Will Taylor

National loves strategic assets too!

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I read with great surprise this morning that the new National government has blocked the sale of the Taharoa iron sands to CKI (who now own the Wellington electricity network too).

Matt was equally surprised, he sent me an email with the subject as “WTF” and the body simply containing the link:)

What the hell is going on? It’s already owned by Australians and pretty much all of the iron ore it produces is exported.  I’m not sure that selling sand falls within the bounds of something that we consider strategic? Maybe that’s just me though

As you probably worked out from my previous rants I disagreed with the decision to block AIAL (here and here) and found it inconsistent with the decision to allow the sale of vector’s electricity network (here). I can’t really work out a consistent pattern for when asset sales will be blocked so I can only imagine what foreign investors are thinking…

If we won’t let people buy our sand from the Aussies what will we let them buy?

Rant over.

dant03

The proper way to levy taxation

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The full set of briefings to incoming ministers (BIMs) following the recent election are now helpfully available on a single page, and between them cover a host of quite interesting, practical, and in some cases timely economic questions. One quite meaty suggestion that I noticed in Treasury’s BIM related to taxation, but it was given very little space (perhaps they knew that it would be ignored?).

The full passage is quoted below, but the bit of interest is in the final bullet:

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Patrick Nolan

Taxing times

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Below is a link to an updated calculator that allows people to compare how their tax situation would change should they shift to Australia.

Taxing times.

The model also allows people to work out how the tax situation and family income assistance for people in their circumstances have changed this century.

The provision of tax relief in this year’s New Zealand budget has closed part of the tax gap with Australia. Yet while this relief kept pace with recent changes in Australia, the growth in the tax gap over the earlier part of this century largely remains unaddressed.

While incomes remain higher in Australia than in New Zealand, Australia will remain an attractive country for Kiwi workers to relocate to. Given the commitment in Australia to reviewing the tax system (including family income assistance) to attract and retain workers in competitive global labour markets, the competition for workers with Australia is only going to become more important for New Zealand.

Matt Nolan

Compulsory redundancy payments

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I see there is some talk of compulsory redundancy payments after this sad story.

Now even though it would be nice if those people hadn’t been left high and dry after all their years of commitment, it is important that we try to get an objective idea about the costs associated with the scheme.
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Matt Nolan

Make expansionary fiscal policy work – give it to the technocrats

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I have no doubt that my views here will be contentious – but they need to be put forward nonetheless.

I think that Treasury (or some mix of part of Treasury and IRD) should function at arms length in the same way as the Reserve Bank, and that they should set tax rates in the same way that the RBNZ sets interest rates.

Now, let me discuss why.

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jamesz

A world without growth?

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My favourite article of NewScientist’s series is Herman Daly’s. The father of modern ecological economics lashes out at the way economists ignore the source of inputs to production and the capacity of the waste sinks that we have. As he puts it, we should imagine the economy as a system within the world’s ecosystem. Read more