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  1. #1
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,105

    Default Has Tax & Inflation Negated Wage Rises?

    Wages Up So Where's The Money Gone?

    Workers on the average wage are at the centre of
    a political row after figures show thousands of dollars
    in pay rises have been whittled back to a few hundred
    by higher taxes and inflation.

    A "Joanna Average" is at the centre of the tussle,
    with National's figures showing she is only $500 a year
    better off than seven years ago once inflation and
    higher taxes are taken into account - despite her
    earnings increasing from $33,968 a year to $44,123
    a year. Her earnings mirror the average fulltime wage.
    - Excerpt

  2. #2
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Right on Perry. Similarly people who invest cash in managed funds etc. have the same problem.
    If you're getting say 9% interest people go yippee. Except take out 2% management fees, 3% tax and 3% inflation you make a whole 1%. And you pay the fees even if the fund makes a loss.

    That's why Ilike property, inflation proofed and tax friendly!!

  3. #3
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,105

    Default

    Isn't it actually worse than that? I seem to recall it was
    possible to have to pay tax in a year that such a hapless
    investor's unit share total value went down.

  4. #4
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Yes I was being kind. I think most funds do OK, but not after tax and inflation.

  5. #5
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,105

    Default

    So your comments on the Gov't KiwiScrewer scheme are . . . . .

    (It's OK - I can guess )

  6. #6
    Join Date
    Nov 2005
    Location
    Taupo
    Posts
    309

    Default

    Kiwisaver is a bit different - you get a few more benefits than a normal managed fund.

    e.g. $1000 starter, $1080 tax benefits per annum, $40 towards fees per annum, 1% employer paying into from April.....etc

  7. #7
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,377

    Default

    Imagine earning $40k per year. How would you survive? How would you bring up a family or pay a mortgage. And this is the average wage! So a lot of people earn a lot less!

  8. #8
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    It's better than nothing but it's a savings scheme designed by poverty mentality people for pverty mentality people basically.
    However the impact of it once it becomes compulsory will be good for NZ. Look at Oz, (who we are copying), it has been fantastic for their economy.

  9. #9
    Join Date
    Jan 2005
    Location
    Auckland
    Posts
    1,530

    Default

    If it is good for the economy it will be good for New Zealanders. Sure, many can do better on their own, but many people have neither the interest or the smarts to lift a finger for their future. For these people it is better the government has in place some form of compulsory savings and investment scheme. I am normally against socialist intervention, but in this case I think it's a good thing - for all of us. The thinkers and workers would end up paying for the lazy and stupid through higher taxes - at least this way the lazy and the stupid will themselves be contributing something towards their future.
    Julian
    Gimme $20k. You will receive some well packaged generic advice that will put you on the road to riches beyond your wildest dreams ...yeah right!

  10. #10
    Join Date
    Jan 2006
    Location
    Wellington
    Posts
    561

    Default

    Considering myself rather than everyone else for the moment, I just worry about the successive governments between me and a pay out.
    The employer contribution law hasn't been passed yet.
    The IRD are fighting against the 2% salary sacrifice payment.
    You can't take the tax portion if you cash up and leave the country.
    Then what happens if the government decide with our new healthy lifestyles that we should work until we are 75 before we get our money.
    Doug


 

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