Tag Archives: package

New Zealand’s new housing policy is really just a new tax package – and it’s a mess | Instant News


The government will allocate nearly $ 4 billion into a scheme to accelerate the pace of new housing construction, which it hopes will help see “tens of thousands” of new properties built.

OPINION:

Economists like to talk about “optimal policy instruments” – in essence, policies that achieve their objectives more effectively or efficiently than alternatives, and have minimal undesirable consequences.

Judging by these criteria, the package of housing policy instruments recently announced by the New Zealand Government is still far from optimal. You might even call it messy.

How? For those who are uninformed, a key element of the package can solve the housing affordability crisis by doing a number of things:

• removing tax deductions on loan interest for residential property investments
• expand bright line test – the period after the sale of the property attracts capital gains tax (CGT) – from five to 10 years
• support new buildings under this tax change
• introducing a “change of use” rule that effectively makes the family home the responsibility of CGT if it is sold within 10 years and leased for more than one year
• increase incomes and limit housing prices to the Government First House Grants scheme.

However, if we examine the package against the three optimal policy requirements, we can see the problem.

Achieve policy objectives

Economists have a policy “rule” that in order to achieve a variety of policy objectives, you need at least as many policy instruments. Housing packages are a mixture of actions that are interrelated, but have several explicit purposes:

• stabilizes house prices
• facilitate home ownership
• discouraging speculative investments (unclear)
• increased the supply of housing with mostly (unspecified) “affordable housing”
• closing what the Government claims is a housing “tax loophole”.

Prime Minister Jacinda Ardern and Deputy PM Grant Robertson.  Photo / Mark Mitchell
Prime Minister Jacinda Ardern and Deputy PM Grant Robertson. Photo / Mark Mitchell

To this, add an implicit goal of addressing the perceived inequality of income and wealth between tenants, landlords and homeowners.

Overall, it is a daunting task, and it would be great if the housing policy suite could achieve such broad objectives.

Arguably, the main target of this policy package is to stop the inevitable increase in house prices (especially in Auckland). Failure to achieve it will only place it among a long line of efforts by the previous government (National and Labor) for at least the last 20 years.

In all cases, the biggest problem is a lack of political commitment to increasing the housing supply.

Unintended consequences

All taxes cause “distortions”, mostly unintentional, that need to be reduced. Moreover, policies that have conflicting goals are “incoherent” and are usually among the most deviant. This applies to the elimination of reduced interest from housing packages.

Previously, in New Zealand and nearly every other country, interest on business loans was treated as a legal expense and therefore tax deductible, regardless of the nature of the business.

With a coherent principle that currently doesn’t apply to housing, then what about other types of business loans that the government thinks should be liked or disliked?

No doubt arguments can be made for such a policy, but the result is an ad-hoc tax system that produces many unwanted distortions and harmful incentives.

It could be argued that the “new building” aspect of the housing package received several incentives by directing rental housing investment to increase housing stock.

But given the existing constraints to new housing construction – such as planning regulations and suitable land availability – the policies are likely to have little impact. This will only divert real estate investors from competing with first-time buyers for existing properties to competing with them for new property.

Over time, the inventory of rental housing becomes a mix of homes that meet or do not qualify for tax exemptions. Taking advantage of these new loopholes and various distortions in property prices will likely provide tax accountants with a lot of jobs.

Back door capital gains tax

It is rare to find transaction-based and time-based obligations among the principles of sound taxation policy. But a bright-line test manages both – it prompts postponement of property sales to evade taxes even when the reverse sale would be in the taxpayer’s best interest.

It was originally introduced in 2010 with a two-year threshold, without supporting evidence, that should stop so-called speculators from flipping properties for quick profits. The 10-year threshold cannot be labeled as an anti-speculation policy, it is simply a back door capital gains tax (CGT).

Like most back door policies, this CGT is bound to be less transparent and coherent than policies designed to deal with problems head-on.

Consider the case of a hypothetical Auckland home owner who moved to Sydney to work for two years. It doesn’t make sense to sell a home in Auckland because of high transaction costs and the risk of slipping on the property ladder when trying to buy back later. It is much better to rent in Sydney while also renting a house in Auckland.

But this will now generate a potentially large tax bill on the family home. Indeed, one calculation suggests such a plausible scenario could result in a CGT obligation of nearly one year of salary – only to move into a house for the same price.

Alternative policy instruments

If a better alternative exists, it does not lie in more ad-hoc tinkering with a coherent tax regime.

Conversely, like the famous real estate mantra of “location, location, location”, the mantra for New Zealand’s housing policy must be “supply, supply, supply”. In particular, supply in Auckland.

Successive governments have adopted national policies at a time when rapid house price inflation is almost exclusively urban and is essentially an Auckland phenomenon.

Without policies reforming construction sector regulations and opening up more land for urban housing, it is unlikely that housing prices in Auckland will stabilize while demand-driven trends remain.

Worse, the Government’s first home buyer scheme would only increase demand without incentivizing supply.

With too many goals and possibly many unintended consequences, the Government’s housing policy risks being grossly incoherent.

Norman Gemmell is chair of public finance at Te Herenga Waka – Victoria University of Wellington.

This article is republished from The Conversation under a Creative Commons license. Read original article.

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Ian Chappell – Who will captain Australia after Team Paine? Does Steven Smith still have a chance? | Instant News


Comment

Cricket Australia had to answer a number of questions before choosing a replacement for Team Paine

The role of the Australian captain is a highly debated one. It’s happening again now, following the former captain Steven SmithResponses to questions. “If the opportunity arises again, I will be interested,” Smith said.

The opportunity to captain Australia should only arise when the incumbent, Paine’s team, Was helpless or decided that he was fed up with a very demanding job. In Paine’s case, he took over under mitigating circumstances, when Smith canceled his duties by leaving a blatant cheating case under his watch. Since then, Paine has done an admirable job of restoring the reputation of Australian cricket.

There are a number of questions Cricket Australia must answer before deciding who will permanently inherit the captain from Paine. The first one may not be answered, because it can be burdensome. Why Smith and David Warner receive the same punishment regarding their captain’s future?

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Ramadan Package to provide aid to people: Aleem Khan | Instant News


LAHORE: Senior and Punjab Food Minister Abdul Aleem Khan said that in order to provide assistance to people all over Punjab according to special instructions from Prime Minister Imran Khan the Ramadan package has been fully prepared; He said this when giving a speech at a press conference for the procurement of wheat and ramazan packages in Jakarta, Friday.

Abdul Aleem Khan added that Prime Minister Imran Khan had a meeting every week to review the prices of foodstuffs. He said that work on grain procurement centers across the province should also start tomorrow and the Government will give farmers a record price of Rs 1,800 per maund of wheat with an increase of Rs 400.

Aleem said that 20 kg of flour was readily available in Punjab for Rs 860 all year round. He said that at the Ramadan Bazaar, a 10kg bag of atta will be available at a price of Rs 375 while there will also be a 25% discount on vegetables and other groceries and sugar at a price of Rs 65 per kg with a discount of Rs 20.

In response to a question, Aleem Khan said that the Ramadan bazaar would be changed to a “Sahulat Bazaar” after Eid so that subsidies to residents could continue. Abdul Aleem Khan said that while a bag of flour in Punjab is selling for Rs. The same 860 bags are sold in Sindh for Rs 1,200 to Rs 1,400, which is a huge injustice for Sindh people.

He asked the Sindh Government to decide on clear subsidies for farmers like Punjab so that flour and flour could be sold in Punjab, Sindh and the KPK at the same price. Answering the question, Abdul Aleem Khan said that the wheat procurement season has started now, therefore the flour cannot be released to the flour factories at the same time, so we keep our own green color for the low cost flour bags. There will be a price mentioned on these bags as well so this “atta” is only available to residents in need at the Ramadan market.

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Rachin Ravindra and Jacob Duffy, who have yet to open the lid, are included in the New Zealand Test squad for the UK tour | Instant News


News

Doug Bracewell, who played his final Test in 2016, has also been selected

Rachin Ravindra and Jacob Duffy Follow Devon Conway as three players open the lid on Trials level included in New Zealand’s 20-man squad for their tour of England, which will include the final of the World Test Championship against India.

Doug Bracewell, who played his last Test in 2016, was also crowned and left-arm spinner Ajaz Patel returned to play, but fast bowler Lockie Ferguson was not considered as selectors chose to protect him for the T20 World Cup. The squad will be whittled down to 15 for the WTC final in June after two games against England.

Conway’s inclusion is a formality following his prolific performances in whiteball cricket this season, assuming his performances the ability to return to New Zealand may be approved under the government’s Covid-19 border policy considering he is currently not a resident.

Ravindra, the 21-year-old who plays for Wellington, has been selected for centuries for New Zealand A against West Indies – both full side and side A. – earlier this season while he also made half a century against Pakistan A (Shaheens) attacks that included Mohammad Abbas and Naseem Shah.

He then returned from a dislocated shoulder that disrupted his season to score 138 against the North District and claimed six goals in the final game of the season with a spin of his left arm.

“Rachin has been set as the star of the future since the U-19 days and we are really encouraged by the progress in his game this season, both with the bat and the ball,” said New Zealand coach Gary Stead. He’s definitely the opening option, but also has the ability to hit in the middle combined with the spin of his left hand makes him a huge asset to our squad.

Duffy, the 26-year-old golfer from Otago, who took 4 of 33 on his T20I debut against Pakistan this season, supports the fast bowling resources of an enlarged squad alongside Bracewell. Duffy took 22 goals at 22.27 in Plunket Shield’s six games and Bracewell claimed 15 in five games while also scoring 256 runs at 42.66.

“Jacob has been consistent on the domestic circuit and his ability to swing the ball makes him a very attractive choice with the Dukes ball in British conditions,” said Stead. “Doug is the winner of the match and we are sure he will enjoy bowling on the English court in June.”

Colin de Grandhomme has been entered but has to pass a fitness test at pre-tour camp in early May following his recent right ankle surgery. Bracewell (hip) and Ross Taylor (hamstring) are also going to be the niggles this season.

“Colin’s injury is progressing well and we hope he will be running again soon,” said Stead. “We will be monitoring him closely over the next few weeks to make sure he is right on target where he needs to be in order to be fit for the tour.

“It’s great to see Ajaz coming back consistently since missing the start of the season and he proved in the past what he can do if the ball rolls.”

Four squad members – Kane Williamson, Trent Boult, Kyle Jamieson and Mitchell Santner – are in the IPL and when they become available for the England series will depend on when their franchise crashes, meaning some of them may miss the first Test.

Andrew McGlashan is deputy editor at ESPNcricinfo

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The Sindh government plans a bailout package to strengthen KDA | Instant News



The chief minister of Sindh said on Tuesday that the provincial government had launched 20 mega projects worth Rs5.78 billion in Karachi, of which 10 of them valued at Rs3.8 billion had been completed, while the rest would be completed preferably by the end of the current financial year. .

“I want to strengthen the Karachi Development Authority [KDA] by giving them a bailout package and a plan that includes more energy and resources, ”said Syed Murad Ali Shah, who chaired a meeting at the CM House to review the progress of the mega project.

The chief executive said he had launched a Rs5.78 billion project in the city to streamline vehicle traffic by building flyovers and underpasses, reconstructing dilapidated rainwater channels and providing water to the West District by installing new pipes.

“I am happy that today of the 20 projects, 10 major projects have been completed, and in the next fiscal year new major projects will be launched,” he said. Completed projects include construction of an underpass at Submarine Chowrangi and nearby roads worth Rs2.2 billion.

Shah directed the Minister of Regional Government Syed Nasir Shah to beautify the underpass and open the turn of the road from Khaliquzzaman Road to Sunset Boulevard by leveling the buildings built on the road. CM said that he had spent funds to compensate the residents and shop owners of the building.

Projects under construction include the construction of a rainwater channel from Star Gate to Chakora Nullah for Rs198.806 million (70 percent progress) and the reconstruction of 8000 Roads from Jam Sadiq Bridge to Dawood Chowrangi for Rs1.48 billion (98 percent progress).

The project also includes repair of traffic signs and signboards as well as works to beautify Mai Kolachi Road for Rs171.56 million (work from MT Khan Road to Punjab Chowrangi has started). There are several more projects in progress.

The chief executive directed the minister LG to personally monitor the progress of the ongoing project and kept him updated. As for the bailout package for KDA, CM asked the minister to submit his recommendations and strengthen the organization.

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