12 Comments

Thanks Bernard... Don't suppose you'd have a gift link to that Brad DeLong piece in the FT? ;-)

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Kia ora Bernard, thanks for all your amazing mahi. What do you think about the following - (happy for you to have a look at this idea in your 'ask me anything' weekly)

What do you think about the following idea -

The government implements a windfall tax on the business sectors in NZ that have maintained medium to high profitability through covid (banking, groceries, building supplies and others). The same sectors that are dominated by just a few players (the big 4, the big 2 etc).

Then the revenue gained from the tax is earmarked to help those who bought property in the last 2 years and are now seeing their mortgage rates double or more and need to come up with another 20 - 30k to keep on top of payments.

It seems really unfair that we let our housing get so unaffordable, and then the people who managed to buy during the last few years, typically young first home buyers, may now be in a position where they can't afford to keep their house because the reserve bank is hammering inflation down so aggressively. Meanwhile, certain sectors of the economy are raking in the profits and paying out high dividends to share holders.

What I'm not sure about with the idea above (windfall tax on those who have done well out of covid earmarked to support those who will be in facing mortgagee sales) is how it could work practically, as in how would one prove that they qualify for support, at what level would the tax be so it raises enough to support those who need it, and probably 10 other considerations.

And then lastly, if such a tax was implemented, would it be more equitable to redistribute it to those on the lowest incomes who are typically renting, rather than supporting middle class home owning New Zealanders?

Let me know what you think?

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Nov 27, 2022Liked by Bernard Hickey

Hope you and Lynn are having a great time in Melbourne. Thank you for your mahi, hope the next couple of weeks are an excellent reset for you both. https://thekaka.substack.com/p/the-kakas-diary-for-the-week-to-nov

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Nov 27, 2022Liked by Bernard Hickey

Re inflation: extract from interview with Jagmeet Singh, leader of Canadian Social Democrats - unlike here, note reference to corporate greed.

Inflation in Canada – although less than in Europe – is still hovering around seven to eight per cent. In your view, what are effective measures to address this and help ease the burden on citizens?

There's been back to back crises that have put the burden on workers. When the pandemic happened, people lost their jobs, but major companies like Amazon or Walmart made record profits. Workers were hurt, Billionaires made money. Now, with inflation and the cost of living going up, we're seeing the same thing. In Canada, workers are suffering, but corporate grocery stores are making record profits. Oil and gas companies around the world are making record profits.

In Canada, the response to inflation has been to increase interest rates. However, that response alone doesn't address the real issue – corporate greed. A lot of the wealthiest corporations are using inflation as a cover to increase prices and make lots of money out of people that are hurting. The windfall tax on the excess profits of these oil and gas companies is a way to put pressure on them to stop profiteering off the war.

In Canada, we've taken measures to tackle the food prices going up. We've put forward measures to soften the blow by increasing direct financial support to some Canadians which economists say will not increase inflation because they're targeted and are only going to the people who need it. We put in place support for dental care and other health care needs to lessen the burden on some families. We also sent out direct financial support for rent. All this is going to be helpful, but we want to do more. We've also called for some steps to reduce the cost of energy this winter. This is our response to inflation: worker focused, going after corporate greed and making sure we soften the impacts on workers as opposed to letting them fend for themselves.

Total article at https://www.ips-journal.eu/interviews/people-have-always-expressed-dissatisfaction-but-its-gotten-to-a-dangerous-level-of-anger-6341/?utm_campaign=en_1053_20221125&utm_medium=email&utm_source=newsletter

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Have a great break, Bernard and thanks for all you do to keep us informed.

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