Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


New Working Papers on Impact of 2008/09 Recession

New Working Papers on Impact of 2008/09 Recession on Households, Tax Smoothing, and Elasticity of Taxable Income
Three Treasury Working Papers published today examine the impact of the 2008/09 recession on New Zealand households, tax smoothing, and the elasticity of taxable income.

New Zealand Households and the 2008/09 Recession (WP 13/05) was written by Christopher Ball and Michael Ryan. This paper studies the changes in three metrics: income, expenditure and equivalent variation between 2006/07 and 2009/10 for different types of households in New Zealand. The period between 2006/07 and 2009/10 is an interesting period to study as it includes the 2008/09 recession. The equivalent variation is a measure of utility changes owing to price changes.

Tax Policy with Uncertain Future Costs: Some Simple Models (WP 13/07)
was written by Christopher Ball and John Creedy. This paper considers how uncertainty about the extent of future public expenditure affects decisions regarding ‘tax smoothing’, that is, the use of higher current taxes to build up a fund so that future taxes do not need to be as high as otherwise. It is not clear whether governments should act immediately or wait until more information becomes available. The paper uses simplified models to clarify the different influences on policy decisions. Illustrative examples show that the potential future expenditure must be relatively large (as a proportion of income) before it is worth pre-funding, though not completely smoothing tax rates over time. Attitudes to risk were found to have a small effect. The size of the potential future tax-financed cost and its associated probability were found to be the major determinants of the optimal policy.

Regression Estimates of the Elasticity of Taxable Income and the Choice of Instrument (WP 13/08) was written by Simon Carey, John Creedy, Norman Gemmell and Josh Teng. This paper examines estimation of the elasticity of taxable income using instrumental variable regression methods (The ‘elasticity of taxable income’ measures the response of taxable income to variations in the net-of-tax rate. It captures the combined impact of various economic responses to marginal income tax rates, so is a crucial component of any investigation of the potential revenue effects of proposed income tax changes.). Two alternative tax rate instruments are proposed, using estimates of the dynamics of taxable income from a panel of taxpayers over a period that involves no tax changes. When applied to the 2001 tax reform in New Zealand, (which involved a mix of marginal tax rate increases, decreases and no change across a wide range of incomes), it was found the proposed new instruments significantly outperform an instrument based on the standard approach of assuming unchanged income levels after reform.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Minister of Finance: Plan Shows $100 Billion Infrastructure Projects

Finance Minister Bill English has today launched the Government’s Ten Year Capital Intentions Plan (CIP) which shows a pipeline of $100.9 billion worth of infrastructure projects over the next decade. More>>


Werewolf: Safe Landings Gordon Campbell on the safety challenge to the Wellington runway extension.

The safety-related legal challenge revolves around the size of the 90 metre long Runway End Safety Area (RESA) being proposed for the runway extension. More>>


Environment Commissioner: We Need To Work Together On Climate Change And Farming

“The debate around agricultural emissions and the ETS has been polarised for too long,” said the Commissioner. “But the ETS is not the only way forward – there are other things that can be done.” More>>


NZ Super Fund: Seeking To Put A Market Price On Climate Change

Oct. 19 (BusinessDesk) - The New Zealand Superannuation Fund says it will devise a set of rules to assess investment winners and losers under climate change, a strategy that could rule out fossil fuels or producers such as current portfolio member Exxon ... More>>


Rejuvenation: Parata Will Not Contest 2017 Election

Education Minister and National List MP Hekia Parata has today announced that she will not be contesting the next election. She advised the Prime Minister of her decision earlier this year. More>>

Prisons Grow: Government Approves Plans For Increased Prison Capacity

Despite significant progress in reducing crime the number of prisoners has increased faster than projected. This is because the proportion of offenders charged with serious crimes has risen, meaning more people are being remanded in custody and serving more of their sentences in prison. More>>


Gordon Campbell: On Plastic Bag Activism, And Street Harassment

Amusing to see the Act Party experiencing another outbreak of young fogey-ism. What has aroused the ire of Act Leader David Seymour this time is the introduction of a Greens private members bill to the ballot process, calling for a 15 cents levy on plastic bags to reduce pollution. More>>


Unclear Weapons: US Navy Ship Cleared To Visit NZ For Navy's 75th

United States Navy ship, the USS Sampson, has been given clearance to visit New Zealand next month by Prime Minister John Key... “The process for considering the visit by the USS Sampson is the same as that used for all ships attending the International Naval Review." More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news