The issue of GST on food is once more gaining traction amongst various political parties and social groups. New Zealand’s system of GST is one of the best in the world because it has only one tax rate and that rate applies to almost everything. We do not have the absurd situation that exists in some countries where, for example, bread has no GST, chicken has no GST, but a chicken sandwich does have GST. Or the situation where the chicken sandwich attracts GST if it is served warm, but not if it is served cold.
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Here is list of Infometrics’ latest mentions in the media.
Real disposable incomes of Kiwi households have been rising on average for a considerable length of time even after taking into account increasing costs of food, fuel and mortgages. This was very clearly demonstrated by a colleague of mine – Chris Worthington – in this column some weeks back. But averages sometimes disguise differences across social strata. Have we all being been enjoying the fruits of growth?
One of the key components of China’s economic development over the last 10-15 years has been the massive scale ofproduction that has been undertaken. Perhaps nowhere are the effects of thatepitomised better than in New Zealand’s manufacturing industry. Although otherfactors such as reduced import tariffs and distance to market have alsocontributed to the long-term decline in our manufacturing sector, it is clearthat businesses in New Zealand are unable to compete with Chinese firms when itcomes to large-scale production.
The policy structure most supportive of an expanding economy deserves to be a central topic of debate in the forthcoming election. Although there is little academic agreement about how to achieve a fast-growing economy (after the basics are in place, as they are in New Zealand), it seems uncontroversial to state that the size of the economy will remain a limiting factor of our ability to pursue other social goals.
National’s plans for the Domestic Purposes Benefit (DPB) have drawn a predictable response from the far left, while others have hailed the changes as well overdue. The DBP has always run a fine line between making solo-mum an attractive career choice and providing reasonable assistance to those in genuine need. More workers mean more money to go around and working towards financial independence can be very empowering for a person. Although most people do see handouts as a temporary last resort, we need to avoid having a welfare system that encourages dependence.
New Zealand is an indebted nation that persistently runs current account deficits. This raises the questions, what is a current account deficit and should we be concerned about it?
Purchasing power parity (PPP) exchange rates are the rates of currency conversion that eliminate the differences in price levels between countries. In other words, the exchange rate that would convert the buying power of NZ$100 in New Zealand to the same buying power in another country.
The rise and rise of commodity prices reflects an economic revolution occurring in New Zealand’s backyard. The breadth of this commodity boom is impressive and is being driven by two fundamental forces – population and income growth. That suggests that high commodity prices may persist for several more years, and possibly even a decade or two. In some cases the lift in prices could be permanent.
The vanishing surpluses in Michael Cullen’s 2008 Budget have not only scuttled his reputation for fiscal conservatism, but also sounded the death knell for one of Cullen’s key policy legacies – the New Zealand Superannuation Fund.
For a mere $708m (or about $165 each) we all took proud ownership this week of one slightly used rail and ferry network. Add to this cheque, the money needed for track maintenance and upgrades of rolling stock and the public investment will be well in excess of $1 bn.