Our 54th Parliament opened last week with our leaders shouting past each other into a void where the nation’s debate should be. They didn’t address our problems or suggest real solutions. Here's a few
Kia ora Bernard, thank you for so thoughtfully exposing, analysing and suggesting solutions to the challenges affecting NZ society. Ka pai eh hoa.
NZs challenges pale in comparison to the injustice and inhumanity being inflicted on the people of Gaza and Palestinians, but the lack of worthy political principles is enabling both.
* replacing the current benefit, accommodation supplement, Working For Families and NZ Superannuation systems with a simple UBI for all those under the age of 30 and over the age of 65;
* bringing in a progressive income tax system that exempts all individual income below $35,000 and ramps up to 50% for those earning more than four times the median wage.
If a flat income tax rate of 50% were imposed would it not be possible for the UBI you propose to be a life-supporting-sized untaxed, unconditional, universal basic income for everyone, not only under-30s and over-65s?
We would need free health care and free education for all.
A lower UBI child benefit, also untaxed and universal, would be needed for under-18s.
And with a universal UBI covering life's necessities, there would be no need to reduce GST from 15%.
Thanks John. Great challenges. I'd have to a do a proper analysis of the fiscal additions and minuses. A lot of income for the richest isn't taxed at the moment. My understanding of the numbers is we couldn't afford the UBI right across the population with those sort of tax levels. I like GST cuts because they help the poorest the most.
Plenty of hurdles, I agree. A $500-a-week tax-free UBI would not be enough to survive on for a retired renter with no other income. Yet even with a flat tax of 50% on other income it would mean someone earning $1000 a week living tax-free ($1000x0.5= $500+$500=$1000) and someone on $10,000 a week being taxed only 45% ($10,000x0.5=$5000+$500=$5500). A household of two adults and two kids would be rolling in it, with the retired penniless renter still struggling. Tax to fund the UBI would have to move beyond taxing income to taxing land as the principal revenue source; not only residential land, but commercial and agricultural. The flat tax on income would temper the largess of the UBI, and along with GST, control inflationary effects.
Not in my proposition. I argue for a flat 50% tax on all income; as I explain above, it is the UBI that effectively turns the 50% flat rate into a graduated tax.
As usual a brilliant exposition Bernard. Problems and solutions all addressed with doable solutions that require 21st Century thinking. I doubt you will get it from this chaotic lot who still believe in trickle-down economics the idea that has created our present problems of gross inequality. Good luck.
Thank you again Bernard for an excellent summary of the ongoing problems facing NZ, and your proposed solutions which make so much sense.
As a Green Party candidate in the recent election and long term member I will be sharing your policy suggestions with the Green Party policy team and trying to persuade them to take on as many of them as possible. There is already close alignment on a lot of policies, but often the devil is the detail. A land tax over a wealth tax for instance. $35 000 tax free threshold instead of $10 000 (this was a modest starting figure to get the idea rolling). UBI at 60% of median wage versus an Income Guarantee of $360 per week per individual plus extras for children, etc.
In terms of climate finance, I would like to see NZ adopt a Carbon Border Adjustment Mechanism (CBAM) like the EU is introducing. This would level the playing field for NZ industries both as exporters and protection from imports. It would allow us to lead the way on carbon reductions and efficiencies, and finally bring in the agricultural sector who have legitimate claims to not wanting to be unfairly disadvantaged against overseas markets. Until, (and it might never happen) we have a legally enforced global carbon tax, CBAMs are the only way to move forward to properly price carbon into our economy.
Great work, Bernard. (As if they'll listen...🤐) The lingering question for me is how does a country which exports low margin (negative margin if you count environmental externalities!?) animal protein and unprocessed wood, but wants to continue importing high value iPhones, Teslas and AI, pay its way in the world? In the same way as we're missing a population and infrastructure strategy, Aotearoa is also missing a coherent technology investment strategy and it's starting to bite our trade balance...
Indeed. It's one of the reasons I think we should leave capital gains on Intellectual property untaxed, and to effectively boost the amount of savings available to invest in real businesses by not taxing the returns while in the funds.
Absolutely Ben! Some years back I sat beside an elderly gentleman on a bus from Dunedin to Chch, What a knowledgeable man - am sorry I was too polite to ask who he was. Anyway two images have stuck in my head.
somewhere around North Otago he pointed out a row of trees across a paddock and told me about a Japanese dairy operation. He'd been able to visit in some capacity I've forgotten. He'd found it impressive. By the time we got nearer to Chch we'd discussed land, industry etc in the south Island and he wound it up almost sadly by saying that NZ kept sticking with a low wage, low technology economy.
And meantime our techy young people find rewarding work with enough pay to buy a house in some other country - my families are in Australia, the US and Canada. - Happy Christmas !!
Now when technology can ease the distance fact are we still back where we've always been.
Do rich people think we want their taxes to pay poor people to do nothing ( nothing the same as rich people do) ? If they thought it would be paying for exciting technology might they stop hiding it in caves?
No land tax on farming. Only residential. Haven't addressed nitrates in water and climate emissions. I'm in favour of a simple carbon tax and a simple methane/nitrous oxide tax.
Maybe rather than a new tax which would probably end with some irate Groundswell member dumping a load of manure on your drive perhaps a subsidy to move to alternative crops? Likely much cheaper than trying to clean up livestock farming. The consumer may precipitate this with trend towards eating less meat for both health and environmental reasons.
I think TOP excluded both Māori and agricultural land from their proposed land tax. I understand the TWG also rejected the idea of a land tax on the basis of its impact on Māori land-owners post settlement. Would you advocate for this too?
Great stuff Bernard. Now how do we get the turkeys to vote for Christmas. Maybe it’s time for us all to start doing rather than talking. Maybe it’s time for the peasants to be revolting...
Wonderful Bernard! I fully support opening up this ahead of December 20! Have you thought of something like a dashboard like a kaka kpi to track how this government is going against your key areas?
The trouble with a general wealth tax is that wealth is so easily transportable: the very rich you want to tax have the means to remove their wealth from New Zealand.
Land tax has two advantages:
(1) land cannot be hidden, or whisked off overseas, so is easily taxable;
(2) taxing land will tend to make it a less desirable investment; that will tend to reduce the price of land, making it more affordable for people to use it to put a home on, rather than to speculate on. Thus there is an identifiable social dividend.
No not really, you can’t pick up a forest and take it somewhere else. The wealthy would like us to believe that they can take their money and run but the assets they hold their wealth in cannot be taken
They can be sold to foreigners and should be stopped
If tour wealth is invested in property, it isn't transportable. Would some wealthy people sell and go overseas? Probably. Should we be scared of it? Absolutely not. They are not productive members of our society and contribute very little.
Thanks elaine. Most of that wealth is in land so it would be taxed, and if unoccupied (ie second homes and holiday homes and land-banked land) then taxed at a higher rate.
A question on land taxes - can these be deferred until the sale of the house? I guess that would turn them into inheritance/capital gains taxes.
We are fortunate to own our own home. Bought shortly before COVID for $520k. The price of our house increasing doesn't benefit us in any way I can see.
But with mortgage, rates and childcare costs taking up over 50% of our income it's tough to make ends meet and an additional tax would be difficult to manage while the kids cost $500 a week in ECE.
This could be solved by free ECE of course! And it's temporary until our kids are old enough for funded education. But I'm interested in the idea of deferrals for people on fixed/temporary reduced incomes.
What about the people aged 30 - 65. Why should they be excluded from UBI? Seems unfair. It should apply to all. Also, Nicole McKee, a firearms advocate, has been put in charge of firearms policy. She advocates allowing automatic weapons. So it is not just the tobacco lobby that will be happy with this government.
Bravo Bernard so organized & doable, get the voting age to 16 & get the young to vote just maybe get rid of Grey brigade, we want to keep experience but at not cost we are currently paying in the suffering of daily stress for those who have not got stable living conditions.
Hi Rae, suggest you look at some old footage of civil unrest in the 1960s-80s. Many of your ‘grey brigade’ were there, and are still protesting for ‘rights’, here on the Kaka if no longer on the streets. Belief for the human right to justice, equality, and fair distribution of resources doesn’t go away with age, but we do get ignored and sidelined by most msm.
Kia ora Bernard, thank you for so thoughtfully exposing, analysing and suggesting solutions to the challenges affecting NZ society. Ka pai eh hoa.
NZs challenges pale in comparison to the injustice and inhumanity being inflicted on the people of Gaza and Palestinians, but the lack of worthy political principles is enabling both.
Go Bernard.
Bernard, you write:
* replacing the current benefit, accommodation supplement, Working For Families and NZ Superannuation systems with a simple UBI for all those under the age of 30 and over the age of 65;
* bringing in a progressive income tax system that exempts all individual income below $35,000 and ramps up to 50% for those earning more than four times the median wage.
If a flat income tax rate of 50% were imposed would it not be possible for the UBI you propose to be a life-supporting-sized untaxed, unconditional, universal basic income for everyone, not only under-30s and over-65s?
We would need free health care and free education for all.
A lower UBI child benefit, also untaxed and universal, would be needed for under-18s.
And with a universal UBI covering life's necessities, there would be no need to reduce GST from 15%.
Thanks John. Great challenges. I'd have to a do a proper analysis of the fiscal additions and minuses. A lot of income for the richest isn't taxed at the moment. My understanding of the numbers is we couldn't afford the UBI right across the population with those sort of tax levels. I like GST cuts because they help the poorest the most.
Plenty of hurdles, I agree. A $500-a-week tax-free UBI would not be enough to survive on for a retired renter with no other income. Yet even with a flat tax of 50% on other income it would mean someone earning $1000 a week living tax-free ($1000x0.5= $500+$500=$1000) and someone on $10,000 a week being taxed only 45% ($10,000x0.5=$5000+$500=$5500). A household of two adults and two kids would be rolling in it, with the retired penniless renter still struggling. Tax to fund the UBI would have to move beyond taxing income to taxing land as the principal revenue source; not only residential land, but commercial and agricultural. The flat tax on income would temper the largess of the UBI, and along with GST, control inflationary effects.
Wasn't 50% only for income greater than 4x the median? So for each dollar earned above about $220k per year you would pay 50%
Not in my proposition. I argue for a flat 50% tax on all income; as I explain above, it is the UBI that effectively turns the 50% flat rate into a graduated tax.
As usual a brilliant exposition Bernard. Problems and solutions all addressed with doable solutions that require 21st Century thinking. I doubt you will get it from this chaotic lot who still believe in trickle-down economics the idea that has created our present problems of gross inequality. Good luck.
Patrick Medlicott
Yes please, open to public.
Wonderful morning chorus Bernard... thank you and whole heartedly agree...
Thank you again Bernard for an excellent summary of the ongoing problems facing NZ, and your proposed solutions which make so much sense.
As a Green Party candidate in the recent election and long term member I will be sharing your policy suggestions with the Green Party policy team and trying to persuade them to take on as many of them as possible. There is already close alignment on a lot of policies, but often the devil is the detail. A land tax over a wealth tax for instance. $35 000 tax free threshold instead of $10 000 (this was a modest starting figure to get the idea rolling). UBI at 60% of median wage versus an Income Guarantee of $360 per week per individual plus extras for children, etc.
In terms of climate finance, I would like to see NZ adopt a Carbon Border Adjustment Mechanism (CBAM) like the EU is introducing. This would level the playing field for NZ industries both as exporters and protection from imports. It would allow us to lead the way on carbon reductions and efficiencies, and finally bring in the agricultural sector who have legitimate claims to not wanting to be unfairly disadvantaged against overseas markets. Until, (and it might never happen) we have a legally enforced global carbon tax, CBAMs are the only way to move forward to properly price carbon into our economy.
Bernard Hickey for Prime Minister if Greens dont pick up and run with some of these ideas
Yes, I agree with this. Would be happy to vote for Bernard. 😀
Thanks Rick. Interesting on CBAM.
I’m sure your party will love the ideas here. 😀
It can be done! Real policy. Real solutions. Strategic, inspiring, intelligent thinking. Thank you.
Great work, Bernard. (As if they'll listen...🤐) The lingering question for me is how does a country which exports low margin (negative margin if you count environmental externalities!?) animal protein and unprocessed wood, but wants to continue importing high value iPhones, Teslas and AI, pay its way in the world? In the same way as we're missing a population and infrastructure strategy, Aotearoa is also missing a coherent technology investment strategy and it's starting to bite our trade balance...
Indeed. It's one of the reasons I think we should leave capital gains on Intellectual property untaxed, and to effectively boost the amount of savings available to invest in real businesses by not taxing the returns while in the funds.
Absolutely Ben! Some years back I sat beside an elderly gentleman on a bus from Dunedin to Chch, What a knowledgeable man - am sorry I was too polite to ask who he was. Anyway two images have stuck in my head.
somewhere around North Otago he pointed out a row of trees across a paddock and told me about a Japanese dairy operation. He'd been able to visit in some capacity I've forgotten. He'd found it impressive. By the time we got nearer to Chch we'd discussed land, industry etc in the south Island and he wound it up almost sadly by saying that NZ kept sticking with a low wage, low technology economy.
And meantime our techy young people find rewarding work with enough pay to buy a house in some other country - my families are in Australia, the US and Canada. - Happy Christmas !!
Now when technology can ease the distance fact are we still back where we've always been.
Do rich people think we want their taxes to pay poor people to do nothing ( nothing the same as rich people do) ? If they thought it would be paying for exciting technology might they stop hiding it in caves?
Yes !!!yes!!! yes!!! to a LAND TAX 👍and hit the land bamkers !!
Thanks Bernard ..
Excellent summary but did notice no mention of agriculture?
No land tax on farming. Only residential. Haven't addressed nitrates in water and climate emissions. I'm in favour of a simple carbon tax and a simple methane/nitrous oxide tax.
Maybe rather than a new tax which would probably end with some irate Groundswell member dumping a load of manure on your drive perhaps a subsidy to move to alternative crops? Likely much cheaper than trying to clean up livestock farming. The consumer may precipitate this with trend towards eating less meat for both health and environmental reasons.
I think TOP excluded both Māori and agricultural land from their proposed land tax. I understand the TWG also rejected the idea of a land tax on the basis of its impact on Māori land-owners post settlement. Would you advocate for this too?
Great stuff Bernard. Now how do we get the turkeys to vote for Christmas. Maybe it’s time for us all to start doing rather than talking. Maybe it’s time for the peasants to be revolting...
Wonderful Bernard! I fully support opening up this ahead of December 20! Have you thought of something like a dashboard like a kaka kpi to track how this government is going against your key areas?
Love it Ben! A Kākā KPI!
We still need a wealth tax on the 1%ers Wealth inequality causes a great deal of harm. High levels of wealth enables some to buy politicians
The trouble with a general wealth tax is that wealth is so easily transportable: the very rich you want to tax have the means to remove their wealth from New Zealand.
Land tax has two advantages:
(1) land cannot be hidden, or whisked off overseas, so is easily taxable;
(2) taxing land will tend to make it a less desirable investment; that will tend to reduce the price of land, making it more affordable for people to use it to put a home on, rather than to speculate on. Thus there is an identifiable social dividend.
Maybe a higher rate of gst on ultra luxury items - helicopters, super yachts and the like? Not items any of the 99% would be able to afford
No not really, you can’t pick up a forest and take it somewhere else. The wealthy would like us to believe that they can take their money and run but the assets they hold their wealth in cannot be taken
They can be sold to foreigners and should be stopped
If tour wealth is invested in property, it isn't transportable. Would some wealthy people sell and go overseas? Probably. Should we be scared of it? Absolutely not. They are not productive members of our society and contribute very little.
Thanks elaine. Most of that wealth is in land so it would be taxed, and if unoccupied (ie second homes and holiday homes and land-banked land) then taxed at a higher rate.
A question on land taxes - can these be deferred until the sale of the house? I guess that would turn them into inheritance/capital gains taxes.
We are fortunate to own our own home. Bought shortly before COVID for $520k. The price of our house increasing doesn't benefit us in any way I can see.
But with mortgage, rates and childcare costs taking up over 50% of our income it's tough to make ends meet and an additional tax would be difficult to manage while the kids cost $500 a week in ECE.
This could be solved by free ECE of course! And it's temporary until our kids are old enough for funded education. But I'm interested in the idea of deferrals for people on fixed/temporary reduced incomes.
Rates can be deferred until the sale of the house, so a similar mechanism could be used for land tax.
A zero tax rate for the first $35,000 will more than cover the 0.5% tax you will pay on the value of the land.
What about the people aged 30 - 65. Why should they be excluded from UBI? Seems unfair. It should apply to all. Also, Nicole McKee, a firearms advocate, has been put in charge of firearms policy. She advocates allowing automatic weapons. So it is not just the tobacco lobby that will be happy with this government.
Bravo Bernard so organized & doable, get the voting age to 16 & get the young to vote just maybe get rid of Grey brigade, we want to keep experience but at not cost we are currently paying in the suffering of daily stress for those who have not got stable living conditions.
Hi Rae, suggest you look at some old footage of civil unrest in the 1960s-80s. Many of your ‘grey brigade’ were there, and are still protesting for ‘rights’, here on the Kaka if no longer on the streets. Belief for the human right to justice, equality, and fair distribution of resources doesn’t go away with age, but we do get ignored and sidelined by most msm.
I was there also, however bad knees not useful for marching now.
Agreed Rae on the voting age. I'd suggest including voting for the first time in the last three years of the school curriculum.
Thanks Bernard, If first vote is before exit school will encourage lifetime voting, even maybe in local body elections.