Latest / The Curve / TCW39: Why we’re breaking from tradition to take a little look at politics.

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TCW39: Why we’re breaking from tradition to take a little look at politics. · The Curve

• 0:00
  Hi and welcome to the Curve Weekly. The podcast that keeps you up to date with all the money,
• 0:06
  business and stock market tea. Everyone should experience for us at least once in their lives
• 0:10
  and Annie shouldn't miss out just because she can't afford it. Help me, I'm poor.
• 0:15
  What are we talking about today? Election. Oh yeah. Oh my god. So Sof was like at me last week.
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  So I think we need to talk about the election. And I was like me, me, me, me, politics,
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  super boring slash. I know you're going to ask me questions about every single policy that each
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  party has or like who I'm going to vote for or some curly question like that. No, I won't ask
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  you curly questions because I know this has been a hard step or so for you to prepare for. Yeah.
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  Well, it's just like there's just so every party. So there's like six to eight different parties.
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  They all have like millions of policies. So what we're trying to do today is there's been quite a few
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  measures and I've heard a lot of friends say things like I have no idea who to vote for. I don't
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  know enough about like the different parties. I don't know how money is affecting the economy
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  and how that relates to politics. And we just thought it would be really helpful whether you are
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  a Kiwi living abroad, you're a Kiwi living in New Zealand or maybe this is not relevant to you
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  because you're not a New Zealander. But having a little bit of understanding as to how the choices
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  that you make to vote or not to vote, how they can impact the world and the country that we see.
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  Yes. And for those of you who are like the New Zealand election is happening this month and the
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  date is the 14th of October. So end of this week actually. So does that mean you have to
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  avoid it by then? Yeah. You have to avoid by 7pm on Saturday the 14th of October.
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  So we've got a week. I mean I think this is a great time for it to come out because everyone lives
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  everything to the last minute. Yeah. But also I hopefully this is going to be a base that's
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  going to at least make you somewhat interested and know the kinds of questions or parties that you
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  want to look into to find more information. And don't worry we're not converting this podcast
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  to political podcast. This is also relating back to money. It's not we're not trying to say vote
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  for this person vote for this party or anything. It's more just understanding how politics influences
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  finances and I'd like to talk off podcast about who you're going to vote for though. I honestly don't
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  know. I still don't know who I'm going to vote for. That's why I want to shoot this episode.
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  Oh so this was just me doing your homework. Is that right? Is that what every episode is?
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  Kind of. We've got to talk about which dining table is the best for which restaurants and
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  London are good for a date. Yeah. I got a research though. It was actually really good for me
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  because I've been meaning to research the policies because I need to vote as well and so I was
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  actually good for me to go through it and be like oh my god. Oh yeah. Yeah. That was what I was
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  doing yesterday. Do you find out? My poor flatmate. I was like did you know she's like I'm just
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  trying to watch TV. I'm like okay sorry. And there was one I got really wrong which we'll get
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  in two and a minute but I was like oh we vote for this party. We could all get $300 a week.
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  She's like no no no babe that's the minimum in cut. I was like oh how did she know the press
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  that she was just like that sounds absolutely barbaric and I was like yeah actually it was so
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  I just got excited. Didn't read the fine print anyway. So choosing who to vote for is a huge
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  huge decision and it ruffles my feathers so much for people who are like oh I don't know who to
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  vote for. It's like we'll do the research and actually vote because otherwise do not complain
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  for the next four years about anything to do with the economists is just a little bitch session.
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  No I think it's good. Do not complain about the thing that the other thing that grinds me is
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  people are like oh Labour National and they didn't vote. It's like you almost cannot talk anything
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  about politics or economic growth or anything like that if you don't vote. Yeah okay rent over.
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  Okay so I've got a vote. I have to vote. You have to vote. Yes and I think this is a really good
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  reminder to everyone listening to get out your phones right now and put a reminder in
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  for let's do Friday. Friday the 13th. Oh but do we have to read just like pre-register if you
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  overseas. Yeah so I would need to remind probably more. Yeah okay so this is not a podcast to
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  tell you who to vote for either. It's literally just educating on the financial implications and
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  there's kind of two things to think about when you're thinking of an election and finance is all
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  firstly is you personally so you know how are the policies for each party going to impact
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  me personally for example is do I have a condition or a disease that now the medical funding
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  isn't going to be around for and therefore I'm going to have to pay for that myself you know is
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  their change to parental leave policies which a party might be wanting to implement you know
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  extending parental leave to a year instead of six months that kind of thing or the big one is
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  how much we taxed and governments love to play around with tax because it's what moves votes
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  so they're like no one's adding tax anymore guys. No like hey vote for us more juice the tax rate
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  of course people are going to vote for that. Do you know what I mean it's going to actually do it
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  that's the thing there is things like politicians say and then what they actually do are quite
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  different and a lot of the time they can put policies out there like you say that hey we'll reduce
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  the tax rate you only have to pay zero percent now but then they get in there and they're like oh
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  actually sorry we lied we're not we lied but you know they do the number and also you've got to
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  think if a government is enticing you to vote for them by reducing the tax rate that means they're
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  going to have less money to spend or they're going to get have to get money from elsewhere because
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  every government has to have money if they want to do things. So it's kind of thing to think about
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  it's also simple but it's definitely not something I thought about and it's kind of you can't
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  please everyone so in some situations might be like we're going to reduce the tax rate here but
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  we're going to increase it here and that's how you polarise people because it's like we're going
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  to increase wealthier payments and all those people are like who amazing and then all the people
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  that you know how you're going to fund that you're going to fund that by taxing maybe increasing
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  the tax rate for wealthier people and then they get pissed off so it's kind of a you can't have
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  Peter without Paul is that the same? You can't have Patricia without Paula. Oh my goodness Patricia.
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  Patricia anyway yes so firstly to think about what the election is you personally and the
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  impact on you personally the second is the stock market impacts because a lot of us listening
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  hopefully have investments now or we're in Kiwi Sava or you know we're investing in the stock
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  market and there can be a bit of uncertainty leading up to elections but that's just short term
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  so if you're saving for retirement don't worry too much. The 20-year holiday which we're
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  20-year holiday. So interestingly under a national lead government historically the New Zealand
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  Stock Exchange has delivered an average return about 8% compared to 2% under Labour so the stock market
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  does better under a national lead government historically. Is that just the New Zealand stock exchange
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  yeah so but if you think about Labour's been in power for the last two terms and we've had
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  Covid so they've had a bit of a rough ride so but yeah historically a national lead government
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  is better for the stock market just little anecdote. I didn't realise that it's crazy so did you say
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  2% versus 8% yeah why do you have any idea why that is? Nationals usually are more capitalists
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  and so it's a stock market yeah so on can I ask you about the tax yes this is so simple but when
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  you get your paycheck whether you're employed yourself employed a certain percentage of your
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  income goes to tax right? PAY is if you're employed and then if you're freelance or
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  contractor you have to pay tax yourself yeah and so tax is what percentage in New Zealand?
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  so it's a sliding scale okay so at the more you earn the greater percentage you pay but you pay
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  say zero to ten and a half percent on the first fourteen thousand and then it goes up and up
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  so you're not if you get getting paid 180 000 you're not paying a full 30% because you're paying
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  a small around a small percentage on the first amount so you're not. Oh that's cool so say for
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  example someone is earning 50k and then someone's earning 250k that first 50k they're both paying
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  the same percentage of tax it's just the more that you get that percentage increases yeah and so
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  that money tax goes into the government or into the New Zealand whatever it's called some kind
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  of government fund and that's the money that the government has to play with when it comes to
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  bike lanes, mid-care or everything like road builds all that kind of stuff. The government's
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  like a big human okay you know what I mean like they've got income and expenses you know and they
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  have to they I like that income and I love that yeah so they but they can spend more than
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  their income they can just go into debt like any human can you know so we are in a big
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  amount of debt at the moment because we paid out heaps during COVID in terms of people lost their
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  job so we had to pay out a lot in terms of helping those people out so we've got we're in a lot of
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  debt so yeah so then who's the bank for New Zealand as a person yeah so if they go into debt they're
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  effectively borrowing money they do that by issuing bonds so if you're buying government bonds
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  you're helping pay for the government to pay back then yeah so it's like this whole
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  firewall okay so depending on who's in government yeah does that then depend on the percentage of
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  who's taxed what so say I don't know say nationals in power in government does that mean they
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  could decide to tax the wealthy more yeah definitely less money more so that that does change
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  depending on the person I mean not every time that might not be one of their policies it might be
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  something on climate change or education or something else but like I said before that's usually
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  the one that sways votes because that's directly impactful for people you know like if labor was
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  like we're going to reduce tax rates for females that between 30 and 35 get to pay nothing in tax
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  I'd be like hell yeah you know I like that kind of thing and I remember when they bought out
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  interest free student loans I say hell yeah because that's going to directly impact me so of course
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  I'm going to vote for you so that's why it's really good to know the policies but there's a
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  difference between an election in a budget so election is the policies and what they promise to do
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  and then once they get in power in May the following year so May 2024 that's when they announced
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  the budget so that's when they go they look at they get in under the hood they go cool this is
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  how much money we've got this is what we promised this is what we can actually afford this is the
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  changes that we're actually going to do and they may have said we're going to spend a billion
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  dollars on renewable energy and once they get in there they might be actually we can only spend 500
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  million or they get more specific so we might spend a billion dollars on renewable energy but not
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  until 2026 or something you know so if you kind of get a bit more of a more visibility I guess
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  that's a good thing to know because I actually didn't even realize that like the difference between
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  the budget and tax yeah so the budget actually for for markets is probably more meaningful because
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  that's when you can see okay there's going to be a billion dollars in on health care I'm going to buy
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  some health care companies you know the election just kind of provides uncertainty in terms of
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  like I said before okay if national gets in or if labor gets in historically it's kind of
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  creates uncertainty because you don't know like with Trump nobody thought the Trump was going to
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  get in well sorry a lot of people that have messed the stock market did not think the Trump was
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  going to get in same with Brexit a lot of people did not think that was going to happen and then when
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  it did that's when the stock market goes oh gosh we didn't fit this in we're done certain about
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  the future is going to be now we have to quickly redo our models and quickly reassess what to buy
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  and I yeah so it's like it's whole frantic thing so hypothetically if labor is in power and labor
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  says we are going to be buying toothpaste for every homeless person in the country yeah you could
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  look at companies in the stock market that sell toothpaste invested them yeah I mean yeah that's
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  a really weird example but yeah yeah exactly if there's a really big government contract that was
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  happening or funding that's going into a certain sector or something like that then 100 percent
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  like and this is what governments are doing all over the world now is most of them some more
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  than others are putting a lot of funding into when your energy climate change and so that's why a lot
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  of those companies have done well or you know people are backing to do well over the long term because
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  there's this wall of government funding because there's a lot of demand from people who are voting yeah
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  want the government to spend money on those things and government's no that's that's a way to win votes
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  oh my god that's great I mean the good thing about that even just understanding that and giving
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  you a reason to vote I think is that it's so easy to think one vote does nothing or what does my
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  vote have to do with this but actually it's like the straw and allergy what's one straw well if
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  you want to see more money spent in you know natural energy or whatever it is voting can actually
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  impact when money goes and it's just like when we say with your kiwi saver it's like oh but
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  you know my my investments or my dollars won't make a difference you know by moving it
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  and investing in companies that have a positive impact on their own it's like yes it will
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  if you and a billion other people do it we can bring about change it's the same with voting
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  you know if you do it and a lot of other people do you can bring about change but having that mindset
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  of oh I'm just small and insignificant yeah it's not it's not good for
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  destroying investing or governments yeah elections so yeah and it's also really good to just
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  not do what your friends do either because that's a lot that's a very easy way to figure out who
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  to vote for but again everyone's got a different financial situation and so could be impacted
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  differently and it's also not just about financial that's a problem I mean I know that we're
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  really focusing here on the financial side of that yeah but everyone's financial situation is
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  different everyone's family or like personal situation is different so yeah what sort of
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  you might not serve me exactly and that's the point of voting and you get a portion of that
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  represents you and it's going to help you and same for me it's also like conscious investing
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  some things that you think are important might not be important to me like one of the policies
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  I'll just pull out a few I've got quite a few here why don't I write them out
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  for the one outside that would be a great idea I'd love that back yeah cool she's like cool
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  add that to the to do why did I suggest that no no no it'll be good I can help write them out
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  yeah I mean they read it out it's just a case of can you pull out some interesting
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  yes I'm so labor one of the policies is removing GST from foreign vegetables we need our pedals
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  yes how cool is that yes I think that's great yes amazing yeah I think that's really good but
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  again that I don't know the dollar figure but that's going to remove a lot of income for the government
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  that they're going to have to find elsewhere but from a moral standpoint and a half of them are
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  being standpoint I think it's really important that fruit veg are the cheapest things in the supermarket
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  or you know not not some of the most expensive and that only to less health problems later less cost
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  all of that so also if fruit and veg is the staple of keeping people healthy yeah then and we're
• 15:41
  not wanting people to go and drink co-considered of water or a bag of chips like imagine I mean most
• 15:49
  people who can't afford fruit and vegetables are doing that because they have to not necessarily
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  because they want to exactly so that would be amazing one of nationals is to introduce a child
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  care tax rebate for people earning less than $1,000 a year so that just means that you will pay for
• 16:06
  your child care costs and then you get money back so it's effectively just lowering child care
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  costs which I think again really important that's national yep so with X they're introducing a
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  two tier tax rate system so we're currently got four does that mean like there's four as in there's
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  four steps oh yeah steps up so you've got to do a hundred or whatever yeah so you've got 10 and a half
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  percent that you pay then you've got 17 and a half percent then 30 percent and 33 percent
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  so they're introducing a two just two tiers so simplifying it from 17 and a half and 28 percent
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  so they're effectively lowering the tax rate for wealthier people and kind of increasing
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  it slightly for less wealthy people so oh shit so it's going from 10 to 17 for act in terms of
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  like for the lower that's shit but again remember that first amount people pay the same I know that
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  what if people don't have more than that and they're getting tax even more and they're already
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  struggling yeah so some will be I'm so glad you're explaining this because some would be
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  charged more some would be charged less so the wealth theory basically paying less tax and then
• 17:08
  the less privilege of playing more to balance it out essentially yeah yeah yeah thank you for
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  explaining this I know that this is another research but honestly it's so helpful this was the
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  one where I got excited greens want to introduce a guaranteed minimum income of $385 a week for
• 17:27
  individuals and then morph couples and families and I was like oh my gosh cool $385 a week
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  I was like we're gonna get that money from anyway I read it was like for those earning you know
• 17:40
  that there's fine print so it's not that's a minimum income so if you're below that then that's
• 17:44
  what you'll get so they'll talk to everyone that earns above that just gets another 385 yeah and
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  they want to introduce a new tax rate of 45% so currently the top one is 33% so anyone earning
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  over $180,000 a year pretty much pays half their salary in tax which is what it is it's pretty
• 18:05
  similar in Australia about 50% tax rate in Australia for the top tax rate which yeah so interesting
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  I guess my thinking of that is like this is a cost of living and I get that but in my thinking is
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  that even now get paid more therefore things just become more expensive yeah the money has to come
• 18:23
  from somewhere else whenever you're socially I think it's great and I think it's great to pay people
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  more because obviously even more expensive totally it's just when you think of okay well where's
• 18:33
  that money coming from and there yeah so they're taxing the wealthy more so they're gonna charge
• 18:39
  them 45% tax rate and kind of all for it sorry no this is not meant to be a saying what we're
• 18:44
  voting for but that's really cool I think that you know and also it's kind of forcing people to
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  be philanthropic it's forcing yeah there's equality and equity arguments in here definitely yeah
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  the multi party so they are again very similar greens they want to have the first $30,000 that
• 19:05
  anyone earns as tax free great where's all this free money coming from so that you're what do
• 19:12
  me free money this is a whole lot of tax that the government's not going to have now to spend
• 19:16
  another thing so they might okay how about this one so the first $30,000 income is tax free which
• 19:22
  means that a hot that's a whole lot of tax income the government has what if the flip sides that was
• 19:26
  but that means that they can't spend as much on renewable energy I love that you knew that would
• 19:34
  get me going I think oh that's why you have to think of all these policies you have to think of
• 19:41
  the other side or look at where they're not spending money do you know what I thought my number one
• 19:50
  value this is mean this is not like a good outcome no it's funny because in the in our most recent
• 19:55
  podcast episode for racing the curve when we talk about values yeah and we went through the
• 20:00
  top seven most obvious ones when it comes like figuring out what is important to you value is I
• 20:06
  rated the environment is number one but that example makes me want to say and that's the hardest
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  thing I've got just flagged through renewables like I want people to be able to survive and live and
• 20:17
  buy the things that they need it's all good and well having a beautiful and healthy environment but
• 20:22
  there's no one that's around to enjoy yeah god it's hard that's why I would not want to be a politician
• 20:29
  yeah just be it's so hard to because you can't please everyone I'll make it so okay so the
• 20:34
  idea is the more socialist or the more labor or left wing the policies are in terms of helping those
• 20:41
  who don't have more money like reducing taxes or giving people more income when they they can't
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  reach that threshold of $380 it's just remembering that the money to counteract what the government
• 20:54
  can then spend yeah it's a seesaw come from somewhere yeah it's a seesaw it has to come from
• 20:58
  somewhere else so they don't have endless supplies of money otherwise we would all pay no tax
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  and we would all have great parks and great facilities and we would run off renewable energy and
• 21:10
  you know all of that we'd have houses built for us for free yeah that would be nice we can dream
• 21:16
  anyway so if you're something you're going oh gosh okay I don't know who to vote for there's
• 21:19
  a really good quiz at vote dot NZ and it's questionnaire and you fill it out and it's quite
• 21:25
  surprising what it spits out like who you're most aligned to I think I did this last time it's
• 21:29
  really good because surprisingly what you take you might not actually think is a party that you
• 21:34
  would have normally voted for so it's actually quite good because you figure out what's important
• 21:38
  I definitely need to do that yeah so vote dot NZ is also this is not a sponsored podcast no I've
• 21:43
  seen lots of people doing sponsored voting voting stuff oh yeah just prophesy this is purely because
• 21:49
  yeah we thought it would be helpful to look at the different policies so was there any other
• 21:53
  interesting ones when you were researching that you wanted to highlight was that we should we put
• 21:56
  them on the website yeah yeah we'll put them on the website yeah okay so we'll link that in our
• 22:00
  podcast show notes but remember every vote counts yeah vote with your vote like you vote with your
• 22:07
  wallet yeah I like that same that was so well done yeah I love it well done got your creativity
• 22:14
  rubbing off of me oh so good and if you've got any other questions that pertain to politics and
• 22:20
  money not politics and how are you voting for um place in the man because it's super interesting for
• 22:26
  us to go and look at and share that I'm sure if you've got those questions lots of other people do too
• 22:30
  but you've got to get your votes in by Friday when we're sitting our lamp for let's do Friday yeah yeah
• 22:36
  also if we're wanting to find out more about the different policies and what the parties do yeah
• 22:42
  would we just google it like what's the easiest way to do it yeah kind of a spin some time yes if
• 22:48
  you go to policy.inzid or vote.inzid both of them are really really helpful yeah thank you it's
• 22:55
  hard to know like what to look for there's so much information yeah hopefully this is helpful
• 22:59
  about the money side of things yes thank you so much for doing that back I'm so stoked we did
• 23:03
  then I learned haves so okay bye bye thank you so much for listening to the Curve Weekly
• 23:09
  make sure you hit the subscribe button to stay up to date with all the many business stock market
• 23:13
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• 23:19
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  could you please leave a review because it really helps other people find our cute little podcast
• 23:28
  and we hope you have a good week and see you next Monday bye bye
• 23:32
  see you next Tuesday
• 23:35
  well see you next Tuesday I made Monday