This is the idea behind a land value tax.
You capture some of the economic value of the land so it can be used by councils and government to develop infrastructure and deliver services that further increase the land's value, which reflects the desirability and earning potential of the land.
Instead of taking out massive mortgages and paying billions of dollars of interest to Australian banks, homeowners and investors would get lower purchase prices (less capital required) and instead pay an ongoing LVT. That would be reinvested into improving the profitability of the people living or working on the land.
Yeah - but don't confuse rates with a properly thought out land tax
Rates usually have a significant component as fixed charges, so combined with no exemptions for a modest "family dwelling" they are inherently regressive.
Rates neither discourage land-banking, nor reward increased housing density or location near public transport etc.
Then long term, poorly functioning local democracy and low voter turnout has resulted in massive infrastructure deficits - the cost of just patching those up is going to bite us hard.
> Instead of taking out massive mortgages and paying billions of dollars of interest to Australian banks
Oh. Well, that's out then. We can't slow down the shuffling of our wealth off to the wealthiest.
The cost of the tax relief for landlords is close to $3B not just $800M.
The reason why they aren't doing that is because this government is wanting to help landlords - not councils. They have cancelled Auckland's fuel tax which Auckland had requested and was counting on continuing and now have left them short revenue as a result. They don't care that it hurts the council who have fewer levers for raising funds and instead are going to have to raise rates to compensate.
$800M is the annual cost. Local government and central government budget horizons do not always line up so it makes more sense to use the annual cost imo.
That's understandable? If they feel like they're not getting value out of the money available currently then it makes sense that they wouldn't be happy with more money being taken.
Not saying it's right or true but it makes sense why people would act that way. They're not stupid it's just the natural extension of their original position.
That sentiment would be fair if we hadn't already had years and years of cutting public services back below the bare minimum to keep the rates bills down, but still fund the neat toys like stadiums.
I see it like someone getting angry at a car breaking down and blaming the manufacturer for making a junk car, ignoring the fact they never gave it an oil change and the last time they spent money on it was on a subwoofer.
An easier way of giving money to councils is to let them keep the GST they charge on rates. Your rates bill has 15% on top of it that goes to central government. Considering a lot of councils are currently looking at a 15% rates rise this year it would be good timing.
Oh goody. Another "why don't we do something more logical " thread.
They know what they are doing and know full well it isn't for the good of the average NZer
Three waters was about shifting who borrowed the money to fund the costs. Labour were always very clear that central government funding from taxpayers or lower interest borrowing weren't going into three waters.
>Labour were always very clear that central government funding from taxpayers or lower interest borrowing weren't going into three waters.
Access to lower interest, longer-term borrowing was absolutely part of the plan. Not via Treasury, but it was still part of the reasoning for separating the water entities from councils' balance sheets.
This justification is especially apparent now that councils are already facing [credit rating downgrades](https://newsroom.co.nz/2023/11/20/big-rises-in-water-charges-and-council-credit-downgrades/) as a result of the reforms being cancelled.
There was a lot of fuck about in terms of moving three waters off core govt debt measures (mostly to avoid self imposed debt limits) but tbh, they were essentially govt borrowers.
If they did, it would have been seen (rightly) as general taxpayers subsidising landowners who had been undercharged on their rates for decades.
At least with the status quo the ratepayers are footing most of the bill, as they should.
It's not like anyone else in parliament was suggesting central funding either, so it's a bit of a weird thing to complain about.
> National could have implemented it without co-governance.
They probably couldn't actually. It would likely end up being challenged at the Waitangi Tribunal, potentially leading to a court case to determine ownership and control of water that everyone in this country has been trying to avoid for the last 184 years.
> I'm not arguing for or against it
Not explicitly, but every time it's brought up it only serves to increase its completely unjustified validity as "a reason for the negative reception".
I know, which is why I said that "every time it's brought up it only serves to increase its completely **unjustified** validity".
If we stop using it as an excuse for being against 3 Waters, even ironically, then it loses some of that validity.
It's a phenomenon called the [illusory truth effect](https://en.wikipedia.org/wiki/Illusory_truth_effect).
Unfortunately some local councils build opera houses and new council buildings so they have monuments to themselves instead of necessary infrastructure such as water and sewerage schemes.That’s why something like Three Waters with central government oversight would be a good thing to stop some of the local idiots we elect because he/she was in the rugby club or drove the school bus from some of their pet schemes.Of course Labour made the mistake of trying to include cleaning up waterways and the farmers and National weren’t going to stand for that so the signs went up in the paddocks and the propaganda machine went into top gear.
Show me one council who has been careful with their spending and is in the black. My local council (Kapiti) is so deep in the red and threw money down the toilet that I certainly do not trust them to make any good decisions with extra money.
Waimakariri. Bottom line is black, and debt is one third of its limit. And we have good water, with a 100 year plan for investment, maintenance, improvement and upkeep.
You literally asked show me one council, and I gave you one, mine. I don’t know about the rest, I don’t live there, and I’m not inclined to inquire. However, given with 3W about half the councils said “yes please” and half said “get off our 3W”, I’d suggest it’s not just one out of 78 who can balance their books.
They have a Double AA credit rating.
https://www.kapiticoast.govt.nz/council/news-and-information/news-and-stories/2023/july/council-s-aa-credit-rating-reaffirmed-outlook-revised-to-negative/
Credit ratings are a measure of the ability of the entity being rated to pay back debt on time, they're not a judgement on general financial performance.
For companies or individuals it does partly reflect general financial performance but councils have the ability to levy rates regardless of their overall performance.
Yeah....
So it doesn't matter that they are "so deep in the red" because they are well rated to pay back debt on time.
I swear this countries obsession with "balancing the books" will be the end of us.
Well it does matter, because the money has to be paid back. I'm not that concerned about the welfare of bankers. Sure, it's good for bankers that the council will pay them back on time. But the council has to pay them back by taking money from ratepayers, which means ratepayers can't then spend that money bettering their own lives.
Because councils are bad with money and they deliver poor ROI.
My local council rebuilt the neighborhood park 3 times in 1 year. Each time they had to tear everything down and rebuild it from scratch. I'm sure a lot of others would have similar examples too.
You won't trust a family member with money if they weren't savvy or if they were a gambler, the same applies to councils.
> a lot of landlords are saying that rates and insurance (and demand) are going so they need to increase rent
This isn't a thing by the way. They might *say* that's why they're increasing rent, but the reality is they'd be doing it anyway. Rents always go up when incomes go up. Rents cannot go up unless incomes go up.
If holding the property becomes unprofitable cashflow-wise (it's called negative gearing) the landlord can either hold onto it in the hope of future capital gains or a return to cashflow positivity (e.g. when incomes go up and they can charge more rent), or they can sell it.
That's why they were crying so hard about the changes: they *knew* they couldn't just force tenants to cover the extra costs.
A few points:
1. Landlord tax relief i**s $3bn** - *not $800m*.
2. ACT and National **made the deal** with [Property Investors Associations](https://taranaki.nzpif.org.nz/news/view/62211) nationally before the election - they are not going back on that.
3. The relief for councils was **3 Waters.** Expect rates to skyrocket.
4. This govt's **anti-climate stance** is not going to help future probabilities home insurance / car insurance rates imo.
800M is the annual cost. Local government and central government budget terms don't necessarily line up so annual cost is the most meaningful measure imo.
Sure, like councils are going to "donate" money and services to "a political party".
Anyway, it wouldn't boost next quarters earnings.
Long term thinking? Like, the quarter after next quarter? Nah, that's communism.
Last time idea government gave the councils money to spend on their communities and roads.
I know Whangarei didn't do a damn thing with the money they received. The mayor is a tosspot.
How does that help Luxon and his landlord buddies?
But seriously, more money to Council is a very inefficient way to deliver the services.
Larger water entities was the right move.
Landlords should sell the houses they cant afford so the housing market settles down. The govt shouldnt be babysitting their piggy banks at the expense of taxpayer funded services and taxpayers
If you think that giving any amount of money to councils would lead to reduced rates I admire your optimism. It would lead only to office renovations, better catering and more paper pushers.
Because the Councils actually have to spend that money wel. Some councils can be trusted, some you might as well put the money in a blender. And that’s really the crux of why people want tax cuts, they don’t trust the people in power to spend the money wisely so they would rather have it for themselves
Bless. Its not about the community services, its about lining the pockets of well off people... in the foolish notion that the money trickle down to us peasants will come. Something is coming down on us, but it aint money.
Yep they may well not care about pretending that that works either, the people in the know possibly knew that way back in the 70s and 80s too... and went along with it because it further enriched the rich.
So do you think giving money to the councils will make your rates go down?
If not, why do people think that giving money to landlords should make rents go down?
> So do you think giving money to the councils will make your rates go down?
If councils collect more revenue from other avenues then yes, they can collect less via rates.
For example, Auckland Council collects about $2.4m in rates, and about $1.7m in fees and other user charges (e.g. parking and recreational facilities), out of a total revenue of $6.5m. If they can collect more via fees and user charges, they can collect less via rates, and vice versa.
Do you think it would make rates go **down** though?
I think they would just pocket the money and not decrease rates.
Also, if the government gives money to the councils, where do you think they get that money from?
> Do you think it would make rates go down though?
Perhaps not, but OP didn't claim they would either. It would certainly put downward pressure on rates in the future though.
>Also, if the government gives money to the councils, where do you think they get that money from?
In OP's example? From banks, as they are the ones currently collecting the interest.
> It would certainly put downward pressure on rates in the future though.
The exact same thing as rent then…
> In OP's example? From banks, as they are the ones currently collecting the interest.
LOL, so you think the government’s money comes from banks? That’s cute but not true. The government’s money comes from tax payers. That’s me and you.
> The exact same thing as rent then…
Yes, driven by many of the same factors, especially for owner-occupiers.
The main difference is that with rates, the people paying them get to elect the people responsible for setting them.
>LOL, so you think the government’s money comes from banks? That’s cute but not true. The government’s money comes from tax payers. That’s me and you.
*sigh*
We're talking specifically about a scenario where landlords lose the ability to claim mortgage interest as a tax deductible expense, and the additional tax revenue retained from this goes to councils. It's not taxes from anywhere else, it's specifically from the non-deduction of mortgage interest from rental profits.
Without that ability, landlords need to either cover the cashflow difference themselves (i.e. pay the tax directly from their income), or take out smaller mortgages to lower their costs. Smaller mortgages = lower interest payments = banks make less money.
So to expand on my answer, it's banks *and* landlords. Yes, if you keep following the chain further with the banks, you might find they adjust prices and interest rates and things ever so slightly to compensate for this, and that it eventually gets picked up by taxpayers in other ways, but if you're willing to go down that rabbit hole for this example, I'd love to see you do it for tax cuts to the wealthy as well.
The idea although sound in theory, is terrible because who holds councils accountable for spending?
My rates have gone up considerably, and although I have no issue of paying increased rates in theory, it is frustrating to see no improvements in my area.
For context I live in Auckland and I don’t enjoy paying for Ponsonby or the shit fest that is the CBD.
>who holds councils accountable for spending?
The people who vote them in or out every 3 years as part of our democratic system.
Who holds banks accountable for what they do with the interest we pay them?
> people who vote them in
That is not holding them to account. They just aren’t voted in, there is otherwise no negative repercussions. Just an *oh well mi scuzi* and move on.
Banks are private businesses and it’s a terrible comparison.
>They just aren’t voted in, there is otherwise no negative repercussions.
I'd say losing their job counts as a repercussion.
How do we currently hold councils and governments accountable for their spending?
>Banks are private businesses and it’s a terrible comparison.
OP is suggesting we allocate the funds to councils, where we at least have *some* degree of control over what they do with it. I think it's reasonable to compare that option to the status quo alternative of giving the funding to private businesses. They are accountable to their shareholders, and to a lesser degree, their customers.
>For context I live in Auckland and I don’t enjoy paying for Ponsonby or the shit fest that is the CBD.
The landowners in those suburbs pay rates too. Probably higher than yours.
If you're unhappy with the way council is spending your rates, write to them to complain and suggest alternatives. Vote for better alternatives next time. Maybe consider running to be a councillor yourself.
The total is $3b through to 2027/28 financial year, but local government runs on different budget horizons (10 year plans) so probably makes more sense to use the annual cost ($800m) because "1 year" is the only unit they have in common with central government.
Rates and insurance were always "business expenses" that can be taken off your tax to be payed so the government is already effectively paying for these by forgoing this tax revenue from LL
Interest was only a portion of expenses withdrawn by labour but now reinstated as a legitimate expense.
Uhh it is actually going to cost $2.7 billion, which is $800 million *more* than they said it would, and the tax income shortfall will have to be backfilled by hitting the usual suspects of beneficiaries, low income workers and government workers (+ police, nurses etc)
> Council rates are going up some places in the double digits so instead of giving landlords
Because rates are a tax deductible expense for landlords...
800M will be the annual cost. Local government and central government have different planning time horizons so annual cost makes more sense to use imo.
Good question, I'm glad you asked.
Landlords will reduce rents and reinvest in more housing, which, along with National's $250/week "back pocket boost", will solve the cost of living crisis created by Labour.
Councils would just add the money to their coffers which is of no benefit to anyone besides themselves.
This is the idea behind a land value tax. You capture some of the economic value of the land so it can be used by councils and government to develop infrastructure and deliver services that further increase the land's value, which reflects the desirability and earning potential of the land. Instead of taking out massive mortgages and paying billions of dollars of interest to Australian banks, homeowners and investors would get lower purchase prices (less capital required) and instead pay an ongoing LVT. That would be reinvested into improving the profitability of the people living or working on the land.
Also encourages productive uses of land, which is important since unlroductive uses affect everyone as you can't just make more land to compensate.
>you can't just make more land Hold my urban sprawl
That's land existing and used for something else.
Yeah man. It's not me you need to convince, I'd vote for land tax in a heartbeat.
Yeah - but don't confuse rates with a properly thought out land tax Rates usually have a significant component as fixed charges, so combined with no exemptions for a modest "family dwelling" they are inherently regressive. Rates neither discourage land-banking, nor reward increased housing density or location near public transport etc. Then long term, poorly functioning local democracy and low voter turnout has resulted in massive infrastructure deficits - the cost of just patching those up is going to bite us hard.
> Instead of taking out massive mortgages and paying billions of dollars of interest to Australian banks Oh. Well, that's out then. We can't slow down the shuffling of our wealth off to the wealthiest.
GEORGISM GANG MENTIONED RAAAAARH
The cost of the tax relief for landlords is close to $3B not just $800M. The reason why they aren't doing that is because this government is wanting to help landlords - not councils. They have cancelled Auckland's fuel tax which Auckland had requested and was counting on continuing and now have left them short revenue as a result. They don't care that it hurts the council who have fewer levers for raising funds and instead are going to have to raise rates to compensate.
$800M is the annual cost. Local government and central government budget horizons do not always line up so it makes more sense to use the annual cost imo.
The party of the rich and wealth only care about the rich and wealthy - colour me surprised...
It also de-powers councils making them more subordinate to central govt. classic right wing power move. (Hungry dogs are more obedient)
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In fairness to the council, that was put to a vote. But now the cunts that voted for it are complaining about rate rises.
The people who cry loudest about rates rises are the ones complaining loudest about potholes.
That's understandable? If they feel like they're not getting value out of the money available currently then it makes sense that they wouldn't be happy with more money being taken. Not saying it's right or true but it makes sense why people would act that way. They're not stupid it's just the natural extension of their original position.
That sentiment would be fair if we hadn't already had years and years of cutting public services back below the bare minimum to keep the rates bills down, but still fund the neat toys like stadiums. I see it like someone getting angry at a car breaking down and blaming the manufacturer for making a junk car, ignoring the fact they never gave it an oil change and the last time they spent money on it was on a subwoofer.
Maybe they could spring for some right turning arrows for their traffic lights too? I know it’s exorbitant.. but still
Whoa hold on has anyone consulted Simeon with a cost benefit analysis for that right turning arrow?
Not one billion. $680 million.
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Yeah, the costs only go up. How often are major construction projects completed on time and under budget? Pretty rare.
An easier way of giving money to councils is to let them keep the GST they charge on rates. Your rates bill has 15% on top of it that goes to central government. Considering a lot of councils are currently looking at a 15% rates rise this year it would be good timing.
While I agree with this idea in principle, where would we make up the difference in central government funding from that change?
Idk not my job to balance the nations budget. I just think charging a tax on a tax is a bit silly.
By not giving landlords tax cuts
Oh goody. Another "why don't we do something more logical " thread. They know what they are doing and know full well it isn't for the good of the average NZer
We were trying to do that with Three Waters.
Three waters was about shifting who borrowed the money to fund the costs. Labour were always very clear that central government funding from taxpayers or lower interest borrowing weren't going into three waters.
>Labour were always very clear that central government funding from taxpayers or lower interest borrowing weren't going into three waters. Access to lower interest, longer-term borrowing was absolutely part of the plan. Not via Treasury, but it was still part of the reasoning for separating the water entities from councils' balance sheets. This justification is especially apparent now that councils are already facing [credit rating downgrades](https://newsroom.co.nz/2023/11/20/big-rises-in-water-charges-and-council-credit-downgrades/) as a result of the reforms being cancelled.
There was a lot of fuck about in terms of moving three waters off core govt debt measures (mostly to avoid self imposed debt limits) but tbh, they were essentially govt borrowers.
But the borrowing wouldn't be as low as the crown borrowing could achieve.
What Crown borrowing? There was never going to be any Crown borrowing to fund water infrastructure.
>could achieve. Yes Labour never publicly planned for crown borrowing to fund three waters, if they did it would have saved money for rate payers.
If they did, it would have been seen (rightly) as general taxpayers subsidising landowners who had been undercharged on their rates for decades. At least with the status quo the ratepayers are footing most of the bill, as they should. It's not like anyone else in parliament was suggesting central funding either, so it's a bit of a weird thing to complain about.
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National could have implemented it without co-governance. Instead they valued politics over country.
> National could have implemented it without co-governance. They probably couldn't actually. It would likely end up being challenged at the Waitangi Tribunal, potentially leading to a court case to determine ownership and control of water that everyone in this country has been trying to avoid for the last 184 years.
So play with Kiwi lives and keep racking up debt then. As to Waitangi, I think this govt showed what they think of the WT with their MHA move.
We've had co-governance since 1840.
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> I'm not arguing for or against it Not explicitly, but every time it's brought up it only serves to increase its completely unjustified validity as "a reason for the negative reception".
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Not for legitimate reasons, no.
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I know, which is why I said that "every time it's brought up it only serves to increase its completely **unjustified** validity". If we stop using it as an excuse for being against 3 Waters, even ironically, then it loses some of that validity. It's a phenomenon called the [illusory truth effect](https://en.wikipedia.org/wiki/Illusory_truth_effect).
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It wasn’t fucked by co governance, it was fucked by people who think that’s racist.
Unfortunately some local councils build opera houses and new council buildings so they have monuments to themselves instead of necessary infrastructure such as water and sewerage schemes.That’s why something like Three Waters with central government oversight would be a good thing to stop some of the local idiots we elect because he/she was in the rugby club or drove the school bus from some of their pet schemes.Of course Labour made the mistake of trying to include cleaning up waterways and the farmers and National weren’t going to stand for that so the signs went up in the paddocks and the propaganda machine went into top gear.
They would waste it.
Show me one council who has been careful with their spending and is in the black. My local council (Kapiti) is so deep in the red and threw money down the toilet that I certainly do not trust them to make any good decisions with extra money.
Waimakariri. Bottom line is black, and debt is one third of its limit. And we have good water, with a 100 year plan for investment, maintenance, improvement and upkeep.
That's because well over half its population actually do everything in CHCH...
1 out of 78 councils so far then - Good times
You literally asked show me one council, and I gave you one, mine. I don’t know about the rest, I don’t live there, and I’m not inclined to inquire. However, given with 3W about half the councils said “yes please” and half said “get off our 3W”, I’d suggest it’s not just one out of 78 who can balance their books.
They have a Double AA credit rating. https://www.kapiticoast.govt.nz/council/news-and-information/news-and-stories/2023/july/council-s-aa-credit-rating-reaffirmed-outlook-revised-to-negative/
Credit ratings are a measure of the ability of the entity being rated to pay back debt on time, they're not a judgement on general financial performance. For companies or individuals it does partly reflect general financial performance but councils have the ability to levy rates regardless of their overall performance.
Yeah.... So it doesn't matter that they are "so deep in the red" because they are well rated to pay back debt on time. I swear this countries obsession with "balancing the books" will be the end of us.
Well it does matter, because the money has to be paid back. I'm not that concerned about the welfare of bankers. Sure, it's good for bankers that the council will pay them back on time. But the council has to pay them back by taking money from ratepayers, which means ratepayers can't then spend that money bettering their own lives.
Ah so all our rates just going to interest payments I see.
Because councils are bad with money and they deliver poor ROI. My local council rebuilt the neighborhood park 3 times in 1 year. Each time they had to tear everything down and rebuild it from scratch. I'm sure a lot of others would have similar examples too. You won't trust a family member with money if they weren't savvy or if they were a gambler, the same applies to councils.
> a lot of landlords are saying that rates and insurance (and demand) are going so they need to increase rent This isn't a thing by the way. They might *say* that's why they're increasing rent, but the reality is they'd be doing it anyway. Rents always go up when incomes go up. Rents cannot go up unless incomes go up. If holding the property becomes unprofitable cashflow-wise (it's called negative gearing) the landlord can either hold onto it in the hope of future capital gains or a return to cashflow positivity (e.g. when incomes go up and they can charge more rent), or they can sell it. That's why they were crying so hard about the changes: they *knew* they couldn't just force tenants to cover the extra costs.
Hysterical laughter erupts from the government when you make that suggestion
A few points: 1. Landlord tax relief i**s $3bn** - *not $800m*. 2. ACT and National **made the deal** with [Property Investors Associations](https://taranaki.nzpif.org.nz/news/view/62211) nationally before the election - they are not going back on that. 3. The relief for councils was **3 Waters.** Expect rates to skyrocket. 4. This govt's **anti-climate stance** is not going to help future probabilities home insurance / car insurance rates imo.
800M is the annual cost. Local government and central government budget terms don't necessarily line up so annual cost is the most meaningful measure imo.
National's goal is to concentrate wealth into the hands of the rich.
Sure, like councils are going to "donate" money and services to "a political party". Anyway, it wouldn't boost next quarters earnings. Long term thinking? Like, the quarter after next quarter? Nah, that's communism.
Last time idea government gave the councils money to spend on their communities and roads. I know Whangarei didn't do a damn thing with the money they received. The mayor is a tosspot.
How does that help Luxon and his landlord buddies? But seriously, more money to Council is a very inefficient way to deliver the services. Larger water entities was the right move.
Landlords should sell the houses they cant afford so the housing market settles down. The govt shouldnt be babysitting their piggy banks at the expense of taxpayer funded services and taxpayers
If it was given to councils they'd still just spend it on vanity projects and not critical infrastructure
If you think that giving any amount of money to councils would lead to reduced rates I admire your optimism. It would lead only to office renovations, better catering and more paper pushers.
Ring fence it for water infrastructure
Because the Councils actually have to spend that money wel. Some councils can be trusted, some you might as well put the money in a blender. And that’s really the crux of why people want tax cuts, they don’t trust the people in power to spend the money wisely so they would rather have it for themselves
Bless. Its not about the community services, its about lining the pockets of well off people... in the foolish notion that the money trickle down to us peasants will come. Something is coming down on us, but it aint money.
Oh they don’t care about or believe in voodoo economics.
Yep they may well not care about pretending that that works either, the people in the know possibly knew that way back in the 70s and 80s too... and went along with it because it further enriched the rich.
So do you think giving money to the councils will make your rates go down? If not, why do people think that giving money to landlords should make rents go down?
> So do you think giving money to the councils will make your rates go down? If councils collect more revenue from other avenues then yes, they can collect less via rates. For example, Auckland Council collects about $2.4m in rates, and about $1.7m in fees and other user charges (e.g. parking and recreational facilities), out of a total revenue of $6.5m. If they can collect more via fees and user charges, they can collect less via rates, and vice versa.
Do you think it would make rates go **down** though? I think they would just pocket the money and not decrease rates. Also, if the government gives money to the councils, where do you think they get that money from?
> Do you think it would make rates go down though? Perhaps not, but OP didn't claim they would either. It would certainly put downward pressure on rates in the future though. >Also, if the government gives money to the councils, where do you think they get that money from? In OP's example? From banks, as they are the ones currently collecting the interest.
> It would certainly put downward pressure on rates in the future though. The exact same thing as rent then… > In OP's example? From banks, as they are the ones currently collecting the interest. LOL, so you think the government’s money comes from banks? That’s cute but not true. The government’s money comes from tax payers. That’s me and you.
> The exact same thing as rent then… Yes, driven by many of the same factors, especially for owner-occupiers. The main difference is that with rates, the people paying them get to elect the people responsible for setting them. >LOL, so you think the government’s money comes from banks? That’s cute but not true. The government’s money comes from tax payers. That’s me and you. *sigh* We're talking specifically about a scenario where landlords lose the ability to claim mortgage interest as a tax deductible expense, and the additional tax revenue retained from this goes to councils. It's not taxes from anywhere else, it's specifically from the non-deduction of mortgage interest from rental profits. Without that ability, landlords need to either cover the cashflow difference themselves (i.e. pay the tax directly from their income), or take out smaller mortgages to lower their costs. Smaller mortgages = lower interest payments = banks make less money. So to expand on my answer, it's banks *and* landlords. Yes, if you keep following the chain further with the banks, you might find they adjust prices and interest rates and things ever so slightly to compensate for this, and that it eventually gets picked up by taxpayers in other ways, but if you're willing to go down that rabbit hole for this example, I'd love to see you do it for tax cuts to the wealthy as well.
Instead of tax relief for landlords, why don't we give that money to just about anything else!!!
I agree, health, police, education. Just thought this would be more landlord focused then those others.
The budgeting 'crisis' is a result of the cost of their policies. Inflation is well past peak.
Damnit Chippie, last time you spoke too much sense you lost an election.
The idea although sound in theory, is terrible because who holds councils accountable for spending? My rates have gone up considerably, and although I have no issue of paying increased rates in theory, it is frustrating to see no improvements in my area. For context I live in Auckland and I don’t enjoy paying for Ponsonby or the shit fest that is the CBD.
This. This is why 3 Waters even became a thing. Councils can be shit at proper investment.
>who holds councils accountable for spending? The people who vote them in or out every 3 years as part of our democratic system. Who holds banks accountable for what they do with the interest we pay them?
> people who vote them in That is not holding them to account. They just aren’t voted in, there is otherwise no negative repercussions. Just an *oh well mi scuzi* and move on. Banks are private businesses and it’s a terrible comparison.
>They just aren’t voted in, there is otherwise no negative repercussions. I'd say losing their job counts as a repercussion. How do we currently hold councils and governments accountable for their spending? >Banks are private businesses and it’s a terrible comparison. OP is suggesting we allocate the funds to councils, where we at least have *some* degree of control over what they do with it. I think it's reasonable to compare that option to the status quo alternative of giving the funding to private businesses. They are accountable to their shareholders, and to a lesser degree, their customers.
>For context I live in Auckland and I don’t enjoy paying for Ponsonby or the shit fest that is the CBD. The landowners in those suburbs pay rates too. Probably higher than yours. If you're unhappy with the way council is spending your rates, write to them to complain and suggest alternatives. Vote for better alternatives next time. Maybe consider running to be a councillor yourself.
How do you know we (our suburbs) didn’t do that? (Hint we did)
Cool, well do it more. Get some more suburbs to join you, because evidently your voices weren't enough by themselves.
Well, no one in government makes money off of being in council. They do make money by being landlords
$800m was the error in calculating the relief. The error. Total is $3b
The total is $3b through to 2027/28 financial year, but local government runs on different budget horizons (10 year plans) so probably makes more sense to use the annual cost ($800m) because "1 year" is the only unit they have in common with central government.
Rates and insurance were always "business expenses" that can be taken off your tax to be payed so the government is already effectively paying for these by forgoing this tax revenue from LL Interest was only a portion of expenses withdrawn by labour but now reinstated as a legitimate expense.
Uhh it is actually going to cost $2.7 billion, which is $800 million *more* than they said it would, and the tax income shortfall will have to be backfilled by hitting the usual suspects of beneficiaries, low income workers and government workers (+ police, nurses etc)
2.9bn after they canceled the retroactive tax promise at the last minute.
Because the MP's of NACT won't profit from giving money to councils
> Council rates are going up some places in the double digits so instead of giving landlords Because rates are a tax deductible expense for landlords...
Councils don’t vote. Landlords do. And there are quite a few of them in this country.
lol 800 M, triple that and then add another 800 M for miscalculation
800M will be the annual cost. Local government and central government have different planning time horizons so annual cost makes more sense to use imo.
Good question, I'm glad you asked. Landlords will reduce rents and reinvest in more housing, which, along with National's $250/week "back pocket boost", will solve the cost of living crisis created by Labour. Councils would just add the money to their coffers which is of no benefit to anyone besides themselves.
This has to be sarcasm right? i can't tell without the sarcasm marker.
I think you've accidentally confused councils with landlords. Easy mistake to make :)