Sunday, March 26, 2017


The one single attribute of the New Zealand Consumption Tax going under the generic title of GST is its universality and simplicity.
Douglas was extraordinarily lucky or as I believe very astute in that when he wrote it over thirty years ago, keeping it simple in compliance, assessment and application were basic.
Yes there are minor issues around it applying to rates and therefore a tax on a tax but for its understandability and collection via self administration along with the fact that there are not interminable court actions to review its application, is remarkable.
VAT,  Aus GST, and other taxes on consumption and there fore widely based, have nothing approaching the simple NZ model. Food is exempt in the West Isle but when the title suggests it is a tax on "goods" and "services" replacing the plethora of variable 'state taxes', any exemption is fraught and will do little to reduce the cost of living. The main argument for the various spurious efforts that come around on a regular basis in NZ.

Now the Media Party and the various desperates who rely on them to try and derail the NZ political train have latched onto water exports and in particular the bottled option that has been portrayed as a terrible injustice being perpetrated by foreign corporations.
BS, the total volumes both current and projected is literally a drop in the bucket.
Any suggestion of a royalty on bottled water exports is also fraught and will be a nightmare to levy, apply and enforce.
Just think for a moment as to where and when such a levy will be applied. Extraction, bottling or when it crosses the border.
Then decide what actually constitutes water being exported, will it include milk, beer, carbonated flavoured drinks, water used in production  or creation of goods and there will be as many more as there will be lawyers seeking work.
Some hypotheticals:
Carbonated water vs pure,
Milk, will the tax on water inputs include rainwater falling on pasture, water collected on farm and sprayed on grass to increase growth or just the now so called free water that costs considerable sums to actually apply.
Water content in exported milk  assessed when dehydrated milk is exported,
Even down to the water consumed to create the one point five liters of H2O in the plastic bottle, tax the total or just the bit in the plastic.

Hosking made simplistic the solution when he claimed "Governments can do anything", well Mike here is the news, MMP means they can do sweet bugger all if faux outrage generated by the ignorant does not agree. Look at the sad and irrational attempts to review the RMA nightmare in the face of the halfwits with agendas making unreasonable demands.

Worst case scenarios have some rather unpalatable cost escalations possible in any attempts to tax the very small volumes of pure water that cross our border currently.

One Commenter on Farrar's Blog summed up the misconceptions and ignorance that this faux debate has fired up with a call to make farmers pay a fair price for their water. There in a Nutshell (pun intended) is a summary as to why it is all total garbage, for starters, define "fair".


homepaddock said...

Far easier than defining fair is imagining the uproar when every single thing we eat or drink increases in price because there's a price on the most basic ingredient - water - at least some of which will be passed on to consumers.

Paulus said...

I understand that it is estimated by NIWA that something like 400 Trillion litres of water falls on New Zealand annually.
How much are we talking about here, that does not remain in/on land, but passes to the sea ?

paul scott said...

Denis O'Rourke hasn't thought the water Royalty out as well as he usually does things.
It shoukld end up Rioyalty on all extracted water for export drinking.
This should include tanker water which will be bottled overseas.

Of course when we talk about water it leads us straight into the 5th NAt Government who give Hone Harawhira and Maori everything they want. Calling rivers people, C0-Governance, and giving Water rights away to select unelected tribakl leaders is very sick.
We will send Nat a message at ChCh central, Auck central, Ohariu, [ all going Labour ] and then after the election Finlayson and Smith go. Traitors to NZ democracy .

The Veteran said...

Paul ... dunno what's in the 'water' O'Rourke's been drinking but you can guarantee Winston will not be pleased unless of course he was speaking officially for your Party in which case putting a tax on water will hasten the demise of NZ First which will happen anyway when the Grim Reaper calls 'time-up' on the Messiah.

I can't believe NZ First is so dumb. The government's position is that no-one owns the water and this proposal will see Maori lodge a deluge of claims for some of the dosh ... something you rail about and here you are handing it to Maori on a platter.

O'Rourke is a plonker (unless he is speaking for your Party in which case you all are).

As for your electorate predictions ... I'd be more concerned about Winston retaining Northland. He's done nothing and he's in trouble not helped by the broken promises viz a viz free rides for Goldcard holders on the Paihia-Russell and Hokianga ferries.
As for Akl Central ... might help if Labour were to select a candidate after Jacinda did a cut and run.