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.
[ read more ]

mist Posted:
Perhaps IMF formulas are not accurate for this area.
(view article + comment)
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?
(view article + comment)
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.
(view article + comment)
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????
(view article + comment)
DGS Posted:
SEE ABOVE
(view article + comment)

Recent News

BusinessDesk: "US economy remains vulnerable to shocks from Europe" - Interest, 3 Feb 2012 Tweet It's been a great start to the year and investors found little reason to change much today, ahead of January's US jobs report due tomorrow. While Federal Reserve Chairman Ben Bernanke told lawmakers there were signs of improvement in the...
Oi! You’ve missed a bit... - Economist - Babbage, 3 Feb 2012 HOW much easier it would be to locate and repair damage to bridges, wind turbines and other dumb objects if those objects could tell you what the problem was. Researchers at the University of Strathclyde, in Britain, led by Mohamed Saafi, are therefore trying to give them a voice, by devising a...
Survey of Banks Shows a Sharp Cut in Lending in Europe - New York Times, 3 Feb 2012 The figures raise concern that Europe is on the verge of a credit crunch that would cause a deeper recession than had been expected.
TYSON: America’s Three Deficits - Project Syndicate, 3 Feb 2012 TYSON: America’s Three Deficits The US faces painful choices about how to close its long-run fiscal gap, and a credible plan should be decided now and implemented promptly – but only after the economy has recovered. For the next few years, the priorities of fiscal policy should be jobs,...
Dollar hampers 'knowledge intensive' exports - Stuff, 2 Feb 2012 The strong kiwi has stymied growth of high value exports in "knowledge intensive manufacturing", according to briefing papers from MED.
MED report highlights problems for high value exporters http://t.co/VoLBDWMv
3/02/2012 12:37 p.m.
Sales bounce at year end http://t.co/VtI5uuSq
3/02/2012 9:56 a.m.
Monetary policy matters http://t.co/45wTSnWd
2/02/2012 1:25 p.m.
New RBNZ Governor and prospects for policy change http://t.co/TiVh9HQY
31/01/2012 2:25 p.m.






In the media posts

Showing 1 of 11 pages

03/02

Sales bounce at year end
Print-friendly 0 comment(s) Posted in: In the media

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2012, shows total sales in December 2011 increased 5.27% (export sales increased by 15.4% with domestic sales decreasing 0.47%) on December 2010.

The NZMEA survey sample this month covered NZ$515m in annualised sales, with an export content of 40%.

... read more...



tags: survey, staff, exchange rate, traded sector, markets


02/02

Monetary policy matters
Print-friendly 0 comment(s) Posted in: In the media

A change in the Reserve Bank Governor provides an ideal catalyst to change the Policy Targets Agreement between the Reserve Bank and the Government say the New Zealand Manufacturers and Exporters Association (NZMEA). Bill English commented yesterday that monetary policy was not important as inflation pressures are low, but monetary policy is still vital to an improved performance from the...

read more...



tags: monetary policy, alan bollard, traded sector, policy targets aggreement, bill english


26/01

RBNZ must respond to quantitative easing and lower interest rates elsewhere
Print-friendly 0 comment(s) Posted in: In the media

The Reserve Bank of New Zealand (RBNZ) needs to respond to unorthodox monetary policy implemented elsewhere if we are to see an export lead recovery this year say the New Zealand Manufacturers and Exporters Association (NZMEA). This morning the Reserve Bank announced an unchanged Official Cash Rate and no plans to match measures used in other countries – this will continue to damage our...

read more...



tags: rbnz, ocr, quantitative easing, non-traded inflation, exchange rate


19/01

CPI down, OCR cut makes sense
Print-friendly 0 comment(s) Posted in: In the media

The Consumers Price Index has dropped 0.3% in the December quarter and inflation increased by 1.8% year on year, well within the target band. That allows plenty of room for monetary policy that supports exports say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “With problems continuing in Europe and a weak domestic economy,...

read more...



tags: reserve bank, ocr, cpi, loan to value ratio, monetary policy


16/01

Currency a problem to be managed
Print-friendly 0 comment(s) Posted in: In the media

New Zealand’s currency overvaluation cannot be simply put down to economic weakness elsewhere say the New Zealand Manufacturers and Exporters Association (NZMEA). It is the monetary policy contrast between the RBNZ’s inaction and the interventionist policies overseas that accounts for a persistently overvalued currency.

NZMEA Chief Executive John Walley says, “The ‘there is nothing...

read more...



tags: currency, monetary policy, rbnz


22/12

A better but uncertain end to the year
Print-friendly 0 comment(s) Posted in: In the media

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during December 2011, shows total sales in November 2011 increased 4.24% (export sales increased by 10% with domestic sales increasing 0.97%) on November 2010.

The NZMEA survey sample this month covered NZ$509m in annualised sales, with an export content of 38%.

... read more...



tags: survey, exchange rate, monetary policy, european crisis


21/12

Slow insurance action heads raft of earthquake issues
Print-friendly 0 comment(s) Posted in: In the media

Insurance issues are topping the list of concerns from manufacturers after the Canterbury earthquakes say the New Zealand Manufacturers and Exporters Association (NZMEA). The City Plan, electricity line charges and the impact of the earthquake on the labour market were other key concerns raised at a meeting last week.

NZMEA Chief Executive John Walley says, “There is hardly a...

read more...



tags: canterbury earthquakes, business interruption, city plan, insurance claims


16/12

Port strike hits supply chains hard
Print-friendly 0 comment(s) Posted in: In the media

Exporters are paying a high price for the industrial conflict at the Ports of Auckland say the New Zealand Manufacturers and Exporters Association (NZMEA). News of further strike action from the 30th of December until the 1st of January is concerning exporters who have already had a disrupted year.

NZMEA Chief Executive John Walley says, “For international buyers supply chain...

read more...



tags: port strike, ports of auckland, supply chains


08/12

RBNZ remains reluctant to act
Print-friendly 0 comment(s) Posted in: In the media

The Reserve Bank’s reluctance to act upon serious economic problems demonstrates the need for Reserve Bank Act changes say the New Zealand Manufacturers and Exporters Association (NZMEA). The Reserve Bank left the Official Cash Rate at 2.5 percent this morning.

NZMEA Chief Executive John Walley says, “The RBNZ has offered a dismal forecast with a worse alternative scenario which...

read more...



tags: rbnz, exchange rate, non-traded inflation


02/12

Cut OCR to match northern economies
Print-friendly 0 comment(s) Posted in: In the media

The New Zealand Manufacturers and Exporters Association (NZMEA) is advocating an Official Cash Rate (OCR) cut next week in response to the problems in Europe and the USA. A cut would help to take some pressure off the currency in the short-term and add some kick to any OCR rises later on.

NZMEA Chief Executive John Walley says, “It is naïve to think that we will be insulated from...

read more...



tags: reserve bank, ocr, reserve bank act, exports