World War 1– the initial New Zealand response
25 Apr 2015 Leave a comment
in economic history, politics - New Zealand, war and peace Tags: World War I
The Gallipoli campaign: the Allies invade Turkey
25 Apr 2015 Leave a comment
in politics - Australia, politics - New Zealand, war and peace Tags: Anzac Day, Gallipoli campaign, World War I
The impact of the top tax rate in the depth and severity of the great depression
24 Apr 2015 Leave a comment
in business cycles, fiscal policy, great depression, macroeconomics, politics - New Zealand, politics - USA, public economics Tags: capital taxation, New Zealand, taxation and the labour supply, top tax rate
Source: Ellen McGrattan.
There were large differences in increases in the 1930s in the top marginal income tax rate between Sweden, the UK, France with Australia and New Zealand and between the USA and Canada and the rest as McGrattan explains:
These data show that there is a strong negative correlation, roughly −94%, between the change in the top income tax rates and the deviation in per capita real GDP relative to trend in 1933.
Company tax rates around the world
24 Apr 2015 Leave a comment
in international economics, politics - Australia, politics - New Zealand, politics - USA, Public Choice, public economics Tags: company tax rate, tax competition
Australian and New Zealand inflation rates adjusted for new goods and quality bias of 1.5%
23 Apr 2015 Leave a comment
in inflation targeting, macroeconomics, politics - Australia, politics - New Zealand Tags: Australia, CPI bias, inflation, New Zealand
In praise of measurement error: good thing no one noticed the severe deflation in Australia and in New Zealand in the late 1990s for otherwise the do-gooders might have felt the need to do something about it. Good thing no one is panicking over the recent mild deflation in New Zealand as well.
Source: OECD StatExtract
Earth Day activists are now victims of the mass kidnappings
22 Apr 2015 Leave a comment
in environmental economics, politics - Australia, politics - New Zealand, politics - USA Tags: Earth Day
Mass kidnappings is the only charitable explanation for their failure to be dancing in the streets by Eart Day activists over the greening of the planet courtesy of capitalism since Earth Day 1970?
The first Earth Day was celebrated 45 years ago today. nyti.ms/1IDVPyC http://t.co/Zpg7zJc8V6—
NYT Archives (@NYTArchives) April 22, 2015
George Carlin on Global Warming
22 Apr 2015 Leave a comment
in energy economics, environmental economics, politics - New Zealand, politics - USA Tags: George Carlin, global warming
I roamed all over Devonport on my bike when I was a lad. No more, no longer!?
20 Apr 2015 Leave a comment
in economic history, politics - Australia, politics - New Zealand, politics - USA Tags: child development, good old days, Helicopter parents, moral panic, political correctness
As a soon-to-be parent, I find this fascinating and terrifying. The diminishing range of children visualized: http://t.co/7NiFN9Eaw0—
Austen Allred (@AustenAllred) April 18, 2015
What are the revenue effects of capital gains tax cuts?
19 Apr 2015 Leave a comment
in politics - Australia, politics - New Zealand, politics - USA, public economics Tags: dynamic scoring, laffer curve, optimal taxation, taxation of capital income
The rapid emergence of Generation Rent in the UK and New Zealand
17 Apr 2015 1 Comment
in politics - New Zealand, urban economics Tags: Generation Rent, housing affordability, land supply restrictions, UK politics, zoning
I thought I should reproduce this chart for New Zealand to show the extent to which a Generation Rent has emerged in New Zealand in the last 10 years.
Source: 2013 Census QuickStats about housing.
Might be more interesting to breakdown the pie charts as a single time series for 25 to 29 and 30 to 34 year-olds as the latter are more likely to be settling down and buying a house.
Source: 2013 Census QuickStats about housing.
The number of New Zealanders who own or partly owned their residence in the really 30s has dropped from almost one in two falling towards one in three since 2001. Generation Rent is very much the majority of New Zealanders aged 30 to 34.
For those New Zealanders aged 25 to 29, instead of one in four at least partly owning their residences, as was the case in 2001, the number of those aged 25 to 29 buying or owning their own house has dropped to less than one in five.
Generation Rent for those aged 25 to 29 has gone from a majority tendency to the dominant state for those in their late 20s. In both cases, the emergence of Generation Rent has sped up since 2006.
The emergence of generation rent coincided with a sharp increase in prices in real terms in New Zealand while housing prices against rents became far less competitive.
HT: Global house prices: Location, location, location | The Economist.
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Who said the New Zealand share index lacked diversification
17 Apr 2015 Leave a comment
in financial economics, politics - New Zealand Tags: active investing, investment diversification, passive investing
One trait that makes the US stock market better than its peers read.bi/1EJ4ZrC http://t.co/6kz7zlghQa—
BI Chart of the Day (@chartoftheday) February 23, 2015
Feminism row erupts over Paul Henry comments – They have the Internet on computers now version
16 Apr 2015 Leave a comment
in discrimination, gender, politics - New Zealand
Jackie Blue, despite the resources of the Human Rights Commission, did not Google her own web site for the biography of the Chief Commissioner of the Human Rights Commission.
KiwiBlog has noted that the headline of “Ex All Black becomes Chief Executive” is common with David Kirk referred to as an ex All Black despite a successful business career.
Average tax rates on consumption, investment, labour and capital in Australia and New Zealand, 1959-2011–updated
16 Apr 2015 1 Comment
in economic growth, fiscal policy, macroeconomics, politics - Australia, politics - New Zealand, public economics Tags: GST, lost decades, taxation and the labour supply, taxation of capital
Cara McDaniel went to the mammoth task of constructing average tax rates for 15 OECD countries over the period 1950-2003 for consumption, investment, labour and capital:
Total tax revenue is divided into revenue generated from four different sources: consumption expenditures, investment expenditures, labour income and capital income.
To find the average tax rate, tax revenue from each source is then divided by the appropriate income or expenditure base.
She used that data to examine the role of taxes and productivity growth as forces influencing market hours. She used a calibrated growth model extended to include home production and subsistence consumption, both of which were key features influencing market hours. Her model was simulated for 15 OECD countries. She found the primary force driving changes in market hours is found to be changing labour income tax rates and productivity catch-up relative to the United States is found to be an important secondary force.
I thought I would summarise the tax rate data computed by Cara McDaniel for Australia and New Zealand.
Source: Cara McDaniel.
McDaniel’s data on average tax rates on household incomes in Australia and New Zealand suggests that the average tax rate New Zealand household incomes fell by a third since 1986. No estimates were calculated for earlier years for New Zealand.
As for Australia, taxes steadily increased between 1959 and 1987 stabilised until 2005 and then fell a bit.
Source: Cara McDaniel.
There is a big spike in the average tax rate on consumption expenditure in New Zealand in 1986 when a GST replaced the pre-existing sales taxes. The average tax rate on New Zealand consumption expenditures and tapered away until the end of2009 and started to increase again.
Not much happened in Australia regarding the average tax rate in consumption expenditures since about 1983 despite the introduction of a GST in 1998.
Source: Cara McDaniel.
The average tax rate in capital income in Australia is much higher than in New Zealand. On the other hand, the average tax rate on investment expenditure is much higher New Zealand as compared to Australia.
Source : Cara McDaniel.
Taxes on investment expenditures increased quite significantly at the same time that a GST was introduced in New Zealand.
All in all, New Zealand cut taxes on personal income but that tax cut seemed to be pretty much offset by higher taxes on personal consumption through the introduction of a 10% and then 12.5% GST.
The most interesting finding in this database is the sharp increase in the average tax on investment expenditures in the mid-1980s. This prolonged New Zealand’s lost decades – the two decades of next to no GDP growth per working age New Zealander.
Real GDP per New Zealander and Australian aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1956-2013
Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014.
New Zealand’s lost decades ended when the average tax rate on investment expenditures started to fall.
Utopia, you are standing in it! 
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