Wednesday, 27 July 2011

Labour Voters better off under Key

I wrote a post about our priminister John Key back in July 2008 that his success should be celebrated rather than used against him in a political way as it has been with the Labour Party, the rabid left media and Labour's mates in the unions.

No matter what you think of his politics John Key is a man that the "right" and "left" should aspire to be like. From humble beginnings living in State house with just his Mum bringing him up, to running a country that has had the worst global economic conditions for more than 70 years, natural disasters by the score and an opposition mired in the controversy of leadership challenges, sex scandals and the promise of economy wrecking massive high tax rates for all if it is lucky enough to be voted in this November, John Key has risen above the chaff and made what I think is a pretty good job of managing New Zealand Inc.

While I dont agree with most of his left of centre policies, his management of our economy has been laudable in the light of MMP politics and the Nats want to cosy up the the racism and welfarism of the Maori party that has had impacts in relation to keeping the huge unaffordable welfare net some have become used to. He has in short out leftied the sniveling left's socialist agenda the Labour party have tried to occupy and also managed to continue to capture the National vote to boot. No mean feat.

Mr Key is a likable man, for sure, but the reason for his current popularity goes deeper than that. Across the political sphere people can see that he has made a success of himself and even the rabid left media in this country from time to time see that admirable quality in him as a fighter, a quality that all of us as New Zealanders can relate and aspire to. To make a success of oneself no matter where one comes from and no matter what sort of family background that an individual is born into. This is a quality that supersedes politics and with Key as a shining example of this as our leader, the inspirational qualities of what he has achieved are clearly positive for us as a people and a good way forward for the future.

On this alone even those who traditionally vote for Labour and the left in general would be better off voting for Key. Policies that incentivise working rather than welfare and lower taxes for those who want to earn more are clear positives for the economy and our country and a good long-term future. Keys experience in knowing how an economy runs is in stark contrast to the Labour parties Robin Hood snatch and grab and a propensity to misunderstand even basic economics if it means there is a vote in it.

Labour have lost their way and its policies of envy and greed in the form of taxing those who work to give to others who don't and the growth of a much bigger Government is the last vestige of Socialism which the country needs and I believe wants to leave behind.

Let us celebrate the success of people like John Key, rather than being petty and envious. Remember if he can get where he has from his background of deprivation, anyone can.

That is what we should be voting for come November 26.

Think Bigger

- From | Think Bigger, By Michael Hill

Darren Rickard 2011

Friday, 15 July 2011

Labour's capital gains tax to punish investors and the economy

Originally from

Lets take a look a Labour's new 15% capital gains tax (CGT) that they are going to impose on New Zealanders should they be lucky enough to be elected come November 26.

We probably need to start from the premise that any tax, whether it be a CGT, GST, income tax or otherwise is counterproductive to growth and always affects the income, asset or investment in a negative way and is therefore anti growth and anti productive.

The country does however need to collect some tax to run the state apparatus (and one may argue how big that should be) and a fairer flat tax system that would incentivise all to work harder and smarter and increase productivity and get the economy moving.

Labour's raft of new taxes across the board for those that earn $150,000 and more and their capital gains tax across all asset classes, except the family home, is not the answer to our current economic malaise or a positive way ahead for the future because if introduced will have the opposite affect to that stated by Phil Goff and his merry henchman David Cunliffe.

What we need to get us out of the economic mess that Labour incidentally spent their way into, is to remove taxes on savings, business investment, stockmarket investment and rental housing and other asset classes and thereby stimulate growth in these areas rather than stifle it with more crippling taxes. Labours 9 years of high taxes, huge spending and backward productivity growth should have been a lesson to them not to repeat the same mistakes but hey they are going to do it all again.

In general then a CGT is going to have a severe impact on investing but let us look at the topic that interests me and those that read this blog the most .

"Will apply to shares for those who trade them "on an occasional basis". Phil Goff New Zealand Herald , 14 July 2011

Lacks detail and needs defining but I will go on.

What the hell will a 15% CGT do to the stockmarket short term if introduced and in the long term?

Obviously before its introduction investors will want to pull out of the stockmarket to crystalise any gains made before the tax is introduced and clearly this will have negative impacts for the markets in the short to medium term. How much is unknown but in my experience it is unlikely to be a small impact and could very well lead to a stockmarket crash of some description.

In the long-term the consequences of a CGT are obvious. Investors are likely to avoid the local stockmarket and local business investment and decide to either spend the money they would have invested or send it offshore where stockmarket and business investments have a fairer tax treatment.

There is no practical, logical, social, ethical or financial reason to impose either the CGT and higher income taxes as whole and specifically a CGT on shares because the desired outcomes are all negative ones.

The only conclusion from that then is this grab for your money is a deeply political one. It is the politics of envy and greed where those that have worked themselves into a position that they earn a good living and have invested instead of spent will be punished for doing so.

You simply don't punish the goose that lays the golden egg and those that Phil Goff are targeting pay the vast bulk of taxes in this country and individuals that would one day want to apsire to being one of those people who have done well are going to be seriously disincentivised by these massive new taxes.

I will end on this quote by Phil Goff:

"Expected to affect less than 10 per cent of New Zealanders"

This is nonfactual because anybody who has a cost imposed on them will simply pass that cost on to those that can least afford them. Its economics 101 and Labour have failed on that test alone.

It will affect all of us, not just business owners, shareholders, rental houseowners and it will impact on those that Phil Goff and Labour say they advocate for and who vote for them. Those at the bottom of the income scale.

These taxes are not positive at all for the economy and risk the country going into economic decline should they be imposed after a Labour win on November 26 or at any latter stage should the party be shown the voters bottoms once again in 2011.

Choose wisely when you vote this year.

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