So much for your tax cuts

Need to get a good analysis of their tax package against Labour - big change for high-income earners by 2011 when that top tax rate disappears. In fact, is for anyone over $50k so that will have a massive impact. Will search for a direct comparison, might put one together myself. NZIER will have their spreadsheet updated shortly I imagine.

Gutted that they've gone after Kiwisaver and the R&D tax credits - for fucks sake, those were two of the best economic policies Labour implemented in the last decade. Improving capital availability and innovation should be the underpinning of our economic policy and they've watered down or removed them.
To be fair, they have made Kiwisaver a more affordable position for the country and given it's massive uptake perhaps we are about at the point where fund growth will continue anyway, but the contributions should have continued to increase, even if it was at a slower rate. Messing with the wrong policies mate.

Exactly

Did you read my post already made above to bob_d?

I will quote it again for you.

I reckon government should spend more of their time trying to get public to learn how to save their money. In the LONG run, this is what will improve economy. People are living in credit and spend way more than they can afford.

Imo, increase the interest rates to the point where on one can borrow. Maybe that way society will learn to save.

Oh, sorry missed it...

I get it.

I'm not too bothered on slowing down Kiwisaver right now. We can change it later when the world financial situation has improved. At least they haven't scrapped it.

I think policy should be flexible with the times.



Totally agree with this. I don’t think people understand how important R&D is for economic development. There are some economists, most notoriously Austrians, who believe GDP is a fallacy to measure economic growth with, especially if it increases as a result of deficit spending.

Growth is possible as a result of ‘savings’ and entrepreneurs who drive innovation. R&D can be included in that process. While I still think the measurement of GDP can be useful, I tend to agree with the general sentiment.

Has National released any policy regarding the Kyoto Protocol?

Heh just made a comment regarding this to Gdub.

Actually some believe that government policy (especially Keynesian economics) has led to a culture of debt.

As quoted from the 4th edition of Paul A. Samuelson's Economics:




Read this: The Paradox of Thrift: RIP

http://www.cato.org/pubs/journal/cj16n1-7.html

Not so sure, long-term capital retirement fund policy should not be changed on political whims. It should be a cornerstone of economic policy

how do you figure you're earning below minimum wage?

regardless, how is it the governments fault you need a better paying job?

The problem with this, is that it eats into peoples savings at a time when we need to reduce our addiction to debt. See the quote from Paul Samuelson's Economics above re: social security.

Ah ha... Cheers Rival. I've bookmarked the page.

got any quantitative/qualitative data at hand given Key's statement that: "It's clear that the tax credit has created a lot of business for tax accountants and tax advisers, but evidence of real increases in R&D is harder to find."?

And remember central bank policy of fixing interest rates below the market level has the effect of penalizing peoples savings. As the honorable Austrian economist Ron Paul will contest in this historic grilling of Ben Bernanke.

[/quote]

No I don't, but then I don't think looking at the business created for tax accountants is any more indicative of it being failed policy. Does such data exist on the investment companies have performed into R&D as a consequence of the policy? A study would need to be preformed before we could really know for sure.

But I make no attempt to hide the fact I am in support of R&D out of share principle. Especially at at time when globalisation makes the need for deriving comparative advantage all the more pressing. Not-to-mention the climate crisis is not being taken seriously enough. I am in full support of giving big incentives to R&D to promote innovation, development, cleaner methods, greater efficiency out of say farming methods et al.

totally
it shouldnt be a football.... otherwise we will never gain the benefits.

Policy flexibility is one thing, but certainty for long-term investment decisions is much more important in the case of this. Set the rate at one that's appropriate throughout an economic lifecycle and leave it.

a pity the football was kicked into touch in '75

How much have they changed it by and does this change really qualify as being apt to use a football analogy?

Also is this a fixed principle for both yourself and Gdub? For instance if the Great Depression x 2 was occurring, would you reconsider cutting away a policy to help your fellow citizen? I don't think any of us have any real idea how bad this situation could become. At the moment we seem fairly isolated as a country but then the repercussions are ongoing and pulling more countries into the fray as it spreads. Read about Iceland lately?

Way to miss a joke William Tell.

Rival, that's an over-the-top analogy. He has cut two very specific policys (so far) to pay for a reduced tax take.
I'm saying it shows a disdain for the type of policy I think NZ needs. He left everything else alone and went after those.

For the record I am not anti-kiwisaver and the points you have made stand. I was more interested in how the policy effects peoples ability to save and spend in a time of global economic uncertainty and whether flexibility should be an option.

Key might not even give a shit regarding the concerns I expressed and might just be cutting it for the sake of party principle.

Interesting that the Herald are being pretty negative on it so far (decrease Kiwisaver, cut R&D, lower income earners get less) while Stuff are being positive (Nats trump Labours tax cuts)...

Changing the Kiwisaver T&C's wont be good for public confidence.

Right now I'm thinking I'm glad I haven't joined because my private scheme will be way better in the future.

so basically (using the calculator on national's and labour's website), if you are on kiwisaver, you will only be better off under National's tax cuts if you earn more than 44K per year (below 44k you're better off under labour).

You only get a noticeable difference once you get up around 50K. So basically, as expected it's a tax cut for higher income earners. So if you're earning the average wage, there is no difference between labour's and national's tax cuts. I guess that's a bit of an anit-climax.

oh yeahhh bayyybeeee

Gee there were a few people banging on about not just voting for the party that was going to give the biggest tax cut and yet your whinging about getting a cut in a handout in disguise. You would think that National is cutting something that has been operating for 20 years from the reaction of you people. You can all still choose to save more from your increased disposable income if you choose, but if you have mortgage payments, kids to feed etc why not. And lets face it we are entering troubled times and most people will be looking to get on top of their financial situation than worrying about a few dollars for their retirement. And your not going to change peopls attitudes of using property to build wealth in the short term anyway. Also to expect employers to shoulder the burden of a nation of poor savers is somewhat dubious anyway. Small business makes up the majority of employers in this country and I would think there are many which are actually marginal operations. When times are good of course everything is fine but no one knows how our economy is going to handle the next few years. Whos to say kiwisaver might not be the straw that breaks the camels back.
Cutting kiwisaver for the time being is not that bigger deal in the big picture and in a few years we may look back and think it was a wise decision. Afterall it can always go back up.
I'd be more concerned about the cuts to R & D but maybe the current method is not working and leading to a fiddling of the books, I don't know hopefully National can bring this back in some form. But of course its easy to target National on this even though it took Labour 8 years to bring it in first place.

^^ good post, was already expressing the same sentiment.

Because it destroys investor confidence, destroys the ability of the funds involved to plan long-term and opens long-term capital market development up to short-term political opportunism.

You don't mess around election-by-election with your nation's long-term retirement plans.

YOU DO WHEN THE SITUATION IS SERIOUS ENOUGH TO WARRANT IT. What part of this don't you understand? I.e. would you cut away kiwisaver if World War III started tomorrow? How about if the Great Depression x 2 sucked us into liquidity trap, impossible to acquire funds and reinitialize spending.

NO? its flat out unethical and will always amount to short-term political opportunism regardless of the situation. i.e we can't mess around election-by-election with our nation's long-term retirement plans! What is this the golden rule of doom?

Your logic = madness

Seriously - fuck off mate. I'm getting a little sick of you waltzing in claiming pragmatism as the be all end all then putting out absurdly out-of-whack OTT comparisons and claiming I or anyone else doesn't understand. Which is it? A pragmatic view of reality? Or conceptual flights of fancy.

Plenty of other people are claiming the same as me - you going to run off and ask them "what part they don't understand?" Herald editorial for example: "The incentives that have underpinned KiwiSaver's popularity should not be hostage to the vagaries of the economy."

They're important policies with long-term implications and of all the Govt spending they could cut they go after those. If the situation is so horribly dire as you allude to, tell me why you support THAT SPENDING BEING CUT BEFORE (and indeed instead of) ALL OTHER. It's got nothing to do with levels of cuts or deepness of deficits - it's the choices made about which spending to go after first.

I didn’t realize being flexible and willing to support policy changes, due to unforeseeable events, changing the political dynamic of the world and demanding we review certain priorities, would ever warrant being considered a “conceptual flight of fancy” or somehow surmount to, claiming pragmatism as the be-all-and-end-all. This isn’t about philosophy? It’s about being a rational human being and considering the implications of how this present economic crisis may pan out. And just answer this simple question for me: is there ever a potential situation in reality, that would ever warrant you abolishing kiwisaver?



You’re moving into ‘argumentum ad populum’ territory, appeals to popularity will not suffice, nor does popular sentiment, necessarily make something efficient or effective for the times. And while we are at it, why would anything quoted in the Herald editorial section sway my outlook? How many of these people you so readily sway in line with (what do you do? not develop your own rationalizations because of peer pressure?), have an adequate knowledge of economics and understand the requirement to remain flexible in uncertain times?



Right, this seems to be your only valid point in this entire discussion and it’s certainly questionable. As we all know National is slowly releasing policy as an election strategy. So how do we know there hasn’t already been, a number of other avenues, that National intend to cut or go after, that they are not telling us about yet? They may be releasing policy in incremental stages, gauging political reaction and then continuing accordingly.

And lets just reiterate something, this is a point that is being made here about flexibility, that isn't necessarily valid but should at least be debated. My rather loud statement above that you have reacted to, was made because you don't seem to be acknowledging the potential for the validity of such a point at all. If you read mine and nchants posts above, we simply raised it for consideration and questioned peoples blind adherence to a scheme that while well intended, still has the effect of diminishing peoples disposable income, in a time where continuance in spending is crucial.

Also my seemingly OTT speculation regarding how serious this economic crisis might be, comes from having read an enormous amount of economics and history, especially surrounding the Great Depression. I can give a very detailed description of what went wrong and why. I have purchased everything from the Austrian position to the Monetarist position and everything else in between. There are some rather striking parallels to the economic boom in the 1920's (Roaring Twenties) and the massive bubbles that have emerged as a result of cheap credit et al.. While it's not a Great Contraction as such due to not being on a gold standard, fiat currency has changed the economic dynamic and still makes the implications of this event, serious enough to warrant scrutinization and a careful approach to long term, planned economic policy.

Just because something isn't "logical valid" doesn't mean it's wrong. oh, and the entire capitalist system is based on argumentum ad populum

ITS YOU! I have missed our exchanges.



It often is though depending on context and how the statements are construed. Which I suspect is relevant here, though can be further debated.



A system of private property rights and exchange mechanisms (whether through barter or currency or various other financial instrument) requires no 'appeal to popularity' as a prerequisite of function. In saying that, it does require everyone implicated by its influence of process requirement, to participate and adapt to market forces as a natural consequence.

I think the word 'appeal' is the important part of the equation missing here. For it is the initiator of 'argument' that one utilizes in order to support a position. A position that is not necessarily vindicated simply due to popular sentiment. One must make an appeal and so I really must ask, does participation within an economic system require an 'appeal' in order to initialize and function?