But that’s what all forms of government are doing to us with taxes and rates.
Not only that but while we’re reeling they are continually dipping into our pockets and going deeper every time.
At the same time the Government is talking tax reform – it has set up a tax working group – it faces clamour for more regional petrol taxes to fund various projects that are getting a bit rich for ratepayers.
Now it’s asked the Productivity Commission to take a look at local body funding.
Local bodies are stuck with one source of funds – us. They could collect it in property taxes known as rates or they could follow the British example and introduce a poll tax, a charge on every person in a council area.
Councils have tried special rates targetted at things like the number of dunnies in a dwelling or on separate buildings like sleepout and self-contained flats, which, in one area famous for its high pensioner population, became known as the granny tax because it would capture granny flats. That latter council abandoned the idea as its reputation for granny bashing started to grow.
Over the years councils have tried various things like differential rates where adjustments are made to to urban or rural, commerical or industrial rates to supposedly ensure fairness and special rates so only the beneficiaries of particular things like water supplies, sewage treatment or flood protection pay for it.
I do have some sympathy for councils. They were forced by governments, for no good reason but because it didn’t fit with their ideological principles, to shed many of their income-earing assets such as trading departments for gas and electricity and things like forests. At the same time thos same governments were increasingly absolving themselves of responsibility for what might be called social services and foisting them onto councils. Also at the same time those national politicians were critising councils for putting the rates up.
They have also in the past been allowed to charge developers for the extra demand, and therefore costs, the people in their houses will put on infrastructure and services. These charges were known as development contributions but were often fudged or accepted in kind, such as land for park, or dropped altogether in a bid to encourage population growth.
And of course we also pay the Goods and Service Tax on council rates. A tax on a tax.
We also pay a tax on a tax when buying petrol. As I write this petrol has topped $2.25 a litre in many places, just a cent off its record high price.
I’m mystified about petrol prices. Here in Feilding the prices are always dearer than nearby Palmerston North, Bulls or Sanson, just 15 or 20 minutes drive away. I often note when going south I can get petrol in Levin up to 25c a litre cheaper than in Feilding. There seems to be no rhyme or reason but that’s another story.
The point is when we buy petrol at the moment the cost of the stuff is about 60c a litres. On top of that the fuel companies add 50c profit. The rest pretty much goes to the Government one way or another. Some is used for Accident Compo and the biggest bit supposedly goes to land transport though governments throughout my lifetime have been accused of syphoning it off for all sorts of pet projects or to make the books look good.
On top of the nearly 70 cents the government skims off we add another 30c or so, depending on price fluctuations, for GST. We pay the GST on the $1.10 the fuel companies get and on the taxes the government takes.
I’d have thought using petrol as a quck fix to cook the books was something governments should no longer be able to get away with.
It seems counterproductive.
Our productive sectors, including farming or even especially farming given the distrances stuff has to travel to get to and from farms, need any competitive advantage they can get. Thus I reckon cutting the price of fuel rather than regarding it as a goose that keeps on laying golden eggs should be the aim of the Government.
I know we are told we should encourage cars to get off the road but I’ve yet to hear a politician say fuel taxes are intended as a tool to change behaviour and stop couples going for a Sunday drive, to get mums and dads to stop taking their kids to Saturday sport or to force commuters onto public transport.
However, I have heard economists and others suggesting taxes are needed to force farmers to change their behaviour in regard to the environment. That’s why farmers are now faced with the prospect of water taxes and a fert, not fart, tax as they are taken into the Emissions Trading Scheme.
I’m inclinded to believe these taxes are aimed at getting farmers to fit in with the ideology of various groups because they’ve had to come up with ways to spend the money like promises to use it to incentivise compliant behaviour.
This oddly, puts green groups in bed with pure monetarits. They advocate the same thing – using money as a hammer to make farmers do as they are told – but for different reasons.
However, in all this the one thing that must be done is to keep in mind the economic viability of the tax victims and the threats posed by continually rising taxes and rates.
It was dogmatic adherence to an ideology that caused the former National Party politician Max Bradford to deregulate the electricity industry so prices would be subject to competition. Prices shot up and wiped out the advantage our producers and exporters gained from cheap electricity.
Now its the Labour-New Zealand First coalition in league with the Greens having a go.
It’s odd that we have a working group looking at taxes and the commission at rates.
I suspect both these inquiries will end up with a bit of tinkering here and there – some for sound reasons and some for ideological ones.
I had hoped when I heard the new Government’s representatives talking abut a bold new future and completely new way of doing things they meant it.
They should have rolled the taxes and rates into one inquiry that started from ground zero.
The sensible approach would have been to assume councils and government had no money coming in then work out how they could and should get enough to carry out their essential services while not robbing us blind and leaving the productive sector with enough in the coffers to keep on producing.
Still, all this is being handled by politicians and bureaucrats so I’m sure it will be all right on the night.
