National’s David Farrar has been running a series for some time trying to paint NZ Labour as out of step with Labour Parties around the world when it comes to their attitude on tax cuts. His intention, of course, is to portray Labour as extreme left and his mates in National as centrist and middle of the road. Problem is, he’s more interested in spruiking for the National Party than he is in getting his facts right.
Yesterday he reported excitedly that while NZ Labour was “almost alone in the world with its hostility to personal tax cuts”, in contrast the UK Labour Party is “delivering a massive package of tax cuts” to deal with the economic crisis.
We’ll forgive him for selectively ignoring the huge family tax cuts in Working For Families, the cut to the corporate tax rate, the personal tax cuts in this year’s budget and the tax credits for Kiwisaver and R&D – these are things National has to omit for its spin to make any sense.
But despite his obvious disdain for the intelligence of his readers he can’t get away with this one – under Gordon Brown’s tax plan that he endorsed so wholeheartedly the wealthy will face a hefty tax increase, while the cut is to VAT, a regressive tax similar to our GST that hits the poor the hardest.
Essentially, it’s a more progressive tax system, with tax reductions for those on lower to middle incomes paid for by tax increases on the rich, and it’s being described in the media as a rejection of Blairism and a return to traditional Labour values – values that would fit in very well with those of the Labour Party here that Farrar has tried to paint as extreme and “almost alone in the world”.
The only question is, given his enthusiasm for Gordon Brown’s plan, will Farrar now be rejecting National’s regressive tax plan – where families on less than $44k pay more tax so the rich can pay less – in favour of a system that’s fairer and more progressive? Somehow, I doubt it.