None of these skills in particular are very difficult or uncommon but what got me was the pay rate. $20/hour at 35 hours/week. On the surface that doesn’t look that bad and probably a lot better than the $12.75/hour most people are getting working in retail, but lets do some maths.

$20/hour * 35 hours/week * 48 working weeks/year = $33,600 NZD per annum.

Now lets convert that to AUD (using xe.com) we get just under $26,000 AUD per annum.

Now the minimum full time wage in Australia is $27,355 per annum (based on 38 hour week).

So a full time graduate job in a growth sector in New Zealand pays lower than the minimum full-time wage in Australia.

So this got me thinking, what is the minimum full-time wage in NZ, converted into Australian dollars?

The minimum is $24,480 NZD (based on 40 hour week), which converts to just under $19,000 AUD per annum.

To put it simply at the minimum wage level in Australia you earn 44% more for two hours less work per week.

Now of course none of this takes into account tax differences, superannuation, living cost differences etc. But it is still a remarkable gap.

Prime Minister John Key may talk about a goal of catching Australia but I don’t believe it is possible. Politics can’t fix the problem, only business paying their employees more can, and of course this idea flies straight in the face of capitalism.

In the meantime it is little wonder why so many young people are leaving when a graduate job is paying less than the equivalent minimum wage of the next door neighbour.

What’s with cafes charging a surcharge today when the statutory public holidays are not till Mon and Tues. Unimpressed.

Yesterday was a public holiday and this tweet shows that Brewer is completely ignorant of the law which is rather surprising given he is the former head of the Newmarket Business Association.

This afternoon Brewer tweeted again:

I had a whack at the 2003 Holidays Act – http://www.voxy.co.nz/politics/brewer-holidays039-legislation-clearly-not-working-any-more/5/77547

Before even opening the link it is obvious that Brewer is going to have a whine over surcharges. Surcharges that are illegal in other countries. One would hope that he would be campaigning for the banning of surcharges but as others have pointed out companies are entitled to charge what they like when they like.

The opening paragraph of the press release shows Brewer does not understand the point of a Public Holiday

The 2003 Holidays Act is failing those it was meant to protect. It was meant to boost the pay packets of those working on public holidays but instead it’s forcing most businesses to shut and leaving employees with less pay not more this holiday season.

The intentions of the 2003 legislation were honourable, but now we’re seeing one big unintended consequence – that is it’s actually forcing businesses shut and workers to cut back their hours when they probably need extra money the most.

I don’t know how Brewer could spin this any more. The purpose of the Holidays act is to set out the minimum legal amount of leave an employee is entitled to. It includes provisions for payments for working Public Holidays which are time and a half plus a day in lieu.

The purpose is not to boost the pay packets or force companies to close. It is designed to set out the national days of significant where everyone should be entitled to the choice of marking them. If companies do not want to observe the public holiday then they are allowed to open (excluding Christmas, Good Friday, Easter Sunday, ANZAC Day morning), but if they do open on these days then it is to be expected that staff required to work be treated above and beyond their normal conditions, because they are going above and beyond their normal duties.

The legislation is actually forcing holidays on staff and cutting their pay packets, not boosting them. What’s more the surcharge seems to be upsetting people more than ever. The Government now needs to assess just how counterproductive the legislation is becoming, and look to repeal it.

“It’s tragic that young cafe workers keen to earn a buck are being told by their bosses that there’s no work for them over Christmas and New Year. It’s becoming abundantly clear that what was actually designed to protect workers is now seeing them lose work opportunities.

Again Brewer is completing wrong here. If a business is not open on a public holiday on which an employee would otherwise work they are required to be paid their normal daily pay for this day. This includes casuals if they have worked two out of the previous four weeks.

What Brewer is actually arguing for in his press release is a return to a two class system. Where those who ‘have’ are able to take a holiday and put their feet up, or shop. While those who ‘have not’ work for slave wages and not getting to enjoy the Public Holidays that other people take for granted.

I for one would rather pay a small surcharge as a mark of respect to those who do not get the benefit of a day off.

Sydney is a rich city, it has been blessed by money, looking at the CBD there are an uncountable number of buildings over 200m in height, looking at the news you seen rich people complaining they are being taxed too much, every mall has a many designer fashion stores, and one thing you don’t see much of is poverty. Except in one place. Street corners in the CBD. On almost every corner there is a beggar, some young, some old. There is one question that screams out from this: How can a city that is as big and as rich and is blessed as Sydney have people on street corners having to beg for money to survive?

I am informed that Sydney beggars are not as bad as other big international cities, and when I have raised this point with locals in discussion their reply is often runs along the lines that the beggars should just get off their lazy arse and get a job. Sure there are probably a few young beggars who could and should do this, but what about the older generation the people who have been on the streets for years? Surely this problem is a failing of the underlying social system than that of solely their own doing.

And the problems in the social system must lie on the shoulders of the government. It is the government’s duty of care to look after its citizens in particular the vulnerable and the disadvantaged in society and the homeless must be some of the most disadvantaged people in Sydney. I have yet to meet a rich beggar.

However, the failings of the government must lie back in a lack of tax revenue being raised from the people who are blessed, those who are earning money and are wealthy enough to be demanding tax cuts so they can buy their sixth holiday home. But can we really blame or attack people for being rich or blessed? People often work extremely hard to get ahead so who are we to bring them down for it?

Ultimately the issues of wealth, poverty, tax and a failed social system lie with the failure of our economic system, capitalism. A system that in its most fundamental form demands that in order to make a profit another must make a loss and those who make the largest profits win. And that is seen in its raw form with bankers walking past beggars at rush hour every morning in central Sydney.

In a column in today’s NZ Herald union activist Matt McCarten writes:

The left intellectuals we used to rely on to challenge ideas have retreated into academia. The staunch left survivors parroting on about an economic system built around the needs of people, rather than the needs of some to make profits, is rather quaint and eccentric.

The fight between socialism and capitalism isn’t over yet.

I was challenged last week to put this to the test.

So we organised a left versus right debate on Wednesday at Auckland University on the question, “Is Capitalism working?” Unashamed right winger Matthew Hooton, aided by the NZ Herald’s Fran O’Sullivan, with liberal conservative cover from National’s Nikki Kaye, agreed to give us the reasons why capitalism was better than socialism. Unite’s Mike Treen and NDU union leader Maxine Gay joined my team.

The auditorium was standing room only, overflowing in the aisles and outside. We won the overwhelmingly majority of the nearly 400 students present. When the right has to justify its dogma it doesn’t stand a chance with a thinking audience.

It is no surprise that the socialists won in a debate at a university, in the same way the capitalists would win if the debate was held in the middle of the stock exchange floor. However, I do believe that capitalism is not working, and it is not an academic argument, it is an argument that can be shown through beggars on street corners, pensioners who can’t afford the necessities of life, or a decent health system, or the young people of today who are being lumped with huge student loans to be able to get a qualification, a ticket to compete in the corporate world where capitalism turns people into cannibals who will stop at nothing to get to the top of the cooperate jungle.

A new system of economics and life needs to be developed, one that does not tolerate beggars, one that values education and our young people, a system where taxation is fair and leaves no one behind. People can become rich and can be blessed but not at the expense of others. I don’t buy the argument that it is just a fact of life that there will be rich and poor. Sure there will always be unbalances in life, but as socially advanced, aware, and intelligent beings we need to start acting intelligently and ensure that everyone in society is guaranteed shelter, food, health, education and employment.

This is not a left verses right political argument. This is a societal argument. I have no issue with people working for the dole, and I certainly do not like the idea of tax money being given freely to those sitting around watching TV all day. This is an argument about how terribly broken our economic situation is, and how we need to change it before our entire world collapses, the global financial crises was only a small warning sound to a much bigger societal collapse – are we intelligent enough to listen and react to the warning? Or are we truly just deaf, blind, dumb and stupid?

The key adjustments are:

The personal income tax rate changes from 1 October 2010 are:

• Up to $14K – tax rate goes from 12.5% to 10.5%
• $14K to $48K – tax rate goes from 21.0% to 17.5%
• $48K to $70K – tax rate goes from 33.0% to 30.0%
• $70K+ – tax rate goes from 38.0% to 33.0%

GST will rise to 15% and company tax will drop to 28%.

If you really wanted to make radical changes to the system this is what I would do:

Taxation:

• Flat tax rate – equal for both individuals and businesses
• No GST
• Capital Gains Tax
• No Working for Families or middle class welfare

Transport:

• Build and upgrade highways but introduce tolls on most major roads
• Encourage people onto public transport by building more railways and introducing light rail into busy bus corridors. Make fares much cheaper than driving until a critical mass is achieved and slowly phase out the subsidies once things are paying for themselves.

Education:

• Free public education until the age of 25 including university or polytech study
• Universal Student Allowance to everyone in full time study in public post secondary education living away from home
• No funding to private schools – if parents want to send their children there they can pay for it entirely
• Increase funding for Research

Healthcare:

• Free doctors visits and hospitals
• Remove ACC
• Introduce Private Health Insurance for accidents with various options around cover but ensure everyone is eligible to be covered

State Owned Enterprises:

• Sell all SOEs operating in a commercial environment such as TVNZ, and Air New Zealand.
• Other SOEs do not pay tax as overheads in giving money to an SOE and then taxing it back is just silly.

Defense:

• Focus on Search and Rescue and Peace Keeping
• Increase funding for equipment to ensure state of the art equipment is used

The best system would be that no one pays any tax until they are earning what one regards as the minimum amount needed for a family of their size. Churning money from tax to welfare to inefficient.

And after that make it a one rate flat system.

It would be simple, fair and effective. No more wasted money on tax agents to creatively balance the books to pay the minimum amount.

The changes suggested are:

1 Introduce a capital gains tax to ensure the property-owning classes think twice before making losses to reduce their tax bills, comfortable they can make it back with tax-free capital gains.

John Key saying he would resign if this happened was probably a very dumb political move in the long run. All it is doing is allowing the rich to get richer through a giant hole in our tax system. We need to fix that hole now.

2 Introduce a land tax to broaden the tax system to include those who made $300 billion of tax-free capital gains from 2002 to 2007. Those without property face the biggest tax burden in the years to come. Without some change to tax the rich, the perceived unfairness will drive away our youngest and most productive generations.

Same as point 1 really, we need tax on land and property.

3 Introduce a single, flat tax rate at 25 per cent for the income, corporate and trust rate. Set a high tax-free income threshold to ensure the poorest taxpayers retain plenty.

The current progressive tax system is simply unfair and does nothing to encourage people to get ahead in life. A single tax system would be fair and balanced to all.

4 Shut down Working for Families and the Student Loan scheme to remove the ruinous marginal tax rates and debts that are building up.

Getting rid of WFF makes sense. The student loan scheme on the other hand is a whole lot harder. You either have to make the courses free (like they used to be pre 1990) or have someone else lend the money at interest. The current system works because anyone can qualify and it allows anyone the chance to get ahead.

5 Increase GST to 16.6 per cent to help rebalance the economy away from consumption and towards saving. Ensure the poorest who spend most of their income are compensated using extra revenue from the capital gains and land taxes.

As painful as this sounds it makes sense and we need to do it in time.

6 Reduce government spending growth over the next decade to return core government spending from the current 36 per cent of GDP to the 29 per cent that it was in 2004.

Yes. But what do you cut?

7 Intervene in local district and city councils to consolidate duplication, reduce their combined size, reduce their rates growth and focus them on freeing land for home building.

Home building can lead to problems in the long run. We can’t just turn all our land to houses we need the land for production and other industries.

8 Increase the Reserve Bank’s prudential liquidity target for banks so they are forced to raise more funds locally and rely less on cheap foreign funds. This will continue to reduce their profit margins, increase deposit rates, encourage local savings and reduce New Zealand’s vulnerability to market freezes.

Yup. Focus on New Zealand first.

9 Increase the amount of capital that banks must put aside when lending against land and property to discourage the heavy lending to property investors that powered the 2002-2007 property boom.

Again a great idea, but why would the banks do this when they make money from people doing this too?

10 Raise the retirement age progressively to account for longer life spans and reduce the pension progressively to 62 per cent of the average wage from the current 66 per cent.

I read yesteday that the pension age was introduced at 65 around 1900 when life expectancy was only 62, now we live 20 years longer, and the age needs to go up, otherwise we cannot afford it.

http://www.stuff.co.nz/business/industries/2958390/No-flat-tax-PM

The Government will not introduce a flat tax system despite Treasury advice in support of one, Prime Minister John Key says.

The working group and Treasury were working on similar ides and the Government would consider a wide range of issues, he said.

Cabinet will discuss all those issues but “there’s not going to be a flat tax system”.

So what is the point in getting Treasury to consider all options and issues but ruling out one of the best ideas before cabinet has discussed it? A flat tax system is not some big scary monster, it is a simple system that just makes sense.

“We also need to make sure we put together a system that isn’t regressive and that is fair,” he said.

Finance Minister Bill English said the tax working group and Treasury were looking at “all sorts of models” but the Government was “certainly not considering a flat tax”.

Those looking at the tax system were told to “rule nothing out” and “by the looks of it they’re doing a pretty thorough job”, Mr English said.

So Treasury is not to rule anything out, but National can before even discussing it. And they want a fair system, but the most fair system of them all a flat tax system is rule out. Is National doing some double speak here?

Labour deputy leader Annette King said her party was opposed to a flat tax because it raised questions about what other taxes would have to be raised to cover expenses.

“But I have to ask every time Treasury puts out a suggestion they are working on, it is knocked back either by Mr English or by Mr Key.

“Why are they wasting taxpayers’ money with Treasury officers working away on policies they don’t intend to implement and they rule out every time they are announced?”

Labour have hit the issue on the head here. They may not support it, but at least they have the sense to wait and see what the all the issued considered are. This is a very bad move by National, they are trying to stop debate on a potentially controversial topic, but by doing so they are opening a can of worms and will piss off their more right-wing supporters (and probably Act as well).

Finance Minister Bill English had a unique opportunity to reform the tax system, Treasury said.

Two options were a flat tax rate or cuts to taxes on dividends, interest and profit, papers obtained by Radio New Zealand under the Official Information Act showed.

GST, land tax and capital gains tax would be increased to fund the changes.

A flat income tax system just makes sense. The current system does not encourage people to earn more because the more you earn the more you will lose through tax. A flat tax system is fair to all, and is simple, this will cut out a huge amount of compliant costs and IR3 returns and other useless bureaucracy.

Secondly, the sooner a capital gains tax is introduced the better. This system would be simple and just make sense.

The ‘h’ debate is spreading to Auckland.

Western Bay community board chairman Bruce Kilmister is keen to change the spelling Wanganui Ave in Herne Bay. He says a poll of residents would be a good start.

Mr Kilmister says if the street has been incorrectly named for the last one hundred years, now is the time to put it right.

Auckland City mayor John Banks says he has not considered a change of spelling for Wanganui Ave but supports the poll idea.

2 thoughts on this:

a) The council which campaigned on cutting ridiculous spending is spending ridiculously.
b) Surely there are much more pressing things in the city then the spelling of a street name, that may or may not be spelt correctly.

Just leave it as it is, and stop trying to create an issue where there isn’t one.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10598348

The Government’s transtasman taskforce is to investigate scrapping the Kiwi dollar and adopting an Aussie one.

Don Brash, chairman of the 2025 Taskforce and former governor of the Reserve Bank, confirmed he would report back in November on whether a common currency would help raise New Zealand living standards to Australian levels.

Brash said New Zealand would be more likely to cancel the Kiwi currency, replacing it with cash stamped “Reserve Bank of Australia”.

The notes would probably retain images like those of Sir Edmund Hillary and Sir Apirana Ngata, so they would look Kiwi – apart from that vital difference in the fine print.

A major benefit would be a fall in interest rates to Australian levels, making business more productive. But economic authorities would be concerned this cheap money would spark a property boom. Currency union would mean New Zealand could no longer adjust interest rates to control booms.

The sooner we do it the better. And while we are at it can we just hurry up and become another state of Australia, and make both countries (or the one) a completely independent republic at the same time. Or are my dreams just too good to possibly come true?