Gulnara Nolan

What is the cost of capital and investment link?

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In this post I intend to motivate research that is underway by Lynda Sanderson and myself on the investment behaviour of New Zealand firms. [“Taxation, user cost of capital and investment behaviour of NZ firms” forthcoming]

The goal of our current research is to understand how changes in tax settings in New Zealand have influenced the investment behaviour of firms.  Doing this involves thinking about how taxation can influence investment. The key channel it does so is by influencing the price associated with investment – what is called the user cost of capital.

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Andrew Coleman

The Big Australians

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One of the most fortunate things about being a New Zealander is that we are close to Australia and we have the right to live and work there. This is not just because Australia does many things very well, but simply because Australia is such a wonderful place.

Looking back, I can’t believe I only lived there for twelve months, given how much I enjoyed the experience. One day I shall kick myself, or possibly ask an Australian to do it for me since they will know how to make a good job of that too.

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Andrew Coleman

Small town dynamics

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By international standards, New Zealand is a small town economy. True, Auckland now has more than 1.5 million people, but by global metrics this is not very large. In 2010 there were 449 cities with more than 1 million residents, and Auckland was ranked 307 in terms of population. Small beans indeed – even if Auckland is four times as large as the next two biggest cities in New Zealand.

So how does this small size influence outcomes for New Zealanders?

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Andrew Coleman

Land taxes and the Zero-Carbon Act

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The Zero-Carbon Act means New Zealand is to accelerate the transition to an economy that uses fewer carbon-fossil based energy sources. Given what we know about the problems of global warming, a future in which most energy is renewable is to be welcomed. (As a life-long bicycle commuter, I also hope this future involves fewer cars, to raise the probability I shall live long enough to see it.) 

However, such a transition may require public investment and redistribution to help certain groups who suffer disproportionately from the changes – implying that feasible externality taxes may not be enough. If so there may be a case for land taxes to help fill this gap.

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Andrew Coleman

Retirement savings and tax: Why are we disincentivising green alternatives?

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In an earlier post I noted that a partial solution to the climate crisis is large scale investments in capital-intensive green energy projects, particularly in developing countries. This provides an opportunity for middle-aged savers in high income countries, so long as their savings are productively invested.

This is where New Zealand has an issue. 

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Benje Patterson

Tiwai Point and the government’s role in “transition”

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Once again, Rio Tinto is threatening to shut down Tiwai Point in order to gain concessions. Ultimately, government isn’t supporting the smelter because we care about Rio Tinto – but because we care about the workers and their opportunities in life.

This reminds me of a post from 2013 which I would like to repeat here – it was originally posted on interest.co.nz here.

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