Tax Working Group Report & Related Matters

[Bob Kane]

The impact of these changes will likely be a significant drop in property values (which is what the politicians want) when it comes in and/or an increase in rents.

I'm not sure about the significant drop in values occurring.
Are prices kept up because the investors are buying?
Or are prices determined by non-investor mums and dads who make up the majority of buyers?
If the market stays flat for the next few years and the property is negative geared, what DRR is payable?
DRR would be crippling during a boom but the boom days are gone and some say forever (10+ years).
I think a number of investors would sell up and get good prices. The remaining investors would then clean up as the rents rocket up.
So we'll have the same house prices and increased rents.
Is this what the proposers of DRR had in mind?

[PC]

The more the pinkos mess about with Mr Market the bigger the mess.
Let's hope they bring in lots of extra taxes. Like Australia in '85 the supply of rentals will decline, rents will eventually sky rocket and as usually it's the poor tenants that suffer.
Three cheers for government thinking!

[Viking]

Irrespective of all this the basic issue is that the Govt. collects to much tax and if it cut Govt. spending back to lower levels as they were prior to 1998 or thereabouts then they could go sit in the sun and we would all be happy. But no they have to feed the habit. Giving out your money to others for various charitable works that do not include you (nor Me.)

[Perry]

I'm not known for naivety . . .

I agreed until I got to this bit:

It is high time that the NZ Government and the NZ
people look at the crap allocation of capital. There
is a serious role to be played by private investors,
but the allocation of capital via dumb domestic
policy especially in relation to no capital gains tax
is ludicrous.

Is it not high time the government - not the NZ people -
took a good, long, hard look at what government policy
(monetary, tax, financial) does in influencing the allocation
of capital?

The NZ people are responding / reacting to the idiocy that
passes for government policy. That response is PI. If the
W'gton woodenheads made proper policy, maybe PI would
look less attractive?

What seems to be happening is a lot of stick-waving and
sabre-rattling in dealing with symptoms. Where is the wise
use of carrots and encouragement towards better things
and fixing causes?

CGT is a perfect example. There is no gain - no increase in
real purchasing power - only a change in numbers.

Besides, even government depts are recommending NZ
companies 'go offshore,' so why would anyone want to
put capital into employing Sri Lankans and Bangladeshis,
instead of their compatriots?

Those who're committed are now in charge of the asylum.

[Viking]

Address to the 2009 Whitlam Institute Symposium
Dr Ken Henry
Australian Secretary to the Treasury

Australian Government expenditure grew from 18.9 per cent of GDP in 1971-72, the last full budget year before the Whitlam Government came to power, to 24.8 per cent of GDP in 1975-76, the last budget delivered by the Whitlam Government, representing spending growth of around 56 per cent in real terms.
In the three and a half decades since, while there have been significant annual fluctuations, the average level of spending by the Australian government has changed little, to be around 25¼ per cent of GDP.4

http://www.nzcpr.com/forum/viewtopic.php?f=3&t=18&sid=7f16d5be4c254a2871fcd045995dcf93&p=26663#p26663

Interesting to note that Govt. expenditure is less than 25.5% of GDP there yet When Dr Don proposed we meet the same sort of level all the fruit cakes and bludgers came out from their closets and hopeless editors of the left MSM and their equally useless journo’s embarked on a campaign to discredit his report.

[drelly]

Viking,

I think the trouble is that Don Brash doesn't seem to understand that there is a gap between the problem and the solution called "understanding and acceptance". He has the habit of dropping the "solution bomb" without warming up his audience.... the Orewa speech is a good example. It's not that he's wrong, just that he's thrown a ball at your head without telling you it was coming.

[Viking]

True to the extent that anyone listening at all would have been aware of all this. The problem is that the MSM et al are socialists and they fail dismally in reporting and researching that reporting. Garth Georges efforts this week clearly exemplify why he should never write for a newspaper again. The same applies to the lies over Global Warming. The bloggers have finally started to force the MSM in some places to acknowledge what is allready well know.

[drelly]

Yep, I suspect that Don is a sacrificial lamb chosen to make any changes look preferable to his recommendations.

[Wayne]

I suspect you are right on that - the Govt knew what he would write!

[CJ]

Yep, I suspect that Don is a sacrificial lamb chosen to make any changes look preferable to his recommendations.

It isn't as drastic as what Gareth Morgan proposed though was it.

The thing is, if the GOVT is serious about catching Australia by 2025, we must do something drastic. We cant hope to get there slowly as Australia wont stand still.

This is a good response by Brash to a reporter who criticises his report:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10613954

This shows Brash is serious about the recommendations he has made and also shows they aren't as unrealistic as they initially sound.

[Wayne]

It isn't as drastic as what Gareth Morgan proposed though was it.

The thing is, if the GOVT is serious about catching Australia by 2025, we must do something drastic. We cant hope to get there slowly as Australia wont stand still.

This is a good response by Brash to a reporter who criticises his report:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10613954

This shows Brash is serious about the recommendations he has made and also shows they aren't as unrealistic as they initially sound.

It is a good reply isn't it. It seems that the media have an agenda and I wikll have to read and understand the report myself because I can't rely on someone else doing it for me (and giving me a precis).

[spaceman]

Hard to tell...

....who is more stupid.

James Weir or Mark Weldon....

Call to scrap 'crazy' tax breaks

By JAMES WEIR - The Dominion Post

SCRAP IT: The Government has a chance to lift the economy in 2010 with big changes on "crazy" tax breaks for investment property, according to NZX chief executive Mark Weldon.

For the rest of the drivel you could go here ... http://www.stuff.co.nz/business/industries/3201400/Call-to-scrap-crazy-tax-breaks

Happy new year
Spaceman

[Hound]

Mark Weldon, eh? He wouldn't be trying to sell us something now, would he?

[foss]

"Property tax breaks crazy" - Weldon

For those of us waking up from our new years stupor, todays Dompost Business lead story from Weldon was a sobering introduction to the new year challenges ahead. (full story at: [stuff.co.nz/dominion-post/business/3201400/Call-to-scrap-crazy-tax-breaks).

Of course we all know that Weldon is pro shares and anti property. However the anti-property lobby has been in full swing lately with Garth Morgan, John Sherwin and Bernard Hickey to name a few bagging property "rorting" the tax system. And there's likely to be a lot more to come. These guys have the ear of the PM.

Public opinion is being shaped by the pro share lobby to make property investors out as the bad guys, "contributing no benefit to the economy". Of course we all have a different view. However, very few representives from the pro-property lobby have come forward in the media to balance the one-sided story.

The point of this blog is to motivate property investors/landlords + those associated & dependent on the industry, especially those with high profiles to start speaking out. If we do not stand up to the inaccuracies being written then we deserve to receive the full blast of proposed tax changes which almost certainly will come our way. Don't complain later!

To remain silent is to accept defeat and become a victim. To do nothing is to accept change. It will be hard if not impossible to make any changes once in. We can and do make a difference. So what about it? What new year resolution/action can you take that will make the most difference this year? Those that make the loudest noise are heard. At the moment its the pro-share lobby. The pro-property lobby is virtually silent.

James Weir at dompost wrote the article obviously initiated by Weldon.

"there is no difference between rental property, shares, bonds it is stated" so treat them equally for tax. The recommendations are far from equal treatment which is significantly missed from the unbalanced reports.

What will you do to make a difference? Unless you like the proposed changes.

what can we do? We can ALL email + write letters to local MPs, quotes for newspapers articles, bending the ear of influencial people. I'm sure there is a lot more that can also be done. But time is running out. Start now in January to make a difference.

Remember the power of positive thinking. This is supposed to be a democracy. But democracy starts with speaking out!

[spaceman]

How very dare you!!!!

What are you insinuating???....I'm certain Mr Weldon wouldn't be biased.... I just think he is stupid....... either that or he thinks eveybody else is too stupid to see through the nonsense he is spouting.

Cheers
Spaceman