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Showing posts from February, 2019

TWG Review - Expert Calls Ardern's Handling of CGT A Crisis

Damien Venuto is a name we are yet to be familiar with however after this stunning revelation today I am sure he will be quickly elevated up the ranks at The NZ Herald to senior Business editor in no time.
Shock horror -
Business NZ, The Employers and Manufacturers Association, the Canterbury Employers Chamber of Commerce and the Property Investors Federation were just some of the organisations to fire out releases before the ink had even dried on freshly printed copies of the report.
Of course they bloody well did!
Just as every single time an issue deeply affects low income workers, the Unions get their hit-men and women out to produce pro-worker material the same happens on the other end of the spectrum when you are proposing to cost business billions extra.
I produced my posts because I am pro-business, pro-right wing and pro-making money.  Everyone reading this knows that.  Money doesn't solve everything but having it sure as hell beats having problems and being poor. Being b…

TWG Review - Part 1 of What Taxes Would I Introduce?

The Tax Working Group were given a terms of reference by Junior Finance Minister Grant Robertson.
They were specifically excluded from raising the following:
Increasing any income tax rate or the rate of GST Inheritance tax Any other changes that would apply to the taxation of the family home or the land under it, and
Exceptions 2 and 3 were all political.  In other words - not even someone with a Ph.D in Communications from Te Whare Wananga o Waikato could sell them currently.  I have already explained how stupid it was from an independence stance that the TWG was not allowed to examine 3. The TWG report itself as written by the author (presumably Michael Cullen's scribe) was gagging to do it.
I often discuss at geek times with likeminded people in my profession of looking after rich prick's assets, as to what taxes our rich prick clients' most hate.  In other words the taxes we are paid the most to avoid work around.  The leading contenders are all forms of:
1. VAT/GST/ Sa…

TWG Review - The "Kiwi Way of Life"

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Today we received the first soft sell on CGT by Prime Minister Ardern.
She is still far off the mark in reaching the hearts and minds of the vast majority of New Zealanders on this issue however here are a few statistics I will put out there to help her. 
Exhibit A
Exhibit B
New Zealanders’ individual net worth increased with age until around retirement. People tend to build net worth throughout their lives. In 2018, young people (15–24 years) had the lowest median individual net worth ($2,000); people of traditional retirement age (65–74 years) had the highest ($416,000).
Exhibit C
The median net worth of the typical Kiwi household in the June 2018 year was $340,000, up from $289,000 three years ago – mainly reflecting rising property values. The median means half of all households are richer and half are poorer than this value.

In short form if you have $416,000 in assets you have more assets than 50% of those of retirement age.  If you have $340,000 in your household in net wealth you …

TWG Review - Cullen Making CGT A Dud

Initial reaction to CGT proposals from the TWG has been pleasing.  The public hate it.  Business hates it.  Oldies who Winston Peters has to pander to, hate it.  The left are unhappy the report doesn't cover enough!.
Opponents of CGT should be happy with the initial comments from Michael Cullen.  He is butchering the sale in a meganormous fashion:
"Everybody else has [a capital gains tax]. The United States, the United Kingdom - these rabid 'socialist' countries like the United States have a capital gains tax," Sir Michael joked.
"France, Germany, the Nordics - they all take it for granted. Many of them have higher productivity than we do. The world doesn't collapse with the introduction with a capital gains tax."
"The sky doesn't fall in," concurred Garner.
"If it does, we'll tax it," Sir Michael quickly quipped.
It is this sort of smarmy salespitch that undermines; anything Michael Cullen wished to achieve, Jacinda Ardern&#…

TWG Review - Treachery in the Ranks

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I went through the background of each tax working group review member the other day .
Surprisingly there were three dissenters who did not agree with all the recommendations of the TWG.   Joanne Hodge, Robin Oliver and Kirk Hope.  I say "surprisingly" as first up we had policy wonk Robin Oliver dissenting for the introduction of any new tax.  Hodge and Hope were welcome surprises to stick up for the taxpayer.  
While the political leanings of Cullen, van den Belt, Rosenberg and Raumati-Tu'ua would be bleedingly obvious, had the following alleged pro-business members of the TWG stood up and dissented as well it would have thrown the entire TWG into disarray and in all likelihood force Labour to drop the silly ideas altogether. Malarao works at Meredith Connell in enforcement so it is likely he would have a left of centre view on tax.
So the members guilty of treachery follow - Elliffe, Nightingale and Redington.   All from business and accounting backgrounds, Elliffe and…

TWG Review - Maori and Tax

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We all know that Maori collectively own large clumps of land in New Zealand.  Some of it more productive than others.  We all know that Maori own collectively tens of billions of dollars of assets in New Zealand.  A lot of it currently paying zero tax and rates at all.  Not surprisingly the TWG found the 17.5% tax rate for Maori authorities "appropriate" although they wanted it extended to subsidiaries!

The TWG have in other words bent over backwards to exempt Maori as much as possible.

The TWG remember is meant to be designing a system of tax that uses resources more efficiently.  That is why they dug into residential housing because there is a belief that your $ in providing rental housing is less efficient and not as good as your $ investing to artificially prop up our underperforming company CEO's and boards with compulsory Kiwisaver.
So how did the TWG deal with Maori?  They effectively hospital passed it with many waffly references back to the politicians to deal…

TWG Review - Why The CGT Exemptions?

So today the long awaited Tax Working Group has come out with its recommendations.  The full report is out at 
Volume 1  Volume 2 - CGT
I wish to cover first how silly the exemptions in the report are in for Capital Gains Tax. The Report at 2a and 2b states the TWG:
"recommends including gains and most losses from all types of land and improvements (except the family home), shares, intangible property and business assets". "recommends not including personal-use assets (such as cars, boats or other household durables)".
1. Why exempt the family home from Capital Gains Tax?
If the only answer is that it is politically unsaleable then there is absolutely zero justification for the exemption.  If the next answer is "but other countries do not do it," then again there is zero justification.  The proposed rates of CGT to be your marginal rate without an inflation adjustment, are some of the harshest in the world and as a NZ resident would apply on offshore assets…

What The Huawei Is Going On With China? - Part II

So after much fuss in their shock and awe PR campaign, Huawei The Herald have suddenly gone silent with stories of China doom.  They've either run out or ceased to be supplied with them through previous channels.
The last to run was on Monday that trumpeted the "China Chill hits New Zealand Schools - Student downturn may hit Kiwi parents in pockets".  This was of course total nonsense.
"Patrick Gale, principal of the country's biggest school Rangitoto College, said 71 Chinese students had enrolled to study at the college this year but 10 per cent cancelled their enrolments".  
So seven.  Woopie.
"Schools, private training institutes and polytechnics are worst hit. Chinese student visas dropped during the year to December by 30 per cent in private institutes, 10 per cent in polytechnics and 5 per cent in schools".
So a meagre five percent in schools, ten in techs and thirty in these "private institutes".  University enrolments were UP.
And …

What The Huawei Is Going On With China?

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It is quite clear after reading NZ mainstream media's excited trumpeting this last week on China that none of them have a clue about what is really happening with the NZ-China relationship and the implications of that.
This is hardly surprising as no one in a privileged position to understand what the Chinese really think of New Zealand and what they actually are doing about it, would ever talk about it out of turn let alone to media.  
We are all just guessing.
Anyone that influential in China understands that the Mainland not only watches its own people closely, they issue J Visas to journalists who forever are tagged and watched wherever they are.  Are journalists phones, laptops and wifi use monitored? Well I have a bridge to sell you if you think for one minute they are not and cannot be.  The Chinese regime know who they are and what they do even if they haven't ever been in the country.  And maybe even have enough information to right now know their sources are and com…