Fat tax?

Researchers at Massey University suggestedthat the government should subsidise fruit and vegetables, in order to increasehousehold’s consumption of these ‘healthy’ foods.  However, if we are willingto accept this I would like to take it one step further and suggest that wealso place a tax on unhealthy foods (foods with a sufficiently low SSCg3d scorefor example), a concept economists tactfully term a ‘fat tax’.

A better personal income tax and benefit system

While tax cuts are a topical issue, in this article we take a step back and instead look at what a better tax-benefit benefit system could look like. Just as with the current system, the size of government could be as big or as small as society desires, but the debate around tax cuts would be much clearer than some of the vacuous comments we hear from politicians and the dubious findings of badly constructed opinion polls.

How inflationary are tax cuts?

For the last few years, the government has put off cutting taxes because of their inflationary impact. Now, with the government willing to cut taxes, the Reserve Bank is unhappy because of their inflationary impact. This begs the question, how inflationary are tax cuts?

"Foreign made" is in our best interest

If you haven’t seen the new poster for the "Buy New Zealand made" campaign, it features an attractively attired woman, asking the question, "Does my economy look good in this?" The implication, of course, is that we should think carefully about the damage wrought when we purchase foreign-made goods.

Confidence evaporates in Cardiff

I haven’t felt particularly enthusiasticabout work this week – like much of the rest of the country, I suspect.  Itmight be the fact that I’m running out of patience with the pitiful weatherthat spring has thrust upon us, with endless gales, overcast skies, and regulardumpings of rain.  Or is it the thought of having to wait until 2011 before theAll Blacks have another chance to get their hands on the Rugby World Cup?

What will the emissions trading scheme cost?

As speculated some weeks ago, the government has decided to introduce a price on carbon emissions in the form of an emissions trading system (ETS), rather than via a carbon tax. Whilst involving higher transactions costs than a tax, especially with some industries receiving free allocations of emission rights (the right to emit greenhouse gases for free), the ETS does at least involve all industries in the economy – eventually.

Generous to a fault

The Labour government has been very generousto its public servants.  Since Labour’s election in 1999, average ordinary timewages in the public sector have increased by 34% compared with 25% increases inprivate sector wages.  In 1999 private sector wages were on average 79% ofthose prevailing in the public sector, today they are around 74% of publicsector wages.

The curse of commission salesmen

The spate of finance company collapses has clearly dented investors’ confidence. That’s obvious from the fact that many investors have been clamouring to get their deposits out of finance companies and into banks. Ironically, that panic has probably been the cause of several finance company closures and will most likely threaten more over the coming months.

A blessing in our low productivity past

New Zealand’s low labour productivity growth in the recent past is often identified as a problem. But if we had enjoyed stronger productivity growth our society may look quite different today, and not necessarily better. Labour productivity measures the value of final goods and services (or gross domestic product) produced in the economy for each hour worked. Low labour productivity growth means that we are producing little more for each hour’s work today than ten or fifteen years ago.