Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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14/7/11

Gareth Morgan explains that claims capital gains are already taxed are 'Rubbish'


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Gareth Morgan explains in this article for the Herald that with assets making deficient returns not being taxed for capital gains it is ridiculous to suggest capital gains are already being taxed:

"Tax applies if the purpose of your investment is to make a capital gain, in theory. I say in theory because a paradoxical feature of our investment landscape is the large number of assets that do not yield an income rate of return even equal to the risk-free rate the Government pays on its bonds.

Why then, you would wonder, would folk invest in assets whose income return is so deficient, if their purpose of investment was not capital growth, and why if this is the true objective do they not pay tax on capital gains? They will argue they're waiting for the long term when the income will grow, so really they are after income.

Rubbish. The reality is commonly quite different, capital growth is a very attractive objective given that in reality it is easy to make it tax free. So long as the tax regime is so porous, we're encouraged to think along these lines, and to the extent we all do, we will all behave in the same manner and the capital gains will be assured. It is a self-fulfilling consequence of a compromised tax regime.

The allocation of our capital in New Zealand is not consistent with maximising productivity, or the generation of income. It is this that is responsible for our poor growth in per capita incomes over several decades now, and our slippage down the OECD league tables.

But from the individuals' perspective, if you can make the most of your return from asset price appreciation then income generated is of secondary importance."

http://www.nzherald.co.nz/business-editors-picks/news/article.cfm?c_id=1501981&objectid=10737829



tags: capital gains tax, gareth morgan, capital allocation, intent rule

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