CTU on the tax switch

Written By: - Date published: 11:15 am, October 14th, 2011 - 7 comments
Categories: debt / deficit, economy, national, tax - Tags: ,

This press release from the CTU deserves wide discussion:

Tax Switch Created Many Problems

The New Zealand Treasury has revealed that the tax switch has created a $1.1 billion hole in the already weakened Government accounts.

Peter Conway, CTU Secretary and one of a number of economists who participated in the Tax Working Group, said that the tax switch has created many problems.

“It pushed up the cost of living, dramatically increased income inequality, failed to stimulate the economy, and has opened a big hole in Government revenue”, said Peter Conway.

“There is no doubt that the Government has had to face many challenges such as global financial crisis and the Canterbury earthquakes. But they have also made some poor policy choices that have made things worse.”

“The tax switch put up GST pushing inflation to 5.3 percent. The take home pay gap between someone earning $30,000 a year and $150,000 a year has grown by $135.00 a week due to tax cuts. And now despite assurances that the tax switch would be revenue neutral, it has already added over $1 billion to the deficit.”

7 comments on “CTU on the tax switch ”

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  1. Deadly_NZ 1
    14 October 2011 at 11:33 am

    No wonder they are borrowing 300 mil a week…

  2. David 2
    14 October 2011 at 12:11 pm

    Why is there no reference or data to back up the claims in the press release? Anyone worth their salt quotes their references in a press release.

  3. Tiger Mountain 3
    14 October 2011 at 12:14 pm

    Peter Conway is far too polite… “poor policy choices”, it was a deliberate wealth transfer ‘upstairs’. It is what tory governments exist for.

  4. aerobubble 4
    14 October 2011 at 12:16 pm

    The finance industry is collapsing under a weight of wishful thinking, Key saw
    the writing on the wall and switched jobs. Unusually nobody made the connection.
    If your industry implodes because of blanant profiteering at the expense of
    investors, by exploiting distortions pushed into legislation by lobbiests, that
    has unbalanced the global system, you’d be a social leper. But that’s the uncouth
    genius of John Key, he knew long before the collapse to get a new gig.
    And then to openly use his skill set in the new job, right under the nose of MSM,
    should have cause many an editor to take early retirement.

    National want us to save, yet don’t want to roll out a deposit guarantee, like\
    they have in OZ, UK, US. And then they wonder why when kiwis save, they
    do so in a Australian bank in Australia! And for some crude fair and balanced
    reporting, the MSM can’t laugh National economic policy out of the arena.

  5. mike 5
    14 October 2011 at 1:24 pm

    The rich get richer and their tax rate gets lower. The cost of living keeps rising which hurts everone except the rich.

    Nothing to see here, move along….

    It’s Labour’s fault anyway.

    So Moonbeam the cat is still cute as hell by the way, and I’m starting to feel good about the new Coro st time slot.