I must say being an Australian, one of the pleasures is being so close to NZ, at leasdt if you live on the East Coast. Australia is for the most part drought-deprived and flat, but NZ is green and mountainous. It takes no stretch of the imagination to say that Australia has by far the better climate, jobs and higher income, though I much prefer the friendly NZ people and its green, relaxed surroundings. The latest news is the shift towards a common market. This will cause a property boom in parts of NZ.
'Buying NZ Property – Download the free sample readings!
NZ presents some of the most alluring property in the Western World; particularly given the greater easy of residency, the low cost of property, and the liveability of the country. In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!
New Zealand Property Report 2010 - Download the table of contents or buy this 180-page report at our online store for just $US19.95. Tuesday, March 24, 2009
Saturday, March 21, 2009
Tax rates in NZ
NZ tax rates are actually pretty low - you are essentially paying just 14% on the first $40,000. Bear in mind that you are also paying 12% on most consumption (Goods & services tax), though at least that is consumption. If your perception is that NZ is a poor man's country, you might find support for your hypothesis in the average income statistics as well as the tax rates.
The flipside is that NZ makes less sense if you are on a high income. That might explain as much as anything why New Zealanders move to Australia - not just for higher incomes, but being aspirational, they might be moving there for tax relief.
Individual marginal tax rates as at 1 October 2008 [applicable to net taxable income] a. 0 – 14,000 12.5%
b. 14,001 – 40,000 15%
c. 40,001 – 70,000 33%
d. 70,001+ 39%
One of the big disadvantages in NZ is the inability to split income between spouses. So if your husband earns $100,000, and your a housewife earning nothing, you are a tax burden in NZ. In Australia and some other countries you can split your income so your wife can get a credit for what she is not earning. This seems fairer. mind you these is PLENTY of unfairness in the Australian tax system. And it would also have to be the most complicated tax system in the world. Australia basically plays favourites. The government gives concessions for political reasons, eg. Baby bonuses of $5K, $21K first home owners grant. This might seems like 'lovely lever pulling' government policy to some. To me its smacks of the worst aspects of Indian-style fascism with government directing human action. There is little difference between price controls and baby bonuses. We should not be incentivised to consume so governments can attempt to reach full employment. If you ever wondered why we never get there - its because governments exist for self service. See my tax blog.
Saturday, March 14, 2009
Property rights in NZ
The concept of property rights in NZ is pretty much the same as anywhere else. Basically you have certain rights to do as you would please, as long as you:
1. Don't so anything that could conceivably hurt others in any respect. This seems reasonable enough if we are talking about noise, water seepage, fire hazards, etc. The government's definition of this can get pretty bureaucratic.
2. You comply with the government's spending priorities, whether its community swimming pools, libraries, changing rooms and public toilets. Civil amenities seem pretty important, except why should one have to pay for them if you don't use them. Certainly there is a public good in the collective provision of these facilities, but there is a difference between things which are 'necessities of nature (i.e. desiccating) and swimming at a pool. Swimming in private pools is not a nuisance, so why would we require public pools. Why not just establish rules to protect neighbours so that anyone could establish a pool and sell access as a service. Libraries are no different. Libraries now even function on a commercial footing.
Over the last 2 decades we have gradually seen governments selling off government profitable businesses, they have placed previously non-profit businesses on a commercial footing, yet we don't see any reduction in taxation. Instead we see a growing intrusion of government into our lives through the local council. NZ is worse than most local governments in this respect. They want a $230 - $500 building permit for all manner of things.
The property holder is paying the cost in terms of rates or land taxes, which are very high in NZ. I will pay about $1350 this year, and that excludes the $1/bag I pay for rubbish, and I pay for some library services, and of course $3/day to access the public swimming pool. All this arises because the government is so inefficient of course.
I also want to correct the perception that Mauris have rights to their traditional lands. Mauris can be quite proud of this. Having fought for their land, they might wonder why they are so disempowered. They might have forced the hand of the British, but really they ended up conceding. The Maoris had a good position, but with the Treaty of Waitangi, they gave it away and became ordinary taxpayers. They think they have rights? Well I actually don'y even know if they pay land taxes for this land. Its an interesting point. But regardless the terms of the Waitangi Treaty ceded their sovereignty to the British.
So Mauris can run around professing to be a proud people. And yes they are, but its not because they fought for their land rights. They in fact surrendered to the British government like every white person I know, and has done so (by birth) ever since. Basically we are all prisoners under the vestiges of the British feudal system. The baron has merely changed. We are slaves to our assets because that's how we best work for governments as common lap dogs. We feed consumption and they tell us when so they can be fed without inflicting pain on us too much, as if we needed to feel pain at all.
I'm not advocating a departure from responsibility. On the contary, I am advocating that government should be operating under the same standard of justice, because quite clearly there is a double standard. That double standard was created when arbitrary legislation was enacted in place of common law.
1. Don't so anything that could conceivably hurt others in any respect. This seems reasonable enough if we are talking about noise, water seepage, fire hazards, etc. The government's definition of this can get pretty bureaucratic.
2. You comply with the government's spending priorities, whether its community swimming pools, libraries, changing rooms and public toilets. Civil amenities seem pretty important, except why should one have to pay for them if you don't use them. Certainly there is a public good in the collective provision of these facilities, but there is a difference between things which are 'necessities of nature (i.e. desiccating) and swimming at a pool. Swimming in private pools is not a nuisance, so why would we require public pools. Why not just establish rules to protect neighbours so that anyone could establish a pool and sell access as a service. Libraries are no different. Libraries now even function on a commercial footing.
Over the last 2 decades we have gradually seen governments selling off government profitable businesses, they have placed previously non-profit businesses on a commercial footing, yet we don't see any reduction in taxation. Instead we see a growing intrusion of government into our lives through the local council. NZ is worse than most local governments in this respect. They want a $230 - $500 building permit for all manner of things.
The property holder is paying the cost in terms of rates or land taxes, which are very high in NZ. I will pay about $1350 this year, and that excludes the $1/bag I pay for rubbish, and I pay for some library services, and of course $3/day to access the public swimming pool. All this arises because the government is so inefficient of course.
I also want to correct the perception that Mauris have rights to their traditional lands. Mauris can be quite proud of this. Having fought for their land, they might wonder why they are so disempowered. They might have forced the hand of the British, but really they ended up conceding. The Maoris had a good position, but with the Treaty of Waitangi, they gave it away and became ordinary taxpayers. They think they have rights? Well I actually don'y even know if they pay land taxes for this land. Its an interesting point. But regardless the terms of the Waitangi Treaty ceded their sovereignty to the British.
So Mauris can run around professing to be a proud people. And yes they are, but its not because they fought for their land rights. They in fact surrendered to the British government like every white person I know, and has done so (by birth) ever since. Basically we are all prisoners under the vestiges of the British feudal system. The baron has merely changed. We are slaves to our assets because that's how we best work for governments as common lap dogs. We feed consumption and they tell us when so they can be fed without inflicting pain on us too much, as if we needed to feel pain at all.
I'm not advocating a departure from responsibility. On the contary, I am advocating that government should be operating under the same standard of justice, because quite clearly there is a double standard. That double standard was created when arbitrary legislation was enacted in place of common law.
Monday, March 2, 2009
Cheap New Zealand flights
The NZ aviation market is going through its greatest shake-up for a number of years with the commencement of operations by a number of outside players. Important changes include:
1. Jetstar - the Australian 'low cost' carrier owned by Qantas has started offering internal domestic flights in NZ. Check out their website.
2. Emirates Air - The Arab airline is now offering onward flights to NZ at cheap prices.
It seems probable that Air NZ will eventually merge with Qantas. The move of Jetstar into the local NZ market should give Qantas a better understanding of the local market. The trend is clear - we are seeing greater integration of the Australia & NZ markets. They will remain separate countries in name only. Auckland (North Island) and Christchurch (South Island) remain the principal gateways into NZ, but in a sense for international travellers, in a sense Sydney and Brisbane can also be considered gateways given the cost advantages of low cost flights from the East Coast of Australia.
1. Jetstar - the Australian 'low cost' carrier owned by Qantas has started offering internal domestic flights in NZ. Check out their website.
2. Emirates Air - The Arab airline is now offering onward flights to NZ at cheap prices.
It seems probable that Air NZ will eventually merge with Qantas. The move of Jetstar into the local NZ market should give Qantas a better understanding of the local market. The trend is clear - we are seeing greater integration of the Australia & NZ markets. They will remain separate countries in name only. Auckland (North Island) and Christchurch (South Island) remain the principal gateways into NZ, but in a sense for international travellers, in a sense Sydney and Brisbane can also be considered gateways given the cost advantages of low cost flights from the East Coast of Australia.
Weak NZD a boon for emigrants
The NZD is currently languishing at 49.5c in USD terms. The implication is that NZ becomes very competitive in the global market place. This is important in the areas where NZ has an advantage:
1. Food products
2. Forestry
But it also means NZ has a strong point in terms of software programming and web design. There are a great many services you can outsoource to Asia, but as regardless of where you look, you will pay for skills. Traditionally we would not expect a backwater like NZ to offer competitive skills. In fact the low average wages in NZ tends to drive skilled labour out. This is why in previous years we have seen people moving out of NZ as retirees moved in.
In certain areas like software programming, where businesses are not requiring daily contact with clients, and can readily deal with client issues over the internet, the reasons for basing a business in NZ are compelling. NZ in this context becomes one of the cheapest places to set up a business. My partner runs a business LVG Consulting which can perform low-end search engine optimisation in the Philippines, but by partnering with local skilled video design editors, she is also able to project manage an array of online product marketing services with greater skills that would cost far more in the larger markets. She operates this business from a rural town in NZ because the town offers all the support we need, and offers a very attractive environment to live and to raise kids. The town is full of vacant office space if you retire a shop front, and buying such property at the current low exchange rate makes a lot of sense. There is even a local college which offers a source of recruits. The college is even attracting graphic design students from Asia. It is remarkable just how international NZ has become in the two decades. The shift started when Asians saw the country as cheap place to learn English.
The big news is that Australia, NZ and the ASEAN group of nations have negotiated a free trade agreement. On top of an already weak NZD, access to Asian markets can be considered a very attract development. You can expect a lot of investment in NZ to flow from this decision. NZ productive land land over a certain size is out of bounds, but there is still possibilities for Asians to engage in food production in NZ to supply their markets. There is of course the opportunity for Chinese, Malay, Singaporean, Filipino millionaires to buy holiday houses in NZ as well - given the possible trade implications. NZ has traditionally been a expensive place to travel, but that is changing. The opening up of Trans-Tasman flight routes has recently seen the price of NZ to East Coast Australian flights plummet. Expect more of this as the NZ Prime Minister seeks further integration of the NZ-Australian markets. There will be flow-on effects for NZ. NZ of course makes a lot of sense for tourists because of its cheap currency and world-class landscapes. Cheaper access through Australia should also make a lot of difference.
If you are interested in buying property in NZ - we recommend our NZ Property report. The amazing aspect about NZ is that its just not for millionaires. You can buy a house here for as little as $US35,000. You can get more value in NZ than in the Philippines. The best value remains in Japan. Of course people like the Philippines for other reasons.
1. Food products
2. Forestry
But it also means NZ has a strong point in terms of software programming and web design. There are a great many services you can outsoource to Asia, but as regardless of where you look, you will pay for skills. Traditionally we would not expect a backwater like NZ to offer competitive skills. In fact the low average wages in NZ tends to drive skilled labour out. This is why in previous years we have seen people moving out of NZ as retirees moved in.
In certain areas like software programming, where businesses are not requiring daily contact with clients, and can readily deal with client issues over the internet, the reasons for basing a business in NZ are compelling. NZ in this context becomes one of the cheapest places to set up a business. My partner runs a business LVG Consulting which can perform low-end search engine optimisation in the Philippines, but by partnering with local skilled video design editors, she is also able to project manage an array of online product marketing services with greater skills that would cost far more in the larger markets. She operates this business from a rural town in NZ because the town offers all the support we need, and offers a very attractive environment to live and to raise kids. The town is full of vacant office space if you retire a shop front, and buying such property at the current low exchange rate makes a lot of sense. There is even a local college which offers a source of recruits. The college is even attracting graphic design students from Asia. It is remarkable just how international NZ has become in the two decades. The shift started when Asians saw the country as cheap place to learn English.
The big news is that Australia, NZ and the ASEAN group of nations have negotiated a free trade agreement. On top of an already weak NZD, access to Asian markets can be considered a very attract development. You can expect a lot of investment in NZ to flow from this decision. NZ productive land land over a certain size is out of bounds, but there is still possibilities for Asians to engage in food production in NZ to supply their markets. There is of course the opportunity for Chinese, Malay, Singaporean, Filipino millionaires to buy holiday houses in NZ as well - given the possible trade implications. NZ has traditionally been a expensive place to travel, but that is changing. The opening up of Trans-Tasman flight routes has recently seen the price of NZ to East Coast Australian flights plummet. Expect more of this as the NZ Prime Minister seeks further integration of the NZ-Australian markets. There will be flow-on effects for NZ. NZ of course makes a lot of sense for tourists because of its cheap currency and world-class landscapes. Cheaper access through Australia should also make a lot of difference.
If you are interested in buying property in NZ - we recommend our NZ Property report. The amazing aspect about NZ is that its just not for millionaires. You can buy a house here for as little as $US35,000. You can get more value in NZ than in the Philippines. The best value remains in Japan. Of course people like the Philippines for other reasons.
Migrating to New Zealand - UK currency advantage
There was a story on New Zealand television tonight suggesting there were some 40,000 English planning a move to New Zealand. According to the report Hamilton, the 5th largest city is a popular destination for Brits at the moment. The reasons cited for coming to NZ was unemployment, a better life, better weather and the forex advantage. The British pound might be falling against the Euro, but the pound goes a long way in NZ.The adjoining chart shows that the NZD is very weak against the pound, such that a pound will get you 2.8 NZDs. In Jan-2006 the exchange rate was even more favourable at 3:1. Its not such a big difference. The advantage of NZ is that a Brit can buy a house in NZ for as little as $NZ80,000 in places like Wanganui, Taumarunui and Otago. By implication asset-rich Brits can live here very comfortably, even if they do it just for a few years. Many Brits come here because they find it a better place to raise a family. Dad's are more relaxed, the working hours are less, but the salary is also lower. NZ runs on a different value system. Money comes a distant 3rd to relationships and sports here.
Clearly NZ makes more sense for people with a lot of assets or offshore income, as these are the people that profit from the low currency. Other nationals, whether Koreans, Americans, Japanese, Australians, Canadians and Europeans will also benefit from the currency advantage. Its that weak.
Service culture in NZ
I have heard it suggested that NZ has a service culture. Having lived in a rural country town for several months I would have to say living in a rural NZ town is like going back in time. My partner and I were setting up a USD bank account. This apparently never happens in rural areas. More surprising was the fact that the process took 1.5 hours, and that is despite the fact that I already had an account there.
The second incident was at the hospital. They must have been bored because my partner had an allergic reaction. We were attended to by 3 nurses on 3 separate occasions, 1 resident doctor, and also a fully qualified doctor. Each doctor and nurse asked us the same questions. The last nurse wanted to check their diagnosis so we had to wait for the doctor. We were left there for about 30 minutes so we started to wonder, and went looking for the anti-histamines since we already got a few diagnoses. We were told the doctor has to give priority to emergency patients. Fair enough, but perhaps the 6-7 nurses sitting around doing nothing might have mentioned that.
They said we should wait, or if we are 'impatient' we could see a GP next door. So we thought we don't want to wait for a 'busy' doctor if there is an available one next door. The experience was pleasant aside from the fact that the hospital was empty and it took a lot of time, and the service was redundant.
I am finding New Zealanders in rural areas amongst the friendliest in the Western world, but I do not equate 'friendliness' with service. They are not so much service or goal-orientated, just prone to a good chat. If you enter a shop you might be waiting a few minutes for a couple of locals to wind up a conservation. This is the slow life. Is that the relaxed life? Well for prior city people like me, I love the friendliness, but can't I get it with a productivity chancer! I do note that New Zealand's productivity is particularly bad.
Thr city of course is going to be far better. I am sure I would be very happy with the service there. The problem is - they are not so friendly. Perhaps there is a satellite city suburb in between that offers the best of both worlds. Fortunately we don't require service very often.
The second incident was at the hospital. They must have been bored because my partner had an allergic reaction. We were attended to by 3 nurses on 3 separate occasions, 1 resident doctor, and also a fully qualified doctor. Each doctor and nurse asked us the same questions. The last nurse wanted to check their diagnosis so we had to wait for the doctor. We were left there for about 30 minutes so we started to wonder, and went looking for the anti-histamines since we already got a few diagnoses. We were told the doctor has to give priority to emergency patients. Fair enough, but perhaps the 6-7 nurses sitting around doing nothing might have mentioned that.
They said we should wait, or if we are 'impatient' we could see a GP next door. So we thought we don't want to wait for a 'busy' doctor if there is an available one next door. The experience was pleasant aside from the fact that the hospital was empty and it took a lot of time, and the service was redundant.
I am finding New Zealanders in rural areas amongst the friendliest in the Western world, but I do not equate 'friendliness' with service. They are not so much service or goal-orientated, just prone to a good chat. If you enter a shop you might be waiting a few minutes for a couple of locals to wind up a conservation. This is the slow life. Is that the relaxed life? Well for prior city people like me, I love the friendliness, but can't I get it with a productivity chancer! I do note that New Zealand's productivity is particularly bad.
Thr city of course is going to be far better. I am sure I would be very happy with the service there. The problem is - they are not so friendly. Perhaps there is a satellite city suburb in between that offers the best of both worlds. Fortunately we don't require service very often.
Subscribe to:
Posts (Atom)
'Buying NZ Property – Download the free sample readings!
NZ presents some of the most alluring property in the Western World; particularly given the greater easy of residency, the low cost of property, and the liveability of the country. In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!
New Zealand Property Report 2010 - Download the table of contents or buy this 180-page report at our online store for just $US19.95. Japan Foreclosed Property 2015-2016 - Buy this 5th edition report!
You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.
Download Table of Contents here.