Wednesday, August 19, 2009

When Will They Ever Learn?

The ACToid ravers and Whaleoil, that is.

Cast your mind back over the last fortnight's agitated shouting about and abuse of Bill English by Cactus, Whale and assorted fundamentalist ACToids and the few remaining live left activists.

It's not a pretty picture, with some, who should know better, hysterically calling for his resignation. The most bizarre of these calls followed just the mere mention that a CGT could be considered within a wider package. The shouters derided the CGT but somehow forgot about the wider package. They were blinded by the spittle flying back into their faces.

On the other hand, for a pragmatic and balanced view from someone who in not impaired by mental scotoma, go no further than this morning's opinion piece from Richard Long.

You see, the difference between the idiots and the professionals is that the pros know that before you make dramatic changes you need to get the people on side. The hallmark of this John Key/Rodney hide/ Pita & Tariana administration (Dunny is just the unnoticed soiled tissue sticking to the inside of the bowl) has been it's ability to take the long view and get the people onside BEFORE moving to make changes. All the leaders know that precipitate action will see them hand the reins of government back to Labour, either in 2011 or 2014 and they are going to make damned sure that does not happen.

Here's what Mr Long has to say:

"Just what do the Nats have to do to bring down the political house of cards?Nothing yet has loomed as the circuit-breaker to end their political honeymoon."

It's all in the implementation, Mr Long. It's all in the implemention and John Key is a master implementer.

"There is nothing like using an economic recession as a reason to get unpopular measures across.

We will know the Nats are confident in their own high approval rating if they canvass a GST increase and a partial sell- down of selected state assets (to improve the budget deficit and introduce private sector oversight to the state-owned enterprise sector)."

Adolf's pick is that by 2011 we will see a campaign based on a revised tax system with increased GST, reduced income tax, a CGT on speculative property profits, the removal of LAQC tax dodges, a cap on welfare benefits, a substantial diminution of WFF and the sale of minority shareholding in SOEs to NZ citizens.

Adolf currently is helping put back on track a church parish which has been rent asunder by bitter division. This happens from time to time.

The problem was that the leader who had a wonderful vision for the future tried to bulldoze it through too quickly. The vision is still a good vision and likely will eventuate but not under his leadership. Basically, he lost the confidence of the people by failing to take them along with him before he made his moves. In political terms, he just lost the election.

The similarities between this episode and today's national political scene are striking.


Anonymous said...

Churchgoers can leave a parish.

The productive can leave NZ.

Bludgers and civil servants generally can't leave - or if they do, we're glad to see them go!

Changing the electoral ACT to say 7 year terms means the next election wouldn't have to be til 2017. More than enough time to fix things. And on 60%, you'd have to say they'd never be a better time!

Andrei said...

Well the Nats seem happy enough to take precipitate actions on lefty concerns - like climate change, the removal of the provocation defense etc.

Adolf Fiinkensein said...

Anonymous you're right.

And that is exactly why the majority of the effort now it to help the factions see that working together for their vision is ten times better than walking away.

No I don't know that I want to risk giving a mob like the last lot a clear run for fourteen years, thank you very much.

Anonymous said...

"CGT on speculative property profits"
Groan, when will people undestand you already have to pay tax on profit from property speculation.
I bet you a chocolate fish theres no CGT implemented. Key has all but ruled it out. (actually I should be more accurate and say that the CGT which exists is set at zero and it wont be increased)

Rakaia George said...

Good post Adolf. As my mum used to say, Democracy is everybody agreeing to do what the leader wants...

Adolf Fiinkensein said...

Anon, a specific CGT will remove the need for IRD to prove intent to trade at time of purchase. Far too easy for wealthy bludgers to take advantage.

Anonymous said...

If I buy a house and sell it in a year or so and it is not my home then the IRD view the profit as income and therefore it is taxed. Therefore the capital gain is taxed. Also if you have claimed depreciation it has to be repaid. So why do we need more tax on the deals.

Adolf Fiinkensein said...

Anonymous, I don't think your assumption that IRD will automatically view it as profit is correct.

homepaddock said...

You are right Adolf. National had a lot of good policies in the 1990s but didn't take the majority of people with them.

They've learned that lesson and this time are going more slowly than some would like and taking detours some dislike.

That's the reality of government - they can't do miracles, and won't please everyone. But they're still doing far more good things in a recession than the last lot managed during a boom.

Anonymous said...

A few budgets ago "Little Toot" Cullen gave $14m extra to the IRD to go around all interested parties .i.e lenders and the like and carefully explain that buying houses to on sell would be regarded as a business and incur all costs of a business such as tax on profit, ACC levies, provisional tax etc etc.

In this regard any file including that of the lender putting the finance application in would be searched for signs of a quick turnover. Lenders would also be questioned on the purpose of the lending.

Any indication the purchase we not long term then the borrower had some serious questions to explain to the IRD and we all know the attitude of the IRD. Guilty is the only option in their language.

So what would a CGT prove?

Adolf Fiinkensein said...

Anon, you make my point for me. How many cases have been reported of capital gais tax being paid on these sales? I haven't seen any. It's very easy to circumvent this provision but it's not easy to doge a blanket CGT.


That's a great one liner:

National still doing far more good things in a recession than Labour managed during a boom.

Anonymous said...

Adolf, in the example of a sale a year later those people would have to prove to the IRD that outside circumstances forced the sale otherwise they would have any profit (the key word to describe the gain made from the increase in value realised) taxed.
The IRD automatically assumes its profit. Its up to the individual to prove otherwise, and it isnt easy.

Look, its been clearly established that CGTs do NOT stop housing bubbles and in a small market like NZ the tax gathered would be fuck all and all it would do is cause further distortions.
My chocolate fish bet stands.

Obeserver said...

Seven may be a bit too long, five, on the other hand, would be a reasonable compromise and would leave us with a three and a half year term of government, preceded by negotiation of a coalition and followed by a 1 year campaign, much better than today's one and a half year government term.

twr said...

a specific CGT will remove the need for IRD to prove intent to trade at time of purchase. Far too easy for wealthy bludgers to take advantage.

Exactly how do you come to the conclusion that being allowed to keep your own money is bludging? I would have thought that the state taking a portion of the sale price of something you own and handing it to a bunch of no-hopers to piss away of propaganda and social engineering is a more accurate description of bludging, but I guess if you tell lies for long enough you'll eventually get people to believe them.

alex Masterley said...


The IRD has been for some time taking a close look at property transactions to see if they can be considered a taxable acitivity or if they generated taxable revenue.

Many people during and after the central otago property boom discovered the tax man ferreting through the records to see if the proceeds of section sales could be taxed.

The IRD have been showing more enthusiasm for this since the recession began and the tax take shrank.

Adolf Fiinkensein said...

All of you miss the point.

IRD may well be ferreting but the clever operator will set up a bogus paper trail to show that at the time of purchase there was no intent to trade. Then, lo and behold, circumstances miraculously change and suddenly there is a need to divest the asset. It is no different from the status of person who buys shares for income from dividends compared with aper5son who clearly is a trader. No different either between the livestock farmer who buys capital stock for breedin g purposes compared with the trader who buys and fattens store lambs.

If you want to make any useful argument for the status quo, you will have to show that IRD has successfully recovered income taqx from a LARGE number of hitherto ignored transactions.

You'll struggle.


Adolf, I've read the Long piece and just posted on the subject.
I share your concern about National being too radical and frightening off people.
But Long's comments read as much as a call for some action. That's how I interpreted it.
Certainly Bill and John must walk a tightripe between between doing something and not scaring the horses.
But a recession and weak opposition present excellent circumstances to even nudge the country in the right direction.
As your good friend Peter Creswell at Not PC notes, we have seen a little too much statist nannying lately, and even here Long sees National doing things even Uncle Helen branded as too nannying.

KG said...

So, let's get this straight; people voted for National because they wanted a change from statist nannying government---and National is a nannying statist government because they don't want to scare the people who voted for them.



That's a good way of putting it KG.

Sally said...

Thanks to FFM for this

"Always love your country - but never trust your government." Robert Novak

Absolutely correct. And National is definitely not the exception

Redbaiter said...

Look, even if one buys into Adolf's argument, that is no excuse for National doing things (for no apparent real reason)that are leftist in nature.

I do not think there is a plan. I think that National are just a hopelessly politically confused bunch of wankers who cannot agree on a firm political direction.

Watching their shuffling and shambling processes, accompanied by so much meaningless waffle and empty rhetoric, I can come to no other conclusion other than that National are in reality either mentally stunted or political traitors. Or both.

If we really want them to get of their arses and change things, we must stop making excuses and rather, name them and shame them as traitors and incompetents.

What is the point of having a two main party system if each party thinks basically the same as the opposition?

The crux of the issue is that National are bereft of alternative ideas, and they cannot articulate an argument outside the socialist paradigm.

I claim Adolf is wrong, that there is no slow movement for change. There is no movement for change at all. National still believe in socialism and just want to do it better.

They just don't get it, they have never gotten it, and they are not going to be any different this time around.

Stephen Joyce for example, with his slavish surrender to bureaucracy and his over concern with road laws while the country has so many other important problems, tells me that as a party, the Nats do not have a damn clue.

Worse than that, they are betraying the producers of NZ to a legion of parasites, whining PC academics and a despicably corrupt media.

Face it. National are no solution.

Adolf Fiinkensein said...

Yadda yadda yadda yadda

So give us your alternative practical pragmatic solution chaps.

The Charge of the Right Brigade led by Nuke'em Red with blood running as beneficiaries are bayonetted in the streets. Followed by an immediate return to a Greens Labour coalition with Delahunty as Treasurer and Bradford as PM and Peter Creswell as Minister for Do Nothing See Nothing.?

Shit yes! Let's do it. That's show those useless bastards in National up for what they really are.

Redbaiter said...

Adolf, IMHO that was a very good post. However, as I said above, I disagree with the claim that National has a plan.

I see nothing from National that 1) indicates they have a vision, or 2) indicates they have a strategy that will enable that vision to become a reality.

For those of us who yearn to escape the clutches of a beneficiary culture, and see National's lack of direction, it becomes a simple question.

Is the quickest path to relief to leave the extreme left of Labour to wreck the economy and thereby remove the beneficiaries as an electoral force, or to persevere with National and their invisible plan??

Sus said...

"National still doing far more good things in a recession .."

Such as, HP?

Adolf Fiinkensein said...

Red, just have a little patience. The trade off is still being there to continue the massive changes needed. It will take two terms just to turn the ship around.

Blame Cullen's fiscal landmines and the recession for the delay. Don't blame NACTionalMP. All things considered, I think they are doing remarkably well.

KG said...

"So give us your alternative practical pragmatic solution chaps."
Adolf, you know damn well there are a whole range of practical measure National could take to differentiate themselves from the Red Gang.
Put a cap on the amount someone may collect on welfare.
Put a time limit on dole and DPB payments.
An upper income limit for WFF.
Amend the laws regarding self-defence in one's own home.
Scrap the RMA
Remove the ability of local councils to dictate to people what they're allowed to do with their own property.
Stop caving in to the demands of the racist separatists.
Respect the opinions and wishes of the vast majority of Kiwis concerning the anti-smacking legislation.

And I haven't really started yet....these measures alone would be seen as perfectly reasonable by the majority of working Kiwis. Key knows that.
The reason National won't move in that direction isn't that they have some kind of cunning master plan. The reason they won't is because they're socialists who differ from Labour only in their rhetoric.

Redbaiter said...

Adolf, your analogy (turning the ship around) made me smile.

It reminded me of Papua New Guinea, and the supply ships working the inland rivers that would sometimes, in the face of a very strong current, miscalculate their approach to the unloading zone.

They would then have to turn around, and during the turn, would be swept a kilometre or more down river, and then have to chug all the way back to the unload point for their second attempt.

I guess that when you said "turning the ship around" you weren't thinking of it first being swept downstream in the leftist current for some time, but when you do think about it, you might agree that it could be quite an accurate analogy.

Adolf Fiinkensein said...

You're quite right. I was thinking of a super tanker in mid Atlantic, in a storm called 'recession.'

I guess the argument really is about the long view and the shirt view. I have never met him but it seems to me John Key is taking a particularly long view which is something not seen in politics for some time with the exception of Helen Clark's strategy of turning everybody into state dependent vassals who would vote for the gummint which promises most, irrespective of its ability to deliver.

There was a wonderful jibe during question time today. I think it was from Paula Bennett to Old Yeller.

"We want people in jobs, you want them on benefits."

More 24 caratgold.

Psycho Milt said...

"We want people in jobs, you want them on benefits."

A jibe that would actually have stung if Labour hadn't presided over low unemployment for a decade and National since presided over a thousand extra a month applying for unemployment benefit, but it was a good try.

Sally said...

Lots of good posts here.

How about asking English straight out if he believes that nothing can be done to change the culture of the welfare system.

Someone maybe able to phrase the question better.

Anonymous said...

Interesting to read that Gorbachev dismantled the apparatus of terror with blinding speed, undoing seven decades of intimidation in a few years.

Surely it is not too much to ask for National to get its act together and dismantle the unsustainable welfare system.

Gooner said...

The shame I see is that National/ACT have a majority: they can do what they want without any other support.

Now it's not really in National's interests to make ACT relevant by enacting ACT-type policy so it figures, I think, that it can just squeeze a little room on the right for ACT but no more. The other thing National clearly cannot afford to do right now is make Phil Goff relevant. While I would like reform much more quickly, and I think it's politically possible, suffocating Goff right now is pretty pleasing to watch.

Redbaiter said...

KG's points are all quite valid.

For me, it started with them putting Stephen Franks way down on the list and Jackie Blue and Stephen Joyce up on the list.

Absolutely hopeless.

twr said...

One thing the Nats could do is try to avoid breaking their own election promises so they could enact Green party ones. For some reason they don't realise that they were voted in precisely so those policies *didn't* get traction.

Anonymous said...

Sure Psycho, Labour kept unemployment low during their term which the worst recession for over 90 years. oh wait..
Fuck youre so thick you actually believe your own bullshit.

Adolf I read awhile ago that the IRD pulled an extra 30 mio in Tax out of South Otago due to auditng "speculators" Cant find the article though