Horror Files: StudyLink’s Definition of Income. Students, Debt, Keynes ...

Sitting in a grey, dimly lit roomful of tax (stereo)types at the Timaru TEO 2015 tax updater course last week, a topic came up which caused as much rebellion rumination as I’ve seen; alarming, indeed, to witness the ordered world of double-entry sundered so outrageously with the unsightly uncrinkling of bowed necks and a vigourous nodding of balding heads raised in surprise over document filled desks attesting to lives lost amongst Section, (Subsection), and (Clause; (nested sub-clause)), and the unspoken bored angst of wrong career turns and stunted inner lives. Noting I don’t use a word like ‘vigourous’ of such a gathering lightly. Or stunted. Indeed, it was a matter of such extreme emotion that the course convenor rashly rushed (blasphemy given this context) to judgement of the perpetrator: ‘stupid’.

Regardless of your view on the state in education, and mine is as dimly lit as that room was, students have an entitlement – that’s the contract for their parents paying tax and their own futures doing so - to an allowance which abates according to how much their parents earn. The problem is some of the most deserving of their entitlement are being refused or abated in their allowances due solely to StudyLink’s incompetence in not being able to grasp some basic concepts about the nature of income.

In defiance of accounting definition and any category of good sense, StudyLink class a businessperson/couple’s drawings in excess of their income for a year, and thus loan drawdowns to cover drawings if the owners have no savings, as income.

For example:

Business couple X are struggling: over the year their business only generated a net profit, that is, gross taxable income (akin to a gross wage), of $30,000. Because their personal outgoings were higher than that - paying the mortgage on their house, tax payments on the previous year’s income which was higher, plus provisional tax for current year, also two of their three children still at high school with books, uniforms and school camps to provide for, and extraneous unexpected dental and medical expenses over the year - they had to extract drawings from their business of $40,000. Of course that was not possible out of income, and as they had no savings, the excess $10,000 funds were supplied via their bank overdraft. So at the end of the year they are that much more in debt than at the beginning.

The problem for their third child applying for an allowance to complete her first year of tertiary study, is StudyLink's equation here is parental income equals the $40,000 drawings, not the $30,000 income earned from their business: apparently their additional debt makes them better off than before they drew it down.

In confirmation of this fact, the last StudyLink officer I talked to several weeks ago had rung to ask me if the parents concerned in that case had drawn down any loans over the year, intending to increase their parental income by such new loans. I told the officer this was ludicrous, ‘what the hell was she thinking’ then asked if she had felt rich with a surplus of income the year she pulled down her mortgage … alas, she was renting.

I no longer know how many ways in which to write how fatuous and wrong-headed this is. Albeit I’m willing to admit what a wonderful world it would signify.

Below is one of the most expensive cars money, or love, can buy; it’s called a Maserati.

It’s getting to the stage only $600,000+ incomed and salaried bureaucrats, lawyers and Kim Kardashian can afford them unfortunately, although, in StudyLink’s fantasy world I could, in theory, buy one, and none of that old-time having to chore away at the day job for years first, foregoing current pleasures to save for future goals, because according to StudyLink debt is income, therefore buying the Maserati creates the income required for the purchase.

Brilliant! Who says our bureaucracies aren’t innovative.

What a pity StudyLink’s policy in no way connects with reality. Worse, even more so than the frustration of dealing with ACC, where after the final internal injustice victims at least have recourse to the district court, there doesn’t appear to be a review process for StudyLink decisions. It's impossible to go outside StudyLink to get an independent, knowledgeable, oversight on falsehoods such as this which parents and students are having enforced on them, which will be ensuring some of the most deserving families Parliament meant to have student allowances, will not be.

Although there’s an even funnier twist in the tail of my sorry tale. Essentially, to continue the fantastical theme, this deluded free-lunchism based on an orgy of debt – and the assumption must be on it being income it doesn’t need repaying, (that’s certainly where the Greek socialist Finance Minister is heading toward) - is the basis our Western command economies have been largely managed on for some decades, after the political class have been convinced by that socialist fraud JM Keynes they are the answer to all societal ills. While destroying our literature and arts as a culture of individualistic resistance to unbridled state power, Keynes was at the same time preaching the Big State to those loving the notion of the power to exact it on us, conceiving of economies not as complex structures based on human ingenuity, needs, desires, and voluntary transactions, but a simpleton’s machine with levers that can be manipulated by our all-knowing simpletons in the Fortress of Legislation and Central Banks, while turning the screw to extract taxes to fill the intellectual deficit of fiat money and irresponsible state spending and growth. That’s how the West has become yet another cage, because you can’t live free of your economic self, and it explains the debt leveraged civilised human calamity being wrought, again. We are not the generations living at the peak of a Western Civilisation that was built on self-reliance, freedom and capitalism: we are the generations living in the ruins of it, waiting for the next crony tyrannies which are already bred and well learned in their evil craft of domination and surveillance over my volition.

So, StudyLink warns us of the end of the civilised world: unsurprising. Fortunate the world has this blog. Off to buy my Maserati and a holiday in Greece: see you in debtors court.

David Cunliffe and the End of the Free World, Again.

The dreadful No Right Turn summed up Keynesian Socialist David Cunliffe’s victory nomination speech yesterday well enough:

#Cunliffe promises to raise taxes on the rich in accordance with Labour's policy platform #FuckYeah
— Idiot/Savant (@norightturnnz) August 26, 2013

Note his delight in the scale of theft he knows David will enact. It’s sick. It’s the ‘fuck yeah’ of Chris Trotter delighting in squeezing my pips until they squeak.

Here’s an interesting notion, those of us bloggers writing political blogs, put up on our menus the income tax we’ll be paying over the coming twelve months. Let’s see which of the statist’s are living by their principles. I don’t have to because this blog is about my privacy, and how I have so little of it, but tomorrow I’ll be paying a third of this year's provisional tax, and it’s five figures.

This is David’s true slogan:

New taxes and spending.

New taxes and spending.

New taxes and spending.

Same old.

Same old.

Writing from a house in that 27% of households paying 70% of the tax take, and constraining ourselves and our finances this year to pay our tax bills so mum of nine can have the extra room for her Sky decoder, I ask David, who used the word fair seven times in a one and a half page speech, to take my fairness test please, because not a single politician has felt themselves up to the task yet.

As a man who has had to have my privacy and right to be left alone before the tax surveillance state taken from me, because apparently David knows how to spend my money better than I do, let's first replace fair with serfdom.

Then looking further through David’s speech in place of community, let's write dependence. Community can only exist on voluntary relationships and the voluntary transaction, not on David’s viciously coercive tax state and the welfare that corrodes self-respect, self-responsibility, and the bonds of natural love and affection between families by incentivising the most imprudent life choices.

And the sad thing is we have all the evidence we need at where his Keynesian socialism leads economically: let’s take at random any country in Europe, say, France:

France's Socialist government has admitted that the country cannot cope with any further tax rises and promised no more hikes just days ahead of the country's largest ever tax bill.

Returning from their summer break, the French are about to discover stinging rises in tax bills in their letter boxes – the result of a series of new levies enacted by President François Hollande as he seeks to plug the French deficit and bring down public debt – now riding at 92 per cent of GDP.

But the extent of the hikes has apparently even shocked the very Socialist ministers who implemented them.

The total tax pressure (taxes and social security contributions) will account for 46.3 per cent of GDP this year – a historic high – compared to 45 per cent in 2012.

Some 16 million households will see an automatic 2 per cent rise in income tax as calculations are no longer mitigated by inflation.

The rich will see the highest rises, following Mr Hollande's decision to raise the rate to 45 per cent for those earning more than 150,000 euros – effectively 49 per cent due to an additional levy.

And here’s the truly offensive bit:

“The problem in France — for both the Left and Right — is that nobody has the bravery to slash state spending, which has now reached 57 per cent of GDP. Just how high can it go?”

Really, is that what we want for New Zealand? Because that’s what David Cunliffe and the cluelessly vicious No Right Turn will bring us. And No Right Turn is further clueless in his campaign against the GCSB Bill, last month, when he takes this blood lust thirst in the tax surveillance state – figure it out. The Left double standard.

Talking of double standards, recalling my blog post from yesterday I am also disappointed that after wanting gender quotas just last month, not one Labour woman MP has tried to contest the leadership away from this dreadful man, and save us from him. Apparently Labour women do expect to be given by quota what they don’t have the gumption to contest when they have equal footing. There’s plenty of capable women Labour MPs, why aren’t any of you contesting? You know you’ll be getting this shameful hypocrisy pointed out to you when at some stage in the future you’re furthering the coercive state by legislating gender quotas on the private sector, because we know that’s the agenda.

Finally, unlike No Right Turn, who certainly lives up to the first part of his name before the forward slash, none of this post is about money. It’s about the voluntary society versus the planned economy dependent as that is on our centrally planned and surveilled lives.

If David makes it to the sandpit in the Fortress of Legislation in 2014, I’ll be either semi or completely retiring: I won’t be  his serf.

Because if David wins, it really is the end of the free world, again.


Update 1:

Ele Ludemann has a great post up, also, on the foolishness of taxing and spending Cunliffe.

Lock Up Granny, The Keynesians Are Coming.

Good FT piece praising higher inflation as a tool to redistribute wealth from old rich savers in Japan to young/poor ft.com/intl/cms/s/0/6…
— bernardchickey (@bernardchickey) March 22, 2013

@bernardchickey So why would I bother saving, Bernard? Seems no point to me. May as well spend b4 inflation gets me, then retire on state.
— Mark Hubbard (@MarkHubbard33) March 22, 2013

@markhubbard33 @bernardchickey Those old savers worked all their lives; young done nothing yet. You advocate straight out theft.
— Mark Hubbard (@MarkHubbard33) March 22, 2013

@markhubbard33 I'm not advocating here yet. A particularly Japanese issue. Key is making sure young have jobs. Can't abandon a generation
— bernardchickey (@bernardchickey) March 22, 2013

@bernardchickey Shouldn't feed granny to them either.
— Mark Hubbard (@MarkHubbard33) March 22, 2013

The best way to help the next generation is for the government to get out of their way, not putting up road blocks like the minimum youth wage; and even before that, not creating a society where 20% of them are now born into a parent’s welfare benefit. Welfare was never meant for that. Micky Savage would be turning in his grave.

And by the way, Bernard, I noted the use of the word 'yet' in your second post: hardly comforting.

Keynesian Socialists; Please Grow Up. Yes, That Includes You, Mr Hickey. Greece Again.

Goodness me, Bernard Hickey is bleating on again. In today’s ‘top 10’, as ever he beats the drum of crippling every company, and hence consumer, with more and more tax: I’ve already answered to that this week.

But worse, and a trend I’m seeing in the mainstream media, Bernard’s item number one: looking at the continuing train wreck of Greece, he says:

“…the debt debacle is getting even worse in Greece, forcing the Germans to think about stumping up yet more money.

The austerity medicine is clearly not working.”

Really? It took Greece, and all the other Keynesian basket-cases, sixty and seventy years of irresponsible government spending to, speaking of trains, the point where Greek state rail had more employees than passengers, meaning it would have been cheaper for the Greek taxpayer to simply give all Greek rail users taxi chits. In the face of such long term insanity, who seriously believes that just one year of austerity was going to change anything!?

Thinking that sixty or seventy years of over-spending can be fixed by one year (or even ten) of (true) austerity, is the sort of childish emoting that got the West into this mess in the first instance. Grow up!

 

And nothing will change, regardless, until philosophy does, away from the big brother surveillance state nightmares that have been created in people’s heads. If you’ve stuffed your face with every sort of junk food crud, paid for with debt and fiat money, for the first fifty years of your life, you don’t lose weight the first day of your diet, and you don’t lose weight and return to health again until you’ve permanently changed your eating habits, and taken up daily exercise. Real world discipline by any other name, which is not the name of Greek austerity which has been to increase taxes and cripple their economy even further, with no serious attempt at all to reduce the size of their state.

Finally, the MSM tends to approach this topic like austerity was optional: it's not.

 

Bernard’s solution to the West’s problems to be in bookstores in time to killjoy your Christmas: ‘Taxing Fat Cats’.