web analytics
The Standard
Advertising

Armstrong on Key’s thinking

Written By: - Date published: 12:07 pm, March 22nd, 2011 - 29 comments
Categories: election 2011, tax - Tags: , ,

John Armstrong’s contacts in National are telling him that Working for Families and student loans are the targets for cuts in this year’s budget. He also reveals the real reason for National opposing the widely-supported earthquake levy: putting on a tax would be an admission that tax cuts for the rich were a mistake in the first place.

Armstrong says National’s ‘the sky is falling, the sky is falling’ cries are about

“softening up voters to a paring back of so-called “middle-class welfare” by removing the entitlement of large, wealthy families to Working for Families income top-ups while stopping interest-free student loans.”

Of course, these measures would raise just a fraction of the money needed, the rest would have to come from widespread cuts to other public services. So why doesn’t National just fund the rebuilding out of an earthquake levy? Key says that would strangle growth. To which the response might be ‘what growth?’ but, more seriously, how does raising a tax and spending that money straight away hurt growth more than slashing household incomes with WFF and student loan costs?

Armstrong reveals the real reason for National not putting on a small earthquake levy is pure politics:

“Though Opposition parties such as the Greens back a levy, its introduction could end up being widely seen as a reason why National should not have cut taxes in the first place, even if the last round of such cuts was fiscally neutral.”

So, there you have it. Key just can’t admit he made a mistake, so he’s digging us deeper into trouble. Rather than putting the rich back in the position they enjoyed just two years ago, he wants to shove the cost on to the poor and middle income families instead.

Btw, come on, John, you go to the Budget lock-up don’t you? You should know that the last round of tax cuts weren’t fiscally neutral, it’s right there in the executive summary:

Cost of the tax cuts, $1 billion over four years. Or $400 million, if you believe in voodoo economics.

29 comments on “Armstrong on Key’s thinking”

  1. Lanthanide 1

    I like how the voodoo magic grows from 205 in 2013 to 435 in 2014, just big enough to give a profit of 175, sufficient to wipe out the previous 2 years of losses and let them wig their way on “revenue neutral”. Very convenient for them. I bet they changed the ‘assumptions’ and ‘modelling’ behind these figures over and over until they got a scenario that fit what they wanted to see.

    Journalists must hum and har about it, and eventually think “well these government types know what they’re talking about with this economics stuff, so I guess a 175 profit in 2014 does mean that going forwards after that it will be revenue positive!” and so buys their shit hook, line and sinker.

    captcha: realitys

  2. Bored 2

    This table represents another reason why the tea leaf readers must be resisted, they are running the lunatic asylum that is Treasury.

    Some salient points:
    * the personal tax rate cuts line indicates that there will be substantial income growth over the next three years (nearly doubling the current loss). How does that work given the recession is not going away?
    * company tax cuts..as above assumes that companies will be making more. In a depression. Post earthquake. Post the lowest dairy receipts for a while. Post a crash in tourist receipts. In the face of an oil price and availability crisis. Should I go on?
    * the working for families money costs diminish…does that mean we will all be earning more or that they are going to slash it?
    * depreciation measures…so where does the cost of subsidising the rentiers get passed on to? Tenants? Is this an admission that the property owners have been rorting the taxpayers for years?

    Quite frankly the numbers are a load of tosh, an indication of an out of control government looking after their mates. Fiddling whilst Rome burns. Hiding behind charlatan economists projections.

  3. randal 3

    hey bored you forgot dickey licking lickspittles.

  4. Kevin Welsh 4

    So, am I correct in assuming that the line that says “Adjustment for macroeconomic effects” is the line where you pick a number out of your arse that somehow corresponds to making everything look rosy and therefore justifies everything above?

    • Bored 4.1

      pick a number out of your arse…..you have been watching economists and Nat ministers far too closely.

  5. there seems to be an ‘n’ missing from the hand graphic

  6. Nick C 6

    Any evidence that the earthquake levy is widely supported?

  7. Dan 7

    A levy plus a return to the tax levels of before. It is simple logic.
    The Nats are so overwhelmed by ideology that they have lost touch with the sensible middle ground. They have made a mistake with their tax cuts. They are a bigger danger to the Left if they admit their mistake. Key would be seen as a sensible populist. If however, as I suspect, they will not change and lose a huge number of singing voters for avoiding the obvious.
    Christchurch deserves much better.

  8. The levy will not cover it all but I support it.
    It’s a debt over time so not all of it has to be paid tomorrow. Better a levy to offset some of the proposed increased public debt (with interest) plus putting us into slavery to international interests that dictate policy to us.
    Not having read Armstrong, but he may need to go even one step further and say it is all about blind adherence to, and religious adoration of, economic dogma.
    A tenant of their religion is (and their identity revolves around) the idea that tax cuts are the answer to all that ails society.
    They would rather increase public debt (plus interest) than admit that their religion is flawed.
    Well, at least they can follow their religion and attack the size of the state!
    http://www.flickr.com/photos/19473099@N05

    • Colonial Viper 8.1

      A tenant of their religion is (and their identity revolves around) the idea that tax cuts are the answer to all that ails society.

      Or the answer to all which ails the society of the privileged.

  9. Jim Nald 9

    Re Armstrong “as John Key put it yesterday – everything changed at 12.51pm on February 22″

    Super fabulous, Key!
    He has been doing a Microsoft Word ‘find and replace’ for beloved George Bush’s oft repeated line that everything changed on September 11. Great to know whose script he is using.
    Guess what? I have a Republican streak within me and he has just massaged it.
    I am catching up on economic news this evening and can say I am masturbating furiously to his “everything changed at 12.51pm on February 22″.
    I hope he repeats that a lot more.
    I love it.

  10. Anne 10

    felix… your turn. :D

  11. George.com 11

    Tax cuts partially funded by the tax payer having to borrow $1 billion over 4 years, based on very optimistic growth levels. In essence, the $1 billion based on NZ quickly getting out of recession. Reality, Bill English has taken us back into recession and the rosy growth estimates are out the door, along with the anticipated tax growth. $1 billion borrowing over 4 years probably looks more like $2 or 3 billion. I wonder if English will give us an update at this budget on how much his income is shy of each predicted income line (GST, LAQC changes, thin Capitalisation, depreciation) ?

    Maybe a clever standardero could crunch the difference between the forecast numbers from 2010 and the updated numbers in 2011 to provide us with an update on how much extra we are borrowing to pay for the tax cuts.

Links to post

Important links

Recent Comments

Recent Posts

  • Recognizing Palestine: The European Parliament Votes
    Last week I wrote a blog drawing attention to Sweden’s formal recognition of the state of Palestine (the second Western state to do so after Iceland).  That move has created ripples throughout the international community. In recent months the parliaments… ...
    GreensBy Kennedy Graham MP
    2 days ago
  • Recognizing Palestine: The European Parliament Votes
    Last week I wrote a blog drawing attention to Sweden’s formal recognition of the state of Palestine (the second Western state to do so after Iceland).  That move has created ripples throughout the international community. In recent months the parliaments… ...
    GreensBy Kennedy Graham MP
    2 days ago
  • Recognizing Palestine: The European Parliament Votes
    Last week I wrote a blog drawing attention to Sweden’s formal recognition of the state of Palestine (the second Western state to do so after Iceland).  That move has created ripples throughout the international community. In recent months the parliaments… ...
    GreensBy Kennedy Graham MP
    2 days ago
  • Minister has work to do over Xmas
    Red flags raised in a multi-agency review into how Phillip Smith was able to flee the country highlight the inadequacies of those very same agencies not having red flags in place that would have notified them of his plans, says… ...
    2 days ago
  • Minister has work to do over Xmas
    Red flags raised in a multi-agency review into how Phillip Smith was able to flee the country highlight the inadequacies of those very same agencies not having red flags in place that would have notified them of his plans, says… ...
    2 days ago
  • Minister has work to do over Xmas
    Red flags raised in a multi-agency review into how Phillip Smith was able to flee the country highlight the inadequacies of those very same agencies not having red flags in place that would have notified them of his plans, says… ...
    2 days ago
  • Gerry Brownlee’s revolving airport door story
    A new report shows Gerry Brownlee is the latest Cabinet Minister to have contracted the infectious tell-porkies-until-you-are-caught disease, Labour’s Chief Whip Chris Hipkins says. “A Civil Aviation Report out today shows that despite being an extremely recognisable figure, Gerry Brownlee… ...
    2 days ago
  • Gerry Brownlee’s revolving airport door story
    A new report shows Gerry Brownlee is the latest Cabinet Minister to have contracted the infectious tell-porkies-until-you-are-caught disease, Labour’s Chief Whip Chris Hipkins says. “A Civil Aviation Report out today shows that despite being an extremely recognisable figure, Gerry Brownlee… ...
    2 days ago
  • Govt spend on transport out of step with reality
    The National Government is planning to allocate ever increasing amounts of taxpayer funding to build expensive new motorways despite record numbers of New Zealanders flocking to buses and trains, said the Green Party. The Government released its Government Policy Statement… ...
    GreensBy Julie Anne Genter MP
    3 days ago
  • Govt spend on transport out of step with reality
    The National Government is planning to allocate ever increasing amounts of taxpayer funding to build expensive new motorways despite record numbers of New Zealanders flocking to buses and trains, said the Green Party. The Government released its Government Policy Statement… ...
    GreensBy Julie Anne Genter MP
    3 days ago
  • Solar homes stymied by Govt inaction
    Government inaction is allowing the big power companies to discourage the nascent solar power sector, the Green Party said today. Green Party MP Gareth Hughes launched a petition today calling on the Government to empower the Electricity Authority to act… ...
    GreensBy Gareth Hughes MP
    3 days ago
  • Solar homes stymied by Govt inaction
    Government inaction is allowing the big power companies to discourage the nascent solar power sector, the Green Party said today. Green Party MP Gareth Hughes launched a petition today calling on the Government to empower the Electricity Authority to act… ...
    GreensBy Gareth Hughes MP
    3 days ago
  • Foreign buyers for iconic island must add value
    Labour will look very closely at any Overseas Investment Office application to purchase Pakatoa Island if it is not bought by a Kiwi, says Labour’s Land information Spokesperson Stuart Nash. “Pakatoa is an iconic island in the middle of Hauraki… ...
    3 days ago
  • Way opening for April Sun in Cuba
    The United States of America’s President’s historic announcement yesterday to restore diplomatic ties with Cuba should be applauded by the New Zealand Government. The announcement marks a turning point in more than five decades of hostility between the two countries… ...
    GreensBy Kennedy Graham MP
    3 days ago
  • Minister ducking for cover over ‘Diplomat Case’
    Apparently the Ministerial Inquiry into what now seems to be being referred to as ‘The Diplomat Case’ ( I have a few other names for it) has been completed and is in front of Foreign Affairs Minister McCully. Initial Reports seem to… ...
    GreensBy Jan Logie MP
    3 days ago
  • Minister ducking for cover over ‘Diplomat Case’
    Apparently the Ministerial Inquiry into what now seems to be being referred to as ‘The Diplomat Case’ ( I have a few other names for it) has been completed and is in front of Foreign Affairs Minister McCully. Initial Reports seem to… ...
    GreensBy Jan Logie MP
    3 days ago
  • Energy users need answers on Vector share plans
    Energy Minister Simon Bridges needs to stop ducking for cover about whether or not the Government will support plans to nationalise and then privatise $2.1 billion of shares in the Auckland Electricity Consumer Trust, Labour's Energy spokesperson Stuart Nash says. “It… ...
    4 days ago
  • Turning up the heat on working conditions
    A “Jobs That Count” campaign has the full support of Labour, the party’s Labour Relations spokesperson Iain Lees-Galloway says. Organised by the Meat Workers Union, the campaign aims to put the spotlight on job insecurity in the meat processing industry. ...
    4 days ago
  • Biosecurity it’s everyone’s responsibility
    Biosecurity costs New Zealand millions of dollars in attempting pest eradication and much more in ongoing management of pests in farming, horticulture, beekeeping and conservation, as well as in our own backyards and recreation areas. More work must happen at… ...
    GreensBy Steffan Browning MP
    4 days ago
  • Biosecurity it’s everyone’s responsibility
    Biosecurity costs New Zealand millions of dollars in attempting pest eradication and much more in ongoing management of pests in farming, horticulture, beekeeping and conservation, as well as in our own backyards and recreation areas. More work must happen at… ...
    GreensBy Steffan Browning MP
    4 days ago
  • Failure to diversify puts prosperity at risk
    Beyond the news that a long-promised surplus is unlikely, further embarrassment is hidden in the fine print of the half year economic and fiscal update, Labour says. "National’s failure to rebalance the economy is further exposed in projections from its… ...
    4 days ago
  • Ombudsman probe targets Ministerial integrity
    John Key is on notice that the entrenched cynical and manipulative abuse of official information requests by his Government will no longer be tolerated, Labour’s Open Government spokesperson Clare Curran says. “The announcement by the Ombudsman of a wide-ranging review… ...
    5 days ago
  • Bill English’s face is redder than his books
    The Government owes New Zealanders an apology for failing to deliver the surplus it spent four years and two election campaigns promising, says Labour’s Finance spokesperson Grant Robertson. “Bill English’s face is redder than the Crown accounts. This is the… ...
    5 days ago
  • Is the Health Minister accountable to the public? He doesn’t seem to thin...
    Lately I’ve been involved in a sort of farcical standoff with the Health Minister, who seems to be under the illusion that I have no right to ask questions about conflicts involving Health Promotion Agency Board member Katherine Rich, and… ...
    GreensBy Kevin Hague MP
    5 days ago
  • Is the Health Minister accountable to the public? He doesn’t seem to thin...
    Lately I’ve been involved in a sort of farcical standoff with the Health Minister, who seems to be under the illusion that I have no right to ask questions about conflicts involving Health Promotion Agency Board member Katherine Rich, and… ...
    GreensBy Kevin Hague MP
    5 days ago
  • Irresponsible tax cuts lead to seventh successive deficit
    National's borrowing to pay for cutting the top tax rate was irresponsible and will likely lead to a seventh successive deficit, the Green Party said today. Treasury have forecast a $572 million deficit this year in its Half Year Economic… ...
    GreensBy Russel Norman MP
    5 days ago
  • Minister closes down dissent on climate change
    Minister closes down dissent on climate change In a threatening letter to Maori leaders, Minister for Climate Change Tim Groser says he will be requiring future international delegations to toe the party line, Labour’s Climate Change spokesperson Megan Woods says.… ...
    5 days ago
  • Heartfelt sympathy for Sydneysiders
    The Labour Party has offered its heartfelt sympathy to the people of Sydney after the hostage situation in the city, says Labour’s Acting leader Grant Robertson.  “Our thoughts are with all those who went through this horrific and traumatic experience. ...
    5 days ago
  • Farewell at Phillipstown
    Last Wednesday, I attended the farewell for Tony Simpson, Principal of Phillipstown School. It was a very emotional event where many of us in the large crowd shed tears. Bagpipes and tiny tamariki performing kapahaka brought the house down and… ...
    GreensBy Catherine Delahunty MP
    6 days ago
  • Labour applauds High Court decision on Ruataniwha
    Today’s decision by the High Court on the Ruataniwha scheme is a victory for NewZealand’s environmental groups, says Labour’s Conservation spokesperson RuthDyson. ...
    1 week ago
  • Welfare system out of date and out of touch
    A new Child Poverty Action Group report released today highlights another example of how our outmoded social welfare system is harming kids, says Labour’s Social Development Spokesperson Carmel Sepuloni.  “The complexities of how a ‘relationship’ is defined in the welfare… ...
    1 week ago
  • James Shaw’s adjournment speech on behalf of the Green Party
    It is a great honour for me to speak on behalf of the Green Party in this adjournment debate. I thank my colleagues for the privilege. I became a MP only 12 weeks ago, a period of time that seems… ...
    GreensBy James Shaw MP
    1 week ago
  • A Tale of Two Farms
    Pig farming has yet again been thrust into the public view with two programmes this week on Campbell Live highlighting the very different conditions for pigs on two very different farms. The first programme exposed the awful conditions on… ...
    GreensBy Mojo Mathers MP
    1 week ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere