Proposed tax cuts

[Deano]

$15 in the hand of every worker each week ???????????

Wouldn't it be fairer to adjust the salary tax bands ?

When were they last adjusted ?

Shouldn't they be 'inflation adjusted' or is this simplistic ?

I mean, a six figure salary nowadays is not worth as much as say, ten years ago.

Also, given that working for families is now topping up working families (top ups for up to $71,000 salary and one child, more for more kids), doesn't it seem that the middle class are now getting screwed ?

The middle class are paying the tax that the 'rich' were paying ten years ago, and lower class paying middle class tax of ten years ago.

Excuse any generalisations on my part - but wouldn't rescaling the tax bands be a more equitable means of divvying up tax cuts ?

[Hitcher]

Hopefully the death throes of a fatally wounded administration trying to divert attention from the Electoral Finance Bill. Tax cuts should be only the half of it, but I can't see this lot and their camp followers being brave enough to slash and obese and comfortable bureaucracy.

[Usarka]

Rescaling the bands doesn't help the poor. it is all about the poor.

[Deano]

Hopefully the death throes of a fatally wounded administration trying to divert attention from the Electoral Finance Bill. Tax cuts should be only the half of it, but I can't see this lot and their camp followers being brave enough to slash and obese and comfortable bureaucracy.

:first:

Personally, I'd like to see the $15 be put to GOOD use in health, education or policing.

$15 doesn't last long in my fuel tank.

[Jantar]

Rescaling the bands doesn't help the poor. it is all about the poor.
Damn right. I never considered myself poor untill I started earning more than $70,000 pa. Now I'm on considerably more than that and see people on the average wage with much more discretionary spending. The low paid are the new rich.

[Highlander]

Rescaling the bands doesn't help the poor. it is all about the poor.

Unless my maths is wrong, does it not help every tax payer if it is the bottom band that is moved, and caps the benifit for every one on the higher bands?

edit: Obviously I am assuming the band is moved upward or the tax rate reduced.

[cowpoos]

$15 in the hand of every worker each week ???????????

Wouldn't it be fairer to adjust the salary tax bands ?

When were they last adjusted ?

Shouldn't they be 'inflation adjusted' or is this simplistic ?

I mean, a six figure salary nowadays is not worth as much as say, ten years ago.

Also, given that working for families is now topping up working families (top ups for up to $71,000 salary and one child, more for more kids), doesn't it seem that the middle class are now getting screwed ?

The middle class are paying the tax that the 'rich' were paying ten years ago, and lower class paying middle class tax of ten years ago.

Excuse any generalisations on my part - but wouldn't rescaling the tax bands be a more equitable means of divvying up tax cuts ?
adjust them in what way?? they havn't moved for years...but what is the point of that?? are the people that are rich no deserving of keeping just as much money as those that are poor??? I sure as hell don't understand why it is the more sucsessful a person is the more they have to contribute to society...they don't get any more voting rights?? or privilages?? same goes with lower income people?? why should they pay less tax?? why can't we just have a flat tax rate?? why is it the family's in any income braket deserve this working for families rubbish??? shit...I wanna go hire purchase a new jet ski too!!! so why can't the government pay me some money for being hopeless with what I already earn in order to pay for my new jetski???

[Hitcher]

Rescaling the bands doesn't help the poor. it is all about the poor.

Redistributing wealth through a tax system is an extremely blunt and inefficient instrument. People who have the means will find ways to avoid paying punitive taxes. Meanwhile middle-income earners get sodomised by the gummint, mortgage lenders and all other manner of fees and charges. The poor, like death and taxes, will always be with us. If people want to become philanthropic with their own money and contribute more to the poor, there's nothing to stop them. A frustrating phenomenon is when the poor get the same voting rights as the unpoor and vote in lame Labour administrations who are wedded to crushing the life out of enterprise, educational excellence and endeavour. And protecting their sorry arses by passing travesties like the Electoral Finance Bill.

[Deano]

adjust them in what way??

Up and maybe more of them - like Aussie - the place a lot of Kiwi's seems to be heading. Incidentally, if I was to move I would only benefit by about 5K per year. Dunno about the cost of living though.


why can't we just have a flat tax rate??

How would that work bro ? Would it be so high that the poor could not pay it and be shot ?

Would it be so low that there would not be enough $$ to pay for health, police, infrastructure etc ?

Anyways, if you adjusted them proportionally, you could effectively give everyone $15 each. But, with all the benefits the 'poor' can receive, it seems the 'middle class' are proportionally more 'out of pocket' than historically.

[Swoop]

Tax cuts??

Today was about some labourite tosser saying "sorry" after being convicted in court.
This was a person who didn't use dodgy labour to tile his houses...


Labour. Pack your bags and fuck off.

[NighthawkNZ]

$15 in the hand of every worker each week ???????????



yeah half a tank of gas extra a week... :D

Then again since I am on a lower wage bracket I'll probably only $5 a month extra... :doh:

[rainman]

doesn't it seem that the middle class are now getting screwed ?


Thus it has been, and will always be... doesn't matter if the blue or red team is in the house.

[Coyote]

are the people that are rich no deserving of keeping just as much money as those that are poor??? I sure as hell don't understand why it is the more sucsessful a person is the more they have to contribute to society...they don't get any more voting rights?? or privilages?? same goes with lower income people?? why should they pay less tax??
Depends. Considering a lot of the richer people don't really earn their money by working. Usually they're managerial types that force people around and hardly lift a finger themselves, or they're the investors that move their money to where it can make them more money, and they usually get a money manager to do it for them.

People with more money have the money to make life more comfortable. Poorer people don't so much. A flat tax rate could starve lower income families whereas a richer family may not be able to buy their daughter the higher spec mercedes she wanted for her 16th birthday.

As for voting, if some people were to have a vote that meant more than others, who'd decide who does have more voting power? I don't want the types that want to bring down minimum wage get more say, nor do I want to hug a tree every day.

Disclaimer: this is a generalisation. Of course there are exceptions like with everything.

Richest 2 percent own half the worlds wealth (http://www.newscloud.com/read/Richest_2_Percent_Own_Half_the_Worlds_Wealth)

[homer]

how about a real saving

Lets say you work 50 hrs a week
now lets go with the idea that a working week is 40 hrs
so now lets all pay 24 % tax ....in other word increase it slightly .....

Hang on im geting to the good bit

So you work what ever hrs you work or want to work ok
you pay tax on a 40 hr week
thats it

you dont pay any tax on any hrs after the first 40 hrs
or any secondary tax if you have 2 jobs

so it tax on 40 and any other hrs you work its all yours

Now isnt that fair

:niceone:

[homer]

how did it even come about asking for a tax cut
we all know you get nothing

[cowpoos]

How would that work bro ? Would it be so high that the poor could not pay it and be shot ?

Would it be so low that there would not be enough $$ to pay for health, police, infrastructure etc ?

Anyways, if you adjusted them proportionally, you could effectively give everyone $15 each. But, with all the benefits the 'poor' can receive, it seems the 'middle class' are proportionally more 'out of pocket' than historically.


it wouldn't mean raising it at all...lowering will put more money in circulation...sure...short term it will raise inflation to a degree...but soon people will learn to spend it as if they never had it...but it will go somewhere...the more dollars in circulation the more times each of those dollars gets taxed at some point in every circulation...money just won't disapear into the richest peoples pockets...also...the richest people are a minority...making them pay extra tax in the grand scheme of things is nothing...just a time amount of money...but these are the poeple with capital to start new ventures and create jobs,enterprise...make out internal economy stronger...so why should we penilise these people for being the lynich pins in society...dairy farming is currently being raped by all sectors for money...they are out current backbone for our economy...and they will be for years to come...because unlike IT and manifacturing,etc...they can't just pack up and piss off over to china to cut costs,so they can make a fair income for the work they put in...like alot of NZ bussiness's do so regularly...

I always believed in 'if you are running short of means...better them or reduce the means in which you live'...do not ever whinge about it and expect someone else to do it for you...to many NZders make excuse's...not enough of us doing something about our situation...shit if we had half the mental ambition of aussie ot the USA...we would be a much stronger nation in ever sence of the word...

[paturoa]

The middle class are paying the tax that the 'rich' were paying ten years ago, and lower class paying middle class tax of ten years ago.

No, totaly wrong, follow this link:

http://www.treasury.govt.nz/budget/2007/taxpayers/01.htm

- the first 47% of people pay only 9% of the income tax.

- the next 33% of people contribute 28% (between 20k and 50K = middle class??? NOT)

- and the remaining (top) 20% pay 63%

Now all of this is before ACC and GST and other "levies" etc etc etc.

Here is some more interesting stuff too

http://www.parliament.nz/NR/rdonlyres/F8AAEF7C-CBA1-48B1-99A9-3688FAD4A8FC/57439/QWA_103172007replyforpq103172007tables1.pdf


Rescaling the bands doesn't help the poor. it is all about the poor.

Somehow this has become an illogical / twisted conversation, where being poor is not about earning more, it has become bullshite about being taxed less WTF????. See above, the "poor" currenlty pay SFA tax, so taxing them less wont make them "richer".

Creating an underlying structure with incentive based principals to earn more would be good a start.

Check out the rebate structure for Working For Families. Why would anyone seek out a higher paying job?


Damn right. I never considered myself poor untill I started earning more than $70,000 pa. Now I'm on considerably more than that and see people on the average wage with much more discretionary spending. The low paid are the new rich.

Agree, but clarification is .. Low paid by their "employeer" and highly paid by the higher income earners.


Unless my maths is wrong, does it not help every tax payer if it is the bottom band that is moved, and caps the benifit for every one on the higher bands?

edit: Obviously I am assuming the band is moved upward or the tax rate reduced.

Yes, thats how they get the $15 thing, and at the same time reduce the 9% paid by the first 47%.


adjust them in what way?? they havn't moved for years...but what is the point of that?? are the people that are rich no deserving of keeping just as much money as those that are poor??? I sure as hell don't understand why it is the more sucsessful a person is the more they have to contribute to society...they don't get any more voting rights?? or privilages?? same goes with lower income people?? why should they pay less tax?? why can't we just have a flat tax rate?? why is it the family's in any income braket deserve this working for families rubbish??? shit...I wanna go hire purchase a new jet ski too!!! so why can't the government pay me some money for being hopeless with what I already earn in order to pay for my new jetski???

I doubt if there is no such thing as a fair and workable income tax system in our "modern" democracy as we all think differently about what fair is.

I'd wager a fairly meagre slice of my after tax income that if there was ALSO a real incentive to earn more without oppressive tax, then that would help a lot too.


Redistributing wealth through a tax system is an extremely blunt and inefficient instrument.

More than that - I doesn't work, has never worked, and will never work.

For me there is a clear and obvious trend here - as the income redistribution has increased, all of the "social measures" that are used to justify this in the first place get worse.

[cowpoos]

Depends. Considering a lot of the richer people don't really earn their money by working. Usually they're managerial types that force people around and hardly lift a finger themselves, or they're the investors that move their money to where it can make them more money, and they usually get a money manager to do it for them.

People with more money have the money to make life more comfortable. Poorer people don't so much. A flat tax rate could starve lower income families whereas a richer family may not be able to buy their daughter the higher spec mercedes she wanted for her 16th birthday.

As for voting, if some people were to have a vote that meant more than others, who'd decide who does have more voting power? I don't want the types that want to bring down minimum wage get more say, nor do I want to hug a tree every day.

Disclaimer: this is a generalisation. Of course there are exceptions like with everything.

Richest 2 percent own half the worlds wealth (http://www.newscloud.com/read/Richest_2_Percent_Own_Half_the_Worlds_Wealth)


Sorry dude...but your veiw and geralisation on how rich people earn there money just says that you are very young and watch to much teli....the reality is sooooo much different you would be bloody amazed....I know mutli multi millionares...and they are the hardest working people I know...there family's regulall do with out there presence as a sacrifice to their sucsess's...

money is rarely just handed to people these days...there arincredible amount of wealthy self made people in this country...and good on them.. for being entripreurial or have for-sight...know how...connections...and savy for getting to where they are...and I am jealous!

I come from a very very low income family...and know only too well the results of lack of money on out house hold at xmas and B days...or the lack of the events...growing up with 7 sibblings in a family on the dole...we had next to know money...but hey...at the end of the day...I have no more no less oppertunities in live to anyone...granted the lack of $$$ may make them take a bit longer...they are no excuse...so don't give me the low income speel!! it doesn't wash with me..it shouldn't be and excuse for anyone!!!

[u4ea]

The low paid are the new rich.

I wish!! Payed 100% ACC receive 80%..can earn $60 pw ,a beneficiary can earn $80..after paying secondary tax on $60 and petrol to get there I really dont think its worth the pain killers!!!I also didn't qualify for full family assistance and now that my boy has left school I get....................0.Dont get me wrong,I loved working but with constant pain it aint as easy as it was to get a full time job.Am in the process of retraining.When my arse is booted off ACC I am worried I'll have to sell my house if I havn't got a job by then , I wont be able to afford to maintain a home.

[homer]

yeah
ACC is bullshit you get 80 % of a wage ...then they do some more calculation of a few weeks wages average that
then you get to pay tax on 80 % so you get a pay of 60% of your wages

I say fuck the acc
and personally everyone getting any from it
fucken milk it

[u4ea]

yeah
ACC is bullshit you get 80 % of a wage ...then they do some more calculation of a few weeks wages average that
then you get to pay tax on 80 % so you get a pay of 60% of your wages

I say fuck the acc
and personally everyone getting any from it
fucken milk it

Admittedly Iv'e probably cost them a bomb after 3 operations although I have paid tax since I was 15 and vehicle registration..milking them ain't an option for me..I would rather be working for some real coin thanx!!!!and $15 pw won't make much of a difference in my house as I pay gst twice on any ACC related travel..the more they give the more they take away..

[bane]

here's my (imho) fair and equitable tax system (theory, take as much tax as required to support essential infrastructure and services) - dont treat the taxpayer as a cash cow.

first $20k tax free (therefore the least fortunate people in society pay no tax)

$20K+, flat tax rate of 20% (no secondary rate bullshit)
Business taxrate 20%

move GST up from 12.5 to 17.5%


GST is a very efficient tax, hard to avoid (unlike income tax for those in the know), and as it's a consumption tax, is actually fair (the more you consume, the more you pay).


perhaps for many, it's lucky I'll never be in a position to make it a reality...

[Deano]

Well I started out poor, bettered myself and now have a job with a decent level of responsibility and accountability, yet I don't believe I am better off than someone earning significantly less.

People on high incomes receive pay increases based on a %, which equates to a shitload more money than the % of a low wage.

The 'rich' get richer disproportionally by the %, the Govt dishes handouts to the 'poor', and the 'middle class' wear the brunt. IMHO.

Poos - how would a flat tax rate work ? Other than the above idea of GST increase, which effectively taxes people who can afford to buy more stuff anyway.

[cowpoos]

here's my (imho) fair and equitable tax system (theory, take as much tax as required to support essential infrastructure and services) - dont treat the taxpayer as a cash cow.

first $20k tax free (therefore the least fortunate people in society pay no tax)

$20K+, flat tax rate of 20% (no secondary rate bullshit)
Business taxrate 20%

move GST up from 12.5 to 17.5%


GST is a very efficient tax, hard to avoid (unlike income tax for those in the know), and as it's a consumption tax, is actually fair (the more you consume, the more you pay).


perhaps for many, it's lucky I'll never be in a position to make it a reality...
lol....you self employed by chance???

[cowpoos]

Well I started out poor, bettered myself and now have a job with a decent level of responsibility and accountability, yet I don't believe I am better off than someone earning significantly less.

People on high incomes receive pay increases based on a %, which equates to a shitload more money than the % of a low wage.

The 'rich' get richer disproportionally by the %, the Govt dishes handouts to the 'poor', and the 'middle class' wear the brunt. IMHO.

Poos - how would a flat tax rate work ? Other than the above idea of GST increase, which effectively taxes people who can afford to buy more stuff anyway.
how is it your not better off than someone earning signifacantly less??

[Robert Taylor]

Depends. Considering a lot of the richer people don't really earn their money by working. Usually they're managerial types that force people around and hardly lift a finger themselves, or they're the investors that move their money to where it can make them more money, and they usually get a money manager to do it for them.

People with more money have the money to make life more comfortable. Poorer people don't so much. A flat tax rate could starve lower income families whereas a richer family may not be able to buy their daughter the higher spec mercedes she wanted for her 16th birthday.

As for voting, if some people were to have a vote that meant more than others, who'd decide who does have more voting power? I don't want the types that want to bring down minimum wage get more say, nor do I want to hug a tree every day.

Disclaimer: this is a generalisation. Of course there are exceptions like with everything.

Richest 2 percent own half the worlds wealth (http://www.newscloud.com/read/Richest_2_Percent_Own_Half_the_Worlds_Wealth)

Either way, its middle NZ being screwed....

[Finn]

Well I started out poor, bettered myself and now have a job with a decent level of responsibility and accountability, yet I don't believe I am better off than someone earning significantly less.

People on high incomes receive pay increases based on a %, which equates to a shitload more money than the % of a low wage.

The 'rich' get richer disproportionally by the %, the Govt dishes handouts to the 'poor', and the 'middle class' wear the brunt. IMHO.

Poos - how would a flat tax rate work ? Other than the above idea of GST increase, which effectively taxes people who can afford to buy more stuff anyway.

You're partly right Deano. The problem with NZ is legislation doesn't support hard work. The rich will always win. They don't pay much tax. This is fine as they create wealth in many other ways (the simpletons here won't understand that). The bigger problem is a shrinking of middle class being replaced by very poor people which is bringing this country down further into the shit. Most wealthy people and big business has had enough and has pulled ALL their investment out of NZ. Remember Fisher & Paykel. In 2008, they won't have an operation in NZ. Why? It's simple really.

NZ has one foot in the grave and the other on a banana skin.

[NighthawkNZ]

h

$20K+, flat tax rate of 20% (no secondary rate bullshit)
Business taxrate 20%

move GST up from 12.5 to 17.5%



ferk that I couldn't afford to live then in effect thats 37.7% in tax over one third... oh wait... ummmm I already pay that... no wonder I can't afford to live

[AllanB]

Mr Cullen (the right horrible) announced in a budget a year or so ago that the tax rates will become inflation adjusted after 2008 or 09 (can't remember which).

I find it amusing how a tax rise or new tax can be added in a month or two but a reduction takes a couple of years. But then you need to save up the taxes paid in between so you can bribe the voters for your next election.

Easy to find $190,000,000 for a bloody rugby game apparently.

[homer]

here's my (imho) fair and equitable tax system (theory, take as much tax as required to support essential infrastructure and services) - dont treat the taxpayer as a cash cow.

first $20k tax free (therefore the least fortunate people in society pay no tax)

$20K+, flat tax rate of 20% (no secondary rate bullshit)
Business taxrate 20%

move GST up from 12.5 to 17.5%


GST is a very efficient tax, hard to avoid (unlike income tax for those in the know), and as it's a consumption tax, is actually fair (the more you consume, the more you pay).


perhaps for many, it's lucky I'll never be in a position to make it a reality...

Think youd be better to read what i posted
Far more simple

[Robert Taylor]

Mr Cullen (the right horrible) announced in a budget a year or so ago that the tax rates will become inflation adjusted after 2008 or 09 (can't remember which).

I find it amusing how a tax rise or new tax can be added in a month or two but a reduction takes a couple of years. But then you need to save up the taxes paid in between so you can bribe the voters for your next election.

Easy to find $190,000,000 for a bloody rugby game apparently.

And impossible to find any money for one of the core neccessities, an air strike defence wing.

[James Deuce]

Working for Families is a crock of shit.

Do some overtime and watch them adjust your "benefit" downwards the next pay. Do some more and look forward to the letter with your projected tax bill in April carefully enumerated in bold type.

Sometimes, when it's really busy at work I end up getting phone calls from IRD, informing me that I will be earning $130,000 this financial year, on the basis of one single fortnight's pay, and I won't be getting any more Working for Families benefit and they will be contacting my Employer to pay back a proportion of what I have received thus far this year. Watch them also take both disabled children's benefits off you, even though that isn't means tested and is granted irrespective of income.

Then ring up to try and get the Disabled Children's allowance reinstated and get told that they've made tremendous strides in medical science and a cure for Down Syndrome is just around the corner. Listen to the under-educated idiot splutter indignantly when you ask them how many chromosomes they have and just what do them there chromosomes do?

I'm convinced the current Government is made up of people who've never had a real job in their lives. They've either gone from School to University to Politics, or through the teaching profession and into politics, or through those other honourable NZ professions that grew out of the reorganisation of the Welfare State in the 70s; the DPB or the Dole - then into politics. They've then gone and staffed their bureaucracies with the carefully crafted end result of the NZ education system and DPB/Dole "University of Life" system; ignorant self-involved geniuses.

[Coyote]

If you want to succeed in business, you're going to have to stop being a pussy.
What, in your mind anyway, do I have to do in order to not be a pussy?

[homer]

Well I started out poor, bettered myself and now have a job with a decent level of responsibility and accountability, yet I don't believe I am better off than someone earning significantly less.

People on high incomes receive pay increases based on a %, which equates to a shitload more money than the % of a low wage.

The 'rich' get richer disproportionally by the %, the Govt dishes handouts to the 'poor', and the 'middle class' wear the brunt. IMHO.

Poos - how would a flat tax rate work ? Other than the above idea of GST increase, which effectively taxes people who can afford to buy more stuff anyway.

Oh all about the % thing

+1 your so damn right
a percent of fuck all is still fuck all

Totally agree

[homer]

Oh all about the % thing

+1 your so damn right
a percent of fuck all is still fuck all

Totally agree

I love the debate between the ones that hold us back and the ones that want to get a head

Im totally guessing that the ones that want to get ahead still live week to week as most of us others
and yet they aways are trying to tell us what we should do
I ll do what the fuck i want
and if the funds dont allow at the time ....if i want ill borrow it ,thats my choice

If your wondering i do earn enough ,but it goes no where
thats my choice

and im guessing these people that think the poorer are holding us back are getting at least 4 weeks holiday a year as weel while the rest of us have now got there , just .

Im refering to a post earlier if anyone cares you ll work it out .
and i say to all that think like it ...fuck off
wealth is not how much you earn ....
As an example i got over 30 k last year , i dont know where it went
but im content
and thats what wealth is ...being content .and it changes so im content now in 6 months i may not be .:Oi:

[Indiana_Jones]

Clark and Cullen can take their tax cut and shove it up their arrogant arses

-Indy

[James Deuce]

Who the hell gets holidays Homer?

[James Deuce]

Clark and Cullen can take their tax cut and shove it up their arrogant arses

-Indy

+1. It barely buys 6 litres of milk, FFS.

[homer]

Who the hell gets holidays Homer?

well you rentitled to them its not up to me to dish them out

[cowpoos]

What, in your mind anyway, do I have to do in order to not be a pussy?
I think he was meaning in the way you were on the back foot in retort to his post...you didn't back your self...because you didn't appear to believe in yourself and what you believed...whether it be true or not...

for the record...finn is a pussy on a motorbike lmfao!!!

[The Stranger]

Think youd be better to read what i posted
Far more simple

It may (but I doubt it) be far more simple, but I didn't see you mention GST.
GST has the benefit of catching those that otherwise avoid tax.

A couple of guys I knew were painters - I always wondered how they got sooo many toys, it turned out they never paid any tax. GST collects tax on their money when they buy their toys.

[BAD DAD]

I just can't imagine this govt actually agreeing to true tax cuts for anyone because they seem to be dedicated to the idea of: a) a large beauracracy and; b) redistribution of wealth through taxation. My frustration with these issues is really that we don't have a viable alternative to replace them with because the other team seems to have nothing other on offer than to sell-off assets to foreigners and to slash essential services without necessarily rendering any true benefit to the tax payers. Whatever short term gain, I'll still be payin'.

[cowpoos]

It may (but I doubt it) be far more simple, but I didn't see you mention GST.
GST has the benefit of catching those that otherwise avoid tax.

A couple of guys I knew were painters - I always wondered how they got sooo many toys, it turned out they never paid any tax. GST collects tax on their money when they buy their toys.
ummm...not nessicarily...I personally would welcome a 100% gst tax system if it could work...from the perspective of being in business...I would pay nxt to no tax on anything!! business's get GST refunded from purchases'

[homer]

It may (but I doubt it) be far more simple, but I didn't see you mention GST.
GST has the benefit of catching those that otherwise avoid tax.

A couple of guys I knew were painters - I always wondered how they got sooo many toys, it turned out they never paid any tax. GST collects tax on their money when they buy their toys.

Now you see the sence in "your own business"
theres a heap of perks
only reason i mentioned the gst is this ....

The more you spend the more the inflation goes up , right
so interest rates rise

If you pay more in the gst then its in your court ,you spend you pay

also then people should thnk ....i wont buy that at the moment
which is what the govt wants isnt it
they tell me that for about 2 years now
The whole point is that a tax cut does jack
and you need to see the money in the bank . Not just a few dollars
but like about 50 a week then youd be getting something

We dont even get a tax write off any more a a worker
we should be all able to claim for work clothes and the expenises associated with work

makes me want to get a small bus going every day
or go to aussie

[James Deuce]

well you rentitled to them its not up to me to dish them out

Ah! Homer is Management material. Or a Union rep.

[homer]

Ah! Homer is Management material. Or a Union rep.

I so wish
:clap:
Right off to sleep
Btw couple nice machines you have there to
checking the profile
later

[Deano]

how is it your not better off than someone earning signifacantly less??

Working for families and me being JUST over the threshold.

I am about $1500 better off per year than someone in the same situation as me who actually earns about $20000 less. (And perhaps has a cruisier job, or works less hours and spends more time with their family.)

Where is the incentive to get ahead ?

With every salary increase, the more money you earn, the bigger the increase. The rich get richer, the poor get topped up with benefits, the middle class bears the brunt.

Given time, every wage earner will be earning over $60000 and therefore a % of their wage will be taxed at the highest rate. Is this sustainable ?

The govt makes more and more as people wages increase.

Also takes more money as inflation affects GST. And fuel tax, despite the price of fuel rocketing, the tax rate remains the same = more money in the Govt coffers.

[jrandom]

Ah, the death throes of an administration. This 'tax cut' is a meaningless waste of money.

Human nature's a bitch, isn't it?

The fine ideals of socialism so easily lead to bloated bureaucracies and relentlessly-growing hordes of the lazy.

And the fine ideals of capitalism so easily lead to corrupt oligarchies and stifling monopolies.

A balance is hard to find, and in practice seems to be best implemented by firing Governments and replacing them with an administration of an opposed ideology at reasonably regular intervals, before failings can become too deeply entrenched.

I suppose we'll have a National-led government at the next election. We'll just have to hope that that bunch of bumbling fools will manage not to cock things up too badly.

It's a shame that the citizens of this country don't investigate the policy offerings of other parties; we could, if voters woke up and paid attention, be implementing some genuinely fresh economic ideas.

[MisterD]

Remember Fisher & Paykel. In 2008, they won't have an operation in NZ.


Incorrect. Laundry manufacturing moves to Thailand mid this year, and the Electronics line follows probably a year later. Refrigeration is, so far, staying here and I'd bet on it being here for the next 5years at least. If anything it's the Brisbane refrige plant that's looking precarious...

Doesn't alter the basic trends or invalidate your argument though.

[Deano]

This 'tax cut' is a meaningless waste of money..

It's just a pathetic bribe IMO.

$15 doesn't last long in my gas tank so I would rather it was spent WISELY/EFFICIENTLY on health or policing for example.

And while I'm not rich - I can afford to turn down the $15, so what is $15 to people earning more ?

[jrandom]

Remember Fisher & Paykel. In 2008, they won't have an operation in NZ...

Not entirely correct.

They won't have a manufacturing operation in NZ, and in my opinion, that's as it should be. The handful of acquaintances I have in the F&P engineering teams tend to agree with me.

There are plenty of places in the world full of little brown people who are happy to do mindless assembly work for a cup of rice a day, and which are nice and close to large shipping hubs to facilitate export to American and European markets. Even if you could talk the lower classes here into doing unskilled work for ridiculously low wages, you'd still suffer from the inefficiencies of our geographical isolation.

New Zealand's natural place in the order of things is to grow woodchips and milk powder and be a scenic place for smart people to live while they generate valuable intellectual property.

[Hitcher]

A National-led government indeed. While one longs for a change in administration, one is not sure whether the Nats are capable of forming a workable coalition with a third (or even a fourth) party, which they will need to do to govern under MMP. Despite what the polls are suggesting, MMP will conspire against the prospect of a single-party government -- it's designed to do that.

Secondly, one is not sure whether one can actually trust a National administration. Indeed one in unconvinced as to whether the National Party trusts itself. There are some key (excuse the inevitable pun) issues where the Nats are potentially out of step with the electorate and may do something silly. For example, nuclear ships, superannuation, state assets, education and health. Add employment law for good measure, and there is enough uncertainty to make a considerable chunk of middle New Zealand continue to vote for the soft-cock, paternalistic lefties and their assorted camp followers of fruit, nuts and losers.

Sigh.

[yungatart]

$15 per week is a pathetic, patronising attempt to get me to vote Labour.

It will make no difference in our household and I would far rather they took the $1.5 billion and put it somewhere it could make a difference to my life... education, roading, and health.

[MisterD]

Not entirely correct.

They won't have a manufacturing operation in NZ, and in my opinion, that's as it should be. The handful of acquaintances I have in the F&P engineering teams tend to agree with me.

There are plenty of places in the world full of little brown people who are happy to do mindless assembly work for a cup of rice a day, and which are nice and close to large shipping hubs to facilitate export to American and European markets. Even if you could talk the lower classes here into doing unskilled work for ridiculously low wages, you'd still suffer from the inefficiencies of our geographical isolation.


You obviously missed my correction to Finn's post...

Anyhoo, from what I was hearing from, shall we say, more business oriented folk at F&P, it's looking more and more like a larger than chewable amount has been bitten off vis a vis the Thailand move. I don't think they have a sh1t show of getting the same productivity out of Thailand's little brown people, as they do out of South Auckland's big brown people.




New Zealand's natural place in the order of things is to grow woodchips and milk powder and be a scenic place for smart people to live while they generate valuable intellectual property.

I don't think that's a given, ok shipping what is effectively a big box of air isn't efficient, but there has to be a way to keep high value manufacturing here - and it does look like Navico will prove that point...even if their low cost stuff is done in Mexico.

[jrandom]

... it's looking more and more like a larger than chewable amount has been bitten off vis a vis the Thailand move. I don't think they have a sh1t show of getting the same productivity out of Thailand's little brown people, as they do out of South Auckland's big brown people.

:laugh:

Yup, always the way. It entirely depends which contract manufacturer one deals with, of course. Letting accountants make that decision is a fast road to disaster. One doesn't want to compromise too far.


it does look like Navico will prove that point...even if their low cost stuff is done in Mexico.

Heh, are they building in Mexico now?

Foolish sea monkeys.

Still, goodness knows there were enough problems with the manufacturing in Northcote. Quality control actually got better at one point after they moved product lines to a CM in Shenzhen, back in the day when we were all one happy company.

[devnull]

High time this country received a complete overhaul...

Flat tax system has a lot of benefits. Rather than copy & paste stuff, have a read of this article:

http://www.nzcpr.com/weekly105.htm

Certainly food for thought.

As for the current disaster that's the welfare system, when will politicians grow some balls and own the damn problem? They whine about levels of violence and abuse, yet their actions serve to make the problem worse.

Have a read of Theodore Dalrymple's article

http://www.city-journal.org/html/14_4_oh_to_be.html

Though it discusses the social problems in the U.K., the parallels between there and here are pretty clear.

Sorry socialists, left-wing politics has done one hell of a lot of damage to this country. I'm not saying that a National govt will be much better, but at this stage they are the lesser of two evils.

But I doubt that they'll have the courage to address the root cause of the problem, and overhaul the failing systems that have developed a bureaucratic mind of their own e.g. health, education, welfare.

Fixing the tax system to encourage investment in business (which in turn leads to better wages and economic growth), is just the tip of the iceberg. There's an awful lot of stuff that needs to be fixed.... who has the balls to do it?

[MisterD]

Heh, are they building in Mexico now?


It's the Lowrance plant there.

[Finn]

Incorrect. Laundry manufacturing moves to Thailand mid this year, and the Electronics line follows probably a year later. Refrigeration is, so far, staying here and I'd bet on it being here for the next 5years at least. If anything it's the Brisbane refrige plant that's looking precarious...

Doesn't alter the basic trends or invalidate your argument though.

Watch what happens in 2008. Their Finance arm is already up for sale. More to come.

[ManDownUnder]

Question - do people on the dole get a tax cut too? And if so - does it come out of their own pockets? If it doesn't then it's coming out of essential services... which pleases me even less.

Tax cuts - too little too late... and (what a co-incidence) announced at the same time as the <strike>Freedom of Speech Limitation</strike> Electoral Finance Bill is passed. Bloody crock the lot of it.

[skelstar]

$15!!!

I'm off to McDonalds for lunch! (and I'll do the same next week!!!)

[ManDownUnder]

$15!!!

I'm off to McDonalds for lunch! (and I'll do the same next week!!!)

Another :jerry: Brownlee in the making...

[Finn]

$15? That's not even enough to start up smoking!

[jrandom]

You know, for $15, you can get quite a nice piece of cheese.

Unfortunately, I don't really pay tax these days, so I guess I won't be affording a nice piece of cheese any time soon.

:no:

[ManDownUnder]

You know, for $15, you can get quite a nice piece of cheese.

Unfortunately, I don't really pay tax these days, so I guess I won't be affording a nice piece of cheese any time soon.

:no:

I'll cut some cheese for you any time you feel up to it...

[ManDownUnder]

$15? That's not even enough to start up smoking!

Sure it is

Used tire = $5.00
Diesel = $1.00
Matches = $0.50

Assemble ignite and wait...

[Ocean1]

Flat tax system has a lot of benefits. Rather than copy & paste stuff, have a read of this article:

http://www.nzcpr.com/weekly105.htm

Have a read of Theodore Dalrymple's article

http://www.city-journal.org/html/14_4_oh_to_be.html



Succinct and accurate, both. Thanks.

Like many I can only hope that we've gone far enough down our respective fiscal and social paths to have made systemic change an utterly obvious necessity. The alternative is the rapid approach of anarchy, but I won’t be here to help out with it.

[MSTRS]

Has everyone missed the obvious? Cullen is sitting on a huge reserve, from which he says he can afford to consider tax cuts. Excuse me?
If he can't/won't put it into essential services like roading, health etc, what good is a tax cut? He will still be sitting on that 1.5 billion. I suppose that 4 weeks out from next year's election, he will announce that every taxpayer in NZ will be getting a cheque for $750 PLUS the tax cut??

[ManDownUnder]

Cullen is sitting on a huge reserve, from which he says he can afford to consider tax cuts. Excuse me?

But he has an election to buy - that's 4 bill right there

[Swoop]

Tax cuts should be only the half of it, but I can't see this lot and their camp followers being brave enough to slash and obese and comfortable bureaucracy.
This dosen't read too well. Please see me after class...:sweatdrop

Despite what the polls are suggesting, MMP will conspire against the prospect of a single-party government -- it's designed to do that.
Thank goodness. The old "two party - FPP" alternating dictatorship, was a complete joke.

[ManDownUnder]

Thank goodness. The old "two party - FPP" alternating dictatorship, was a complete joke.


And STV? I quite like that one meself...

[Coyote]

I think he was meaning in the way you were on the back foot in retort to his post...you didn't back your self...because you didn't appear to believe in yourself and what you believed...whether it be true or not...

for the record...finn is a pussy on a motorbike lmfao!!!
My final comment was the one that backed me up. I must've been on to something for him to lash out.

[Coyote]

I suppose that 4 weeks out from next year's election, he will announce that every taxpayer in NZ will be getting a cheque for $750 PLUS the tax cut??
Whee! Let's vote for them! :rolleyes:


Is there anyone actually worth voting for?

[ManDownUnder]

Whee! Let's vote for them! :rolleyes:


Is there anyone actually worth voting for?

yes... me.

less money for prisons, more for cops, less money for dole and DPB, more on health and education.

The current system is total and utter SHIT

[Dilligaf]

I don't think they have a sh1t show of getting the same productivity out of Thailand's little brown people, as they do out of South Auckland's big brown people.
.

Relative to most OECD countries, the level of labour productivity in New Zealand is low and, when measured as GDP per worker, the historic growth performance has also been relatively poor. The apparently poor performance is a key concern for policymakers and has attracted much research attention. The focus has been to understand why performance has not been better, given that cross-country indicators of New Zealand's economic environment broadly suggest New Zealand should be amongst the highest performers, not a laggard.
(Quoted from Reserve Bank)

Gotta say MisterD, after living in both countries, it'd be fairly close.
Let's just say that the message "Work harder, millions on welfare depend on you" hasn't quite filtered through.... ;)



EXPENSIVE TASTE: The Government's new BMW limos, costing about $170,000 each, fail to meet their own emission standards despite being described as environmentally friendly.



Internal Affairs announced yesterday that it will buy 34 BMW saloons - each retailing for about $170,000 - to replace the fleet of Ford Fairlanes and Holden Statesmans.

Though the chauffeur-driven BMWs are described as environmentally friendly, they do not meet the emissions targets.

The Energy Efficiency and Conservation Strategy issued in October sets efficiency targets of 6.5 litres per 100 kilometres travelled. The BMW 730Ld uses 8.01 litres.

"[The fuel efficiency] is way worse than the average they are going to impose on the rest of New Zealand," Green Party co-leader Jeanette Fitzsimons said.

http://www.stuff.co.nz/4328965a10.html


Ah dontcha just love this country run by some of the world's greatest thinkers....

[Coyote]

yes... me.

less money for prisons, more for cops, less money for dole and DPB, more on health and education.

The current system is total and utter SHIT
Got a name for your party then?

Why less money for prisons, but more for cops? I wouldn't imagine the police would be too keen on prisons getting less, it's more work for them when those prisoners they can't fit into a cell are released instead.

I'm not too sure about the dole. My family went through rough times, my Dad was made redundant, the government cut out giving money to struggling families when I was born and my mum was paying the government back 120% of her wages since of some flaw in the system. Money for the dole shouldn't be cut, instead they should run the system better and make sure they use the money right which will end up in them spending less anyway. And they should search the houses of long term dole users for hydrophonic equipment.

[MisterD]

Watch what happens in 2008. Their Finance arm is already up for sale. More to come.

Well there's a reason why I'm no longer the Key Account Manager for one of their suppliers....:done:

[Jantar]

Relative to most OECD countries, the level of labour productivity in New Zealand is low and, when measured as GDP per worker, the historic growth performance has also been relatively poor. The apparently poor performance is a key concern for policymakers and has attracted much research attention. ....

...Ah dontcha just love this country run by some of the world's greatest thinkers....

So how is it that New Zealanders working abroad are seen to have higher productivity than local workers?

It surely couldn't be that our best workers and more intelligent kiwis are the ones emigrating, uh could it? :whistle:

[Ocean1]

Thank goodness. The old "two party - FPP" alternating dictatorship, was a complete joke.

As opposed to the current "2 party MMP" alternating dictatorship hilarity?

[Coyote]

http://www.stuff.co.nz/4328965a10.html

I was in a sad hysterical laughter when I read:

The custom-made BMW 730Ld costs at least $100,000 more than three models bought and trialled by Internal Affairs this year - the $70,000 Chrysler 300 CRD, the $76,000 Peugeot 607 and the $60,000 Skoda Superb. They failed the VIP test, which included exiting in an "elegant way".

My god, and that's not party specific, that's all the MP's. Were doomed no matter who we vote for.

That's it, I'm off to Italy.

[ManDownUnder]

Got a name for your party then?


No - politics doesn't pay enough - another reason why egos are doing it rather than anyone with actual talent


Why less money for prisons, but more for cops? I wouldn't imagine the police would be too keen on prisons getting less, it's more work for them when those prisoners they can't fit into a cell are released instead.

More money for cops = better equipped, more attractive job and better able to catch the little bastards

Less money for prisons = make it less comfy for them when they arrive in their cell. Poor babys might have to spend a year or three sleeping on the floor and give up their ham and roasts for Christmas and Sundays etc... I'd like prison to be a place they don't want to go back to (and with boosted cop numbers getting caught is easier so... DON'T DO THE FUCKEN CRIME)


I'm not too sure about the dole. My family went through rough times, my Dad was made redundant, the government cut out giving money to struggling families when I was born and my mum was paying the government back 120% of her wages since of some flaw in the system. Money for the dole shouldn't be cut, instead they should run the system better and make sure they use the money right which will end up in them spending less anyway. And they should search the houses of long term dole users for hydrophonic equipment.

Those in need get helped for sure. Those that are just milking the system can also get fucked. Put 'em all in the army for an extended boot camp. Make it hard work, give them discipline and send them out looking for work.

They do menial work till they find a job they want... and they get boot camp refreshers every 6 months to keep discipline and discomfort levels up

[Swoop]

As opposed to the current "2 party MMP" alternating dictatorship hilarity?
Two party??:rofl:

"labour" = <-- those nutters + Maori party + Lunatic fringe (greens) + Winston's mob.
Does that make "one party"?

At least there is some semblance of having to work as a group. With FPP there would just be the loonies of one party (labour) currently in power... with even MORE power to do whatever they felt like...

[Ocean1]

Two party??:rofl:

"labour" = <-- those nutters + Maori party + Lunatic fringe (greens) + Winston's mob.
Does that make "one party"?

Effectively, yes. One we didn't vote for.


At least there is some semblance of having to work as a group. With FPP there would just be the loonies of one party (labour) currently in power... with even MORE power to do whatever they felt like...

This is a bad thing?

The major parties never surrender control of key policies, they trade minor concessions in unimportant areas for support on the issues they were always going to dominate anyway.

I get sick of people bitching about how FPP sometimes meant we got an administration that less than half of the population voted for. The fact is such a government got a simple majority of votes. I can't see that as inherently undemocratic or even unfair let alone see how including those entities who got the least votes into government fixes it.

What it does do is accentuate a trend towards focusing every portfolio budget towards buying the next election, rather than any investment in infrastructure or long-term policies which might support growth.

[Swoop]

This is a bad thing?
Absolutely not! Politicians co-operating, rather than dictating, is a fine thing indeed!

The major parties never surrender control of key policies, they trade minor concessions in unimportant areas for support on the issues they were always going to dominate anyway.
Do concessions include "baubles"?:apint:

[Jantar]

... The fact is such a government got a simple majority of votes. I can't see that as inherently undemocratic or even unfair let alone see how including those entities who got the least votes into government fixes it.....

Not quite. There are at least two elections under FPP where the party with the simple majority of votes did not become the government. I believe that in at least one of these cases the unsuccessful party actually polled over 50% of the popular vote. That is one of the main arguments in favour of proportional representation. MMP is possibly the worst option of all proportional models, and that is possibly that the reason it was put forward. The major parties hoped that everyone would see how bad it was and want to go back to FPP.

MMP wasn't the only option though, remember a complicated two-part poll, voters were asked whether they wanted to change the existing voting system and then to indicate support for one of four reform options: mixed member proportional representation (MMP), the single transferable vote (STV), supplementary member (SM) or preferential vote (PV)? My choice at the time would have been in the order of PV, STV, SM, MMP and FPP last.

[ManDownUnder]

Absolutely not! Politicians co-operating, rather than dictating, is a fine thing indeed!

It would be assuming co-operation is what's going on.

Horse trading is closer

[Ocean1]

Absolutely not! Politicians co-operating, rather than dictating, is a fine thing indeed!

I was refering to the effect MMP has of hamstringing any non-outright majority government wrt long term initiatives.


Do concessions include "baubles"?:apint:

Like new BMW730s?

[Coldrider]

So how is it that New Zealanders working abroad are seen to have higher productivity than local workers?

It surely couldn't be that our best workers and more intelligent kiwis are the ones emigrating, uh could it? :whistle:
Probably it is not the productivity per individual, but the outputs per person is low, our manufacturing & service base is manual & not highly automated, and not high speed, (these are also barriers to entry, financially).

[Ocean1]

Not quite. There are at least two elections under FPP where the party with the simple majority of votes did not become the government. I believe that in at least one of these cases the unsuccessful party actually polled over 50% of the popular vote. That is one of the main arguments in favour of proportional representation. MMP is possibly the worst option of all proportional models, and that is possibly that the reason it was put forward. The major parties hoped that everyone would see how bad it was and want to go back to FPP.

MMP wasn't the only option though, remember a complicated two-part poll, voters were asked whether they wanted to change the existing voting system and then to indicate support for one of four reform options: mixed member proportional representation (MMP), the single transferable vote (STV), supplementary member (SM) or preferential vote (PV)? My choice at the time would have been in the order of PV, STV, SM, MMP and FPP last.

You're right, happened twice iirc.

And I also was suspicious of alterior motives wrt the poll.

Your preferences aren't substantially different from mine, except for the last two. My discomfort comes from the fact that inevitably MMP means narrow-focus interest groups end up well over-represented.

Given me druthers the one thing I'd like is a method of declaring actual resource assignments. A simple common description showing how a party would budget different sectors and a method of enforcing compliance to that, should they be successful. I know, I know, pipe dream.

I just get sick of the simplistic manipulation, the downright lies and the blatant bribes.

[Hitcher]

It's an obsession with "fairness" that has led to the demise of a perfectly good electoral system in the form of FPP. A country is divided into a number of electorates of approximately the same population number, candidates stand, the one with the most votes wins. The party with the most seats gets to form a government (or a coalition, depending on how many seats other parties won). If more people vote for an unsuccessful party than the one that won, then that is their tough shit. It happens. Get over it.

Under MMP the electorate gets held to ransom by single issue, uninformed, loonies, and run by a government that nobody voted for (given that a coalition is inevitable and key manifesto issues are traded in order to form a workable arrangement). Is that "democratic" or even "representative"? I think not.

[homer]

I still want to know a very simple question .....


Where di dthe whole tax cut idea actually come from ....

did anyone out there actually start voicing for a tax cut or was it actually just the politicians that spoke about a tax cut in the first place

So when we heard about it then we all are expecting it ,When im guessing no one actually wanted one in the first place .

[davereid]

So how is it that New Zealanders working abroad are seen to have higher productivity than local workers?


How hard you work is only one aspect of productivity.

The most important thing is investment.

A country that invests in good roads, good telecommunications etc will be more productive than one with poor infrastructure (like NZ).

And a tax system that rewards investment in your business will result in a better (more productive) business, than one which penalises investment.

The trouble with high-tax economies is really simple.

As a self-employed person I can make a good living. But working twice as hard does not give me twice the reward. In fact, the extra effort returns very little.

So, what do I do ? Well, I play within the rules. So I buy a new ute every year, as I like new cars, and its paid for with pre-tax money. Actually, I would be more productive if I bought a new spectrum analyser. But there is only enough money for one or the other, and if I up production, I will only write myself a provisional tax problem.

Easy decision. Leave production right where it is. Buy a new Ute.

[Usarka]

I still want to know a very simple question .....


Where di dthe whole tax cut idea actually come from ....

did anyone out there actually start voicing for a tax cut or was it actually just the politicians that spoke about a tax cut in the first place

So when we heard about it then we all are expecting it ,When im guessing no one actually wanted one in the first place .

National brought it up [supposedly] because they saw the huge surplus year after year and thought it would make kiwis more productive if they had some of this money back. And by looking at why kiwis are moving overseas and thinking it might be in our best interest to keep the hard workers here.

If you're slaving away for something you slave harder than if you were slaving away for nothing.

The theory that tax cuts will contribute to inflation is bollox. If the government has it they will spend it on shit. If people get it there will be a blip at first, but blips don't mean much. But there will be at least *some* savings, therefore less inflation by giving it back to the people.

Mmmmm tanquery.

[Jantar]

I still want to know a very simple question .....


Where di dthe whole tax cut idea actually come from ....

did anyone out there actually start voicing for a tax cut or was it actually just the politicians that spoke about a tax cut in the first place

So when we heard about it then we all are expecting it ,When im guessing no one actually wanted one in the first place .

Tax cuts have been called for ever since the increased marginal rates of 30 years ago. As for no-one wanting a tax cut? I certainly do.


The trouble with high-tax economies is really simple.

As a self-employed person I can make a good living. But working twice as hard does not give me twice the reward. In fact, the extra effort returns very little. ....

So true. So why are our political leaders so poor at understanding this simple fact?

[Ocean1]

So why are our political leaders so poor at understanding this simple fact?

How could they not?
But their understanding means little, their agenda is getting elected, surely, they benefit from bribing a bare majority, not growing the economy.

[Usarka]

Simple, labour have created a nation of bludgers, civil servants, and PC tree huggers. Thats where their votes are, if they need to lose a couple of "middle class" votes then so be it.

[u4ea]

ok so IF I get a $15 tax cut does that now pay for the registration increase next year??????? ha pharken ha....oh no hangon its to pay for the new BMW fleet for polititians!!!!I knew it was a load of poooop

[davereid]

The theory that tax cuts will contribute to inflation is bollox. If the government has it they will spend it on shit. If people get it there will be a blip at first, but blips don't mean much. But there will be at least *some* savings, therefore less inflation by giving it back to the people.

Yep, Mr. Cullen likes the fantasy that when he spends your money, its less inflationary than when you spend it.

Of course spending has no influence on inflation at all as long as the money was earned in the first place.

Inflation is not a monster that is beyond our understanding. Quite the reverse.

As an economy grows, and business prospers, we reinvest in the products and services we provide. So, over time, in real dollar terms, businesses LOWER costs.

Thats why your new Ford Falcon costs no more in real terms than it did in 1971. But its got 3x the power, the same economy, ABS, traction control, and a radio and heater are standard, not an option !

Thats what a free market will do on its own, over time. We don't call it "deflation". We just experience an increase in our standard of living.

But then, what happens when the Government increases the minimum hourly wage claiming business can afford it ?

There is no more production - just higher costs. So we don't upgrade the product this year, we leave it. Or worse, we put the price up.

So actually, inflation is just the normal reaction of an economy to poor government.