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LB: Bill’s Busted Budget and Tim’s Exploding Emissions

Written By: - Date published: 4:28 pm, April 9th, 2014 - 13 comments
Categories: bill english, Economy, farming, jobs, Minister for International Embarrassment, tax - Tags: , ,

Local bodies points out a couple more of the National government’s sad-sacks. For some strange (but obvious) reason a warmish market for milk powder doesn’t do much for NZ apart from destroying our enviroment. Nationals’s taxcuts for the wealthy have destroyed the fiscal base of the government and done nothing to cause investment in the productive parts of our economy.

The Government’s ‘Rock Star’ economy hit a bum note (or rather a number of them) when Bill English had to admit that, yet again, his targeted surplus in 2015 is under threat. Despite the often trumpeted improving economy, the tax take was well under what was projected. The core tax revenue was $1.14 billion below expectations because assumptions around personal tax and custom duty did not eventuate and lower than predicted corporate tax and source deductions were received.

The Government has stubbornly stuck with their tax cuts to upper income earners, a loss of around $1.2 billion a year. This is despite the revelation that 107 out of our 161 wealthiest (who have assets of over $50 million) claimed to have taxable incomes of less than $70,000 a year. 2012 research discovered that up to $6 billion in unpaid tax was being cheated by tax evaders.

The dairy industry is largely leading New Zealand’s supposed economic recovery and now generates about 1/5 of our export income (around $15 billion), however very little tax comes from the sector relative to others. We also have a very buoyant property marketwith many regions seeing house prices rising over 10% last year. Property investments are now the preferred method in New Zealand for building wealth because most profits are nontaxable.

Property investments and dairy conversions are largely financed by loans from our big four Australian banks and we all know how little tax they pay.

There is obviously a lot of extra untaxed wealth around because New Zealand’s luxury car market sales have never been better.

The Government’s sale of state assets has not proved to be successful either. While the assets were valued at around $5.2 billion only $4 billion was raised and the sales cost significantly more to promote and manage than budgeted (costing tax payers over $250 million).

Rather than attempting to increase revenue by addressing the huge issue of tax avoidance and evasion Bill English is looking at further restraints in Government spending. There will obviously be more cuts to public services and more state employees will lose their jobs. Further attacks on beneficiaries can be expected too.

Tim Groser came under stiff attack from Russel Norman because of the Ministry of the Environment’s latest projections of our green house gas emissions. Our modeled net emissions under the Kyoto protocol will see an increase of around 50% by 2024. Per capita we are now one of the worst polluters in the developed world. It seems that my satirical description of the Government’s approach to our obligations to reduce emissions was probably closer to reality than I thought.

Bill English and Tim Groser have such a hands off approach to their Ministerial responsibilities that we’d probably be in a better position if they didn’t bother to turn up for work at all.

13 comments on “LB: Bill’s Busted Budget and Tim’s Exploding Emissions”

  1. tc 1

    They have to show up for work and execute the backers script, it’s what will feather their nests after they exit the beehive.

    When Bill said in 2008 that he’d inherited a good set of books from the Clark years what he left out was the follow on statement that this means he can plunder and leave someone else to clean up after him.

    The national party is owned by big business and it does what its funders tell it to do, the exiting MP’s probably know this all too well now.

  2. karol 2

    From the post:

    The dairy industry is largely leading New Zealand’s supposed economic recovery and now generates about 1/5 of our export income (around $15 billion), however very little tax comes from the sector relative to others. We also have a very buoyant property marketwith many regions seeing house prices rising over 10% last year. Property investments are now the preferred method in New Zealand for building wealth because most profits are nontaxable.

    Questoon One today in Question Time: David Cunliffe to the PM on housing affordability & home ownership:

    Hon David Cunliffe: Will the Prime Minister now commit to supporting Labour’s capital gains tax; if not, why is he standing by while young Kiwi first-home buyers are outbid by foreign telephone bidders using cheap foreign money to buy up New Zealand houses—for example, like the more than a dozen overseas phone sales witnessed by Auckland real estate agent Adam Wang?

    Rt Hon JOHN KEY: The member is asking me whether I am going to support a capital gains tax on every small business in New Zealand and every hard-working farmer in New Zealand, and whether we are going to support a capital gains tax in an area that is already in existence. It is already on speculators. If the member does not know that, he does not know anything.

    • Tracey 2.1

      capital gains tax on small business… that may be his most laughable lie yet…. mind you… if thats wbat he heard cunliffe asking bim … it could explain alot

    • Naki Man 2.2

      “Hon David Cunliffe: Will the Prime Minister now commit to supporting Labour’s capital gains tax; if not, why is he standing by while young Kiwi first-home buyers are outbid by foreign telephone bidders using cheap foreign money to buy up New Zealand houses—for example, like the more than a dozen overseas phone sales witnessed by Auckland real estate agent Adam Wang?’

      Typical bullshit from Cunliffe, 6.5% of homes are bought by foreigners in New Zealand.
      Most of these houses are in suburbs like Remuera, Only someone like Cunliffe would think first home buyers can afford these types of properties

      • Draco T Bastard 2.2.1

        /facepalm

        We already have a housing shortage so 6.5% going to foreigners, even if they are only in the more expensive suburbs (which they probably aren’t), will still push up prices everywhere else.

        • RedLogix 2.2.1.1

          And next year another 6.5% and the year after …

          Making the very conservative assumption that this rate continues for just another 10 years then 1.065 ^ 10 = 1.87 or about a 90% change.

          In other words 90% of NZ houses would be owned by overseas people. Still keen?

      • Dave kennedy 2.2.2

        That 6.5% figure is not certain, no research has been done to judge the real extent of foreign buyers. Given the huge returns on investment properties here, minimal tax and few restrictions on foreign investment(see the ‘most profits are non taxable’ link on my post) I would be surprised if it wasn’t double that.

  3. srylands 3

    There are no “rich mates”. (There are hardly any “rich” people in New Zealand – probably less than 100.)

    The tax “cuts” were fiscally neutral. Tax revenue is up, not down. It has simply varied down against forecasts. Variance from tax forecasts is nothing new.

    Emissions growth is not news. The last Labour Government faced the same challenges. The answer is to use the flexibility mechanisms allowed by the UNFCCC to help reduce global emissions.

    A capital gains tax with owner occupied homes exempt will increase house prices and drive up rents – viz Australia. Solution = build more houses and release more urban land.

    A capital gains tax is not a bad idea but it should apply to all assets. Labour does not have the courage to do this (neither does National of course.)

    So I found your post a bit hysterical, and not helpful.

    • Draco T Bastard 3.1

      Wow, you really do come out with some BS:

      The tax “cuts” were fiscally neutral.

      No they weren’t – they left government with a billion dollar hole.

      Tax revenue is up, not down. It has simply varied down against forecasts.

      Yeah, you should probably try reading what was said rather than what’s in your head.

      Emissions growth is not news. The last Labour Government faced the same challenges. The answer is to use the flexibility mechanisms allowed by the UNFCCC to help reduce global emissions.

      So, SorryLands advice about not meeting emissions targets is to be “flexible” about it. This sounds remarkably like someone saying we shouldn’t try because we could always get someone else to do it for us.

      I found your comment false, flaky and hysterical.

    • framu 3.2

      “Tax revenue is up, not down. It has simply varied down against forecasts.”

      wouldnt the fiscal neutrality of the tax cuts be based on forecasts as well?

      if so – arent you just trying to have your cake and eat it? I do hope your not using two different systems of measurement to try and make a comparison

      also – you forgot gst increase – go on – how much is gst now? i know you can do it.

  4. Not a PS Staffer 4

    “Tim Groser has also made an artform of making NZ worse off.” So you say. I disagree!

    The little fella has made an artform of being a small big swinging dick wherever international trade negotiation are happening: he loves first class seats on planes, the five star hotels, switching seamlessly from English to French at well-catererd someothertaxpayer funded receptions or dinners.

    Is a more prosperous New Zealand his raison d’être? Non.
    Is the prosperity and happiness of the people of New Lynn (where he is repeatedly thrashed by Cunliffe) the reason he gets out of a satin sheeted bed? Mon Dieu, Non!

    The agoraphobic boy is selling you and me down the river so that he can be acclaimed by his peers in Wasingtton, London and Geneva as a truly great Trade “hand”. Groser is devoid of vision and self confidence. He is a great reason to drop the List System and insist that all MPs get some type of direct mandate from the people. Groser hates having to answer to the piulic: any public.

    • Rodel 4.1

      Not a PS Staffer- ..
      .” He is a great reason to drop the List System and insist that all MPs get some type of direct mandate from the people.”-a sentiment with which I tend to agree even though I like MMP

  5. philj 5

    xox.
    just a thought. Maybe it’s a rock star economy (for the rich) because the tax take is down. it’s not rock star for you and me.

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    4 days ago
  • Charges up for some as funding up for grabs
    A proposal being considered by the Government would see some people having to pay more for health care and district health boards forced to fight amongst themselves to fund regional health services, Labour’s Health spokesperson Annette King says “Information leaked… ...
    4 days ago
  • Stop experimenting on kids
    The trouble with the Charter school model is that it is a publicly funded experiment on children. The National Government has consistently put its desire to open charter schools ahead of the safety of the children in them, ignoring repeated… ...
    GreensBy Catherine Delahunty MP
    5 days ago
  • Bank puts the squeeze on mid Canterbury farmers
    News that an unnamed bank in Ashburton has put a receiver on notice over financially vulnerable farmers will send a chill through rural New Zealand, says Labour’s Finance Spokesperson Grant Robertson. “The Government needs to work with  New Zealand’s banks… ...
    5 days ago
  • Key is trading away New Zealand land and homes
    John Key yesterday admitted what National dishonestly refused to confirm in Parliament last week – he is trading away New Zealand’s right to control who buys our homes and land, says Opposition leader Andrew Little. “The Prime Minister must now… ...
    5 days ago
  • Razor gang takes scalpel to health
    Plans by the Government to take a scalpel to democratically elected health boards are deceitful and underhand, coming just months after an election during which they were never signalled, Labour’s Health spokesperson Annette King says “Leaked documents reveals a radical… ...
    5 days ago
  • Spin lines show a department in chaos
    Corrections Spin Doctors sending their place holder lines to journalists instead of responding to serious allegations shows the scale of chaos at the department over the Serco scandal, says Labour’s Corrections Spokesperson Kelvin Davis. “As more and more serious allegations… ...
    7 days ago
  • Court ruling shows law should never have been passed
    A High Court ruling that a law banning prisoners from voting is inconsistent with a properly functioning democracy should be a wake-up call for the Government, Labour’s Justice spokesperson Jacinda Ardern says. In an unprecedented ruling Justice Paul Heath has… ...
    1 week ago
  • Judicial Review Gamble Pays Off for Problem Gambling Foundation
    Congratulations are due to the Problem Gambling Foundation (PGFNZ) who have won their legal case around how the Ministry of Health decided to award their contracts for problem gambling services to another service provider. Congratulations are due not just for… ...
    GreensBy Denise Roche MP
    1 week ago
  • Environmental Protection Agency appoints GE advocate as new CEO
    This week, the Environmental Protection Authority Amendment Bill passed its first reading in Parliament. The Bill puts protection of the environment into the core purpose of the Environmental Protection Authority. This month, Dr Allan Freeth, the former Chief Executive of… ...
    GreensBy Steffan Browning MP
    1 week ago
  • Charanpreet Dhaliwal death demands genuine health and safety reform
    The killing of a security guard on his first night on the job is exactly the kind of incident that National’s watered-down health and safety bill won’t prevent, says Te Atatu MP Phil Twyford. The coronial inquest into 22-year-old Charanpreet… ...
    1 week ago
  • Arbitrary sanctions hit children hardest
    Increasing numbers of single parents are being penalised under a regime that is overly focussed on sanctions rather than getting more people into work, Labour’s Social Development spokesperson Carmel Sepuloni says. “Figures, obtained through Parliamentary questions show 3000 more sanctions,… ...
    1 week ago
  • Hekia just won’t face the facts
    Hekia Parata’s decision to keep troubled Whangaruru Charter school open despite being presented with a catalogue of failure defies belief, goes against official advice and breaks a Government promise to close these schools if they were failing, says Labour’s Education… ...
    1 week ago
  • No more silent witnesses
    Yesterday I attended the launch of a new initiative developed by and for Asian, Middle eastern and African youth to support young people to name and get support if there is domestic violence at home. The impact on children of… ...
    GreensBy Jan Logie MP
    1 week ago
  • Single Use Plastic Bags campaign – Some wins and some green-washing
    As we near the end of Plastic Free July I’m nearing the conclusion of my Say No To Plastic Bag tour when I will have completed all 30 of my public meetings. The campaign was designed to work with community… ...
    GreensBy Denise Roche MP
    1 week ago
  • Single Use Plastic Bags campaign – Some wins and some green-washing
    As we near the end of Plastic Free July I’m nearing the conclusion of my Say No To Plastic Bag tour when I will have completed all 30 of my public meetings. The campaign was designed to work with community… ...
    GreensBy Denise Roche MP
    1 week ago
  • Minister must take responsibility for problem gambling debacle
    The Government’s handling of the Problem Gambling Foundation’s axing in a cost-cutting exercise has been ham-fisted and harmful to some of the most vulnerable people in society, Associate Health Labour spokesperson David Clark says.“Today’s court ruling overturning the axing of… ...
    1 week ago
  • Labour will not support TPP if it undermines NZ sovereignty
    The Labour Party will not support the Trans Pacific Partnership Agreement unless key protections for New Zealanders are met, Opposition leader Andrew Little says.“Labour supports free trade. However, we will not support a TPP agreement that undermines New Zealand’s sovereignty. ...
    1 week ago
  • Coleman can’t ignore latest warnings
    Resident doctors have advised that a severe staffing shortage at North Shore Hospital is putting patients’ lives at risk, Labour’s Health spokesperson Annette King says. “They say a mismatch between staffing levels and patient workloads at North Shore has… ...
    1 week ago
  • ACC must remove barriers to appeals
    The Government must prioritise removing barriers to justice for ACC claimants following a damning report by Acclaim Otago, Labour’s ACC spokesperson Sue Moroney says. “ACC Minister Nikki Kaye must urgently scrap her flawed plan to remove claimant’s right to redress… ...
    1 week ago
  • Six months’ paid parental leave back on the agenda
    Six months’ paid parental leave is back on the agenda and a step closer to reality for Kiwi parents after Labour’s new Member’s Bill was pulled from today’s ballot, the Bill’s sponsor and Labour MP Sue Moroney says. “My Bill… ...
    1 week ago
  • Sole parents at risk of having no income
    New requirements for sole parents to undertake a reapplication process after a year is likely to mean a large number will face benefit cancellations, but not because they have obtained work, Labour’s Social Development spokesperson Carmel Sepuloni says. “Increasing numbers… ...
    1 week ago
  • Juking the Welfare Stats Again
    Last week the government’s major initiative to combat child poverty (a paltry $25 increase) was exposed for what it is, a lie. The Government, through the Budget this year, claims to be engaging in the child poverty debate, but instead,… ...
    GreensBy Jan Logie MP
    1 week ago
  • OCR rate cut a result of flagging economy
    The Reserve Bank's decision to cut the Official Cash Rate to 3 per cent shows there is no encore for the so-called 'rock star' economy, says Labour's Finance Spokesperson Grant Robertson.   "Today's interest rate cut comes off the back… ...
    1 week ago
  • Reboot to an innovation economy, an Internet economy and a clean economy
    In my short 33 years on this planet we’ve seen phenomenal technological, economic and social change, and it’s realistic to expect the next 33 will see even more, even faster change. You can see it in the non-descript warehouse near… ...
    GreensBy Gareth Hughes MP
    1 week ago
  • Bill that puts the environment into the EPA passes first hurdle
    A Bill that puts the environment squarely into legislation governing the Environmental Protection Authority passed its first reading today, says Meka Whaitiri.  “I introduced this member’s bill as the current law doesn’t actually make protecting the environment a goal of… ...
    1 week ago
  • Key’s KiwiSaver deception exposed
    KiwiSaver statistics released today expose John Key's claim that the cutting of the kickstart payment "will not make a blind bit of difference to the number of people who join KiwiSaver” to be duplicitous, says Labour Finance Spokesperson Grant Robertson.  “Official… ...
    1 week ago
  • Minimum Wage Amendment Bill to protect contractors
    All New Zealanders should be treated fairly at work. Currently, the law allows non-employment relationships to be used to get around the minimum wage. This is unfair, says Labour MP David Parker. “The Minimum Wage (Contractor Remuneration) Amendment Bill, a… ...
    1 week ago
  • Bill raises bar to protect Kiwi farmland
    The Government’s rubber-stamping of every one of the nearly 400 applications from overseas investors to buy New Zealand farm land over the last three years proves tougher laws are needed, Labour MP Phil Goff says. “In the last term of… ...
    1 week ago
  • Costly flag referendum should be dumped
    John Key must ditch the flag referendum before any more taxpayer money is wasted, Opposition Leader Andrew Little says. “Millions of dollars could be saved if the Prime Minister called a halt to this hugely expensive, and highly unpopular, vanity… ...
    1 week ago
  • Nats letting Serco off scot free
    Government members have prevented Parliament’s Law and Order select committee from getting answers out of a senior Serco director about the fight clubs being run at Mt Eden prisons, says Labour’s Corrections Spokesperson Kelvin Davis. “At today’s Law and Order… ...
    1 week ago
  • Charter school experiment turns into shambles
    The National Government’s charter school experiment has descended into chaos and it’s time for Hekia Parata to stop trying to cover up the full extent of the problems, Labour’s Education spokesperson Chris Hipkins says. “The Education Minister must release all… ...
    1 week ago

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