors - and prospective house buyers - were yesterday all aflutter as they played guessing games.
        “Some are likely to hold-off on making an acquisition until after May 20. Others will get out now in fear that property prices will take a drop after the Budget.
        “This is not great governance. . .
        “The Prime Minister subsequently cut through the confusion on Larry Williams' Newstalk ZB show by indicating the Government indeed plans to raise GST and wipe depreciation. It is also planning to reduce company tax.”
  • “Tax changes could hammer cost of doing business in NZ” says Connal Townsend: “The cost of doing business in New Zealand could take a hit if Victoria University’s Tax Working Group suggestions go ahead, according to some property experts.
        “The Property Council of New Zealand commissioned financial advisers KPMG and NZIER to produce reports about the impact of the proposed changes.
        “If depreciation were abolished and land taxes applied, it would have the same effect as if the productive sector’s taxes were increased, making it more expensive to do business in New Zealand, the reports found.
        “According to Property Council chief executive Connal Townsend, commercial property is the infrastructure of business and is fundamental to productivity, international competitiveness and growth.
        “’But more than 80% of commercial property is owned or occupied directly by business owners and the proposals around depreciation would be the equivalent of an effective rise in tax from 30% to 32%,’ Mr Townsend said.”
  • Lindsay Mitchell: “Nobody should be under any illusion that National is getting tough on welfare. They should be red-faced over these window-dressing gestures. Really. It's nothing more than 'been there, done that.’ ”
  • Will de Cleene: “NZ is a freaking backwater in a global recession. There's pluses and minuses to that. And John Key doesn't get it.”
  • Shane Pleasance gives you “John Key's REAL Tax Speech”: “Forget Australia – we could be the Switzerland of the Pacific. Further to our election promises, today I am lowering your tax rates dramatically, and comprehensively.” Sadly . . .
  • UPDATE: The Standard uses M.C. Escher to illustrate John Key’s “Step Change”.  Very apposite.
  • UPDATE: Dodger Rugless says there should be No Tax Changes Without Spending Restraint. (If you’ll recall, however, it was Dodger Rugless who introduced the Goods and Services tax.  And under Dodger Rugless, the government’s total tax take went up . . . )
  • UPDATE: Keith Ng writes to the DomPost: “Dear DomPost. Your headline today, in very large letters, said "$4b in tax cuts coming".People might read that, and think that there are $4b in tax cuts coming.Except that it's $4b in tax cuts, funding by $4b in tax hikes . . . ”
  • UPDATE: Brad Taylor: “One thing really pissed me off though: the suggestion of unspecified reforms to liquor licensing rules to address the Problem of Binge Drinking. This means that beer is likely to get more expensive and less conveniently available so the government seems like they’re doing something. Not cool, John.”
  • UPDATE: Dim Post says The Sun King stumbles: “They haven’t decided what they’re going to do yet, just what they’re not going to do.” On reflection . . .
  • UPDATE: Education Directions: “. . . there are some big announcements for tertiary education . . . ” [hat tip TVHE]

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