John Bishop

Nearly four hundred thousand more taxpayers have joined the two highest tax brackets since Labour came to power, figures from the Inland Revenue Department show.

The number of taxpayers paying the top rate of tax - 39 cents in the dollar on incomes over $60 000 - has nearly doubled in the eight years the rate has been in effect.

The number of taxpayers in the top bracket has increased from 193 620 in March 2001 to 384 720 in March 2007, an increase of 98.6%.

The amount of tax paid by this group has also increased from $5.8 billion to $11.3 billion over the same period, while inflation has increased by 16.2% and average hourly earnings have increased by 25% (Reserve Bank data)

When the top tax bracket was introduced in 2000, the Labour/Alliance government claimed that only 5% of taxpayers would pay the highest rate.

That figure was 11.7% for the March 2007 year, an increase of 83%.

The Treasury forecasts an even higher figure of 14% for the March 2008 year in the Tax Ready Reckoner on its website. The IRD says that this is an estimate and "comes from Household Survey data (HES), not tax administrative data."

In the other tax brackets movement is also evident. In the $38 001 to $60 000 bracket there were 399 190 taxpayers the year ended March 2001 The IRD reports that in the year to March 2007 there are now 596 180, an increase of 49.3%.

Published in the National Business Review on 28 March 2008

Legislation implementing the government's ten year ban on the use of fossil fuels in new power generation offers an opt out in its preamble "except to the extent necessary to ensure the security of New Zealand's electricity supply".

But the phrase 'security of supply" is not in the Bill itself. Clause 62G of the Climate Change (Emissions Trading and Renewable Preferences) Bill provides for eight grounds for exemption from the ban, but none of them will actually lead to an exemption being granted.

For example, an exemption can be granted if the proposed new plant is not base load, but base load is not defined in the Bill. That will come in regulations later, but this might be set as low as 10MW, which would make virtually all but the smallest stations base load.

A generator can also get an exemption "for the purposes of mitigating the effects of an emergency." As no generator is going to be standing about with resource consents obtained, land purchased, equipment ordered and a contractor to build the plant selected before an emergency occurs, any new plant that might be given an exemption will only be operating long after any emergency is over.

There is no relief to a shortage of electricity in this clause.

The same applies for another ground, "for the purpose of providing reserve energy", although some have argued that reserve energy could mean a station that operates only in emergencies.

Published in the National Business Review 20 March 2008

Two of the country's major unions are joining forces to establish a centre to help companies and unions boost productivity in small and medium sized firms.

The Engineering, Printing and Manufacturing Union (EPMU) and the Diary Workers Union are setting up the Centre for High Performance Work after what EPMU Secretary Andrew Little says is a successful history of co-operation in the dairy industry, particularly in Fonterra's Milk Products company.

Mr Little told a Wellington business audience that big companies in New Zealand were prepared to invest in productivity negotiations and were willing to share the gains with employees.

"Small and medium sized companies are much less willing and they find it much harder to share," he said.

The new centre aims to make the intellectual property "around the productivity question" accessible to small and medium sized businesses.

The Department of Labour is helping with funding of a study of 12 workplaces (eight selected by the EPMU and four by the Dairy Workers) to test how various different processes work.

The project aims to gives employers, unions and staff willing to make a practical commitment of lifting productivity a head start based on real life experience.

Mr Little said that to address the productivity question, "which is at the heart of improving wages and incomes", the right environment was needed.

Published in the National Business Review of 29 February 2008

Bill Payne is a rich white American in his mid 60s who trained as a ceramics engineer, now has a touch of arthritis and a golf handicap of 15. He lives in the town of Henderson, outside Las Vegas and travels the world helping entrepreneurs and angel investors to get to know each other.

"Entrepreneurs typically have never sold anything and they aren't deal makers. On the other hand angel investors are either entrepreneurs who have exited their businesses well cashed up, or they are people who have otherwise made a fortune by being deal makers."

After selling his own business in 1980 he became an angel investor. He's invested in 45 businesses. "Some were successful, others not. Most angel investors stick to the knitting. Mine is in software, but I have lost money in low tech, high tech and no tech."

Angel investment is a key source of capital for the 60% of companies not represented in the public markets, according to a background paper prepared by the New Zealand Seed Company for the angel investment workshops Mr Payne held in Auckland and Wellington last week.

He's affiliated with the Kauffman Foundation, founded by a Kansas City businessman who sold his business to Merrill Dow in 1959 for $6.3 billion and gave $1.3 billion to the foundation to promote skills in entrepreneurship.