If National wins ...

[iceman]

I know you don't agree we should be chasing these rip off artists EZ but look at the numbers involved. We are not talking small change here are we ? Resulting largely from one of Clark's/Cullen's maddest of many mad moments when they bribed students (and gullible parents) with interest free loans on the eve of an election that polls were showing they might lose

http://www.nzherald.co.nz/nz/news/ar...ectid=10858246

[elZorro]

I know you don't agree we should be chasing these rip off artists EZ but look at the numbers involved. We are not talking small change here are we ? Resulting largely from one of Clark's/Cullen's maddest of many mad moments when they bribed students (and gullible parents) with interest free loans on the eve of an election that polls were showing they might lose

http://www.nzherald.co.nz/nz/news/ar...ectid=10858246

Fair enough Iceman, I read the article the other day and thought it needed some more data.

Already, the govt pays out 34% of the cost of tertiary education in advance as loans, and then writes off nearly 50% of it as expected bad debts, and the cost of use of money etc, so that effectively students are expected to pay only 16% of the total annual cost, which is about $4.46 billion in total. This means that after all these years, the outstanding poor payers are overdue only 9.4% of the actual course costs each year, and the overdue amount is only 3.2% of all the monies lent to students that is still to be collected.

This means that the vast majority of students are paying their loans back as and when required. There is also a niggling issue that students who racked up big interest bills on their loans in the 1990s, before the govt changed the policy to interest free in most cases (2005, changed again in 2006), have been hit harder than most. I feel for them (considering the govt paid nearly all my fees a few years back) and maybe some of these ex-students have been less keen to pay interest.

The fact remains, the outstanding amounts, when put into context, are not a big part of the govt's annual costs, and ongoing education has other positive effects on the economy. I think we're seeing all this news because some lobbying by National is being carried out to soften the voting public towards a harder stand on tertiary students. If they can reduce the education spend by whatever means, they'll be trying it. They're simply trying to reduce the bad debt writeoffs that are already lodged in the books, and after that maybe introduce loan interest again.

This is part of the vicious circle: the tax take is down because the market is not being prodded by govt to take on more staff. The market knows that quick and easy profits (or a reduction in losses) are achieved by reducing staff.

[fungus pudding]

This is part of the vicious circle: the tax take is down because the market is not being prodded by govt to take on more staff. The market knows that quick and easy profits (or a reduction in losses) are achieved by reducing staff.

Businesws entrepeneurs don't need prodding. Govt's role is to ensure there are no barriers and remove any that exist.

[elZorro]

Business entrepeneurs don't need prodding. Govt's role is to ensure there are no barriers and remove any that exist.

Greetings for 2013, FP. Your view above assumes many things, including that in a right-thinking world:

-There are many entrepreneurs ready to risk all of their existing assets, if only govt would reduce the red tape.
-That these people will all then get past the first five years of their business cycle without needing any assistance, and none will fail miserably, taking out their own savings and some of those around them
-That these people will naturally be good employers and will be keen to take on and train staff, for the betterment of NZ
-That once the operation is profitable they will seek to build on this in NZ, rather than sell out to an overseas investor, risking at best a flight of profits and exchange earnings
-That all NZ entrepeneurs are fully trained in running a business and will need no govt assistance
-That these investors are acutely aware of every opportunity that NZ has, and will not need this to be pointed out
-That the new businesses will need no guidance from the govt in choosing commercial activities that are in line with normal govt policy for improving the income gap in NZ, and other such stated aims.

On the other hand, your comment about "barriers" refers much more to the costs and rules that existing businesses face. In many cases these are there to protect other NZers. For example, you can't put in a new bore for irrigation on your farm without paying a hefty fee to get the whole situation checked out. At the same time you'll need to pay a bit over the top, as councils derive some of their income from those who are moving their businesses into higher earnings, rather than staying static. This is not a "barrier" , it's common sense.

[POSSUM THE CAT]

The big problem is the lack of customers with money to spend (they are In the most being screwed by the govt to give big tax cuts to the high income people.

[elZorro]

The big problem is the lack of customers with money to spend (they are In the most being screwed by the govt to give big tax cuts to the high income people.

And those with the big money aren't keen on paying tax. National a bit quiet on this area.

http://www.stuff.co.nz/business/mone...-dodge-schemes

Biased or not, I think Rod Oram is being astute about the govt's issues this year.

http://www.stuff.co.nz/business/opin...mic-challenges

Rod Oram, Fairfax.

Some common themes emerge from these six areas of economic development policy: The Government has taken far too long to get even this far with them; it co-ordinates, sells and executes these policies badly; there are merits in many of the policies but they are not bold enough to shift the economy to a higher growth track; and public resistance to many of the policies is rising. If the Government thought the global financial crisis was hard, it will find its self-induced domestic stagnation crisis even worse.

[fungus pudding]

And those with the big money aren't keen on paying tax. National a bit quiet on this area.

http://www.stuff.co.nz/business/mone...-dodge-schemes

I am suprised there has been so little reaction to National disallowing depreciation on buildings. The damn things depreciate faster than moany other physical assetts.. It has left a couple of previously high income earners I know with no income at all or worse. It certainly increased my tax bill by a huge amount. That was a real kick in the guts for plenty of those with 'the big money' whatever that means.

[Major von Tempsky]

Rod Oram is a card carrying member of the NZ Labour Party and that should be disclosed on all his columns although it very quickly becomes evident if you have the misfortune to accidentally start reading one. The SST should offer equal space to the NZ National Party.

[elZorro]

I am suprised there has been so little reaction to National disallowing depreciation on buildings. The damn things depreciate faster than moany other physical assetts.. It has left a couple of previously high income earners I know with no income at all or worse. It certainly increased my tax bill by a huge amount. That was a real kick in the guts for plenty of those with 'the big money' whatever that means.

The 'big money' I was referring to was those with several million of freehold assets. But I'm surprised that the lack of a depreciation writeoff scuttled the income of some property owners. It means the underlying profit was fairly small anyway. Tax has a way of cycling so that it's high one year, and lower the next. I've read one book that showed (among many other tips) how to laboriously separate the parts of a rented out building off into asset sections with different depreciation rates, so as to get the most tax drop out of it. Maybe the bach rental rules have also affected some. Sorry but I have no sympathy for this result, if people have extra assets and property, they should be prepared for all the costs, and not expect there to be tax writeoffs for everything. An ordinary employee gets none of these perks.

MVT: $300 a year to the Labour Party entitles you to also be a card carrying member should you wish. It doesn't mean that all sensible discussion of issues affecting NZ is forgone. I think Rod has looked long and hard at many issues in NZ, and after all his talking with various people and over time, he has formed well-researched opinions. I'm keen on knowing what they are. There is always plenty of other fodder from govt offices in the press.

[fungus pudding]

The 'big money' I was referring to was those with several million of freehold assets. But I'm surprised that the lack of a depreciation writeoff scuttled the income of some property owners. It means the underlying profit was fairly small anyway. Tax has a way of cycling so that it's high one year, and lower the next. I've read one book that showed (among many other tips) how to laboriously separate the parts of a rented out building off into asset sections with different depreciation rates, so as to get the most tax drop out of it. Maybe the bach rental rules have also affected some. Sorry but I have no sypathy for this, if people have extra assets and property, they should be prepared for all the costs, and not expect there to be tax writeoffs for everything. An ordinary employee gets none of these perks.

An ordinary employee has none ofr the costs - costs are not perks. It's illogical that businesses can depreciate computers, vehicles etc, but not buildings. It means all property investors had their tax increased, even with no increase in income - not just some. Even you eZ. In many cases it has caused real hardship, but there's been little reaction.It was a silly move which acheives little.