pn885. Fiji Leads the Way—and helps the poor— on taxes in the new National Budget

Whatever the reasons, ordinary people in Fiji are going to be much better off as a result of  tax changes approved in the new 2021-22 National Budget, and an increase in the minimum wage from $2.68 hour to $3.01 on April, then $3.44  on 1st October and $4 an hour from 1st January 2023. 

Predicably, the tax and wage changes have been seen as election bribes. Elections are due any time after 26th of May and there have been signs Bainimarama's First First has lost some of its support. A SODELPA coalition could form the next government. SODELPA  Opposition speakers called the tax changes "overly optimistic, an election budget" from which the rich would also benefit, while NFP's Prof Biman Prasad said it was "a little too late." His party had been calling for relief on VAT for several years.

Sticks and Carrots to help the housing market (pn705)

With Government due to make a major housing policy announcement next week, Jeneé Tibshraeny discusses some stick and carrot options in interest.co.nz while Finance Minister Grant Robertson says the policy package will include a “mixture of both incentives to go [invest] elsewhere and disincentives within the housing system.” and  Reserve Bank Governor Adrian Orr said people need to look for “alternative places to invest.. We didn’t say, go out there and buy only homes."

pn578. Susan St John answers Jo Hill's query on tax reform: not draconian but fair and effective

See Susan' original article pn566, and Joe Hill's query pn574.

Hi,  sorry this has taken so long

The net equity is aggregated and $1 million exemption applied for an owner occupied amount.  It is likely that only 10-15% of property owners will be affected.  It will get at multiple dwellings- over-expensive owner occupied homes and speculators. Only NZ registered Mortgages allowed to determine net worth of family home.  

 

pn574. Susan St John unclear on needed tax reform. See pn566

Susan St John

This question from a reader:

Croz

In this abbreviated form I think you and Susan maintain that property owners of farms and residential houses with high govt valuations should be taxed according to the value of their properties.  Is this really what you mean?  

I think of people in what used to be working class Eastbourne who under this rule now find that their modest family cottages are worth over a million should be taxed on the measure decided on the basis of inflated market values. 

Is this what you mean or are you and Susan referring to owners of multiple properties that generate rent or provide a weekend retreat for the bourgeoisie?  How far do you take it?  Who are going to be the tax payers you have in mind?

I’m disappointed that this govt has removed capital gains taxes from their agenda.  These property speculators seeking capital returns from properties bought on the hard work and rent paid by those less well-heeled is just not fair. Wonderful Jacinda is so middle of the road she makes me think she has only comforting “I’ll always do my best” words and hugs and kisses as her policy platform.  Hope not. We need more backbone than this if NZ is going to solve the housing crisis..  

All the best

Joe Hill

P.S. from Croz. Auckland University Hon Assoc Professor Susan St John did not reply to my email requesting an answer. If you know her, please inform her of Joe's question.  Comments on this, and all other postings,  are most welcome.

Click on Comment below. How can we tax on property income rather than property value?

Other comments on this and other postings are most welcome. 

pn566. Be thoughtful not timid: Economist says Tax Reform needed now

 

Auckland University economist  Susan St John says government needs to act now on tax reform if NZ's  housing problems  — the source of much of our inequalities — are to be resolved. She offers a number of suggestions on how.

For example, "Policies are needed to extract more tax from the undertaxed owners of expensive real estate and residential land, both to restrain price rises and to provide a secure revenue stream. But the government has ruled out introducing any new tax. 
"One fruitful approach is to revive the narrative of comprehensive income tax. Using our existing tax system we can expand the base of what is captured under an income tax. The persuasive narrative is that income earned from holding assets in whatever form should be treated the same."

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