NZ dollar & economics

[Skyryder]

It's what happens when you have a Reserve Bank with practically only one goal - to keep inflation between 1% and 3%.
Using interest rates only to achieve this is like cracking nuts with a sledgehammer.
Every other 1st world country has capital gains tax to moderate the excesses of the property market, why haven't we?

1 Because the government has taxed almost everything else.

2 Every one one in this country wants to be a property developer.

3 There are now more property developers in this country than sheep.

Skyryder

[Hitcher]

Following on with Hitchers post, does anyone remember what the top tax rate was in that period. It was something like 70-80% I think - compared to the current 48%.

66 cents in the dollar. Bless.

[scumdog]

Following on with Hitchers post, does anyone remember what the top tax rate was in that period. It was something like 70-80% I think - compared to the current 48%.

Does that 48% include the 12.5% GST component???

[Lou Girardin]

Does that 48% include the 12.5% GST component???

ZAP! POW! KABOOM!
Got 'im

[Marmoot]

ZAP! POW! KABOOM!
Got 'im

I was really tempted to mention petrol tax, parking cost, minor traffic infringements, levies including vehicle registrations, various permit costs including warrant of fitness, etc.....but I managed not to

[TwoSeven]

Does that 48% include the 12.5% GST component???

Cant remember, but its the average tax paid in NZ - includes indirect taxes and everything so probably.

[TwoSeven]

Actually, just thinking.

Buy NZ is probably not such a good idea either. I think it needs to be Save NZ (as in Save Money).

There is a formula for the money equation of exchange. Its MV=PY where M is money, V is velocity, P is price of all goods (CPI) and Y is quantity sold.

Velocity is the rate at which money goes from consumer to producer and back again in one year.

So if you buy NZ you will increase V and also Y but... because producers suddenly cant make more goods, you will increase demand which will put the price of the goods up (P). That means the value of M must also rise to balance it. So at a guess buy NZ will increase inflation.

I also guess that means that Save NZ will decrease inflation for the opposite reasons.

Not sure if this is true or not, just taking a wild guess with the forumula

[Lou Girardin]

NZ'ers are not really highly taxed, we're pretty much mid-field.
It's like all the complaints about company taxes vis a vis Australia. Sure our rate is higher, but we don't pay payroll taxes, medical insurance and other levys Aussies have to.

[Marmoot]

NZ'ers are not really highly taxed, we're pretty much mid-field.
It's like all the complaints about company taxes vis a vis Australia. Sure our rate is higher, but we don't pay payroll taxes, medical insurance and other levys Aussies have to.

If you want to compare apples with apples, we don't get paid at european pay rate here either. At the end of the day, the amount of $ we can save is much less than theirs.

If I want to simply compare tax rates, 3rd world countries seem to be a nice place to live in, until you realise that their pay rate is 1/10th of 2nd world countries.

[cowpoos]

NZ'ers are not really highly taxed, we're pretty much mid-field.
It's like all the complaints about company taxes vis a vis Australia. Sure our rate is higher, but we don't pay payroll taxes, medical insurance and other levys Aussies have to.

we pay huge amounts of medical insurance....ACC...check you bill for rego...work out what you pay in your PAYE....and on top of that your employer will be paying around $1000 for every $20,000 in wages he or she pays...ACC made a fuckin 801million dollar profit last year...thats bullshit...and my acc rates for myself [I'm selfemployed] and my workers hav gone up 16%...how can a state run medical insurance provider be allowed to make a profit....let alone give shit service...

and theres alot your missing from your argument on comparing auz to nZ in regaurd to bussinesses...its easyer top do business in NZ....but shitloads more profitable in auz...and that is mainly to do with there tax laws...I could get away with paying next to no tax in auz if my bussiness was running over there...and if that was the case...I would make more money...net result would be....I would hire more employee's and do fuck all work myself.....

[TwoSeven]

As much as I hate the way ACC raise their money, I suggest you live in a country that doesnt have ACC before complaining too hard about it

[Brett]

The retarded monkeys that try to run this economy only know one way of controlling the economy, housing market, imports exports etc...and that is to go and raise the interest rates...then they think that it will be an instantaneous thing, and when in a few months time nopthing has yet changed, they raise it again...then a few years down the line (maybe not quite so long) the economy starts struggling because of the extremist measures taken a little way back...
Welcome to economics run by meatheads...

[Brett]

Plus they are now talking about removing our no tax on capital gains system...that is going to remove a HUGE drawcard that overseas investors see in NZ, let alone tighten things on investors already here. Gutted.

[Marmoot]

Plus they are now talking about removing our no tax on capital gains system...that is going to remove a HUGE drawcard that overseas investors see in NZ, let alone tighten things on investors already here. Gutted.

and when the foreign investors pull back, they'll be wondering why the economy slumps down, and will do another knee-jerk reaction towards the other direction.

Deja vu.

[MacD]

NZ'ers are not really highly taxed, we're pretty much mid-field.
It's like all the complaints about company taxes vis a vis Australia. Sure our rate is higher, but we don't pay payroll taxes, medical insurance and other levys Aussies have to.

And guess what, the OECD agrees with you. Compared with countries that offer a similar level of social services NZ is not highly taxed. You also missed stamp duty and capital gains taxes in Australia.

Abstract from the OECD document linked above:

New Zealand’s tax system is one of the most neutral and efficient in the OECD. Bases are generally broad
and rates are moderate. The full imputation system for dividend payments works to reduce tax distortions
for corporate financing decisions, while efficiency in corporate investment decisions is encouraged by the
low level of targeted tax incentives. The tax system is also more neutral vis-à-vis private saving than in
most other countries, in particular because no general incentives are provided to private pension saving.
There is hence no immediate need for major tax reform, but several second order issues should be
addressed in order to reap the full benefit of an otherwise well-functioning system. The most important
improvement would be to broaden the income tax base by including capital gains on a more
comprehensive scale as well as introducing a tax on imputed rental income of owner-occupied housing.
These two steps would not only reduce horisontal inequities and hence tax shifting incentives, but also
contribute to a better allocation of private savings, which is currently biased strongly towards housing. It
should be emphasized, though, that tax policy is unlikely to be very effective in raising the level of private
saving in New Zealand.

What is significantly different about Australia is that salaries are now on average 25% higher than in NZ for equivalent jobs.