Tagged: media

Don’t believe the scaremongering on capital gains tax

capital gains tax first world problem

The unholy trinity of National, right-wing blogs and the mainstream media are scaremongering about Labour et al’s proposed capital gains tax again. Because it’s new and because it’s a tax, it seems scary and there’s easy political points available in opposing it. But in fact most countries have capital gains taxes. New Zealand’s tax system is one of the most generous to the rich, and part of that is our anomalous lack of CGT.

The current scaremongery relates to inherited family homes of deceased family members. The impression John Key et al are putting across is that a grieving, struggling family will have to scramble to sell their deceased parents’ family home to avoid being stung with a hefty capital gains tax they can’t afford. IF that were the case, a one-month “grace period” certainly doesn’t sound like long enough to grieve, get organised & sell the house to avoid financial ruin.

But it’s NOT the case. Even without a grace period, only profit since inheritance – I repeat, profit since inheritance – would be taxable (and at a modest 15%). If a family inherited a house worth $400,000, and sold it a year later for $430,000, they’d incur tax of $4,500, but they’d get to keep the other $25,500. They’d still be $25,500 better off than if they’d sold the house straight away, and $425,500 better off than if they hadn’t inherited the house.

This is no different from inheriting any other profitable asset. Currently, if you inherit a company, and it makes $30,000 profit over the next year, you’ll be liable for 28% ($8,400) company tax on that profit. There’s no “grace period” there. And more importantly, there’s no “grace period” on the profits – 72% of which you’ll keep and no doubt enjoy.

So it’s extremely dishonest of Key to portray families inheriting profitable assets as somehow hard-done-by, simply because they’ll incur tax on those profits. Truly hard-done-by families are the families of (increasingly numerous) people who’ve never managed to buy a house (largely because of tax-free property investment). Those families will receive no inheritance (let alone profitable inheritance), and many struggle to pay for (increasingly exorbitant) funeral and burial costs.

Years from now, if my siblings and I inherit my parents’ house and it makes capital gains by the time we get around to selling it, we’re not hard-done-by if we incur tax on those gains. We’re lucky my parents own their home in the first place, and have something to leave us (in fact, something that continues gaining value until we sell it).

That said, I do tend to agree there should probably be a grace period of maybe six months, because the tax is supposed to target people who buy extra houses for profit, not people who gain an extra house by accident because a relative died. Besides, it may take some months to decide whether they’ll sell it, keep it as a rental, or have other family move in (in which case it remains a family home, thus exempt from CGT). But a grace period would be an act of compassion to people who don’t really need it; certainly not a demand of justice or need.

Of course, Cunliffe didn’t help his own cause by remembering the policy wrong and declaring unequivocally that the grace period will be one month. In truth, the length of the grace period is a detail that they’ll leave to an expert advisory group to work out. It was incompetent of Cunliffe not to know this.

Anyway, despite those two caveats: don’t believe the hype. Look into it, listen to David Parker’s explanation, think about it, etc. After doing so, no right-thinking person would think there’s anything to worry about.

Parliament rises on a good note, thanks to some meddling kids

The above video provides a good introduction to the slavery conditions of workers on foreign charter vessels fishing in NZ waters, as well as the Christchurch Anglican church’s involvement in it. While the Government took a while to act on the problem, rising awareness and public pressure led to them introducing a bill in 2012 to ensure all boats fishing in NZ waters re-flag and become subject to NZ labour/wage laws and health and safety protection.

All parties across the political spectrum supported the bill. But two years later, it was still going through the Parliamentary process and hadn’t had its third reading. A few days before Parliament was set to rise for the election, the bill’s sponsor, Primary Industries Minister Nathan Guy, thought it was too late, and would have to wait months until after the election. This article’s original title (still visible in the browser title, and when shared on Facebook) was “Anti slave fishing bill fails.”

The Christchurch Anglican Social Justice Unit – whom former Minister of Labour Kate Wilkinson had called “a bunch of do-gooders getting in the way” – heard about this, and started a social media campaign asking people to phone Guy, John Key and Gerry Brownlee (the Leader of the House, who controls Parliament’s agenda), urging them to schedule the third reading for before Parliament rose today. I put in my call to Brownlee, my local MP.

And, well, they did it! The bill was put onto the agenda and passed under urgency (a rare good use of urgency powers) at 1pm today as Parliament’s last act before the election. It will take effect in 2016.

So, well done to the Government for eventually getting their act together (pun intended), well done to the “do-gooders getting in the way” at Anglican Social Justice, and well done to the many other groups who have lobbied and raised awareness on this, including the Indonesian Society, the Maritime Union, reporters (you’re not all bad, Fairfax), and even – eventually – the fisheries companies themselves. This is great news.

PS: Let’s hope the meddling kids get similar cross-party support for their current petition. I’m not holding my breath.

In case you need any more convincing …

dailyblogjohnarmstrong

NZers like to think our mainstream media are “balanced” and “neutral,” unlike in the UK or US. That’s becoming less and less credible. New Zealand print media is basically owned by two companies: Fairfax (Stuff, Press, Dominion etc) and APN (Herald). I’ve written about Fairfax a few times before; they have a major crush on the personality of John Key and a banal pro-National way of framing things (compare this headline with this one, for example; though the articles themselves are more balanced).

I haven’t mentioned the Herald so much – they usually seem not quite as bad as Stuff. But it’s worth reviewing what they’ve been up to over the last few weeks, in case you need any more convincing that our corporate newspapers are biased towards the corporate party.

The New Zealand Herald and its reporters:

You could say the media just love a good political scandal, whoever’s the target, and it just happens that Labour’s the target this time (and often an easy target); and that sometimes the press get it wrong, and it just happens they were wrong this time. That’s basically how they’re defending themselves. But what precedent is there for major media outlets doing similar things to these for the other side? When Labour were in government, Labour were the press’s main target (notwithstanding Brethren, and certainly since Key’s ascendancy); now, in opposition, they still are (notwithstanding teapots).

Anyway, I can’t for the life of me work out what all this has to do with one in four children living in poverty, skyrocketing inequality, skyrocketing housing costs, climate change, the last 55 Maui’s dolphins, our native forests, a floundering Christchurch rebuild, educationeconomic policy, the end of our independent foreign policy, war, NSA spying, pro-corporate/anti-democratic trade agreements, corporate dominance of NZ, democracy for Canterbury’s regional council, democracy in general, or any other issues that actually matter to NZ and this election.

Post-script (Fri 4 July):

Armstrong’s at it again. David Slack says it all.

Post-script (Mon 14 July):

Here’s another example of how the Herald report when a senior National MP does something (genuinely) wrong.

Post-script (Mon 21 July):

Good points made here; another example of “Cunliffe does essentially nothing wrong; Key doing far worse not acknowledged.”

Post-script (Thurs 24 July):

Imperator Fish hits the nail on the head: Understanding the 2014 Election Campaign; see also his comments on the latest ridiculous attack on Cunliffe.

Post-script (Thurs 31 July):

Here’s a good blog from a few months ago about the media’s tendency to just repeat whatever John Key says without doing any fact-checking or real journalism.

Post-script (Wed 10 September):

This very detailed analysis by Frank Macskasy indicates the Liu hit was another example of the now-famous Dirty Politics.

Herald

Student politics + evidence vs. inequality

SPD U Can be part of the solution

I’m somewhat embarrassed to say that 5 1/2 years after graduating from the University of Canterbury, I’ve got myself embroiled in student media/politics again. But this time, instead of contributing to Pun Network News or trying (unsuccessfully) to bring down the UCSA status quo, I’ve responded to a face-palm-worthy Canta article defending inequality. I take aim at all-too-common, evidence-free, essentially religious arguments for inequality and capitalism. You can read it here.

I’m not embarrassed to have my article appear in a new alternative publication, Counta, set up by a group of students fed up with the anti-intellectualism and political illiteracy of mainstream student politics/media at Canterbury at the moment. Counta were happy to publish the response when Canta declined.

I’m also not embarrassed to say I was inspired to respond by a lot of evidence and research suggested by friends in MarxSoc, which enabled me to put together a well-researched response I’m pretty happy with.

So, although there’s plenty of disturbing, disappointing and depressing stuff happening in student politics at Canterbury, there’s also some encouraging signs in informed student resistance, and awesome groups like Students for Participatory Democracy, FemSoc, MarxSoc and UC POLS. These groups make me want to get embroiled in student politics again. If you’re at Canterbury (as a student or a staff member, like me), I recommend you check them out.

Fairfax lives down to expectations

ImagePhoto from the Fearfacts Exposed blog

The Anglican Church commissions into same-sex couples and ordaining gay people have just released their reports and, true to form, Fairfax have released a grossly misleading article about it, appearing in between “Another student auctions her virginity” and “Why are couples taking #aftersex selfies?” in their Love & Sex section.

The headline is the most inaccurate part. Firstly, it’s not a fair reflection of what’s being proposed. It dishonestly portrays a church split as some kind of apartheid for gay people, when in fact all the Ma Whea Commission are saying is that without some kind of compromise between the various factions who disagree on gay marriage and ordination (among other issues), the church may have to split (please note: there would be queer people and straight people on both sides of such a split). This could happen in a planned way (as in option H) or in an unplanned way as people dissatisfied with the decision leave the church in protest (which could happen with any of the options).

Anyway, as the article admits, that’s only one of ten possible options the report has put forward for how the church might proceed. Another option is “Adopt a New Understanding … [which] would not present any bar to those seeking blessing who were engaged in a same sex relationship. A rightly ordered relationship could include those in a same sex relationship.”

The report writers do not recommend any of the ten options (though it’s clear they’d favour some over others) because that’s not their job. Now that the reports are out, the church has to decide between the ten options (or some other option).

Please note that I make these observations as someone who believes the church is guilty of centuries of institutional and personal oppression for its collusion in enforcing patriarchal gender binaries, and wishes for the church to repent of this, make amends and remove all gender-based restrictions on sexual partners, marriage, church leadership etc.