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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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    5 days ago
  • Relationships Aotearoa
    It is disturbing that Relationships Aotearoa, a voluntary organisation set up in 1949 to help couples struggling with their relationships following the upheavals of World War II, may be forced to close, says Acting Spokesperson for the Voluntary and Community… ...
    5 days ago
  • An economy that is just working for some is an economy that is not working
    The National Party presents itself as a great manager of the economy, but if the economy is only working for some we really need to question that assertion. Alongside the perpetually elusive surplus, the levels of risk in our economy are… ...
    GreensBy Jan Logie MP
    5 days ago
  • An economy that is just working for some is an economy that is not working
    The National Party presents itself as a great manager of the economy, but if the economy is only working for some we really need to question that assertion. Alongside the perpetually elusive surplus, the levels of risk in our economy are… ...
    GreensBy Jan Logie MP
    5 days ago
  • House prices to a crack $1 million in 17 months
    The average Auckland home is on track to cost $1 million in 17 months’ time if nothing substantial is done to rein in soaring price rises, Labour’s Housing spokesperson Phil Twyford says. “Auckland’s house prices have skyrocketed 63 per cent… ...
    5 days ago
  • Vital support services can’t be left in lurch
    The National Government has big questions to answer about how a provider of services to thousands of vulnerable New Zealanders is set to fold, Labour’s Finance spokesperson Grant Robertson says. Relationships Aotearoa which provides support and counselling to families, individuals… ...
    6 days ago
  • Treasury and IRD on a capital gains tax
    Both the Treasury and IRD have been advising the National Government on the benefits of a capital gains tax. Documents released to the Green Party under an Official Information Act request show that John Key has been selective with the… ...
    GreensBy Russel Norman MP
    6 days ago
  • Charity legislation needs review
    It is unacceptable that the big corporate based charities claim  millions in annual income tax exemptions, while small community based and operated non-profit organisations  struggle to gain official charity status, Labour’s acting spokesperson for the Voluntary and Community Sector Louisa… ...
    6 days ago
  • John’s panic-Key response to housing crisis
    John Key needs to tell New Zealanders what caused his sudden change of heart that led to the Government’s scrambled and last-minute housing measures, Opposition Leader Andrew Little says. “The Prime Minister’s sudden rush of blood to his head followed… ...
    6 days ago
  • Keep our Assets Christchurch Campaign: An update
    I recently presented my submission to keep Christchurch Council assets at the Christchurch City Council’s public hearings on its 10 year plan on 13 May. The hearings are live-streamed and recorded so you can watch them on www.ccc.govt.nz. The Council’s… ...
    GreensBy Eugenie Sage MP
    6 days ago
  • John Key finally admits there’s a housing crisis
    John Key’s weak measures to rein in the astronomical profits property speculators are making are an admission – finally – that there is a housing crisis, Labour Leader Andrew Little says. “But yet again National is tinkering with the housing… ...
    7 days ago
  • Government stifles voices in CYFs review
    The Government’s exclusion of the Māori Women’s Welfare League in a panel on the future of CYFs is a cynical ploy to stifle views, says Labour’s Māori Development Spokesperson Nanaia Mahuta. “It's unbelievable that a significant review on the future… ...
    1 week ago
  • Speech to the Otago Chamber of Commerce
    Thank you very much for the opportunity to be here today. It’s a pleasure as always to be back in the town that raised me. Growing up in St Kilda meant that there was one thing that was a big… ...
    1 week ago
  • Key can’t just be Prime Minister for Parnell
    John Key must show New Zealanders in next week’s Budget that he is more than the Prime Minister for Parnell, and is also the Prime Minister for Pine Hill, Putararu and Palmerston North, Labour’s Finance spokesperson Grant Robertson says. In… ...
    1 week ago
  • Stop the conversions
    This week, some Waikato locals took me and intrepid photographer Amanda Rogers on a tour of some  lakes and waterways in their region, and up to the massive dairy conversions in the upper catchment of the Waikato River. It… ...
    GreensBy Catherine Delahunty MP
    1 week ago
  • More regional jobs go in Corrections reshape
    News that 194 Corrections staff are to lose their jobs will have ramifications not only for them and their families but for the wider community, Labour’s Corrections spokesperson Kelvin Davis says. Prison units at Waikeria, Tongariro and Rimutaka face closure… ...
    1 week ago
  • Government’s climate meetings off to a bumpy start
    On Wednesday, I attended a hui and an evening meeting that the Government had organised in Nelson as part of its climate change consultation tour, to support the Nelson community telling the Government to take meaningful action on climate change.… ...
    GreensBy Steffan Browning MP
    1 week ago
  • Taxpayers the only ones left feeling blue
    Ministry of Social Development bosses could have saved themselves thousands of dollars in consultants’ fees by providing staff with rose-tinted spectacles, Labour’s State Services spokesperson Kris Faafoi says. A report out today reveals the Ministry is spending over half a… ...
    1 week ago
  • Why are the regions still facing restrictions?
    Labour's Housing spokesperson Phil Twyford is questioning why the regions should continue to be saddled with LVR lending restrictions announced by the Reserve Bank today. “Labour has been calling for the regions to be exempted from LVRs for the best… ...
    2 weeks ago
  • The high costs of weak environmental regulation
    Te Waihora/Lake Ellesmere is described on the Department of Conservation website as “Canterbury’s largest and New Zealand’s fifth largest [lake], and an internationally important wildlife area.” But the lake is also polluted by nutrients leaching from farms in the catchment.… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • Submissions to Wellington City Council on their Gambling Venues Policy
    Every three years Councils across the country are required to check that their gambling venue policies are still fit for purpose and they can choose to consult on their policy if they are thinking of making changes. Councils don’t have… ...
    GreensBy Denise Roche MP
    2 weeks ago
  • Reserve Bank action shows Govt out of touch and out of ideas
    The Reserve Bank’s unprecedented measures today show it understands the serious risks of the overheating housing market – in complete contrast to John Key’s refusal to acknowledge the crisis, Labour’s Finance spokesperson Grant Robertson says. “The Bank is right to… ...
    2 weeks ago
  • Send us your snaps: 25 Years of the Green Party
    This year we've hit a milestone. We're turning 25.To help celebrate a quarter of a century, please send us your photos from the last 25 years of the Green Party Aotearoa New Zealand! Note: Photos must be jpg, gif or… ...
    2 weeks ago
  • 25 Years of the Green Party
    This year the Green Party sends 25. To help us celebrate a quarter of a century please send us you photos of 25 years of the Green Party!Photos must be jpg,gif or png and smaller than 2MB. If you are… ...
    2 weeks ago
  • Bay growth plan too little too late
    Today’s Bay of Plenty growth study from MBIE is another example of Government spin - lots of talk but little action, says Labour’s Regional Development spokesperson David Cunliffe.  “This is a region that desperately needs to develop the downstream processing… ...
    2 weeks ago
  • Government bows to ACC pressure
     The Government has finally buckled to pressure from Labour and the New Zealand public in making a half billion dollar cut to ACC levies, but the full benefits are two years away,” says Opposition Leader Andrew Little.  “$500 million over… ...
    2 weeks ago
  • False figures cloud Auckland transport facts
    The Prime Minister should apologise and issue a correction after both he and Transport Minister Simon Bridges have been caught out misrepresenting facts on Auckland’s transport spending, Labour’s Housing spokesperson Phil Twyford says. "Both John Key and Simon Bridges have… ...
    2 weeks ago
  • Govt books confirm National can’t post surplus
    The last publication of the Government’s books before the budget shows National will break its promise of seven years and two election campaigns and fail to get the books in order, says Labour’s Finance Spokesperson Grant Robertson. “The Government is… ...
    2 weeks ago

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