John Key said all last year he wanted a “world class tax system”. Now Bill English’s working group has granted him his wish, with a stern injunction to get on with it. This is his big first-term test.
When English told the Treasury and Victoria University’s Centre for Accounting Governance and Taxation Research to form a group to research tax reform, officials thought they would be doing some repairs. By August Bob Buckle’s group had convinced officials the system was “broken”.
We spent the double-noughts decade on a spending binge. The tens are payback time. It might take a while.
By we, I mean Europeans, North Americans and Australasians. The result has been to push along a redistribution of economic power.
Floyd Norris of the New York Times calculates that an investment spread across all “developed” markets, with all dividends reinvested (and investors “somehow avoided all taxes”), would have had an annual return through the 2000s of 0.2 per cent, “not enough to offset the transaction costs and far below inflation”. The United States return was “negative 2.3 per cent”.
In 1999 the United States ran the world. By 2009 pretenders had grown more assertive and power more dispersed. To navigate these shifting tides this small country will need to keep its wits about it.
Four events shook the United States in the decade after 1999: the dotcom crash in 2000, ending investors’ digital euphoria; the islamist terror of September 11 2001; the banking crash of 2007-08; and Chinese and Indian intransigence at Copenhagen.
OK, you’ve now begun to break those resolutions you made last Thursday midnight. Some you’ve forgotten. Some you wish you’d never made. Some you will make again 361 days hence.
That’s the good thing about New Year’s Eve: it comes round once a year. You get another go.
Here are 13 other resolutions that might have been made on Thursday — or might not.
While most big-name magazines have been contracting and even going out of print under the internet’s assault, The Economist has been expanding.
The Economist is a distinctively English — Oxbridge — institution, a weekly established in 1843 to spread the word about free markets. From the 1970s it has pushed into the United States, Asia — everywhere.
It’s been a year of flags and forelock-tugs. John Key so reveres the Union Jack he gave us back knights and dames. Then he runs the tino rangatiratanga flag up the pole alongside his quaint vestige of empire.
Meet the bifurcated Prime Minister, part-ancient, part-modern. He said the iwi flag is a symbol of the Treaty of Waitangi as the nation’s founding document — a historical relic. He also said the meaning he takes from it is “potential and hope” — a signpost to the future.
Did you notice the recession? Did it savage your household or neighbourhood? Have you noticed that things are looking up now and it’s (nearly) fine, sort of?
Or did you only know there was a recession because economists and politicians kept banging out numbers of gloom? Is it the same with the sort-of lift?
This week the government will invite us to think in two different ways about investment. One invitation is implicit and the other explicit.
The implicit one will come late in the week from Simon Power and other social services ministers on the “drivers of crime”.
Power’s main focus has been to be tough on crime, increase police powers and take victims’ side. While American states have been trying to cut prison numbers to save cash, John Key’s cabinet has been determined to put more in prisons.
If you can’t get through the door, you are not likely to be much help to families in trouble and need — nor, more important, to their children. The Maori Women’s Welfare League, which can open doors, can tell you that.
So can Shine, an Auckland NGO (non-government organisation) which has begun a three-month pilot of a Paula Bennett initiative to get more effective “low-key” intervention to head off domestic violence and protect under-2s.
John Key turns out to be a slow follower: a ticket to Copenhagen, long after dozens of other heads of government have bought theirs.
He gets to have dinner with the Queen — Denmark’s, not his — then a day of schmoozing, all to limited avail except that not to be there sends a message of insincerity.