Direct Democracy

JulianP's picture
Submitted by JulianP on Wed, 2006-04-26 00:17

I had an interesting chat with a friend on AIM this morning... Here is the log:

Friend: morning
Julian: Morning! Smiling
Friend: ever heard of Direct Democracy?
Julian: Yup.
Julian: Ran into them a few times.
Friend: its an interesting idea
Julian: Why?
Friend: saw a flier of theirs for the first time yesterday
Julian: Ah.
Julian: What do you think?
Friend: its an interesting idea, but it might well scare 'big business' away from nz
Julian: Why?
Friend: I would imagine they're the ones who's tax bills would increase
Julian: Any other qualms?
Friend: referenda to make every decision would soon become cumbersome
Julian: But presumably, internet voting could ease that...
Friend: true
Julian: No fundamental objections?
Friend: I wouldn't say I have made my mind up based on 1 flier
Julian: Smiling
Julian: I haven't seen the flier...
Friend: I was wondering if they have many similarities with the libz
Julian: Not really...
Julian: It is a very tempting idea... But very dangerous.
Julian: And there are some people who know it... And support it, because of it...
Julian: See
Julian: Quote: The extreme right-wing National Front says it is backing New Zealand First in the election campaign. "National and Labour are Tweedledum and Tweedledee. We are backing the policies of New Zealand First or the Direct Democracy Party (DDP)," new national director Sid Wilson said today. The DDP is a fringe party which is contesting the election with 32 candidates on its list.
Julian: Now why would hard-core racists support direct democracy?
Julian: Smiling
Friend: I'm not sure?
Julian: You can figure it out... Smiling
Julian: Found some more info here...
Friend: Immigration
Julian: Yup.
Julian: There are a few select groups who think their agendas would be well-served by popular voting.
Julian: Pure democracy is a scary thing...
Friend: politics in general really
Julian: That's why the US has never been one... They decided that right in the beginning.
Julian: If there is not sufficient protection of individual rights, you can imagine the horrors that would happen. Mob rule, basically. 60% of people don't like Chinese? - out they go. Raise the drinking age to 35? - sure (Easy with our aging population Eye ) Also people could vote themselves special favours, or into other people's wallets.
Friend: I hadn't thought of that
Julian: If there is a strong constitution, protecting individual rights, and severely constraining what government can legally do, then it really doesn't matter how you run the country. Direct Democracy would be as good as anything else, really. But until people realise what freedom and individual rights actually mean, Direct Democracy would be very dangerous. Even a constitution could be perverted, if most people don't understand what its purpose is (see the USA). So, you can see, it's a long road. Smiling
Julian: There are no shortcuts. We have to change the mindset of almost all New Zealanders.
Julian: So I'll be busy for a few decades yet... Smiling

PS. I tried to track down any official policies of Direct Democracy, other than the ones on the NZVotes website. In particular, I wanted to know whether they respect individual rights, whether they know what individual rights are, and whether they support a constitution which safeguards those rights. There doesn't seem to be any official position on any of those issues.

See here for what real rights are:

Direct Democracy:

NZ Herald - National Front says it backs NZ First:

NZVotes - Direct Democracy profile:

The Free Radical - Constitution for New Freeland:

Not-PC - Cue Card Libertarianism -- Rights:

( categories: )

Rough-enough figures are

Rick Giles's picture

Rough-enough figures are fair enough for me, with my aversion to accountancy.

I hope he comes back so I can smoke him.


Fraser Stephen-Smith's picture

Kelvyn has also sought to squirm out of the truth regarding his miscalculations and his lack of budget preparation. The fact that he expects to get away with his childish lies is an implicit insult (at least, that's how I took it).

Oh come on now

Rick Giles's picture

he has created a political party, and has candidates standing for government

Commitment to acting on his beliefs rather than being satisfied with yammering about them year by year internally. Another virtue!

I was able to read him well enough, and I think you are unneccesarily over-threatened by this economic clown. Let 1000 flowers bloom! Ideas are healthy in the open society, and it's not like we can't kick his tail from the Cape to the Bluff effortlessly come election time.

We are all seeking change and the fact that we rally against injustice and inequality is testament to this.

Actually, we celebrate most forms of inequality here!

It seems community spirit has given way to competitive rivalry

Yes, because xenophobia is an ugly thing isn't it?

But the two are perfectly compatable though and of no concern of yours since, like trust and promise, these things do not exist. Eh?


Fraser Stephen-Smith's picture


Reading your posts is not an easy job. They are not clearly written and they contain phrases that don’t mean what you think they mean (e.g. paradigm shift). Above all you don’t understand some of the questions I am asking – so there is not much point in continuing.

I have skimmed your posts and will respond (without insults) to a few bits. This is probably my last reply on this thread to you.

 “So I guess in your haste to prove yourself intelligent to the readers” My aim isn’t to appear intelligent to the readers; nor is it to make you look stupid to the readers, it is to make you realize that your ideas are undeveloped and therefore you should not be proposing policies without a great deal more thought. I admit that I am exasperated by your poor writing, and the laziness you have shown in checking your facts and arguments.

My request was for you to explain the moral decisions behind the targeting of your tax. You have not yet explained how you morally justify why Mr Smith and Mr Jones should pay different amounts of tax. In fact you even get the basis of your tax wrong when you write the “Tax means all people contribute a comparative (based on their earnings/income) 1%.” We agreed earlier that more tax is paid by someone who SPENDS more, not by someone who earns more. The tax is NOT based on their earnings/income, but rather on their outgoings.

“As for your taking vast quantities of cash out of the country, at present anything over $10,000 must be declared, unless you are advocating smuggling it?” There is no need for smuggling. I would declare that I had loads of money in my suitcase and take it anyway – because taking it out isn’t against the law, is it?

The tax can be applied via the ESAS: Does the tax get collected at the point of sale, and passed to the government by the person receiving the payment? I assumed it would be collected from the bank when the money is moved out of the account, rather than from the receiver of the payment; as you wrote earlier than an employee would not be taxed, as the employer would be taxed when they paid the money over.  I guess you could manipulate the exchange rate to account for this; in which case I suppose I’m back to making cash transactions to avoid the tax.

 “You try to purport I have not done my homework because I will not supply you with all of the information I have to hand – as if I am going to do that for you.” Why wouldn’t you provide me with the information? That is EXACTLY what you should do to try and persuade me that you are credible? What possible advantage do you get from finding the solution and refusing to tell me? I think the reason you aren’t providing the budget is because you don’t have one. If you did have one, you could paste the figures into a post in 10 seconds.

“You can not counter my position on the creation of money and irredeemable debt” Well, I started to engage you on that discussion in my last reply. I was trying to get to the bottom of it, because every time I ask you about something else (e.g. the moral basis of your tax), you keep coming back to that. Let’s not bother though, I doubt either of us will enjoy reading or writing more on the subject.

“I doubt that the IRD, power company, communications company etc would accept payment by cow, do you?” Well...they might; it’s more likely than you getting elected. (I thought about it, and that’s not an insult, just an assumption about relative probabilities)

“If you can not stomach the thought that we are not able to be placed into a nice neat little box that you can categorise for your own purposes and labelled in such a way to allocate “sides”, that is a problem you will have to take up with your counsellor.” In all honesty, Kelvyn, I have no idea what point you are trying to make here.

He is the leader of a Political Party, Rick

Fraser Stephen-Smith's picture

Kelyn Alp is not just airing views for discussion; he has created a political party, and has candidates standing for government. He is willing to impose his policies on the population, with a pathetic level of research. 

My tone would be "mean" if Kelvyn was not running for office.

I am also reacting against the pathetic quality of the work Kelvyn has produced. I am truly appalled by the quality of Kelyvn's communication, his writing and his maths. I admit that lacks generosity on my part. I was reacting as if someone who reports into me produced a proposal that weak.

I know I re-drafted some of my posts also to cut out some of the insults. I very much doubt that kelvyn had the courtesy to draft and review his posts to make them easier to read. That laziness fucks me off as well.

Thank you Rick

Kelvyn Alp's picture

I appreciate your comments.

All problem solving starts with an idea and it is important to build on these ideas. I welcome all input on the solutions I have advanced on the DDP website, but as has been clearly demonstrated there is no shortage of critics. To simply ridicule and dismiss something out of hand without providing alternative choices is not helpful in the slightest.

I am one that is able to have a paradigm shift when supplied with evidence that contradicts my stated position on any given subject. We are all seeking change and the fact that we rally against injustice and inequality is testament to this. Even the most ardent individualist requires the help of others to effect the changes sought. "United we Stand, Divided we fall" has never been more prevalent than it is today.

It seems community spirit has given way to competitive rivalry and this will be our undoing unless we can learn once again to respect others as fellow human beings and be ready to lend a hand. Thanks again!

Geeze Fraser

Rick Giles's picture


I do think you have been harshly treated for rising to challenging inquiry raised by Julian. You are patient and radical and concerned with changing the country for the better- that alone should make you welcome on a forum for the exchange of free ideas.

If these virtues are enough to help your bunkam notions triumph over the uncivilised and mean then you're on to a winner.

Mr. Know-it-all, knows nothing!! HA HA

Kelvyn Alp's picture

Now allow me to demonstrate why your “cow” scenario and reasoning is ridiculous.

In essence you say you will use the $100.00 to but a very cheap cow and bull, breed them then sell them for more whereby enabling the repayment of the $100.00 + the $5.00 interest payment. - What you have failed to address in the fact that within the economy, that $5.00 interest payment does not exist and can not exist without another purchasing your cows using other money that has been borrowed into existence. Therefore, as with the mortgage example, your ability to pay the extra $5.00 will mean a deficit/shortfall in the economy. This is compounded each time that scenario is played out.

There is certainly the ability to create “real” wealth in the manner you describe, however, the method for the distribution of such lays squarely in the hands of those that issue the “currency” required to purchase it. I am sure the ‘card game’ example used in my ‘Open letter to the New Zealand people’ on the website clearly proves this point. So in actual fact your ability to sell the cows for the money required to service your debt, would depend on another ability to purchase from you.

You could certainly use a barter system (seems you are advocating social credit at this point) whereby you trade your cows for wine; however on a large scale this would not be sustainable due to the money required by many people to service debt. I doubt that the IRD, power company, communications company etc would accept payment by cow, do you?

Now let’s look at your other points:

ITEM 1: Obviously my sense of morality in comparison to yours is different. The situation as it stands now means those that earn more pay more, yet with the employment of the Transaction Tax means all people contribute a comparative (based on their earnings/income) 1%. Of course those that are fortunate to earn more will pay more, but far less than they do now. As I have already mentioned, we must work with what we have until we can then take it to the next step by addressing that as well. It should be evident to you, that years of constant messing with the production and wealth generation of this country has seen an imbalance and the reasons why some require assistance, while others are better off. Surely you are not that much of a mercenary that you would add further insult to those that have been less fortunate that ones that have been able to “get ahead”? Hence morals etc…

Now I am all for freedom of Choice and I see the argument for the right to choose where one spends their money, however, does that mean that we must abandon our fellow man just because they are less fortunate? If you think that, then I would never expect your vote in any event, as I share different values to you.

In the perfect world the Government will be able to address ALL of the needs of health, education etc through the ability to create from the public purse (treasury) the finances required for such things. However we do not have that perfect world and until we are able to get to that point, we must employ other strategies in order to deal with them. In case you didn’t realise our ‘Government’ does NOT control the issuance of this country’s coin, credit or currency and THAT is the problem.

ITEM 2: Using an Australian credit card to purchase in new Zealand would mean the transaction would have to be cleared through the Reserve Bank of New Zealand 'Exchange Settlement Accounts System' (ESAS)’ and as a result would certainly attract the 1% for each purchase.

As for your taking vast quantities of cash out of the country, at present anything over $10,000 must be declared, unless you are advocating smuggling it? If not and you decided to electronically send your funds abroad, you would have the 1% transaction tax apply and of course then be subject to exchange rates which can easily be changed to address any seepage of funds and provide a counter in that regard. So I guess in your haste to prove yourself intelligent to the readers, you completely missed those points aye?

ITEM 3: We have a number of figures and comparisons compiled, but what do I look like to you, your own personal research department? I provided you with the links, do your own research. You can not counter my position on the creation of money and irredeemable debt; THAT is the cornerstone to what we propose solutions for… however you completely lack the mental ability to climb out of your ignorance comprehend that.

SUMMARY: So let’s summarise your argument here – your “cows” scenario falls over because everything you propose relies on another ability to be able to purchase from you, yet ALL the money that will be used to purchase from you is created out of debt at interest (something YOU have no answer for); You speak about you jet setting tax avoiding ways, which again fall over for the reasons described (foreign exchange adjustments (spreads) addresses that easily); You try to purport I have not done my homework because I will not supply you with all of the information I have to hand – as if I am going to do that for you. Your general ignorance and attitude is proof that you do not seek to discuss the issues in an open minded way, but instead to try and ridicule in order to give you a sense of self importance. You have failed there also as I am sure any reader of this thread would agree, unless they are cut from the same cloth.

My morals are certainly orientated towards the betterment of all and not that of self serving interests as clearly indicated by you. The mess this country is in will not be solved through self interest but instead, through extending a hand to lift up those that are less fortunate. If you can not stomach the thought that we are not able to be placed into a nice neat little box that you can categorise for your own purposes and labelled in such a way to allocate “sides”, that is a problem you will have to take up with your counsellor.

I am steadfast in my belief that the moral justification for the solutions advanced by the Direct Democracy Party – DDP is change! Change for the betterment of all and not for the self serving interests of the few. Until you can get your head around that fact, there is no point in continuing this exchange, hell you don’t even know anything about the operation of the current monetary system, so how on earth would you comprehend the need for change?

Want to know how much is expected to be collected and then redistributed back into the economy? Check the figures on the Reserve bank website, it is all there for you… but of you wouldn’t bother with that would you? HAHA – Have a great day, it’s been fun Smiling

Nothing Exists! The Cows Are Imaginary!

Fraser Stephen-Smith's picture

Palatable? Kelvyn, when I was 13 my English teacher told me not to use words I didn’t understand. It seems charitable to pass that advice on to you.

You keep trying to avoid the point in what you refer to as the “Banking situation”. Let’s avoid that particular abuse of the language, and refer to it as your ‘banking example’, shall we?

Banking example:
Fraser’s point: You asked for a factual justification for my argument that you wrote many incorrect things. I provided an example where your post was demonstrably…wrong. You claimed that you provided wrong figures intentionally, to make the point easier to understand.

Kelyn’s reply: Prove me wrong that interest doesn’t exist.

I’m sure you can see that your reply has nothing to do with the point I made. At least now you have stopped trying to slime your way out of your error though.

Item 1:
You didn’t answer the question. You have no answer as to why Mr Smith should pay more than Mr Jones, you just claim that it is easy to monitor and equitable. Please back up your claim that it is equitable. If the tax is equitable, then by definition, you must think that it is fair that someone who spends more money should pay more for government services.

Let me give you an example of why someone might thing that was inequitable. What if Mr Smith pays more, because he pays for health insurance, and pays rent on a house, whereas Mr Jones pays less because he uses the public health services, and lives in state-provided accommodation?
Mr Smith pays for his own healthcare and accommodation…AND he pays for part of Mr Jones’  healthcare and accommodation through his tax…AND he pays MORE tax than Mr Jones, BECAUSE he pays for his own healthcare and accommodation.

How is that equitable, Kelvyn?

Item 2:
You admit that a strictly cash economy would ensure that no tax would be paid; but you don’t think that people’s behaviour would change as a result. What if I stockpiled my annual savings in cash, carried it on a suitcase and banked it in Australia during my annual summer holiday? I can buy clothes/shoes/food/movie tickets in New Zealand with my Australian credit card, and never pay tax. This would be completely legal. I like this idea, but for very different reasons than you propose it.

Item 3 & 4:
You mean you don’t ALREADY have these figures collected, validated and compared?

So you have no idea of how much revenue you will have if your transaction tax is implemented, but you assert that you will be able to fund “healthcare, Police (peace keeping), Ambulance, Fire Service, Education, Welfare (for those with genuine hardship cases), and Defence etc. (sic)
You ask that I prove you wrong, Kelvyn; but it turns out you have not even done any calculations that I can prove wrong.

Well, maybe I’m being unfair – you may have absolutely no clue about how much money you will receive, but I guess you must know how much you will spend right? How much money do you plan to spend in each of the areas you listed above? Can you provide a link to your itemised budget?

1. Simplification and being less cumbersome are not moral justifications. They are pragmatic arguments.
2. Equality could be related to a moral argument, but I have already demonstrated that your system is very inequitable
3. Reduced public spending  could be related to a moral argument – but you have yet to answer why you think public spending is immoral. Why do you think public spending is immoral, Kelvyn?

Kelvyn’s “MORAL JUSTIFICATION”1. Simplification and being less cumbersome are not moral justifications. They are pragmatic arguments.2. Equality could be related to a moral argument, but I have already demonstrated that your system is very inequitable3. Reduced public spending  could be related to a moral argument – but you have yet to answer why you think public spending is immoral. Why do you think public spending is immoral, Kelvyn?

OK Kelvyn. To be honest, I’m bored of illustrating how ridiculous you are, but for an exercise I will take you on where you no doubt think you are the strongest, your “imaginary money” idea. I don’t think this will get very far before descending further into farce, but it’s better than sudoku.

What do you mean when you say the interest doesn’t exist? I have agreed that I have an obligation to pay $105, so I find the $105 from my disposable income. The agreed $105 repayment was a promise. The $105 repayment exists the moment that I make the repayment.

How do I make this repayment? Well, let’s say I’m a farmer. I use the $100 to buy a (very cheap) cow and bull. I breed the cows and bulls and make…more cows and bulls. Through expending my labour (which I get for free), I have increased the number of bulls and cows I have. Now I sell all my cows and bulls and get $106 dollars; allowing me to pay back my loan and luxuriate in the extra $1 I have.

I exist, the cows exist, the bulls exist, the money exists, the bank exists. The cows didn't exist when  took the loan out, but they do when I make the repayment.

Now I could do this without money, and just barter the cows with the wine maker; because I only live on beef and booze. Each year, there would be more cows, because I can all breed cows faster than the wine maker and I can eat them. Does this mean the extra cows don’t exist, because they sure smell like they exist?


Kelvyn Alp's picture

Before I reply to your questions, let me once again address the 'Banking' situation for you in such a way that it may be palatable and easily understood. I "loan" you $100.00, I charge to 5% for borrowing it from me - all you have is the $100.00 I gave you, yet you now owe $105.00 - how do you repay the $5.00 that does NOT exist? - Now if you are unable to comprehend that, you seriously do have problems. Bearing in mind of course, ALL new money is created in that way i.e. through debt!

If you are able to pay, it means someone else is not able to pay to the value of that $5.00 plus whatever the interest component of their loan may be. So unless you can provide definitive proof that I am wrong on this, then I suggest that YOU stop digging the hole on this matter and let it rest.

Now as per your questions;

Question 1: ANSWER: The Transaction tax “punishes” to a far lesser degree than the current system does, and is at this stage the best solution available in my opinion. Feel free to provide any other system as simple, easy to monitor and equitable that ensures the current requirements are met.

Question 2: ANSWER: The Transactions are defined in the Transaction Tax policy i.e. a “withdrawal Tax” – The cash economy is negligible in comparison to other forms such as Cheques, Eft-pos, Credit Cards and the like. In any case, in order to get cash from your account, it would mean a withdrawal, hence a 1% Transaction Tax would apply. Using cash to pay a particular person, then that person pays another in cash and so on, would obviously not incur the Tax.

There is approximately 3.5 Billion in cash circulating through the economy, however I do not see a “cash economy” becoming prevalent as more people would retain more of their ‘money’ and the 1% Transaction Tax would not have a great impact on their normal commerce and therefore they would not feel it necessary to deal strictly in cash as some do now in order to avoid it. Currently people deal in cash to avoid the hefty taxation employed in this country.

Most companies / organisations / departments / services / individuals etc, deal in direct debit or payment by cheque, meaning that the payments would attract the 1% Transaction Tax.

MORAL JUSTIFICATION: The moral justification for the employment of this system as opposed to the current system is one of equality, simplification (inasmuch as it will free people from the associated compliance costs), less cumbersome for all and reduced public spending through the abolishment of the Inland Revenue Department in its entirety to name a few; The monitoring of collection could be incorporated within the Auditors office and undertaken by a hand full of people instead of the thousands of staff the IRD employs.

Question 3: ANSWER: The easiest way to show this as opposed to typing it all out if to provide the reference links as follows; - don’t forget to view discrepancies also. (yes they are both different links with variations of figures)

Question 4: ANSWER: I will provide these figures as soon as I have compiled them.

Kelvyn,  I gave you an

Fraser Stephen-Smith's picture


I gave you an opportunity to ignore the banking example. You chose not to, by claiming that you wrote what you did simply in order to make it easier to understand. That’s absolute bollocks, and you know it. Your example was no easier to understand as a result of your miscalculation. I suggest you take this second opportunity to let that point lie.

So, now we have agreed that your proposed tax system intends to cost more to people who spend money, and less to those who don’t spend their money. Please note, I am still talking about whether this is morally justifiable, rather than what the hypothetical effect on the economy will be.


Question 1:

Why does Mr Smith, who ‘transacts’ more, by spending all his $100,000 salary deserve to pay more towards government spending, than Mr Jones, who ‘transacts’ less by spending $60,000?


Let me ask the question another way: You use the term ‘punish’. Your tax punishes those who spend, over those who do not spend. Why is this? Why is it worse to spend than not to spend?

Question 2:

How do you define an outward transaction? It seems to only refer to money being transferred from one bank account to another. Is this correct?

If Mr Jones gets paid in cash; and pays the supermarket in cash; who hold all their cash in a big safe, guarded by security who the supermarket pays in cash, who in turn take their cash salary and spend it in a clothes store, who also keep the cash in a safe – do these payments and receipts get taxed?


Question 3:

How much tax revenue is currently earned through each of the taxes in New Zealand?


Question 4:

What level of funds are currently sent offshore to overseas investors?


Kelvyn Alp's picture

The reality of the situation as it stands here in New Zealand means that there are many New Zealanders that can not afford what they otherwise would, had they more money in their hands, as opposed to being taxed to the hilt.

In a perfect world people would be free to enjoy life liberty and the pursuit of happiness; however the reality is far from that mode of wishful thinking. In order to address the problems, solutions must be created… it matters not what you think should be the case because it is not; we have to effectively get to that point of time. One step then the next.

Essential services are healthcare, Police (peace keeping), Ambulance, Fire Service, Education, Welfare (for those with genuine hardship cases), and Defence etc. A number of these can of course be less of a burden on the state should people have adequate resource to provide it for themselves; as opposed to the basket case mentality ingrained in most people these days. People can not themselves afford the majority of these services because they are ripped off at every turn both directly and indirectly.

Who would seriously mount much of an argument against those that they rely on for survival? Creating state dependants ensures and effective level of control of the population and ensures those that rely less on the state are pitted against those that rely heavily. It is the simple ‘divide and conquer’ proven technique.

You speak of the moral justification and example of taking from someone at the point of a gun to give to those that have not earned it - there is never any justification for state coercion. A Transaction Tax on the ‘money’ itself is not a tax on any type of real wealth creation, in fact it does not hinder, but aids in the production of that wealth generation by ensuring people retain more purchasing power and therefore the ability and freedom to choose.


In the current economic climate there are those that simply can not afford to pay for essential services and many people struggle; this is why state assistance exists i.e. benefits etc.

What are essential services? Why can't people afford them? Where have transfer payments ever worked in the long term at generating wealth? Why is it moral to take from some something they produced at the point of a gun and give to others who have not earned it?


Islam insofar as it is directed by governments, and as a measure enforced from above by any government, is to be done away with.

Proffessor Fraser :)

Kelvyn Alp's picture

In answer to your question 1: If both Mr. Smith and Mr. Jones earn the same salary of the $100,000.00, then as each one transacts, a 1% Transaction Tax on the amount transacted would apply. So in essence if Mr. Smith transacted the entire amount he would pay 1% of that $100,000.00, or $1,000.00. If Mr. Jones transacted only $60,000.00 from his $100,000.00 salary then he would effectively pay 1% of the $60,000.00 or $600.00.

The more each decides to save and not transact from their accounts, the less they would pay. The Transaction Tax does not apply unless one is outwardly transacting. If Mr. Jones wanted to keep money under his mattress, he would have paid the 1% Transaction Tax on that amount when he withdrew it from his account, unless of course it was paid to him in cash where the person that paid Mr. Jones would have paid a 1% of their transacted amount in order to obtain the cash from the financial institution in order to pay Mr. Jones in the first instance.

In answer to your question 2: Mr Smith would only pay more than Mr. Jones if Mr. Smith transacts more (in terms of total amount transacted), not because he earns more. So it is logical that either one would pay more than the other regardless of the amount earned if that person transacts more in terms of the total amount transacted at 1% application of the Transaction Tax.

In the current economic climate there are those that simply can not afford to pay for essential services and many people struggle; this is why state assistance exists i.e. benefits etc. So to take people from the current system to one where less reliance on the state is required, there needs to be a transition. With more ‘money’ in the hands of businesses, individuals, groups and organisations there will be more of a chance of increased production (requiring more employees), more purchasing power (creating more demand), the ability to eat healthy (decreasing the need for medical assistance over time due to health issues relating to poor diets) etc.

The Transaction Tax will also ensure that that the funds sent offshore in large quantities to overseas investors will realise a 1% return of that amount to the Country that will in turn, be used to fund public works, infrastructure and essential services. Mr. Smith and Mr. Jones would ultimately be better off with a Transaction Tax as opposed to the current system of Taxation.

The beauty of the Transaction Tax is that it does not punish the rich in favour of the poor, it does not punish big business in favour of small business and it certainly does not punish hard work or enterprise. In fact in a manner of speaking, the rich would get richer and the poor would get richer. Now that can not be all bad and ‘morally’ good.

Banking example: Was given in that way for a simple ease of understanding the ‘moral’ of the story. Either way, you still have not shown me how anyone is expected to “find” the extra required by the bank, whether it be $450,000.00 or the $160,000.00 that you assert, without having an adverse effect on the amount of ‘money’ in circulation in comparison to the amount of ‘money’ required for total debt servicing.

Maths Not Taught at Kelvyn's School of Common Sense

Fraser Stephen-Smith's picture

“it seems fairly evident that no matter what information is supplied to you it will simply not be enough.”

Absolutely not, Kevin. If you stick to providing only information that is relevant to the question, you will need to provide only short replies.

“so given the fact that you have not pointed to anything of relevance, or provided a factual justification on which to base your statement, I ask that you prove me wrong.”

It’s not just about proving that what you say is incorrect, Kelvyn, it’s even more important to point out the things you haven’t even thought of, which is why I am keen to investigate some of your early assumptions. But you asked for an example, and you have replied to me, so it would be rude not to oblige:

Example of Factual Inaccuracy:

A $300,000 loan, with 5% interest which is paid back at $480 per week, would be paid off in  fewer than 19 years (after 956 weeks) – NOT the 30 years you assert. The total amount paid back would be around $460,000, not the $750,000 ($300,000 + $450,000) you assert. This is because after each weekly payment, the amount you owe decreases, and hence the interest you accrue decreases. This is pretty basic stuff, Kelvyn. Given that your mathematical skills are this bad; I don’t think that you are qualified to develop a more efficient macro economic policy.
But please – don’t bother to reply to this example; let’s assume for the sake of the argument that it was a typo on your part, and that you understand the maths; or let’s assume that it doesn’t matter whether the total interest is around $450,000 or $160,000, because the money has still gone to the same place. I only produced the calculation above because you asked for a factual example of something you have written that is wrong. Let’s get back to finding out how you justify your policies.

Question 1:
Your description of the difference between our hypothetical ‘Mr Smith’ and ‘Mr Jones’ is only that Mr Smith earns more. What about two people who have the same salary? If Mr Smith and Mr Jones, both earned $100,000 per annum; what different actions would make Mr Jones pay less tax? If Mr Jones spends very little and keeps £90,000 under his mattress, and Mr Smith spends all his $100,000, is this another way that Mr Jones will pay less tax?

Question 2:
You haven’t described why it is good and proper for Mr Smith to pay more. Your only answer was that is “logical” that Mr Smith pays more because he earns more. I would like to know why this is “logical”. Why is it morally correct that someone who earns more money should pay more tax?

The School of Commonsense - sign up here!!

Kelvyn Alp's picture

FRASER: I can see that explaining things to you will be a very difficult exercise as it seems fairly evident that no matter what information is supplied to you it will simply not be enough.

Feel free to continue your attempts at sarcasm as dismal as they are, however, I will provide you with the replies as and when (time permitting) I am able; after all is it not all about the ability of people to make an informed decision based on all of the 'relevant' information supplied?

First of all the Transaction Tax is on the popular method of exchange i.e. the ‘money’, it is not a direct tax on any particular sector of the economy nor does it penalise those that work hard to get ahead or increase the real wealth production in this country. The “moral basis” justification (as you put it) is a nonsensical application of that term in regards to this.

What each person has to ask themselves is this; “am I better off paying just 1% of what I outwardly transact as opposed to the current system of taxation”? If the answer to this question is “yes”, then I am sure there will be no quarrel from that quarter. If the answer is “no” then obviously that person would not welcome this method.

Surely even you Fraser, would be better off with that system unless of course you own a bank that makes very large transactions with other banks as you settle each days transactions through the Reserve Bank of New Zealand’s ‘Electronic Settlement Accounts System’.

The reason why this system is favourable in comparison to the current system is due to the efficiency by which it is collected i.e. via software only. There will no longer be a need to have a gigantic organisation known as the Inland Revenue Department to collect the various types of taxation currently burdening many people including small and large business alike. So obviously a huge cost saving in that regards and therefore less need to take from the pockets of the public to fund it.

At present there is “income tax”, “corporate tax”, “provisional tax”, “Goods and Services tax” “petrol tax” in fact taxes and levies of varying degrees on just about everything, from labour through to production and sales through to purchasing; whereas the Transaction Tax will be a singular application that will replace all others.

Mr. Smith who transacts more than Mr. Jones will obviously pay more, which is logical. In fact under the current system that happens now, and to a much larger degree i.e. Mr Smith who is on $250,000.00 per year will pay much more than Mr. Jones who may be on $60,000.00 per year. A simple calculation will show that the 1% Transaction Tax (in place of all other tax obligations) will see both Mr. Smith and Mr. Jones in a very desirable position and without too much complaint.

You stated “There are many, many things wrong in the material you have written below”; so given the fact that you have not pointed to anything of relevance, or provided a factual justification on which to base your statement, I ask that you prove me wrong. I do not require arm waving diatribe from you, just the proof that evidences your statement is one of fact. I look forward to your reply Smiling

The University of Kelvyn

Fraser Stephen-Smith's picture


Oh dear. You heard about all this from someone in a pub, didn’t you? It didn’t take you years of study, researching various texts, working in money markets, or talking to trained economists to develop this innovative taxation technique, did it? There are many, many things wrong in the material you have written below; but let’s start with one repeated question. Once we have this, we can move on in slow steps.

Question: I still have no idea what the moral basis for your transaction tax is. Can you describe a person (Mr Smith) who pays a lot of tax, and a person (Mr Jones) who pays less tax; and explain why it is right and good that Mr Smith pays more tax than Mr Jones?

Feel free to prove otherwise :)

Kelvyn Alp's picture

Hi Lindsay – Its not quite like the Social Credit ideals as that particular system had two serious flaws;

1) The inability to effectively extinguish credit created and spent into the system (inflationary) and;
2) It did not take into account the Foreign Exchange component and its effect on our currency. – This of course due to that particular philosophy being based on an earlier time and not devised for the current climate. I have sought to fix this.

Hi Fraser – MONETARY REFORM: I think you are missing the point, what is it about my statement do you not comprehend? Of course some people manage to pay their mortgages (including the interest), but many others go into default and quite often bankruptcy due to scarcity of funds – a simple check on the latest figures of bankruptcy increasing in nature will highlight this for you.

When one takes from the economy more than they put in, then it becomes obvious that it will inevitably have dire consequences. The way the current monetary system operates is that there can be no new money without an equal debt i.e. in order to increase the monetary supply; there must be an increase of indebtedness.

Let’s do the maths together here: - You go into a bank and borrow say $300,000.00 and you then over a period of time, repay that amount along with the interest of say 5% calculated every year on the total for a period of 30 years ($15,000.00 per year) effectively you pay an extra $450,000 over an above your initial $300,000.00 loan; meaning your payments per week amount to approximately $480.00 per week.

Now considering the only amount created at the time of your “Promise to pay” (to which a credit was given against that debt) was $300,000.00 and no more, how do you effectively “find” the other $450,000.00 to pay? Now most people would say “well I work for it, or I earn it from somewhere” and this may be true, however in order for you to acquire that extra amount, there must then be a shortfall of $450,000.00 in the system meaning others will not have that ability and find themselves forfeiting property, land and chattels.

My argument is this, the Government should not be in debt to lending institutions and should have the right to issue this nations coin, credit and currency, where at present it does not. The Government talks about having to increase “borrowings” in order to pay for Government services and infrastructure, so it stands to reason that when they do this, they have to “find” the “interest” component from somewhere… now if it does not exist what happens? Asset sales, privatisation and certain “reforms” are undertaken to try to address the problem. All this amounts too is less control for the people over this country and its wealth, because it ultimately finds itself in foreign ownership.

TAXES: At present “money” has become a tradable commodity as opposed to serving its intended purpose which is to allow the distribution of goods and services to be exchanged at an agreed value. This being the case, a simple tax on the “money” itself and not on production, labour, goods, services, manufacturing, farming, agriculture etc, would provide the capital needed to address the imbalance. Your mention of the more transactions meaning others having more wealth is nonsensical and I would advise you to read the policies again, especially my ‘Open Letter to the New Zealand People’ which can be found on the DDP Website when you click on the “read more” at the bottom of the main page. If one transacts $100.00 – either 100 at $1.00 each time or in one lump sum, it will still equate to the 1% total Transaction Tax, which is all. Of course the bigger the transaction, the bigger the 1% amount will be.

So following the formula for Monetary Reform and that of the Transaction Tax it will undoubtedly be beneficial to this country. It is a matter of this country controlling its currency and not foreigners. Remember also, that this Transaction Tax will replace ALL other taxes, period!

Delicious, Fraser! :-)

Lindsay Perigo's picture

This lot sound like the old Social Credit party.

So do I have to pay my loans...or not?

Fraser Stephen-Smith's picture

Kelvyn, I have also pasted the extract below from your website. Can you explain the following statement?

"Remember now, that extra $50Million does not exist and therefore can never be repaid as it was not created at the time of the loan."

You see, I have a personal loan, and that loan requires me to pay interest. I'm quite excited to hear that the interest doesn't actually exist, but I'm a little disappointed to learn that my loan can never be repaid. It's even more confusing, because I have friends who say that they have managed to repay their loans. Are they in on the whole scam?





A larger extract for reference:

"But wait, there’s more;

The money borrowed by our Government via the RBNZ from those foreign private banking and financial institutions is done so at “interest”. Now here is the problem. Let’s say our Government borrows $1Billion at 5% “interest”. They would indeed receive $1Billion injected into the Government coffers. However, because there is an “interest” component of 5% to pay, this means that the total repayment over a period of say 12 months will be the initial loan of $1Billion plus the “interest” component of $50Million. Remember now, that extra $50Million does not exist and therefore can never be repaid as it was not created at the time of the loan.  Now you can see why New Zealand currently owes more in interest than the principal we borrowed in the first place. This is the real reason why you are being taxed at a greater rate each year and it is only set to get worse."

I think even a SOLO lightweight can deal with this

Fraser Stephen-Smith's picture


Clearly I need to spell out my criticism in a simpler manner. For clarity, your website claims that your tax will improve people's health. Are you making that claim with a straight face; or as I suspect, are you wearing big red shoes that we can't see in your photograph?

Let's see if you can provide anything more substantial in your posts than an insipid whine about people not being very nice, or an obtuse and meaningless collection of statements. Just because I think you're an idiot, there is no reason that you can't prove me wrong.

What is the moral basis for your transaction tax? Regardless of the effects of the tax (of which your claims are frankly ludicrous), what is the moral case for someone who makes more transactions paying more towards social welfare, or tax, or defence etc?

I'm guessing your justification will be that someone who makes more transactions has more money, which will in turn raise questions both about: whether your tax will effectively target those people, and; whether someone who earns more should pay more towards governmental spending. However, I will wait for your substantive reply.

A wordsmith in us all :)

Kelvyn Alp's picture

I hope you are not indicative of the type of people that frequent this forum as it would be a very sad indictment on the site.

However, it is an interesting post and it clearly speaks volumes about your approval for the policies advanced by the Direct Democracy Party.

If that is the best criticism you could muster, then I thank you for your support.

Therapeutic Properties of Tax

Fraser Stephen-Smith's picture

"This solution [a tranaction tax] will bring economic prosperity, major increases in employment, less dependence on the State. It will give people a sense of value and worth, thereby increasing the mental and physical health of people and much more. Most important of all, the DDP Taxation Policy will greatly reduce the strain of workplace relations between management and workers, family violence and discord due to lack of funds and increase the quality of life for all New Zealanders."

Can you make your solution remove stubborn stains, and change the oil in my car as well? I have a sore back this morning, can your tax fix that as well? I hope these are included in the "and more" section of your policy above.

I'm a judgemental person, and I judge you to be a clown.

From the shadows they speak

Kelvyn Alp's picture

A friend of mine was trawling and came across this site and your comments. I see you have a high opinion of me Mr. Elliot, yet you have never met me, or spoken to me in person; surely such character assassination would be deemed inappropriate if the tables were turned?

I personally do not know you nor have I met you. I can however surmise by your post, that you are a very judgemental person.

Now I do not expect you to be pro any other party other than your own; unfortunately this is very inhibitive of change these days as we close our minds to the possibility of others points of view being correct. I do not mind what you have to say about me, all I ask is that you base your views and opinions on as much fact as you can rather than speculation, assumption and conjecture.

I wonder given the age of your post, whether you have read the party website at all? If not, now would be a good time to do this ( As for dismissing and solutions put forward for consideration before you have a grasp of them in their entirety is nonsensical at best. You do not believe in Direct Democracy (everyone having a say as to what they want for their future), yet you advocate that very thing, strange to say the least.

We do not suggest that every issue needs to be put to the vote, but certainly any and all decisions that would have a direct impact on society and the peoples lives, must certainly be put to the vote. As for it being a dangerous thing due to the old "mob rule mentality" argument, again, you really need to educate yourself and see that we do in fact believe in the inherent individual rights and freedoms of people.

So please, before you wish to cast aspersions upon someone, at least ask them directly and get the full story before you go off half-cocked. You may be surprised and actually enjoy the experience.

Thank you for your time.

"armed intervention force"

Phil Howison's picture

One of their candidates [edit: it was party leader Kelvyn Alp] had previously created what he claimed was a nationalist guerrilla army combined with an international mercenary company. Investigate magazine breathlessly talked of imminent attacks, which were not forthcoming.

Julian, you've explained very succinctly the way these ideas attract nutcases.

Julian. Yes, Direct

Ross Elliot's picture

Julian. Yes, Direct Democracy is bullshit. They may as well wear black shirts and Docs. I'd liken them to proto-facists of the 1920s Italian variety.

I exchanged several emails on the subject of taxation with their leader just before the last election. Unfortunately he couldn't see the forest for the trees. They think they've discovered some Holy Grail of state revenue based on a transaction tax. No amount of facts and figures would deter him from his wonky belief.

My guess would be that they are disaffected NZF voters, or a Sinn Fein for NZ's National Front. As dangerous as the Greens given the right set of circumstances.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.