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Recovery could take years - English

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Recovery could take years - English

3News NZ

Bill English (Photo: Jared Mason)

Bill English (Photo: Jared Mason)

Finance Minister Bill English admits it could be three years before New Zealanders start seeing some light at the end of the economic tunnel.

Economic forecasts this week paint a subdued picture, with Treasury revising down its growth forecasts to around 2.5 percent in two years' time.

Mr English says this has been a long, slow recovery, but New Zealand is in a better position than the eurozone.

"[Compared to] those large economies with virtually no growth, we're on track to a moderately positive outlook. People will be able to continue to get some wage increases and see the creation of some new jobs."

Mr English says New Zealanders have adapted to changing times by spending less and saving more.

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Comments

16/01/2013 1:58:46 p.m.

Cathy wrote:

Ooops! Got my 'Ks' and 'Cs' mixed up sorry Katubaldy. I don't like it when my name is spelt with a 'K' so must be consistent.

16/01/2013 10:58:53 a.m.

Cathy wrote:

Ha ha! You could be right Catubaldy. But whichever party introduced it you can almost guarantee the other party/s would oppose it.

16/01/2013 6:49:02 a.m.

katubaldy wrote:

Yeah,sounds like a move in the right direction....how quickly do you think the idea would be picked up by the govt? You said yourself, it 'should' be easy and I tend to agree but its the politicians that have the last say and how likely is it, they'd implement the changes? A tax system with no loopholes might make them dazed and confused...

15/01/2013 8:51:57 p.m.

Cathy wrote:

Katubaldy. If the spending tax was collected in the same way GST is now, getting people to cough up should be easy because people would have to pay the tax with the purchase price internally before they receive the goods and the sellers would be required to pass it on to IRD as they do at present. With imported goods the tax would be collected 'at the border' and administered by Customs to make sure there are no loopholes, before being passed on in much the same way import and excise duty is currently processed except under the proposed new system, there will be NO exemptions and every one pays with stiff fines for anyone found producing false declarations of value or undervalued receipts.

15/01/2013 6:45:01 p.m.

katubaldy wrote:

Yeah it sounds like a move in the right direction.The major hurdle is getting everyone to cough up huh?

14/01/2013 3:45:10 p.m.

Paul wrote:

Good comment to a point Katubaldy. Business have to spend eventually to either buy raw materials, new equipment or product or pay for services rendered or maintenance etc and they also pay wages that will eventually be spent and at that stage attract the spending tax. If businesses did not spend on anything, they would stagnate. The more successful the business the more they spend and the more tax they would pay. Infrastructure is partly paid for through local rates and partially through Central Government, all of which would still be budgeted for through both systems as at present. Yes, it extremely important no-one gets a free pass and there must not be any exemptions for anyone at any time, because that's the main weakness with the present GST set up where businesses claim back GST even when the goods the tax was paid on had nothing to do with being 'on-sold' or 'used in production' and is currently easily and frequently diverted to private use GST free. 'Fair' to me is everyone paying the same rate of tax pro-rata on every purchase without exemption that means the bigger spenders will pay the most tax. The smaller income spenders will pay the least tax. Either way, the system will also encourage savings because interest is not taxable either till something is spent.

14/01/2013 9:10:04 a.m.

katubaldy wrote:

Sounds ok initially, but what happens if a business decides to stop spending for a while,which they have every right to. It continues to use the public infrastructure; roads,rail,electricity etc. Who covers the costs to the govt to maintain that infrastructure? There's no consideration of the user pays angle. Taxation is a complex issue and any solution has to look at different scenarios with an overall view in mind...the main point is to try and ensure that whatever the system, no one gets a free pass from the govt and everyone pays their fair share...the debate continues ad nauseum on what 'their fair share' is....

11/01/2013 11:07:34 a.m.

Cathy wrote:

The simplest tax system and also the fairest one is certainly NOT a TRANSACTION TAX nor an INCOME TAX of any sort. Money is only of use when it is spent so to only have a SPENDING TAX (GST of perhaps 20% or 25%) without any exemptions on either local or international purchases will greatly simplify the NZ tax system, reduce IRD administration in a big way and make it a more level playing field for all. The bigger the spending the more tax people or organisations will pay, the lower the spending, the less people will pay. What could be fairer or simpler than that?

10/01/2013 5:56:30 p.m.

Paul wrote:

Are you an ex 'Social Credit' person Dan? That policy failed last time too. Devaluation in any form or percentage affects all imports and increases the cost of living and production in every area possible, including export costs. Increases in oil, petrol and much needed machinery and technology for industry in turn increase transport, production, manufacturing and retail prices at every level not to mention more GST. The only sector to individually benefit in a small way, are exporters who are doing ok at the moment and don't need or deserve any extra windfalls at everyone elses expense.

10/01/2013 11:46:51 a.m.

Dan wrote:

Borrow the $25 billion we have left to borrow, create somewhere between 120,000 to 200,000 jobs, then print money. Make sure we do not devalue our currency more than other countries and make sure we do not print any money at all until unemployment is low.