What is the Real Economy?
The ‘Real Economy’ is made up of the farmers, manufacturers, tourist operators and service providers that sell to the world and generate New Zealand’s external income. As Angus Tait once said, “There are three ways to generate wealth; you farm things, you make things or you dig things up.” That is the essence of the real economy.
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mist Posted:
Perhaps IMF formulas are not accurate for this area.
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mist Posted:
" tax increases in one area supports decreases in another is correct" it can only be correct if it is true. Observation and repeated sampling has proven that the hypothesis is faulty. Tax increases in one area are not causally linked to decreases elsewhere - not "possibly", not "it adds up". "Philosophically" it _might_ but testing proves it does not. One could even say "it should" but we both know an equivalent term for "it should" is "doesn't" What drives taxes down is political advantage. If a political party has an agenda they don't want the public to look at too closely, then sweeters (aka "bait") is put forwards. Tax decreases is a classic. This can be achieved because the tax increases and tax decreases are not linked. They're not zero sum nor do they have causal or proportional connection. This is because the "buffer solution" in the middle is that endless hole. tax increase means more spending. tax decrease means more government borrowing. The in/out relationship is decoupled, through size and power in the marketplace (financial economy). The abysmal productivity is because of the massive overheads from doing business in NZ. personal taxes double the rates of the US, huge taxes on goods and services, massive levies on critical imports, price gouging in the energy and communications markets, interest rates 300 to 500 times that of the US!, and not nearly the number of cost writeoffs either (subscriptions, training, vehicle rebates). Nor would get the 401k option either, of rebuying into the same market and not having to pay CGT. Oh and horrendous ever inflating local rates, again much much higher, for less, than our foreign counterparts (excepting Scandinavian countries). Our "abysmal production" is a result of this overtaxation being sand in the gears of the economy, wearing it down and rubbing out real growth. Putting CGT makes that problem worse!! And to sum up... your last comment.... O.M.G. You think that improving our situation, of people not wanting to save or invest in government buggered industry is to bugger up the ability to accumulate equity in useful assets??????? Where do you think people are going to get savings or capital to do anything??? (including retiring when their earning ability is severely reduced!) Put it in finance companies???????????? Buy the oh-so-excellently-performing NZX? In the few companies squeaking by?
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John Walley Posted:
I think we agree on the lending without security issue. It might well be that the intent to change the source of tax and not increase government spending is fictitious, however given the provision that government spending does not change the statement that tax increases in one area supports decreases in another is correct. The broader point is demonstrated by the Romney situation where he pays tax at half the rate of his salaried staff - and in the USA capital gains carry a 15% tax rate - it will be interesting to see how that one pans out. For New Zealand the economic distortions supported by the complete absence of capital gains tax are clear from our abysmal productivity record. Why save, why invest in production (taxed interest paid or via the income statement) when money can be made without tax from passive asset appreciation.
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carl Posted:
"a Capital Gains Tax means less tax in other areas or lower borrowing for the same amount of government spending. " Only in your wildest dreams, mate. a drip or a bucketful does not change an infinite hole. The only reduction in tax you would see is short-term, and done to create a perception. Once the elephant was sold it'll be put back up, often with extra claw-back clauses to catch more cash. And Banks do lend for shares - but at lower rates of coverage. 50% for business assets is rule of thumb, 80% for first mortgages, 20-25% for basic unencumbered share parcels. with additional security and reasonable ability to cover debt servicing compliance. That's the ball. So why's the man (original poster) running with such blatantly obvious fouls????
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DGS Posted:
SEE ABOVE
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Blog only posts

Showing 1 of 3 pages

07/07

Capital Gains Tax objections and the answers
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With Labour proposing a Capital GainsTax it is worth looking at some some of the arguments against it.

Arguments from those who opposed to taxing capital gains and the answers:

  • 'Rental incomes will rise' - rental incomes are governed by supply and demand and the tenants ability to pay whether or not the landlord is paying more or less tax is...
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tags: capital gains tax


28/06

Commodities killing exports?
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There has been a view that high commodity prices are reducing the impact of the high New Zealand dollar. This is despite the fact that commodity exports only make up a quarter of our exports and there are numerous other reasons for the dollars’ appreciation.

This graph shows that only 25 percent of New Zealand’s exports are solely reliant on commodity prices. For the...

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tags: neville bennett, exchange rate, export profile, capital controls


10/05

IMF calculations on house prices and the exchange rate
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These tables from the International Monetary Fund’s (IMF) report on New Zealand calculate the extent to which New Zealand's housing prices and the exchange rate are overvalued.

They indicate that there has been little economic rebalancing.

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tags: imf, house prices, exchange rate, economic rebalancing


26/04

Post earthquake - Elastomer Products Ltd
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Efforts to stabilise the factory, temporary office buildings outside and storage containers have allowed Elastomer to get production back up and running. There were options to relocate to the unaffected Western side of Christchurch but after consulting with staff it was evident that everyone was determined to do whatever was necessary to keep the existing plant open.

...

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tags: canterbury earthquake, elastomer, epl, tom thomson, mark field, andy mcnicholl


18/04

Post earthquake - Ravenscroft Ltd
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In the wake of the February 22 earthquake some Christchurch manufacturers have sustained severe damage while others have come through largely unscathed. Many that have sustained the damage have got through with due to the determination and dedication from staff involved, and the help and cooperation from others in the sector. We have collected the stories firms have shared.

...

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tags: ravenscroft, christchurch earthquake


14/04

Post earthquake - Windflow Technology Ltd
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In the wake of the February 22 earthquake some Christchurch manufacturers have sustained severe damage while others have come through largely unscathed. Many that have sustained the damage have got through with due to the determination and dedication from staff involved, and the help and cooperation from others in the sector. We have collected the stories firms have shared.

...

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tags: christchurch earthquake, windflow technology ltd


05/04

Post earthquake - Vynco Industries (NZ) Ltd
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In the wake of the February 22 earthquake some Christchurch manufacturers have sustained severe damage while others have come through largely unscathed. Many that have sustained the damage have got through with due to the determination and dedication from staff involved, and the help and cooperation from others in the sector. We have collected the stories firms have shared.

...

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tags: vynco industries, christchurch earthquake


04/04

Post earthquake - Tait Radio Communications
Print-friendly 2 comment(s) Posted in: Blog only

In the wake of the February 22 earthquake some Christchurch manufacturers have sustained severe damage while others have come through largely unscathed. Many that have sustained the damage have got through with due to the determination and dedication from staff involved, and the help and cooperation from others in the sector. We have collected the stories firms have shared.

...

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tags: tait radio communications, aaron robinson, frank owen


04/04

Post earthquake - Plastech Industries Ltd
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In the wake of the February 22 earthquake some Christchurch manufacturers have sustained severe damage while others have come through largely unscathed. Many that have sustained the damage have got through with due to the determination and dedication from staff involved, and the help and cooperation from others in the sector. We have collected the stories firms have shared.

...

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tags: plastech industries, graeme rickard, earthquake support subsidy, pacific plastics


24/11

SWG reiterates Standard and Poor's concerns
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The Savings Working Group has released a statement outlining New Zealand's savings problems. The Group chair Kerry McDonald said these problems included a land and farm price bubble, a halving of productivity growth and skewed growth towards the non-tradeable sector in a speech to a Taihape Rotary Club.

McDonald said:

"output and employment had actually declined from the...

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tags: savings working group, standards and poor's, credit rating, foreign debt