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In September 2018 the Tax Working Working Group did the calculations to remove GST from food, and said a more targeted welfare transfer could provide greater benefits to lower income households.
https://taxworkinggroup.govt.nz/sites/default/files/2018-09/twg-bg-gst.pdf
32. For example removing food and drink from the GST base has a greater absolute benefit for higher income households than lower income households. Such an exception would benefit a decile 1 household by $14.58 a week and would benefit a decile 10 household by $53.03 a week.
33. Such an exception would reduce GST revenues by an estimated $2.6 billion. With this same amount of revenue each household could instead be given a cash transfer of $28.85. Removing GST from food instead of such a transfer would therefore provide approximately an additional $24 weekly benefit to the richest households and $14 less to decile 1 households compared with lump sum payments. In addition, for the same fiscal cost a more targeted welfare transfer could provide greater benefits to lower income households.
Hipkins is nothing but an economic vandal. He doesn’t give a toss that New Zealand is absolutely stuffed on the revenue front, he just continues his socialist lolly scramble pushing us deeper and deeper into the red. Absolutely disgraceful. It’s going to take ‘the Razor Gang II’ to reverse the damage Hipkins is doing in his blind lust for personal power. He will clearly destroy the country if it enables him to keep his filthy mitts on the levers of power.
Of course this expensive and silly GST policy is going to be funded from the imaginary COVID fund. What an absolute joke
It seems to me that many countries are heading down the same path, taking on more debt, and spending more than they earn and it doesn’t seem to matter whether it is Labour or a conservative party that is in power.
So, it is not a problem that is unique to New Zealand. NZ has 51% debt to GDP, Australia 52%, Canada 92%.
Many voters are calling for and support increased government spending on health, education, police etc.
https://www.worldeconomics.com/Debt/
https://worldpopulationreview.com/country-rankings/countries-by-national-debt
Japan 259.43%
Sudan 200.35%
Greece 194.50%
Eritrea 179.66%
Singapore 159.87%
Maldives 154.39%
Lebanon 150.58%
Italy 150.30%
Like all election promises, they'll come to nothing if the party doesn't form a government, and the way it's going with almost certainly coalitions being required, nothing is certain. GST off food is a vote winner though, (however it's funded, the average voter probably doesn't care about that), it's up to the opposition to prove that reduced taxes are a better alternative that puts more $ in their pocket.
Either way, the majors are arguing to put more of our money in our pockets. That's what people need, in this very expensive inflationary environment and cost of living crisis! That'd be nice instead of a 6 year history of government take take take with f'all to show for it.
Bring it on, this is shaping up to be the most interesting election in decades. Choose your party vote carefully, the choices are another 3 years of ambition, borrow and spend albeit constrained only by the lunatic fringe coalition parties, or more money in your pocket, restrained government growth and realistic sensible economic restoration to sustainable health and growth.
More importantly, what that website does not show, is what % of that debt is domestic? The US figures from what I last recall is that over 2/3rds of their total debt is domestic (meaning internal). Technically, a country can not go bankrupt on it's own, which is the people that lend their $ in buying US treasury bonds, can not force themselves into bankruptcy. This is very different if the debt was wholly owned by a foreign country.
Above all, it all depends on the quality of the debt and not all central banks are the same. To the unbaised investor, when they look at small countries like NZ they realise that it's really hard to invest anywhere else but in the US and being the largest economy in the world, your odds are far better lending to the US than say lending to NZ. They are the magnet that attracts all business and the leaders of capitalism.