Borrowed money isn’t inflationary on it’s own, as long as the borrowed money is being spent on imports the amount of money in circulation will not inflate.

Prices doubled between 1946 and 1953 because the country was flooded with the money from Britiain’s deferred war materiael payments at the same time that imports were severely restricted and domestic production was restricted due to full employment. The supply of money had inflated but the the supply of goods and services did not inflate, and the productivity of the workforce could not inflate fast therefore prices had to inflate to absorb the extra money.
Governments at this time were fixated on the balance of payments and largely ignored inflation. Today they are the exact opposite.
It was this fixation on the balance of payments that seems to have triggered the stagflation of the 1970s. The drop in commodity prices, relaxation of import restrictions and increased oil prices should have led to deflation due to the deflated money supply or noflation due to a fall in the value of the dollar. Unfortunately the dollar was pegged to the pound sterling so it rose instead of falling. And government borrowing increased to fund its gauranteed commodity prices arrangements with the producer boards so the actual money supply didn’t deflate as much as it should. The government did such a good job of blaming the BoP crisis on higher oil prices that unions and employers became convinced that inflation would be inevitable and this conviction became a self fulfilling prophecy. Of course stagflation is when you get high inflation despite there being no economic growth to cause the inflation. Essentially there was so much “noise” in the economic disruption that nobody could read the correct pricing signals so they were basically flying blind Which pretty much gaurantees a crash or a very hard landing.

90% of what doctors do could be done by you or I using a computeised expert system. More cheaply and more accurately too. I suspect this fact underpins the medical profession’s abhorence of managers. The biggest increase in hospital spending during the 1990s was on salaried medical professionals. The comparisons of spending on managers and medical staff were actually comparing waged workers and salaried workers as this was what the RHAs were actually reporting in their accounts.

It must be all or nothing, big bro. Allow one exception and everybody will want one.

We can only hope that the tax break to the OZ banks of $90 million a year (a profit of over 3billion) is to sweeten them before the RB goes regulatory. Presumably Telecom is expected to reinvest all of it’s tax cut and more besides or …

To complete the “savings” policy we need to reduce tax on interest income (given some is not real income but only compensation for inflation). Why not a low flat rate (once and for all) withholding rate of 20 cents.

And also a capital gains tax of 20 cents on residential rental property.

To influence the market - allowing this tax to be written off if landlords sell to first home buyers or sell to build a new property (increase supply).

No tax on the first $5000 is c$600 per tax payer or c$10 a week for all?

Why not replace the 20 cents tax rate with one of 10 cents for the first $20,000, then apply the 30 cents rate at an earlier point? (still a $10 a week tax cut a week from the average wage and above, but from the minimum wage about $30 a week and 25 to 20 to 15 dollars a week as one moves on up from here to the average wage.

One can cover the cost by increasing GST to 15% (reducing tax on food to zero so there is no impact on the poor).

Yup, borrowed money is every bit as inflationary as printed money.

That’s why something like a “Tobin tax” that limits the profitability and ease of lending money to Kiwis would do Cullen a bit more good than the current nonsense he’s been spouting. There ARE ways to keep the money from coming in, that’s why it’s called a government, and we give it the power to do exactly that sort of thing. Moreover, since it is MONEY we are dealing with the WTO can’t stick its beak in.

He’ll never do it though… I suspect that Westpac has ear-flappers in his office to ensure that he never hears what’s actually going on out here.

respectfully
BJ

your childrens’ education..?

phil(whoar.co.nz)

No, No and No.

i guess as a (self-regarded) ‘purist’ ..

you take no govt money/subsidies/wff..?

eh..?..

phil(whoar.co.nz)

Apart from Doctors there is no other profession that I as a tax payer should be subsidizing.
I am not interested in subsidising social workers nor am I interested in subsidizing teachers, lawyers or accountants.