what message is national sending i am takeing it as national doesnt what us to save at all ,national doesnt what a build up of stable new zealand based capital funds national wants new zealand exposed to instability of off shore capital. national would pefer new zealanders to be in dept up to there arm pits and paying high interest to the day they drop dead.

national says its for private public paternerships (but only with the generous benofactors of national) ppp could have been kiwi saver funds.

national says its for privateisation of the best state assets( but only for mates of national) again privateisation if we must have it could have been kiwi saver funds.

So giving every worker half a million is sustainable now, is it? How does that work then? Or if it’s their own money, are you now encouraging private incentives? I just can’t figure it out.

Effectively the incentive is a targeted tax cut. (And please, don’t exaggerate the impacts- nobody’s being handed half a million instantly. They’re getting small sums that could potentially add up to that much over a half-century or so of saving) Or, if you like, it’s mostly their own money, with some subsidies for those who are on low wages and have Working for Families to greatly reduce their tax costs. I’m not a big fan of running detailed maths, but I’d be doubtful that National’s plan will actually end up subsidising anyone. So they’ve taken a very effective targeted tax cut that could well have helped our culture of debt… and turned it into a less effective, untargeted regressive tax cut. Genius

And yes, Kiwisaver should be sustainable in any responsible policy program. In fact, I’d say a government-backed retirement program is just as important as a health system in a modern nation. It’d be a big item on budgets, but the only reason it’s being cut back is so that National doesn’t completely balloon the national debt with their tax cuts for the very wealthy on top of their promised infrastructure spend. It’ll work on 2%, but it won’t address our debt levels the way it could at 4%. Labour was looking to make real inroads into the debt generation with Kiwisaver- we’ll just have to hope that National picked a sweet spot in their scale back plans, and that claims they’ve gutted it are wrong.

You seem obsessed with the tax rates. National’s tax cuts did not increase the deficit or debt – nor did they particularly impact current spending – they were almost totally funded by reducing KiwiSaver subsidies – which is very different to touching current social spending on health or education.

National’s regressive tax cuts were the only significant point of difference in the two old parties’ policy plans. So, firstly, if we buy your line that the tax cuts aren’t funded by borrowing, (Which is kind of difficult when they’re your biggest spending item and you’re borrowing about as much as they cost) we still have the problem that National has scaled back a wildly successful targeted tax cut that everyone seems to agree was great in order to give extra untargeted tax cuts to everyone that amount to chump change. Remind me who’s supposed to be the party that has a handle on economics? Because it’s certainly not National.

Ari also fails basic economics by arguing to maintain Kiwisaver subsidies and argues that during a recession is the time when you need to spend. Borrowing money to stick into savings scheme adds little to boosting the economy. During a recession you want money spent – through tax cuts or current government spending. Borrowing money to stick into retirements savings that can’t be accessed for 30 years is the worst thing for a recession – that money is needed now.

If you borrow less money than you pay off, then yes, it is useful. The recession is a short-term one that we’re already lifting ourselves out of thanks to Labour’s economic management. I agree that you want to circulate money around the local economy during a recession. I disagree that our culture of debt is not such an urgent problem that it needs to be put off until after we’ve dealt with the economic downturn. That’s just stupid, as it will push people further into debt.

I also wasn’t referring to kiwisaver with the cut spending. I was referring to the plans to cut the public service, the closing down of the insulation fund which everyone seems to agree will pay for itself in the long term, and several other initiatives… to pay partially for tax cuts, and partially for the big Road/Broadband spendup. (which, again, is poorly targeted)

Your defence of all government spending is also misguided. The focus should be on infrastructure spending.

That’s where my focus is, but there are other important issues to resolve such as national and personal debt, the basis of our economy on unsustainable resource use, the fact that our biggest export is essentially water, and National’s intent to scare beneficiaries and low-income workers in a time when confidence is already low.

Long-term problems will always trump short-term ones if we continue to make no attempts to address them, and this government is looking like it’s stuck in the short term even more so than the previous one.

“Of course there is no plan to pay back debt – paying back debt looks to be impossible for the next decade.

So National has no plan for paying back debt. Like I said. The decade bit is a distraction of your own insertion.

You seem obsessed with the tax rates.

Hah. I guess that’s why you brought them up. I mean shit. National policy has been for the last ever so very long:

“We will cut taxes. You Can’t trust Labour not to cut taxes. Labour over taxes you. Surpluses are theft. Too much tax. National equals tax cuts. ”

Seriously David. I’m obsessed with tax rates? Get a fucking grip.

You make a comment about how ‘Hopefully Labour will run on a tax hike policy next election and how wouldn’t that be like totally funny and awesome and shit.’ I say that eventually Labour will probably raise taxes given that the National party are retarded about taxes and can’t seem to work out how to pay back debt. As you tacitly admit.

“Anyway great to see so many people advocating Labour should campaign in 2011 on tax increases, such as they did in 1999. Please keep up the advocacy”

No one said that David, that’s just your own BS line. People are saying that Labour will at some point have to raise taxes. This will probably not be the killer in the electorate that seem to think it will be, because the electorate actually like having a government that can fund a decent social infrastructure. That’s why Key ran on ‘Labour plus’.

In 2011 David, I doubt Labour will be looking to raise taxes. There are a number of things that National is going to have to make it’s mind up about though. Asset sales for one. Maybe they will just punt that till 2014.

The graph seems to completely ignore this concession. Is there a reason why the unions would ignore something they got the Government to change?

[lprent: Since he started as PB, I haven't had cause to notice him. The 'general*' rule around here is that it is your behaviour that causes issues, not who you are. In other words I apply a 'what I can see' filter to my comprehension in moderator mode.

* Of course as with every rule there are exceptions. There are some people that just get me severely annoyed because of their long-term blubbering.]

Govt fiscal policy and the global economic environment are of course mutually linked and do not exist in isolation from each other.

But you also ignore that fact for much of the last 7 years National led the chanting pack demanding tax cuts, cuts that if they had been implemented, would have necessarily led to much higher public sector debt levels.

You ignore also that National have just passed into law, tax cuts that will necessarily mean that govt will have to borrow more to fund the grim looking deficits being currently predicted.

A sane balanced Keynsian policy is to save and reduce debt in the good times, and draw down on the resulting reserves of credit in the bad times. Now the rainy days have most certainly arrived, National would not only have failed us on the first requirement, but has now committed this country to far greater deficits and debt levels than any of us should be at all comfortable with.

This assertion would be correct if you ignored the past 7 years of the strongest economic growth NZ has had in living memory during Labour’s term due to low interest rates and high primary produce prices vs what looks to be a economic depression coming our way in Nationals term forcing them to borrow (unless of course you like public sector service cuts).

But hey don’t let the facts get in the way of a good post.

Weak.

Another interesting point to ponder is “what good’s a tax cut if you don’t have a job anymore?”

The cash put into Kiwisaver is not locked up for 30 years, it is immediately reinvested, both domestically and internationally and generates returns. It is not being tossed into a big hole in the ground. What Kiwisaver does is divert cash from short-term expenditure to long-term investment. What National is doing is the opposite, destroying long-term investment in favour of short-term consumption.

It means that when NZ wants to build infrastructure, or fund productivity investment, we have to borrow offshore. It means that we continue with a deeply unbalanced investment income profile, with many billions of dollars being repatriated offshore by overseas investors and businesses, with only a few pitiful millions coming back the other way.

It means that our current account deficit will continue to rocket toward danger levels, because we are doing nothing to address the structural imbalance that is causing it.

Fundamentally it has been the failure to invest for the long-term that is the underlying factor causing the crisis we face, both locally and globally. Short-term profit taking made from credit card funded consumption, financial trades, securitisations, futures and derivatives, greed and outright fraud are the causes of the collapse we are facing.

National’s prescription is more of the same poison that is already killing us.