Landlords very rarely build to rent - they buy existing houses. those houses won't disappear because an investor doesn't want to buy.

It will be a tax neutral package. You can bet your bottom dollar the revenue raised from a CGT will be plugged back in by providing relief in the lower tax brackets. There’s no doubt it’s people on the richer side of average who will pay CGT.

So yes, it will affect inequality.

The government could afford to do some kind of tax relief package in the lower brackets without a CGT but they decided to fund things like Shane Jones' slush fund and free university education for people who don't need it

The government making out like a tax cut isn't really affordable right now is a total joke, they are practically rolling in revenue because they are over taxing.
Using tax relief to justify the CGT would be disingenuous.



The thing is, the government doesn't need to make up some kind of flimsy justification for a CGT. At it's basic principle it is simply a fairness issue

I'm just stating the inescapable laws of nature.

The Pareto principle. https://en.wikipedia.org/wiki/Pareto_principle

Prices Law. https://brainlid.org/general/2017/11/28/price-law.html

You have the right to a different opinion but I'd need to see what you base it on to give it any credence.

The question was whether this would help inequality. It would, and the shane jones slush fund or free tertiary won’t change that. Those are irrelevant right now.

And they are not rolling in revenue. I have no idea what gives you that idea. This years budget is epically oversubscribed from agencies begging for cash after the lean years under nationals zero-spend budgets (which were necessary at the time, no criticism there). But Labour is not flush with cash. fudge no.

And using tax relief to justify a cgt is perfectly acceptable. It’s a complete restructure of the tax system in order to make it more fair.

Interesting read.

Says who? I work with some of those kids, and the policy has introduced tertiary education to people who couldn't previously afford to access it.

How does this mean a cgt won’t impact inequality exactly? Seems somewhat unrelated and more than a bit random...

Over the next four years they're forecasting an increase in spending of over $11 billion and still forecasting a surplus in 2021-22 of over $7 billion.

In the 2018 financial year, tax revenues increased by 6% and the government found themselves with a surplus $2.4 billion ahead of what they had forecast.

The government making out like they're skint is a joke. The fact that they've decided to allocate away much of it on wasteful spending, which might leave them short in other areas, is a bed of their own making. But in any case, if they were really keen on tax relief, they could afford to do it without introducing a CGT.

But there doesn't seem to be much impetus from the government to alter the brackets. They were very vocal in their criticism of National's plan to do much the same thing and immediately rolled it back when they came to power. That plan would have only cost $1.5 billion. I really don't think they'll do it prior to 2020 and it will be some kind of election bribe.

So you're talking about perhaps 10% of people who go to university. Maybe less even.

The other 90% would have got their interest free student loan and gone along and got their degree just like every single other uni graduate managed to do in the last 18 years.
If the goal was really to enable access for those kids for whom cost was a genuine barrier to study, surely that couple of billion dollars of taxpayer money every year could have been better targeted.


It was a blatant vote buy, nothing else.

That wasn't what you said though. Still, I don't see most of Europe complaining about having zero tuition fee tertiary study. Studies show the investment pays off in the long run through the entrepreneurial economy which, incidentally, Stephen Joyce was obsessed with to the tune of wasteful initiatives like the ICT Graduate Schools and Entrepreneurial Universities Initiatives, but I don't hear much whinging about those initiatives. Fees free is about $500m cost per annum. EUI was about $100m and so was the ICTGS. There's been a lot of chat about how few students benefitted from fees free, but still exponentially more than have benefitted from EUI or ICTGS. That's before you factor in the complete waste of funding that Callaghan Innovation has proven to be (compared to IRL) and the unnecessary National Science Challenge initiative that succeeded in basically wasting science sector investment for about 3 years. Quite frankly, in comparison fees free is an initiative that will pay dividends.

Ah, kinda curious on your thoughts regards the Callaghan Innovation. I've seen it about and even considered using it, but never really understood just what it is or isn't doing... if it is in anyway successful.

I don't see that inequality is worse in New Zealand without cgt than it is in countries with cgt.
You may have some credible sources that say different.

Callaghan Innovation turned a reasonably successful applied research organisation (Industrial Research Limited) into another government research funding organ - replicating what MBIE, TEC and the Royal Society already do, but at the more applied research end. At the same time, the remaining applied researchers at the new Callaghan Innovation were no longer allowed to apply for government funding; only commercial funding, so the really top quality people left (mostly offshore) and crippled the applied research sector. Obviously, the blue skies research still happens at universities and applied research still happens in the CRIs, but the advanced physics and chemistry that IRL used to manage is largely gone. The fact that they put Sir Paul Callaghan's name to this debacle adds insult to injury.

But where Callaghan Innovation does plug a gap is that they do provide support to small and emerging businesses and aid in the commercialisation process. My view is that this could have been managed within MBIE, removing unnecessary duplication and not crippling the IRL research at the same time.

That's one relevant question, but the other equally relevant question is whether inequality would be worse in those countries with CGT if they didn't have it.

Why was the free year applied to the first year rather than the final or even second year?

Is there any financial penalty for students who take advantage of the free first year and then decide that the course/degree isn’t for them

Pareto principle says no.
Price's law says no.
NZ example says no.

The financial penalty is that they still have to pay living expenses for the time they're studying and if they withdraw without completing, they have absolutely nothing to show for it other than having less money than when they started.

As for applying it to the final year instead of the first year - yep, I can absolutely see that being a valid alternative. In terms of pragmatism and cost to implement though, the 'final year' is less clearly defined. For Architecture students, it's year five; for medical students its 5+ years, Engineering 4 years, those doing conjoints or double majors it could be anywhere over 4 years. Inherently more complicated. But yes, I can see the benefit that the final year being free would encourage students to complete... perhaps...

How is there an 'NZ example'. The question I'm posing is if, in somewhere like the UK, would inequality be worse without CGT. How does the NZ example provide any evidence, given that we don't have a before and after? As for your other principle and law, I'd rather see a case study or two in this specific example. After all, most physical and economic laws only apply only in a limited range of circumstances and applying such laws to examples without empirical and experimental evidence could be seen as ridiculous extrapolation.

On the other hand, I will confess to a certain level of playing devil's advocate here. I would not be surprised in the slightest to see that CGT is a mere drop in the ocean when it comes to effecting inequality. In which case, a more robust adjustment of, say, reducing GST and increasing top rate income tax would be more effective. However, that wouldn't achieve the rebalancing of investments that the CGT is purported to achieve.

The only way of wiping out inequality is by wiping out the human race.
Why is inequality so bad?

CGT ain't going to happen with Winston on 3%

As someone from the lower classes who's had to fight tooth and nail to where I've got to, what annoys me the most is the inequality of opportunity - perpetuated throughout society either with the "which School did you go to" attitude of certain cities which don't need naming or the "voluntary" contributions that Schools insist upon. Inequality of opportunity is intrinsically and inexorably linked to basic inequality.

Think back throughout history and basically all the violent social upheavals or revolutions in the last 300 years were brought about by extreme wealth inequality

It does very bad things to countries in the long run when it gets out of hand.

Inequality is what drives the economy and creates wealth.
It's why 20% of the people get 80% the work done.
Most of us are reliant one way or another on that 20%.
Some of that 20% had worse starts in life than you did.
Equality of opportunity is desirable.
Equality of outcome is a false god.

Most of very worst disasters were bought about by trying to achieve equality of outcome.
Stalin.
Mao.
Pol Pot.

What!?

The rewards are there for the for the more capable.
If we were all paid the same rate nobody would give a shit.
There's nothing like a good dose of socialism to suck the vitality out of a nation.

It could have been put more eloquently but inequality exists as part of the human condition, and competition drives innovation. Some people are more driven than others, have more ambition and/or possess greater cognitive abilities. There is a reason that an oncologist gets paid more than a florist. Now there are arguments to be made that one may be over paid and the other under but that does not address the fact that one takes on a whole lot more commitment and risk than the other.

As mentioned by BillW: Equality of opportunity good, equality of outcome so very, very bad.

Oh so he meant competition? Someone should tell him that competition and inequality are not the same thing.

I don't remember the details, it was a couple of years ago and I was nodding off at the time, but according to the mayor, who spoke at our conference, they're are desperately trying to free up land and encourage developers to construct worker and family accommodation.

Great for the Simple House (Acceptable Solution) and Multi-Proof, but they will need to dot their i's and cross their t's before they will be granted consent(s). Great when you need to bung up a bunch of dwellings in a hurray and your clientele isn't too fussy about having the same house as a bunch of other people. Not great for when you start hitting different wind zones, for e.g. All the same, I am a fan for keeping our building materials suppliers honest and maybe even encourage them not to gouge the locals to the extent they have been doing for many many years - everyone like a competitive market, right?

Manufactured houses are going to be pretty much the norm anyway. It's a good thing in some respects as their does not seem to be a will to fix our broken trade training regime. Semi skilled people in a managed environment, under the supervision of the minimum number of LBP's; no weather to bother about and with as much automation as can be thrown at it, surely has to bring costs down and even out the quality - note: that doesn't necessarily mean high quality, just less very poor quality, which is the best we can hope for when the minimum standards our performance based building codes are, by default, maximum standards when applied to the majority of builds (hey, they get a CCC, so why go further than, say a 15 year durability for brand new cladding..... with normal maintenance of course, which incidentally is not defined anywhere in the Act or Code).

Ok, that went off piste rather quickly. It's a subject that is dear to my heart.

I didn't always, but I quite like Judith.

Yeah me too.

Jammy, keep in mind that year one is the hardest one in which to gain a scholarship. If you can get in (don't overload in year 1) and work like hell, it is far easier to get awarded scholarships for subsequent years. I would prefer the assistance in year one but geee, it would be tempting to chuck in that extra class, wouldn't it?

Now I'm seriously worried about you guys!

You need to go back one step in your root cause analysis. What led to the communist revolutions in Russia and China, and the subsequent domino effect in Indochina?
They were corrections, and obviously overcorrections, to the huge disparity in wealth between the landowning elite and the newly liberated serfs and peasants who owned nothing. The disenfranchisement caused by extreme inequality led these people to throw out their own governments and spend the next 30 years exterminating the educated middle classes to prevent it happening again.


Clearly not the right way to go about things but an example of why a country should not let inequality grow unchecked.

She's the leader we'll need when we invade Australia.

She’s the leader that won’t need us when she invades Australia.

Our very own Iron Lady.

Perfect antithesis to the smiling windbag.

I don't rate her highly, but I'd rate her higher than Simon Bridges. I saw him at Auckland domestic airport once and he had piss stains on his pants the grub.