I hadn't thought about this one until a helpful email showed up in my inbox. It's pretty obvious that income tax thresholds should automatically index with inflation - whether to anchor the thresholds in percentiles of the income distribution, or to anchor against a real consumption bundle.  But what about the threshold for filing GST? My correspondent notes that when GST was first set in 1986, the threshold was $24,000. $24,000, CPI-adjusted to today's dollars, is $65,000. But the GST filing threshold is $60,000. So should it go up? There's a petition before Parliament on it.  That ..read more

Every bit of this seems insane. And people wonder why productivity is falling through the floor.  Energy News reports that the Environment Court finally threw out Allan Crafar's appeal against a solar farm. From the story: Consent was granted in 2022. Crafar appealed November 2022. On what grounds? That turning a dairy farm into a solar farm would mean the effort of turning it into a dairy farm would have gone to waste. In his view, there would be a $30m annual loss to the country. Competing experts provided evidence about whether there would be a net national benefit. I don't know why t ..read more

Grudges are bad. Better to move on. But it can be fun to keep a couple of really trivial ones, so you're not tempted to have other ones.  For example, because of the rootkit fiasco of 2005, no Sony products in our household.  It's a low-stakes grudge. Differences across major brands aren't huge; I forgo little by dropping one brand when considering the next TV or headset.  I'm thinking of taking up a second one.  I mean, just look at this. A neighbourhood fish’n’chip shop, trading as Popeye’s for at least 30 years, has bowed to the legal threats of a fried chicken chai ..read more

If a localist agenda involves punting more responsibility down to councils, then central government assistance in funding some of those responsibilities could make sense.  If councils were only responsible for core infrastructure, that can and should be covered by rates revenue and user charges on use of the infrastructure. If the resulting rates charges are unaffordable because of low income in the district, that's generally a problem for central government redistribution policy. Central government takes a lot of money from higher earning households and redistributes it to lower earning ..read more

A standard popular argument for public or council ownership over private ownership is that private shareholders are too short-term focused, at the expense of longer-term value.  It's an eminently debatable proposition. But as always, Demsetz would say 'as compared to what?'. We always need to compare how the alternative works in the real world. Here's Oliver Lewis over at BusinessDesk: To mitigate rates rises and fund services, Christchurch City Council will be asking its commercial arm to frontload dividend payments and provide $47 million extra over the next three years. The move, endo ..read more

A living-wage campaigner didn't like my column on tobacco prohibition and complained to the Media Council.  The Council didn't uphold his complaint on substance but did want the Post to have a disclaimer on our columns about the Initiative's membership base. The Council's ruling is here.  Here's what I'd told the Post, and the Council, in response to the complaint: Please feel free to share this both with the media council and with Mr Herz-Edinger. I viewed and continue to view the VLNC rules as prohibition on smoked tobacco. In the same way that near-beers with less than 0.5 ..read more

A closing of some of the tabs First, a set from closing a pile of the week's accumulated stories from the Stuff papers. I wonder whether the people who complain about the absence of real journalism bother reading what The Post and Sunday Star Times have been putting out lately.  National's 'tax relief' won't be a tax cut "because the only real cut is a spending cut, anything else is just rearranging who pays what and in which generation." "If Health New Zealand can't find doctors, his iwi will." Some of the social services already being provided by Ngāti Toa. Andrea Vance asks "How ..read more

The Reserve Bank of New Zealand desperately wants to find reasons to have workstreams in climate change.  It makes little sense.  They've run another stress test on the banks looking to see if they could find a prudential regulation case.  They couldn't.  They found no systemic risk from a harsh scenario, just losses absorbed by shareholders of banks that don't respond adequately. And while that might make the banks less resilient against further shocks, that ought to just mean that the RBNZ's prudential side makes sure that bank capitalisation remains high enough.&nbs ..read more

Kainga Ora is the government's house building agency. It's been building a lot of social housing. Kainga Ora has its own (but independent) consenting authority, Consentium.  It's a neat idea. Rather than have to deal with building consents across each different territorial authority, Kainga Ora can run building consents, inspections, and Code of Compliance Certificates through Consentium.  I really really like the idea of making building consenting contestable.  Councils have local monopolies on this stuff. Having alternative sources of building consents and certificates that fo ..read more

I'd been wondering about the proposal to dig a really long tunnel to route through traffic away from Wellington's central city.  It seems the kind of thing that you might decide to do, after running congestion charging for a while and seeing that the project is warranted, rather than deciding on ahead of having that information from revealed preferences and prices. The thing won't be cheap.  So I was happy to see this in my inbox this afternoon to help me think through it.  The Wellington Long Tunnel could be a transformative project to take enough traffic out of the city, e ..read more